Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarter ended March 31, 2019

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

For the transition period from ________ to ________

Commission file number: 000-56030

EUROSPORT ACTIVE WORLD CORP.

(Exact Name of Registrant as Specified in Its Charter)


Florida		30-0781375
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

3250 Mary Street, #303, Miami, Florida 33133

(Address of Principal Executive Offices, including Zip Code)

Tel No.: 305-517-7330

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None


Title of each class	Trading Symbol(s)	Name of each exchange on which registered

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer þ	Smaller reporting company þ
	Emerging growth company þ

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No þ

The number of shares outstanding of the registrant’s classes of common stock as of May 2, 2019 was 90,394,683 shares.

INDEX


		Page
	PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of March 31, 2019 (Unaudited) and December 31, 2018	1
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2019 and 2018 (Unaudited)	2
	Condensed Consolidated Statements of Changes in Stockholders' Deficit for the three months ended March 31, 2019 and 2018 (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018 (Unaudited)	4
	Notes to Condensed Consolidated Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	12
Item 4.	Controls and Procedures	13

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	14
Item 1A.	Risk Factors	14
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	14
Item 3.	Defaults Upon Senior Securities	14
Item 4.	Mine Safety Disclosures	14
Item 5.	Other Information	14
Item 6.	Exhibits	14
SIGNATURES		15

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

The information contained in this Report, including in the documents incorporated by reference into this Report, includes some statements that are not purely historical and that are “forward-looking statements.” Such forward-looking statements include, but are not limited to, statements regarding our Company and management’s expectations, hopes, beliefs, intentions or strategies regarding the future, including our financial condition, results of operations, and the expected impact of the offering on the parties’ individual and combined financial performance. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would” and similar expressions, or the negatives of such terms, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements contained in this Report are based on current expectations and beliefs concerning future developments and the potential effects on the parties and the transaction. There can be no assurance that future developments actually affecting us will be those anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the parties’ control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date hereof.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. The following discussion should be read in conjunction with our financial statements and the related notes included in this Report.

PART I. FINANCIAL INFORMATION

ITEM 1. FININCIAL STATEMENTS

Eurosport Active World Corp.

Condensed Consolidated Balance Sheets


	March 31, 2019			December 31, 2018
	(Unaudited)
ASSETS
CURRENT ASSETS:
Prepaid expenses	$	2,325		$	—
TOTAL CURRENT ASSETS		2,325			—

TOTAL ASSETS	$	2,325		$	—


LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	890,266		$	861,222
Due to affiliate (Note 5)		280,427			298,313
Convertible loan payables (Note 6)		684,825			586,825
Due to officers (Note 5)		2,069,255			1,994,168
TOTAL CURRENT LIABILITIES		3,924,773			3,740,528

COMMITMENTS AND CONTINGENCIES (Note 7)

STOCKHOLDERS' DEFICIT:
Preferred stock, par value $.001 per share; 500,000,000 shares authorized, no shares issued and outstanding in March 31, 2019 and December 31, 2018, respectively		—			—
Common stock, par value $.001 per share; 1,000,000,000 shares authorized, 88,113,933 and 87,913,933 shares issued and outstanding in March 31, 2019 and December 31, 2018, respectively		88,114			87,914
Additional paid in capital		7,219,662			7,187,862
Accumulated deficit		(11,230,224	)		(11,016,304	)
TOTAL STOCKHOLDERS' DEFICIT		(3,922,448	)		(3,740,528	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	2,325		$	—

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

Eurosport Active World Corp.

Condensed Consolidated Statements of Operations

(Unaudited)


	For the Three Months Ended
	March 31,
	2019			2018

GENERAL and ADMINISTRATIVE EXPENSES
Management fees to affiliate	$	75,000		$	75,000
Officers’ salaries and payroll taxes		80,738			80,738
Professional fees		47,185			35,250
Travel and entertainment		2,900			1,928
Other general and administrative expenses		3,201			7,713
TOTAL GENERAL and ADMINISTRATIVE EXPENSES		209,024			200,629

LOSS FROM OPERATIONS		(209,024	)		(200,629	)

OTHER EXPENSE
Interest and Other expense, net		(4,896	)		(1,444	)
TOTAL OTHER EXPENSE		(4,896	)		(1,444	)

LOSS BEFORE TAXES		(213,920	)		(202,073	)

TAXES		—			—

NET LOSS	$	(213,920	)	$	(202,073	)

Loss per share - Basic and diluted	$	(0.00	)	$	(0.00	)

Weighted average number of shares outstanding - Basic and diluted		87,998,377			87,652,841

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

Eurosport Active World Corp.

Condensed Consolidated Statement of Changes in Stockholders’ Deficit


					Additional					Total
	Common Stock				Paid-in		Accumulated			Stockholders'
	Shares		Amount		Capital		Deficit			Deficit

BALANCE AT DECEMBER 31, 2017		87,201,863	$	87,202	$	6,476,504	$	(10,214,859	)	$	(3,651,153	)

Common stock issued to satisfy related party liability		712,070		712		84,736		—			85,448
Capital contribution on settlement of related party liability		—		—		626,622		—			626,622
Net loss		—		—		—		(202,073	)		(202,073	)
BALANCE AT MARCH 31, 2018 (Unaudited)		87,913,933	$	87,914	$	7,187,862	$	(10,416,932	)	$	(3,141,156	)


					Additional					Total
	Common Stock				Paid-in		Accumulated			Stockholders'
	Shares		Amount		Capital		Deficit			Deficit

BALANCE AT DECEMBER 31, 2018		87,913,933	$	87,914	$	7,187,862	$	(11,016,304	)	$	(3,740,528	)

Sale of common stock		200,000		200		31,800		—			32,000
Net loss		—		—		—		(213,920	)		(213,920	)
BALANCE AT MARCH 31, 2019 (Unaudited)		88,113,933	$	88,114	$	7,219,662	$	(11,230,224	)	$	(3,922,448	)

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

Eurosport Active World Corp.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	For the Three Months Ended
	March 31,
	2019			2018

CASH FLOW FROM OPERATING ACTIVITIES:
NET LOSS	$	(213,920	)	$	(202,073	)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES:
Changes in operating assets and liabilities:
Prepaid expenses		(2,325	)		—
Accounts payable and accrued expenses		11,158			10,431
Accrued management fees and due to/from officers		75,087			75,000
Net cash used in operating activities		(130,000	)		(116,642	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts from affiliates		—			116,642
Net cash provided by investing activities		—			116,642

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common shares		32,000
Proceeds from convertible loans		98,000			—
Net cash provided by financing activities		130,000			—

NET CHANGE IN CASH		—			—

CASH AT THE BEGINNING OF THE PERIOD		—			—
CASH AT THE END OF THE PERIOD	$	—		$	—

NON-CASH INVESTING AND FINANCING TRANSACTION:
Stock issued to satisfy related party liability	$	—		$	85,448
Capital contribution on settlement of related party liability	$	—		$	626,622

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

Eurosport Active World Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

March 31, 2019 and December 31, 2018

Note 1. Incorporation and Nature of Operations

Eurosport Active World Corp. (formerly Eagle International Holdings Group Inc.”) (the “Corporation”, “Company”, “EIH” or “EAWC”), was incorporated under the laws of the State of Florida on August 23, 2000.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The condensed consolidated financial statements (unaudited) include the accounts of Eurosport Active World Corp. and its wholly-owned subsidiaries Powermax Energy, Powermax Green Technologies, GEM, Swiss Green Solutions and African Sunlight and have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission. These unaudited financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC.

In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosures contained in the audited financial statements of Eurosport Active World Corp. for the fiscal year ended December 31, 2018 have been omitted.

Certain reclassifications have been made in Fiscal 2018 results to conform to the presentation used in Fiscal 2019.

Loss Per Common Share

The Corporation accounts for earnings (loss) per share in accordance with FASB ASC Topic No. 260 - 10 , “Earnings Per Share”, which establishes the requirements for presenting earnings per share (“EPS”). FASB ASC Topic No. 260 - 10 requires the presentation of “basic” and “diluted” EPS on the face of the statement of operations. Basic EPS amounts are calculated using the weighted-average number of common shares outstanding during each period. Diluted EPS assumes the exercise of all stock options, warrants and convertible securities having exercise prices less than the average market price of the common stock during the periods, using the treasury stock method. When a loss from operations exists, potential common shares are excluded from the computation of diluted EPS because their inclusion would result in an anti-dilutive effect on per share amounts.

For the three months ended March 31, 2019 and 2018, an aggregate of 2,200,000 stock options to purchase shares of common stock were excluded from the computation of diluted net loss per share, as the inclusion of such shares would be anti-dilutive.

In addition, as discussed more fully in Note 6, convertible note holders have the option of converting their loans into common shares commencing on February 19, 2019, the completion of an approved S-1 registration of its common shares. Some lenders were also granted the right to purchase additional shares, however these rights expired as of June 13, 2018. The above conversion feature represents a potential for 6,787,350 and 4,741,750 shares at March 31, 2019 and 2018, respectively. The potential shares from both the conversion feature and the rights to purchase additional shares were excluded from the computation of diluted net loss per share, as the inclusion of such shares would be anti-dilutive.

Eurosport Active World Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

March 31, 2019 and December 31, 2018

Note 3. Recently Issued Accounting Standards

Accounting standards promulgated by the FASB are subject to change. Changes in such standards may have an impact on the Corporation’s future consolidated financial statements. The following are a summary of recent accounting developments.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) to increase transparency and compatibility among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Topic 842 affects any entity that enters into a lease, with some specific scope exceptions. The guidance in this update supersedes Topic 840, Leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For public companies, the amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of ASU No. 2016-02 will have no material impact on our financial statements.

In June 2018, the FASB issued ASU 2018-07, “Improvements to Non-Employee Share-Based Payment Accounting”, which simplifies the accounting for share-based payments granted to non-employees for goods and services by expanding the scope of ASC Topic 718, “ Compensation – Stock Compensation”. The guidance is effective for public companies for fiscal years, and interim fiscal periods within those fiscal years, beginning after December 15, 2018. The Company does not believe that the adoption of ASU 2018-07 will have a significant impact on the Company’s consolidated financial statements.

Note 4. Going Concern

The Corporation has yet to commercialize its products and consequently has generated no revenue, incurring operating losses since inception (June 24, 2005) totaling $11,230,224 at March 31, 2019. During the three months ended March 31, 2019, the Corporation incurred net losses of $213,920. The Company also incurred a working capital deficit of $3,922,448 at March 31, 2019.

These factors raise substantial doubt regarding the Corporation’s ability to continue as a going concern. The ability of the Corporation to continue as a going concern depends upon its ability to obtain funding to finance operating losses until the Corporation is profitable. The Corporation expects to be financed through equity capital, debt financing or from deposits related to purchases orders on proposals pending customer acceptance.

In the event the Corporation does not generate sufficient funds from issuance of common stock, debt financing or purchase orders, it may be unable to fully implement its business plan and pay its obligations as they become due, any of which circumstances would have a material adverse effect on its business prospects, financial condition, and results of operations. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Eurosport Active World Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

March 31, 2019 and December 31, 2018

Note 5. Related Party Transactions

Due to officers

Amounts due to officers as of March 31, 2019 and December 31, 2018 are comprised of the following:


	2019		2018
	(Unaudited)
Ralph Hofmeier:
Unsecured advances due to officer	$	17,678	$	17,678
Accrued salaries		1,062,500		1,025,000
Total due to Ralph Hofmeier		1,080,178		1,042,678

Irma Velazquez:
Unsecured advances due to officer		38,577		38,490
Accrued salaries		950,500		913,000
Total due to Irma Velazquez		989,077		951,490
	$	2,069,255	$	1,994,168

Unsecured advances due to officers represent unreimbursed Corporation expenses paid by the officers on behalf of the Corporation. These advances are non-interest bearing and are due on demand.

Accrued salaries represent amounts accrued in accordance with the employment agreements for the Corporation’s Chief Executive Officer and Chief Operating Officer (see note 7).

Due to/from affiliate

Effective January 2017 the Company engaged EAWC Tecnologias Verdes, SA (“EAWC-TV”) to provide its management services, including disbursement processing for $25,000 per month totaling $300,000 annually. During the first quarter of 2017 and prior, EAWC-TV had been a borrower from EAWC. But starting in the second quarter of 2017 EAWC-TC began repaying EAWC. The balance due to at December 31, 2017 had decreased to $116,643. In April 2018, EAWC-TV completed the repayment of all funds previously borrowed from EAWC and continued to remit its own funds to EAWC suppliers on behalf of EAWC and in satisfaction of EAWC obligations to its suppliers. During the year ending December 31, 2018, EAWC-TV provided $300,000 of services plus $3,620 net in interest and remitted $170,483 to vendors in satisfaction of EAWC obligations. EAWC also remitted $20,000 to EAWC-TV. The balance due to EAWC-TV by EAWC at December 31, 2018 was $298,313.

During the three months ended March 31, 2019, EAWC had paid $120,480 to EAWC-TV and EAWC-TV charged EAWC $75,000 in monthly management fees. In addition, EAWC-TV had funded and paid on behalf of EAWC $24,278 to EAWC vendors and charged EAWC $3,316 in interest. The balance due to EAWC-TV by EAWC at March 31, 2019 was $280,427.

Note 6. Convertible Loans Payable

As of March 31, 2019 and December 31, 2018, the Company had outstanding in aggregate $684,825 and $586,825, respectively, in convertible loans. The convertible loans are due on demand unsecured, have no maturity date and are generally non-interest bearing although some of the notes have 2% interest. The holders of the instrument have the option to convert these convertible loans into common stock at conversion prices ranging from $1.00 to $.10 per share. The conversion feature becomes exercisable commencing when the Company’s S-1 registration went effective on February 19, 2019.

The above debentures were determined to be solely debt without an equity portion as the Company has determined that these conversion options issued in 2018 and prior are not beneficial. As such, these convertible debentures have no equity portion and are presented as loans payables in the financial statements. The transaction price for these loans payable reflects the fair value of the instruments issued.

Eurosport Active World Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

March 31, 2019 and December 31, 2018

Note 6. Convertible Loans Payable (continued)

During the three months ended March 31, 2019, the Company issued two additional non-interest bearing notes totaling $98,000 which are convertible into 1,960,000 common shares at a $0.05 per share. These notes contained a beneficial conversion feature for a full discount. Further, the Company also accepted requests to convert $265,825 of notes into 2,280,750 common shares, which were issued on April 16, 2019.

Note 7. Stockholders’ Deficit

During the three months ended March 31, 2019 the Company issued to an investor, 200,000 common shares at a $0.16 per share for a total of $32,000.

Note 8. Stock Option Plan

On January 2, 2012, the Corporation’s Board of Directors approved the creation of the 2012 Non-Qualified Stock Option Plan (the “2012 Plan”). The 2012 Plan provides for the issuance of incentive stock options to designated employees, certain key advisors and non-employees members of the Board of Directors with the opportunity to receive grant awards to acquire, in the aggregate, up to 5,000,000 shares of the Corporation’s common stock.

A summary of information regarding the Corporation’s common stock options outstanding is as follows:


					Weighted
					Average
			Weighted		Remaining
	Number of		Average		Contractual
	Shares		Exercise Price		Term (Years)
Outstanding at December 31, 2017		2,200,000	$	0.10		3.0
Issued		—		—		—
Exercised		—		—		—
Outstanding at December 31, 2018		2,200,000		0.10		2.0
Issued		—		—		—
Exercised		—		—		—
Outstanding at March 31, 2019		2,200,000	$	0.10		1.7

The above outstanding options were granted on January 1, 2012, to a former Corporation’s executive. The options vest 20,000 options per month with 2,200,000 being vested and exercisable at March 31, 2019. During the three months ended March 31, 2019 and 2018, the Corporation did not recognize any stock-based compensation expense as the options were fully vested at December 31, 2016.

Note 9. Commitments and Contingencies

Commitments

Employment Agreements

The Corporation entered into employment agreements with its Chief Executive Officer, Mr. Ralph Hofmeier, and its Chief Operating Officer, Ms. Irma Velazquez (collectively the “Employment Agreements”), effective January 1, 2012. Under the Employment Agreements, the Corporation will pay each of Mr. Hofmeier and Ms. Velazquez an annual base salary of $125,000 during the first year and $150,000 during the second year and forward. Any increase to the annual base salary after the second year is subject to approval by the Corporation’s Board of Directors. The Employment Agreements each has initial terms of ten (10) years and is automatically renewed for successive one-year terms unless either party delivers timely notice of its intention not to renew.

Lease

On March 1, 2016, the Corporation leased US office space at 3250 Mary Street, Suite 303 Coconut Grove FL 33133 USA from its counsel for monthly rent payments of $300 on a month to month basis. Rent expense in the three months ending March 31, 2019 and 2018 amounted to $900 and $900, respectively.

Eurosport Active World Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

March 31, 2019 and December 31, 2018

Note 9. Commitments and Contingencies (continued)

Contingencies

From time to time, the Corporation may be a defendant in pending or threatened legal proceedings arising in the normal course of its business. While the outcome and impact of currently pending legal proceedings cannot be predicted with certainty, the Corporation’s management and legal counsel believe that the resolution of these proceedings through settlement or adverse judgment will not have a material adverse effect on its consolidated operating results, financial position or cash flows.

Litigation

Norwood - Action proceeding on concluded litigation, Case Number 10-58982 CA 09 – Miami-Dade County, FL Circuit Court. Nick Norwood vs. Eurosport Active World Corp. and Ralph Hofmeier. The case is resolved. An Agreed Stipulation for Final Judgement was entered into by the plaintiff, Nick Norwood and the Company and Ralph Hofmeier in November 2013 in the total amount (as of that date) of $107,872, which has been entered in the public records against the Company. This remains the current situation.

CocoGrove – The nature of the litigation was for breach of a lease agreement. This case is concluded with a judgement against the Company in July 2010 for $84,393 plus 6% interest. There have been no efforts to seek collection of this judgement. Management intends to settle this judgement when it is in a financial position to make a payment.

Note 10. Subsequent Events

On April 16, 2019, holders of two convertible debentures exercised their conversion options on convertible debentures amounting to $265,825, in exchange for 2,280,750 shares of common stock.

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

INTRODUCTORY STATEMENT

The following discussion should be read in conjunction with our condensed consolidated financial statements and the notes to those consolidated financial statements that are included elsewhere in this Report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. See “Forward-Looking Statements.”

RESULTS of OPERATIONS

Results of Operations for the Three Months ended March 31, 2019 Compared to the Three Months ended March 31. 2018

Revenue

For the three months ended March 31, 2019 and 2018, we generated no revenue.

General and Administrative Expense

General and administrative expense increased by $8,395 or 4.2% to $209,024 for the three months ended March 31, 2019 from $200,629 for the three months ended March 31, 2018.

The $8,395 increase in general and administrative expenses was primarily due to increases in the following categories:


	·	$11,935 for professional fees due to the added expense of our registration and other corporate matters,
	·	$488 net in other general and administrative expenses, and
	·	$972 for travel and entertainment a result of the Company renewing its efforts to secure both customers and additional financing.

The foregoing increases were partially offset by a $5,000 syn-gas fee incurred in 2018 that did not repeat in 2019

Other Expense

Other Expense increased by $3,452 to $4,896 for the three months ended March 31, 2019 from $1,444 for the three months ended March 31, 2018 primarily due to an increase in interest expense.

Net Loss

Net Loss increased by $11,847 or 5.9% to $213,920 for the three months ended March 31, 2019 from $202,073 for the three months ended March 31, 2018. This increase was attributable to the increase in interest and other expenses as discussed.

LIQUIDITY and CAPITAL RESOURCES

We had $0 cash and a working capital deficit of $3,922,448 at March 31, 2019. Our operating and capital requirements in connection with supporting our operations will continue to be significant. Since inception, our losses from operations and working capital requirements have been satisfied through the deferral of payment for services performed by our founders and related parties discussed more fully below.

We have sustained operating losses since our inception. At March 31, 2019, we had an accumulated deficit of $11,230,224. The Company cannot predict how long it will continue to incur further losses or whether it will ever become profitable as this is dependent upon the reduction of certain expenses and success in obtaining project contracts, among other things. These conditions raise substantial doubt about the entity’s ability to continue as a going concern.

We have satisfied our cash and working capital requirements in the three months ended March 31, 2019, through the support of an affiliate who paid our operational expenses on our behalf, the issuance of convertible loans and the sale of our stock. During 2019, the expenses paid by an affiliate on our behalf totaled $102,594. During the three months ended March 31, 2019, the Company sold 200,000 common shares at $0.16 per share or $32,000 and issued $98,000 in convertible loans. The holders of the convertible loan instrument have the option to convert these loans into common stock at a conversion price of $0.05 per share.

The Company has determined that these conversion options are beneficial for a full discount. These convertible debentures are presented as loans payable in the financial statements. The transaction price for these loans payable reflects the fair value of the instruments issued.

Comparison of Cash Flows for the Three Months Ended March 31, 2019 (2019) and March 31, 2018 (2018)

Cash Flows from Operating Activities

We used $130,000 of cash used in our operating activities in 2019 compared to $116,642 used in 2018. The increase of $13,358 is primarily due to $11,847 of working capital used for the increase in net loss in the current period compared to the same period one year ago and due to $2,325 of working capital used for the increase in prepaid expense, partially offset by a $727 increase in accounts payable and accrued expenses.

Cash Flows from Investing Activities

We received $0 cash provided by our investing activities in 2019 compared to $116,642 provided in 2018. The decrease of $116,642 is due to no investing activities in the current period compared to the same period one year ago.

Cash Flows from Financing Activities

We received $130,000 and $0 in cash from financing activities in 2019 and 2018, respectively. The increase of $130,000 is due to the increase in financing though convertible loans and the sale of common shares in the current period compared to the same period one year ago.

Financial Position

Total Current Assets – At March 31, 2019 the Company had $2,325 representing advance payments for services.

PLAN OF OPERATION AND FUNDING

We have no lines of credit or other bank financing arrangements. Until we begin to generate revenues and positive cash flow, which there is no assurance, we expect that working capital requirements will continue to be funded through affiliate loans and/or further issuances of other securities. There is no assurance that we will be able to meet our working capital requirement from these possible sources. Additional issuances of equity or convertible debt will result in dilution to our current shareholders. We may not be able to secure the additional financing necessary to commercialize our products and execute our business strategy, at terms that are acceptable to us.

Our mission is to provide sustainable water production design and already commercialized systems as well as energy design and systems based on high efficiency and renewable sources, and also smart grid and storage solutions. Through a combination of the best design and configuration of AquaTech, EnergyTech and waste management assisted solutions and technologies, we believe that it is possible to create a completely self-sufficient energy generation and water production system, which can be used at the same time to meet the potable water requirements as well as the electrical energy needs of businesses, communities and entire States, like California in USA and or Cape Town in South Africa.

EAWC seeks to promote green technology solutions through commissioned-based distributers and agents worldwide. EAWC anticipates using Made in Germany Green Tech, Swiss and US technologies such as: atmosphere water generators (AWGs), CO2-free energy production (steam energy generators), plasma-assisted gasification and sterilizations systems, solar-powered water purification systems, as well as those in solar and wind energy solutions which we may, when our financial condition permits, further develop ourselves.

Today we believe we have potential technology partners, technology transfer agreements and technology representation agreements in place relating to aspects of renewable energy and water supply and we believe one of our key unique selling features and capabilities is this relationship. We believe that one of our key unique selling features and capabilities is the combination of the different disciplines of water, energy and waste management.

Revenue would be generated by the sales of Engineering and Technical Consultancy Services, sales of various identified technologies, royalties from the sales of energy and/or water in certain projects.

MATERIAL COMMITMENTS

Employment Agreements

The Company entered into employment agreements with Mr. Hofmeier, its President, Chief Executive Officer and Chairman of the Board, and Ms. Velazquez, its Chief Operating Officer and Vice-Chairman (together, the “Employment Agreements”), effective January 1, 2012. Under the Employment Agreements, the company agreed to pay each of Mr. Hofmeier and Ms. Velazquez an annual base salary of $125,000 during the first year and $150,000 during the second year and forward. Any increase to the annual base salary after the second year is subject to approval by the company’s Board of Directors. Each Employment Agreement has an initial term of ten (10) years and is automatically renewed for successive one-year terms unless either party delivers timely notice of its intention not to renew.

OFF-BALANCE SHEET ARRANGEMENTS

None

GOING CONCERN

The Company has yet to commercialize its products and consequently has generated no revenue, incurring operating losses since inception (June 24, 2005) totaling $11,230,224 at March 31, 2019. During the three months ended March 31, 2019, the Corporation incurred net losses of $213,920. The Company also incurred a working capital deficit of $3,922,448 at March 31, 2019.

CRITICAL ACCOUNTING POLICIES

Our critical accounting policies are set forth in Note 2 to the condensed consolidated financial statements.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

We do not expect the adoption of recently issued accounting pronouncements as discussed in Note 3 to have a significant impact on our results of operations, financial position or cash flow.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13(a)-15(e) and 15(d)-15(e)) as of December 31, 2018. This evaluation was carried out by our Principal Executive Officer and our Principal Finance Officer. Based on that evaluation, our Principal Executive Officer and our Principal Finance Officer concluded that, as of March 31, 2019, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of March 31, 2019, our disclosure controls and procedures were not effective:


	·	Inadequate segregation of duties,
	·	Limited level of multiple reviews among those tasked with preparing the financial statements,
	·	Lack of a formal internal control environment.

Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting

Our company plans to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending December 31, 2019: (i) appoint additional qualified personnel to address inadequate segregation of duties and limited reviews (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

We are unable to remedy our controls related to the inadequate segregation of duties and ineffective risk management until we receive financing to hire additional employees.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended March 31, 2019 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Internal Controls

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

ITEM 1A. RISK FACTORS

We are a smaller reporting company and are not required to provide the information under this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The Company issued the following common shares during the three months ended March 31, 2019:

200,000 common shares, for proceeds of $32,000 to pay operational expenses. The shares were issued pursuant to an exemption from registration pursuant to Section 4(a)(2) of the securities Act of 1933 (the “ 1933 Act ” ).

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

N/A

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

EXHIBIT INDEX

Incorporated by Reference

Filed or Furnished

Exhibit #

Exhibit Description

Form

Date Filed

Exhibit #

Herewith

31.1

Certification of Principal E xecutive Officer (Section 302)

31.2

Certification of Principal Financial Officer (Section 302)

32.1

Certification of Principal Executive Officer and Principal Financial Officer (Section 906)

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.


	EUROSPORT ACTIVE WORLD CORP.

Date: May 9, 2019	By:	/s/ Ralph Hofmeier
		Ralph Hofmeier
		President and Chief Executive Officer (Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Signature	Title	Date

/s/ Ralph Hofmeier	President, Chief Executive Officer, Director, and	May 9, 2019
Ralph Hofmeier	Chairman (Principal Executive Officer)

/s/ Irma Velazquez	Chief Operating Officer (Principal Financial Officer and	May 9, 2019
Irma Velazquez	Principal Accounting Officer), Director and Vice-Chairman

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