Washington, D.C. 20549

                                   FORM 10-QSB

     ACT OF 1934

                  For the quarterly period ended March 31, 2001


             For the transition period from _________ to _________.

                         Commission file number 1-12293

                               ESOFTBANK.COM INC.
        (Exact name of small business issuer as specified in its charter)

         Nevada                                              87-0394313
-------------------------------              -----------------------------------
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or Organization)

                  Flat A, United Plaza, 5022 Binhe Main Street
                      Futian District Shenzhen, PRC 518026
                    (Address of principal executive offices)

                (Issuer's Telephone Number, including Area Code)

         (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  Exchange  Act of 1934  during the past 12 months (or
for such shorter  period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]  No [_]


Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practical date.

Common Stock, $.001 Par Value - 12,920,000 shares as of May 22, 2001

                      ESOFTBANK.COM, INC. and Subsidiaries

                                                                       Page No.
Part I.  Financial Information

Item 1.    Financial Statements (Unaudited)

          Condensed consolidated balance sheets--March 31, 2001

          and December 31, 2000                                               3

          Condensed consolidated statements of operations--

          Three months ended March 31, 2001 and 2000                          4

          Condensed consolidated statements of cash flows--

          Three months ended March 31, 2001 and 2000                          5

          Notes to condensed consolidated financial statements--

          March 31, 2001                                                      6

Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results Of Operations                                           8

Part II.  Other Information

Item 1.   Legal Proceedings                                                  13
Item 2.   Changes in Securities                                              13
Item 3.   Defaults Upon Senior Securities                                    13
Item 4.   Submission of Matters to a Vote of Security Holders                13
Item 5.   Other Information                                                  13
Item 6.   Exhibits and Reports on Form 8-K                                   13

Signatures                                                                   14


Item 1. Financial Statements

                      Condensed CONSOLIDATED BALANCE SHEETS
                      March 31, 2001 and December 31, 2000

                                                       December 31         March 31,
                                                          2000         2001          2001
                                                      (Unaudited)         (Unaudited)
                                                          Rmb           Rmb           US$
                                                       -----------    ---------    -----------

Cash                                                    3,221,718     1,567,408      188,845
Accounts receivable                                       640,900     1,834,980      221,082
Deposits and other                                      1,000,271       646,561       77,899
Advances to employees                                     427,395       461,699       55,626
Costs and estimated earnings in excess of
billings on uncompleted contracts                         207,944       315,684       38,034
Due from a related party                                       --        95,352       11,488
                                                       -----------   -----------   ----------
          TOTAL CURRENT ASSETS                          5,498,228     4,921,684      592,974
                                                       -----------   -----------   ----------
 Long-term investment                                   2,800,000     2,800,000      337,349
 Product development costs, net                           852,995       924,823      111,425
 Fixed assets                                           2,929,976     2,784,636      335,498
 Other                                                    265,068        71,453        8,609
                                                       -----------   -----------   ----------
          TOTAL NONCURRENT ASSETS                       6,848,039     6,580,912      792,881
                                                       -----------   -----------   ----------
          TOTAL ASSETS                                 12,346,267    11,502,596    1,385,855
                                                       ===========   ===========   ==========
  Short-term loan                                      16,000,000    16,000,000    1,927,711
  Accounts payable                                        159,900       159,900       19,265
  Accrued expenses                                             --            --           --
     Salaries,wages and other compensation                669,171     1,102,407      132,820
     Employee frings benefits                             635,988       694,633       83,691
     Taxes                                                355,713       322,053       38,801
     Other                                              1,588,513     1,502,755      183,224
  Customer deposits                                        41,000        30,000        3,614
  Billings in excess of costs and estimated
   earnings on uncompleted contracts                       57,890       316,012       38,074
  Due to director                                       2,316,408     2,887,801      347,928
  Due to related party                                         --       200,000       24,096
                                                       -----------   -----------   ----------
          TOTAL CURRENT LIABILITIES                    21,824,583    23,233,561    2,799,224
                                                       -----------   -----------   ----------
MINORITY INTEREST                                         261,925       441,260       53,164
                                                       -----------   -----------   ----------
Common stock - Par value US$.001; issued and
  outstanding - 12,920,000 shares                        107,236        107,236       12,920
Additional paid-in capital                            52,715,431     52,715,431    6,351,257
Reserve funds                                            347,148        347,148       41,825
Accumulated deficit                                  (62,910,056)   (65,342,040)  (7,872,535)
                                                     ------------    -----------   ----------
          TOTAL SHAREHOLDERS' EQUITY  (DEFICIT)       (9,740,241)   (12,172,225)   1,466,533)
                                                     ------------    -----------   ----------
           EQUITY                                     12,346,267     11,502,596    1,385,855
                                                     ============    ===========   ==========

            See notes to condensed consolidated financial statements.




                   THREE MONTHS ENDED MARCH 31, 2001 AND 2000

                                           2000          2001          2001
                                       ------------   ------------  -----------
                                           Rmb            Rmb           US$

REVENUE                                        --      2,117,926     $ 255,172
COST OF SALES                            (371,322)    (1,443,985)     (173,974)
                                       -----------    -----------    ----------
GROSS PROFIT (LOSS)                      (371,322)       673,941        81,198
   EXPENSES                            (2,947,130)    (2,818,282)     (339,552)
                                       -----------    -----------    ----------
LOSS FROM OPERATIONS                   (3,318,452)    (2,144,341)     (258,354)
                                       -----------    -----------    ----------
  INTEREST EXPENSE                             --       (256,864)      (30,947)
  OTHER INCOME, NET                        13,021        161,535        19,462
                                       ----------     -----------    ----------
   TOTAL OTHER INCOME (EXPENSE), NET       13,021        (95,329)      (11,485)
                                       ----------     -----------    ----------
LOSS BEFORE TAXES                      (3,305,431)    (2,239,670)     (269,839)

TAXES                                          --         12,979         1,564
                                       ----------     -----------    ----------
  MINORITY INTEREST                    (3,305,431)    (2,252,649)     (271,403)
MINORITY INTEREST                         658,674       (179,335)      (21,607)
                                       ----------     -----------    ----------

NET LOSS                               (2,646,757)    (2,431,984)     (293,010)
                                       ==========     ===========    ==========

Basic and diluted net loss per share         (.21)          (.19)      $  (.02)
                                       ==========     ===========    ==========

WEIGHTED AVERAGE SHARES OUTSTANDING    12,800,000     12,920,000    12,920,000
                                       ==========     ===========   ===========

            See notes to condensed consolidated financial statements.




                   THREE MONTHS ENDED MARCH 31, 2001 AND 2000

                                                              2000              2001              2001
                                                              Rmb               Rmb               US$
                                                           -----------       -----------      -----------

Cash Flows from Operating Activities
Net income (loss)                                          (2,646,757)       (2,431,984)      $(293,010)
                                                           -----------       -----------      -----------
Adjustments  to reconcile  net income  (loss) to net
cash  provided by (used in) operating activities:
  Depreciation                                                 37,840           147,340          17,752
  Amortization of product development costs                    85,152            98,136          11,823
  Provision for losses on receivables - Customers              75,653           265,089          31,938
  Minority interest                                          (658,674)          179,335          21,607
  (Increase) decrease in
      Accounts receivable                                    (124,653)       (1,265,554)       (152,476)
      Deposits and other                                   (1,263,518)          353,710          42,616
      Costs and estimated earnings in excess of
       billings on uncompleted contracts                           --          (107,740)        (12,981)
      Advances to employees                                     8,411           (34,304)         (4,133)
  Increase (decrease) in
      Accounts payable and accrued expenses                  (233,868)          390,463          47,044
      Customer deposits                                     5,986,729           (11,000)         (1,325)
      Billings in excess of costs and estimated
        earnings on uncompleted contracts                          --           258,122          31,099
      Net repayments to director                              (33,015)               --              --
                                                            ----------       -----------      ----------
                            Total Adjustments               3,880,057           273,597          32,964
                                                            ----------       -----------      ----------
                Net Cash Provided by (Used in) Operating
                Activities                                  1,233,300        (2,158,387)       (260,046)
                                                            ----------       -----------      ----------

 Cash Flows from Investing Activities
  Capital expenditures                                       (559,675)           (2,000)           (241)
  Capitalized expenditures for product development
  costs                                                      (123,763)         (169,964)        (20,478)
  Net repayments from shareholders                          1,485,426                --              --
  Initial investment of minority shareholder                  240,000           (95,352)        (11,488)
  Other                                                       (73,196)                -               -
                                                            ----------       -----------      ----------
               Net Cash Provided by (Used In) Investing
               Activities                                     968,792          (267,316)        (32,207)
                                                            ----------       -----------      ----------
Cash Flows from Financing Activities
  Net borrowings from SiTech Holding                        1,508,161           200,000          24,096
  Net short term borrowings                                 5,144,995                 -               -
  Net borrowings from director                                      -           571,373          68,843
  Capital contributions                                       207,108                 -               -
                                                            ----------       -----------      ----------
                Net Cash Provided by Financing Activities   6,860,264           771,393          92,939
                                                            ----------       -----------      ----------
 Net Increase (Decrease) in Cash                            9,062,356        (1,654,310)       (199,314)

 Cash, Beginning of Period                                    629,351         3,221,718         388,159
                                                            ----------       -----------      ----------

 Cash, End of Period                                        9,691,707         1,567,408       $ 188,845
                                                            ==========       ===========      ==========

            See notes to condensed consolidated financial statements.



                                 March 31, 2001

NOTE 1 - Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements.

The Company also  believes  that the interim  financial  statements  contain all
adjustments  necessary for a fair  presentation  of the results for such interim
periods. All of these adjustments are normal recurring adjustments.  The results
of  operations  for interim  periods do not  necessarily  predict the  operating
results for the full year.  The  consolidated  balance  sheet as of December 31,
2000 has been derived from audited financial statements but does not include all
disclosures required by generally accepted accounting principles as permitted by
interim reporting  requirements.  The information included in this report should
be read in conjunction  with  Management's  Discussion and Analysis of Financial
Condition  and Results of  Operations,  the  audited  financial  statements  and
related  notes  included  in the  Company's  2000 Form  10-KSB  and the  audited
financial statements in the Form 10-KSB.

For further  information,  refer to the  consolidated  financial  statements and
footnotes thereto included in the Company's annual report on Form 10-KSB for the
year ended December 31 2000.




On May 29,  2000 the  Company  entered  into a  one-year  credit  facility  with
Shenzhen  Commercial Bank for RMB 16 million at 5.3125%.  The credit facility is
secured by shares in the Company owned by Dr. Lan,  director and  shareholder of
the Company.


Item 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS of Financial Condition and Results
        of Operations

Forward-Looking Statements

   The following  presentation  contains  forward-looking  statements within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the  Securities  Exchange Act of 1934, as amended.  These  statements are
based on our current  expectations and relate to anticipated  future events that
are not  historical  facts,  such as our business  strategies and their intended
results.  Our actual results could differ materially from those set forth in the
forward-looking  statements  as a result  of (i)  changes  in  general  economic
conditions,  (ii) changes in the  assumptions  used in making these  statements,
(iii) our lack of a long-term operating history, (iv) competition generally, and
in the technology sector in particular,  (v) our ability to attract, hire, train
and retain  competent  personnel in a variety of functions,  (vi) our ability to
raise sufficient capital to fund our expansion, and (vii) our ability to attract
sub-contractors, software engineers, development teams to our website, and setup
a nation-wide collaborative platform for software outsourcing in China.


   ESOFTBANK.COM,   Inc.   is  a   Chinese   online   software   development   &
sub-contracting services provider. We offer a wide range of value-added services
including  IT  consulting,  project  outsourcing,  quality  control and software
releasing.  Our focus is on various e-commerce,  network management and resource
control   systems  for  business  and  government   enterprises.   Our  website,
HTTP://,  is a registry  for  Chinese  web page  designers  and
e-commerce  developers,  as well as institutions requiring the services of these
people,  on which we provide a  cost-efficient  platform for job  exchanges  and
assignments.  It is an interactive  and integrated  virtual  software  community
offering technical databank,  knowledge exchange,  job subcontracting,  software
testing and support services. Through the website, we offer independent software
engineers a source of business  opportunities and web space, while companies are
able to select from a variety of software engineers and software companies.  Our
revenues are derived from commissions on transaction volume on the platform,  as
well as handling fees and service charges for software engineering and technical
support services. Our headquarters are in Shenzhen, China.

   We  changed  our  company's  name from  Natural  Way  Technologies,  Inc.  to
ESOFTBANK.COM,  Inc. on March 31, 2000 when we acquired (the  "Acquisition") all
of the  issued  and  outstanding  shares of World  Concept  Development  Limited
("WCD").  WCD  owns  the  software   development  and  Internet-based   software
subcontracting   platform   operations   conducted   in  China  under  the  name

   The  Acquisition  has  been  accounted  for  using  the  purchase  method  of
accounting as a reverse  acquisition,  whereby the company issuing its shares to
effect a business  combination  is determined to be the acquiree in the business
combination.  This occurs when the  shareholders  of the issuer have less than a
majority  of  voting  control  of  the  combined   entity.   The  company  whose
shareholders  retain the  majority  voting  interest in the  combined  entity is
presumed the acquirer.  In the Acquisition,  the  then-existing  shareholders of
Natural Way retained a 27% voting  interest in the combined entity on completion
of the Acquisition. Accordingly, WCD is deemed to be the acquirer and the assets
of Natural Way are required to be fair valued at acquisition. As Natural Way had
no assets (other than  obligations due from a shareholder) or operations  during
1999 and 2000 (prior to March 31st), no fair value adjustments were required and
there are no changes to the WCD  financial  statements  that would require a pro
forma  analysis.  Additionally,  because WCD is deemed to be the  acquirer,  the
historical  financial  statements of Natural Way (now  ESOFTBANK.COM  Inc.) have
been  restated,  and  now  reflect  the  historical  operations  of WCD  and its

     SiTech Hainan Ltd.  (Haikou) is the only company that existed prior to 2000
that is reflected  in our  consolidated  financial  statements.  WCD,  ESOFTBANK
Shenzhen and Beijing  were formed in the fourth  quarter of 1999 and only became
operational  in the first quarter of 2000.  While for the first quarter of 2001,
revenues come from WCD and ESOFTBANK Shenzhen, Beijing, Haikou.


   The  business of  ESOFTBANK.COM  is  currently  conducted  in  Renminbi,  the
currency of China ("RMB"),  which for purposes of this section and our financial
statements are converted at an exchange rate of $1.00 = RMB 8.30.

Results of Operations

   We had revenues of $255,172 from operations during the first quarter of 2001,
compared to $0 for the same periods of 2000,  when we put all our resources into
developing our outsourcing  platform  (,  The increased
revenues over the respective periods of 2001 reflect the services that ESOFTBANK
Shenzhen,  Beijing, and Haikou provided to Shenzhen Huawei Technologies Co. Ltd.
(hereinafter  referred to as "Huawei")  under a $534,939  service  contract with
Huawei, of which $207,871 was completed and billed in the first quarter of 2001.
Other  projects,  including  several  B2B  website  projects  in Hong Kong which
generated   (  and  local  government)  approximately  $28,431  in
revenues  and a project  from the United  States  that  generated  approximately
$18,869 in revenues.

     We  believe  that  our  current   contracts  signal  the  growing  software
outsourcing and e-commerce market that our business model is viewed favorably in
China and has the  potential  to  compete  in both  domestic  and  international
markets. We also expect to generate revenues from our international expansion.

     Our cost of sales were $173,974 in the first  quarter of 2001,  compared to
$44,738 for the  corresponding  period of 2000. The increases  resulted from our
being  engaged in more  projects  than last year,  increased  salaries,  and the
continued  development  of our new platform  operations.  Salaries for the first
quarter of 2001  increased  over the same  period of 2000  primarily  because we
hired more software  programmers and because of increasing  salary levels of our
incumbent  programmers.  Gross margin as a percentage  of sales was 31.5% in the
first quarter of 2001

   Our selling  and  administrative  expenses  ("SGA")  decreased  by $15,524 to
$339,552 in the first quarter of 2001 from $355,076 in the comparable  period of
2000.  The decrease is due to increases in staffing and marketing  efforts since
the third  quarter of 2000,  management  has also imposed  stricter  controls on
advertising  expenses.  We expect  these  controls to continue  contributing  to
decreasing SGA expenses in the future and in an effort to make our  distribution
system  more  efficient,  we have  also  established  strategic  alliances  with
established  companies  that will assist us in  distributing  our services.  See
"Recent Developments."

   We incurred interest expense of $30,947 for the first quarter of 2001. We had
no interest expense for the first quarter of 2000. We incurred  interest expense
on our short-term loan from the Bank.

   Other income,  net consist of recovery of prior  expenses,  foreign  currency
gain or losses and miscellaneous  income.  For the first quarter of 2001, we had
other income of $19,462 compared to $1,569 for the corresponding period of 2000,
principally reflecting reduced foreign currency losses and miscellaneous income.

   Our income taxes increased to $1,564 for the first quarter of 2001. We had no
tax liability for the corresponding period of the prior year. We incurred income
tax expenses,  even though we had an operating  loss because income taxes in the
People's Republic of China are a function of gross sales and not of net income.

   The minority  interest  represents  the 20%  interest in eSoftBank  (Beijing)
Software  Systems  Co. Ltd. and the 47.6% of SiTech Hainan Ltd. not owned by the


   We incurred a loss from  operations for the first quarter of 2001 of $258,354
and a net loss of $293,010  compared to an operating  loss of $399,813 and a net
loss of  $318,887  of the  same  period  of  2000,  a  decrease  in the net loss
of$25,857.  The decreased operating losses in the first quarter of 2001 over the
first quarter of 2000 were due to our incomes from  projects are growing  faster
than our cost.  We believe  that these  trends  will  continue  as our  revenues
increase and expenses decrease.  We also expect that our operations from being a
software outsourcing services provider and subcontracting  platform will produce
additional  revenues  and,   ultimately,   profitability.   Notwithstanding  our
expectations,   however,  there  is  no  assurance  that  we  will  ever  become



      We  believe  that  we are  well  positioned  for  growth  in  the  rapidly
developing  information technology ("IT") industry in China and internationally.
Our web site is currently  visited and utilized by individuals  and companies in
Beijing, Shenzhen, Hainan and other cities in China and our outsourcing platform
has been accepted by Chinese  software  venders and buyers.  Approximately,  300
projects were traded on our platform in 2000 but we only recorded those projects
which our employees are involved and provided  value-added service in our annual
audit report of 2000.

      There are three  other  types of  projects  from which we do not  generate
revenues,  the first are projects where we serve as a middle-man,  and introduce
external IT software  engineers to  outsourcing  project owners  (clients).  The
client will make payment  directly to the  external IT  engineers  and we do not
charge a commission in order to attract more IT engineers and projects.  Second,
we split some  projects  into small  packages and  recommend  these  packages to
external IT  engineers  without any  commission;  and third  direct  transaction
signed between external IT engineers and outsourcing  project owners.  The total
annual  amount  for these 3 types of  projects  in 2000 was  $796K  (unaudited),
managed by ESOFTBANK and finished by a third party, $995K(unaudited), managed by
ESOFTBANK and be outsourced  to a third party) and $1,721K  (unaudited,  managed
and  finished by a third  party)  respectively.  And we are  confident  with the
functioning of our project management platform,  external IT engineers will turn
to use our  service  and IT tools,  while  outsourcing  project  owners  will be
attracted to our offline program  management and development  services to ensure
timely,  qualified  and  efficient  outsourcing.  All these  will  produce  more
services revenues in Year 2001.

      We also  expect  that  our  revenues  will  increase  as a  result  of our
software-outsourcing     model    as    an    integration    of    our    online
software-subcontracting  platform and our onsite project  management  center. We
have already established four project management centers in China:

o    Huawei Project Management Center to provide software  outsourcing  services
     in telecommunication industry;
o    BKB Project Management Center, to access the Japanese software  outsourcing
o    Beijing  Project  Management  Center  will be  focus on  American  software
     outsourcing  market this s a department under ESOFTBANK  (Beijing) Software
     Systems Co., Ltd.;
o    SiTech Project  Management  Center  provides  e-business  solutions for the
     China  and Hong  Kong  markets.  They have  recently  developed  one of the
     largest investment e-commerce systems ( in China.

Recent Developments

   We believe that the recent developments  described below will have a positive
impact on our future results of operations.  However, there is no assurance that
these benefits will be realized or that, if realized,  these benefits will reach
the levels we anticipate.


     1. We have entered a strategic  partnership with Huawei  Technologies  Co.,
Ltd.  to  provide  software  development  services  for  the   telecommunication

Huawei  Technologies Co. Ltd. is one of the leading telecom  equipment  provides
and  one  of the  largest  network  solutions  providers  in  Asia.  Under  this
agreement,  ESOFTBANK  is required to build a  multi-layer  and  object-oriented
automatic testing platform.  The platform is primarily used to provide black box
testing  with high  automation.  It also  provides a  system-integrated  testing
platform  which has an open  interface  for various  testing tools and completes
various testing tasks such as system function  testing,  integrated  testing and
reliability testing.

We have  established  a  special  Project  Management  Center  (PMC) to  provide
software  outsourcing  services to the  telecommunication  industry,  and annual
revenue from this PMC are estimated to be over US$ 1 millions.

     2. We are  discussing  an  acquisition  for Beijing Kebao Systems Co., Ltd.
(BKB) which will  enable  ESOFTBANK  to tap the  Japanese  software  outsourcing

BKB was  formed  in 1992 by  Beijing  Computation  Center (a  Beijing  Municipal
Governmental Research Institute) and Kawasaki (KSI) Steel System Incorporations,
Japan. Its principal business is outsourcing projects from Japanese markets.

BKB has been  successful in many fields,  and had provided  customers  with many
products,  including  Network  Management  Information  System,  Bank Remittance
System,  Business Management  Information System, and Factory Automation System.
Through  their  software  developing  experience,  BKB has  accumulated a set of
software developing  standards both in developing procedure and quality control.
As the result of this endeavor, BKB has grown into a leading software developing
company in remote development and its achievements were rewarded when BKB became
the first  software  company to get the  certificate  of ISO9001  and passed the
verification of UKAS.

At present, BKB has over 60 employees, among whom 95% hold bachelors and masters
degrees. Many of these are working in Japan or have once worked in Japan. We are
confident that the technological background,  the strong sense of responsibility
of our staff and the software  developing  experience  of our teams will lead us
into a new era.

Under the draft acquisition  agreement,  ESOFTBANK will acquire a major interest
in BKB while  Beijing  Computation  Center will hold the remaining  shares.  The
expected  revenue  for BKB from  Japan  outsourcing  market  should be over US$1

     3. We are also  negotiating  with Hunan  Xiangyou  Technology  Co., Ltd. to
establish a joint software  development  center to provide software  outsourcing
services for the China Post Bureau

In 2000,  ESOFTBANK (Shenzhen) Networks Co., Ltd. purchased a 2.67% equity share
(1.8 millions  common shares) in Hunan Xiangyou  Technology  Co., Ltd. for about
$337,000.  Xiangyou  Technology  plans  to be  listed  on the  Shanghai's  Stock
Exchange  at the end of this year.  We believe  that we can  leverage  our joint
development  center with Xiangyou  Technology into a broader  technology base in
telecommunications and e-post services and generate stable revenues from our new
business model of the Project Management Center.

     4.  ESOFTBANK  Beijing  will  focus on the  American  software  outsourcing
market.  It currently has a business  partnership with  ConnectedBrand  (a media
company in Silicon  Valley) and US Technical (a  aero-consultant  company in Los
Angeles).    ESOFTBANK   (Beijing)   Software   Systems   Co.,   Ltd.   provides
web-development services for ConnectedBrand,  and database transfer services for
US Technical.

Liquidity and Capital Resources

At the end of the first  quarter of 2001,  we had cash of $188,845 and a deficit
in working capital of $2,206,250, in contrast to cash of $1,167,675 a deficit in
working  capital  of  $284,431at  the end of the  first  quarter  of 2000.  This
decreased our cash and decrease in working  capital  resulted from a combination
of  our  investment  in  Hunan  Xiangyou   Technology   Co.,  Ltd.   ($337,349),  web site,  our OnTeam  platform  and  project  and an increase in
accounts  receivable  $221,082  from  Huawei  and other  clients.  (See  "Recent


   Cash  provided by (used in)  operating  activities  decreased  by $408,636 to
$260,046  used in  operating  activities  for the  first  quarter  of 2001  from
$148,590  provided by operating  activities for the first quarter of 2000.  This
change in attributable to a decline in net income and an increased  depreciation
and amortization which was partially offset by changes in current accounts.

   Net cash used in  investing  activities  increased  to $32,207  for the first
quarter of 2001 from net cash  provided  of  $116,722  for the first  quarter of
2000.  This  increase is  attributable  to  increased  expenditures  for product
development  and an advance from a related party which was  partially  offset by
reduced capital expenditures and no repayment of shareholder loans.

   There was  $826,538 of cash  provided by  financing  activities  in the first
quarter of 2000, compared to $92,939,  of cash provided by financing  activities
in the first quarter of 2001, all of which were from  borrowings from a director
and a related party.

      Our business is now generating  more revenues from our project  management
centers.  However,  management is now in the process of raising $534,940 capital
from investors in China, and believe that this funding will enable us to develop
our  business  and meet some of our  operating  cash needs.  Under the terms and
conditions  of a credit  facility  between  ESOFTBANK  Shenzhen and the Shenzhen
commercial bank, on June 30, 2000,  ESOFTBANK  Shenzhen  borrowed $1.928 million
from the bank at an interest rate of 5.3125% and a term of one year. The loan is
collateralized  by 3,193,660 of our shares issued to one of our principals,  and
the bank has  recently  agreed to renew  the loan to two  years  loan to May 29,

However, based on the current level of expenditures, it will be necessary for us
to seek additional funding over the next twelve months. Without such funding, we
will be unable to implement our business plan.



Item 1. Legal Proceedings.


Item 2. Changes in Securities and Use of Proceeds.


Item 3.  Defaults Upon Senior Securities


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


Item 5.  Other Information


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



Reports on Form 8-K




   In  accordance  with the  requirements  of the Exchange  Act, the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly

                                  , Inc.

Dated: May 22, 2001                        By: /s/ Dr. Hongbing Lan
                                              Dr. Hongbing Lan
                                              Chief Executive Officer

Dated: May 22, 2001                        By: /s/ Liao Qianzhi
                                               Liao Qianzhi
                                               Principal Accounting Officer