31.12.2010 - YEARLY REPORT 2010
Dear shareholders,
Report schedule
For the last few years we have been publishing company reports here on the website. The report published last year on December
31st 2009 included a summary of the company's activities during the previous years. During the year 2010, an intermediate report was
published on August 30th 2010. Hereunder is the year-end 2010 report dated December 31st 2010.
How to follow the company
Because our shareholders come from the Americas, Asia, Africa and Europe, reports are published mostly in English, that being the
most common language spoken. If you do not understand English, you will find a translation button, in the top right hand corner of this
page, that offers translation into the major world languages. You will also find the usual Facebook button where you can ask any
questions, in any language, and receive smaller activity updates we publish between reports. All Facebook status updates are auto-
tweeted to the Twitter 'eurhold' page. In addition, each project has its own web-page and Facebook and Twitter pages, with some
projects such as Fit-Chat and Paqlite being on YouTube too. Video will increasingly be featured on our websites in 2011. We also have
an increasing presence for the projects on LinkedIn, thanks to their new formats for business. Furthermore, the undersigned is a
registered member of the principal social media sites in China (RenRen and Ushi), Russia (vkontakte), and Germany (MeinVZ and
Xing), plus others detailed at eurasian-holdings.com/Hpeople. All these platforms are accessible using the major languages.
Mission
I want to use this report to comment in a few lines on how certain events have marked the evolution of the company. Like many
startups, the company has had good moments and bad, but unlike many startups, it is still very much alive. In fact I have rarely been so
enthusiastic about it, because it is finally coming together into a collection of activities at the crossroads of sociability and health.
Share quotation
You will recall that the company's business model at foundation was to package together a number of unconnected property projects
and technologies that had been brought to us by shareholders, with the intention of putting them under a single corporate structure that
could be listed on a share-trading exchange. The share quotation would allow shareholders to reduce or exit their position by selling
shares to the public. That was the original business model, for which we designed a classic holding company. After spending the first
2 years launching the basic activities of the company, we initiated the process of obtaining a share-quotation. However, after an
immense amount of work, we had to suspend our efforts to obtain a quotation for the shares of the company in the USA, Germany,
Switzerland or the UK. There was just no longer a market for public share issues of small companies with short operating and
profitability histories. And merging with a dormant listed shell company in the US, where history requirements were less demanding,
became prohibitively costly because of high demand for such shell companies from new buyers such as Chinese entrepreneurs, and
new legal requirements introduced after the well-known accounting scandals, and a general shift by the finance industry away from
small-capitalization situations towards more exotic financial instruments. Much of the venture capital industry was increasingly
preferring private transactions. Eurasian's original business model was based on obtaining an early market quotation of the
company's shares that would provide share liquidity for investors through share sales, because obviously the time needed for our
startups to reach profitability was going to be several years. A quoted share would also allow development funding to be raised. This
"quotation strategy" was totally feasible when the company was founded. Today, however, liquidity can only be provided by trading
shares privately between shareholders or with new investors. The company has been acting as a facilitator for such transactions.
Nonetheless, beyond such ad hoc trading of shares, our primary shareholder strategies remain those of buying back shares into our
own treasury or via new strategic partners prepared to buy out part of the existing shareholder base.
Financial crisis
After showing promising growth in 2007 and early 2008, our industrial sales suffered from the financial crisis and it will be 2011 before
sales can be resumed. The crisis caused customers to cancel programs. Some customers went out of business. When there is a
crisis, the first thing customers do is shrink to their traditional core business and cancel new programs, especially those involving new
product ideas. We also had time-consuming litigation in several projects as partners tried to re-arrange their commitments.
Complex structure
To be ready for share quotation and commercial development, we had created a corporate structure with numerous subsidiaries and
participations in different countries. Such structures require a lot of administration and accounting work and this is acceptable when
everything is growing. But as financial and legal difficulties increased with the financial crisis, this structure became a costly dead
weight and cash drain. Furthermore, we had been advised to set up the European base in Zug, because of its holding company
legislation, but this in fact only created costs and complications because of language and location, without adding any benefit for
operations. Companies are easy to create but difficult to unwind, so we have had almost three years of un-structuring to do, which we
hope will soon be finished. This will also free up management time for operations. During the next weeks the company's base will be
moved, most likely to the Geneva region, which now has similar holding legislation to Zug, and where many of our potential customers
have their European headquarters.
Personal
The few brief paragraphs above summarize what was in fact thousands of hours of worry and work to re-orient the company's
business-model. By end-2008 I was suffering from total burnout. I have always been extremely resistant so it took me a long time to
realize and accept what was happening. Then I thought it would just go away but of course it just got worse. In reality, I think I needed
time to admit that many of the things the founders had wanted to do with the company just were no longer possible. For weeks, we
modelled different scenarios that attempted to maintain the original business-model. Finally, it became evident that the original 'vision'
needed a re-birth. The world had changed radically, but especially so for start-ups and young companies.
Apology
The only thing I can do is to say is that I sincerely apologize to you all personally for the time I stopped communicating properly during
that difficult period.
Solutions
In 2010 we started to develop solutions. Firstly, we needed a range of new products that are more in touch with today's way of building
companies, that are more sustainable, more flexible, and that require low investment, that can be quickly launched and modified and
cost little if they fail. Secondly, administrative costs and corporate complexity had to be slashed close to zero. Thirdly, we had to
become much more active on the internet. Fourthly, we had to operate with almost no fixed costs. Fifthly, we needed to become far
more agile, creative and adventurous. Sixthly, we needed to refresh our shareholder relations. Finally I put myself through an intensive
sport and health program to become fully functional again.
These solutions are coming on stream now. My aim is that as of January 2011 we are in a position to start an aggressive sales
campaign for our new products and start to get the cash moving again. That will be good news for shareholders who want to sell their
shares, and good news for us since we haven’t had a salary since June 2008. With a share quotation impossible in the short-term
future, our only solutions for shareholder liquidity are to buy back shares from our own cash earned from operations or to find outside
private buyers or develop and sell some of our businesses. Personally I have used up all my financial reserves in order to carry the
company during the transition period.
So this year is going to be very aggressive. You as shareholders are co-owners of the company and can contribute to the company's
operations by sending us people to contact, telling us about opportunities in your area, and making suggestions on how we can get
the business moving faster. For example, have your local cities and corporations and clubs and schools start Fit-Chats, or find buyers
and retailers for the new Paqlites™. All our businesses are suitable for institutional or corporate sponsoring, including social media
friending, advertising and event organization. As part of our re-organization, we have branded our operations under the
"CheaperSimpler" brand.
Valuation
One benefit of having reduced our overheads and having new product-lines with low fixed costs, is that we only need to have net profits
of say € 300,000 to justify a valuation of around € 4,500,000, using a standard P/E ratio of 15x net-profits. This is equivalent to a
valuation of € 1.00 per share, based on the current number of public shares issued of approximately 4,000,000 shares. The company
had a net profit of € 25,000 in 2008, a net loss of € 29,000 in 2009, and expects near to break-even in 2010, showing that overheads
and costs are essentially covered. Consequently, profits from new activities can go almost entirely to net profit. A net profit of € 300,000
should be attainable based on the interest in our products that we have seen while market-testing the last few weeks. And finally, the
company has no debt.
Feedback
If you have a question, please ask for an answer. As of today, I still have maybe 20 emails from shareholders to answer and then I will
be up-to-date. I definitely want to hear from you with your ideas or suggestions. The bigger our active network the better. Finally, please
don’t forget to interact on our various Facebook pages, because it’s a fast way of getting news and staying up-to-date. Also please click
on the individual project logos in this website and in the CheaperSimpler pages. There's plenty of information there.
Your support is always very motivating for us. We have survived a bad period. I am functioning again. The wheel turns. And after being
involved in maybe 50 start-ups over the last 30 years, I am enthusiastic about the new Eurasian businesses.
Sincerely,
EURASIAN HOLDINGS
Michael Harrop - CEO
http://www.harrop.info
Denver and Geneva, December 2010.
Dear shareholders,
Report schedule
For the last few years we have been publishing company reports here on the website. The report published last year on December
31st 2009 included a summary of the company's activities during the previous years. During the year 2010, an intermediate report was
published on August 30th 2010. Hereunder is the year-end 2010 report dated December 31st 2010.
How to follow the company
Because our shareholders come from the Americas, Asia, Africa and Europe, reports are published mostly in English, that being the
most common language spoken. If you do not understand English, you will find a translation button, in the top right hand corner of this
page, that offers translation into the major world languages. You will also find the usual Facebook button where you can ask any
questions, in any language, and receive smaller activity updates we publish between reports. All Facebook status updates are auto-
tweeted to the Twitter 'eurhold' page. In addition, each project has its own web-page and Facebook and Twitter pages, with some
projects such as Fit-Chat and Paqlite being on YouTube too. Video will increasingly be featured on our websites in 2011. We also have
an increasing presence for the projects on LinkedIn, thanks to their new formats for business. Furthermore, the undersigned is a
registered member of the principal social media sites in China (RenRen and Ushi), Russia (vkontakte), and Germany (MeinVZ and
Xing), plus others detailed at eurasian-holdings.com/Hpeople. All these platforms are accessible using the major languages.
Mission
I want to use this report to comment in a few lines on how certain events have marked the evolution of the company. Like many
startups, the company has had good moments and bad, but unlike many startups, it is still very much alive. In fact I have rarely been so
enthusiastic about it, because it is finally coming together into a collection of activities at the crossroads of sociability and health.
Share quotation
You will recall that the company's business model at foundation was to package together a number of unconnected property projects
and technologies that had been brought to us by shareholders, with the intention of putting them under a single corporate structure that
could be listed on a share-trading exchange. The share quotation would allow shareholders to reduce or exit their position by selling
shares to the public. That was the original business model, for which we designed a classic holding company. After spending the first
2 years launching the basic activities of the company, we initiated the process of obtaining a share-quotation. However, after an
immense amount of work, we had to suspend our efforts to obtain a quotation for the shares of the company in the USA, Germany,
Switzerland or the UK. There was just no longer a market for public share issues of small companies with short operating and
profitability histories. And merging with a dormant listed shell company in the US, where history requirements were less demanding,
became prohibitively costly because of high demand for such shell companies from new buyers such as Chinese entrepreneurs, and
new legal requirements introduced after the well-known accounting scandals, and a general shift by the finance industry away from
small-capitalization situations towards more exotic financial instruments. Much of the venture capital industry was increasingly
preferring private transactions. Eurasian's original business model was based on obtaining an early market quotation of the
company's shares that would provide share liquidity for investors through share sales, because obviously the time needed for our
startups to reach profitability was going to be several years. A quoted share would also allow development funding to be raised. This
"quotation strategy" was totally feasible when the company was founded. Today, however, liquidity can only be provided by trading
shares privately between shareholders or with new investors. The company has been acting as a facilitator for such transactions.
Nonetheless, beyond such ad hoc trading of shares, our primary shareholder strategies remain those of buying back shares into our
own treasury or via new strategic partners prepared to buy out part of the existing shareholder base.
Financial crisis
After showing promising growth in 2007 and early 2008, our industrial sales suffered from the financial crisis and it will be 2011 before
sales can be resumed. The crisis caused customers to cancel programs. Some customers went out of business. When there is a
crisis, the first thing customers do is shrink to their traditional core business and cancel new programs, especially those involving new
product ideas. We also had time-consuming litigation in several projects as partners tried to re-arrange their commitments.
Complex structure
To be ready for share quotation and commercial development, we had created a corporate structure with numerous subsidiaries and
participations in different countries. Such structures require a lot of administration and accounting work and this is acceptable when
everything is growing. But as financial and legal difficulties increased with the financial crisis, this structure became a costly dead
weight and cash drain. Furthermore, we had been advised to set up the European base in Zug, because of its holding company
legislation, but this in fact only created costs and complications because of language and location, without adding any benefit for
operations. Companies are easy to create but difficult to unwind, so we have had almost three years of un-structuring to do, which we
hope will soon be finished. This will also free up management time for operations. During the next weeks the company's base will be
moved, most likely to the Geneva region, which now has similar holding legislation to Zug, and where many of our potential customers
have their European headquarters.
Personal
The few brief paragraphs above summarize what was in fact thousands of hours of worry and work to re-orient the company's
business-model. By end-2008 I was suffering from total burnout. I have always been extremely resistant so it took me a long time to
realize and accept what was happening. Then I thought it would just go away but of course it just got worse. In reality, I think I needed
time to admit that many of the things the founders had wanted to do with the company just were no longer possible. For weeks, we
modelled different scenarios that attempted to maintain the original business-model. Finally, it became evident that the original 'vision'
needed a re-birth. The world had changed radically, but especially so for start-ups and young companies.
Apology
The only thing I can do is to say is that I sincerely apologize to you all personally for the time I stopped communicating properly during
that difficult period.
Solutions
In 2010 we started to develop solutions. Firstly, we needed a range of new products that are more in touch with today's way of building
companies, that are more sustainable, more flexible, and that require low investment, that can be quickly launched and modified and
cost little if they fail. Secondly, administrative costs and corporate complexity had to be slashed close to zero. Thirdly, we had to
become much more active on the internet. Fourthly, we had to operate with almost no fixed costs. Fifthly, we needed to become far
more agile, creative and adventurous. Sixthly, we needed to refresh our shareholder relations. Finally I put myself through an intensive
sport and health program to become fully functional again.
These solutions are coming on stream now. My aim is that as of January 2011 we are in a position to start an aggressive sales
campaign for our new products and start to get the cash moving again. That will be good news for shareholders who want to sell their
shares, and good news for us since we haven’t had a salary since June 2008. With a share quotation impossible in the short-term
future, our only solutions for shareholder liquidity are to buy back shares from our own cash earned from operations or to find outside
private buyers or develop and sell some of our businesses. Personally I have used up all my financial reserves in order to carry the
company during the transition period.
So this year is going to be very aggressive. You as shareholders are co-owners of the company and can contribute to the company's
operations by sending us people to contact, telling us about opportunities in your area, and making suggestions on how we can get
the business moving faster. For example, have your local cities and corporations and clubs and schools start Fit-Chats, or find buyers
and retailers for the new Paqlites™. All our businesses are suitable for institutional or corporate sponsoring, including social media
friending, advertising and event organization. As part of our re-organization, we have branded our operations under the
"CheaperSimpler" brand.
Valuation
One benefit of having reduced our overheads and having new product-lines with low fixed costs, is that we only need to have net profits
of say € 300,000 to justify a valuation of around € 4,500,000, using a standard P/E ratio of 15x net-profits. This is equivalent to a
valuation of € 1.00 per share, based on the current number of public shares issued of approximately 4,000,000 shares. The company
had a net profit of € 25,000 in 2008, a net loss of € 29,000 in 2009, and expects near to break-even in 2010, showing that overheads
and costs are essentially covered. Consequently, profits from new activities can go almost entirely to net profit. A net profit of € 300,000
should be attainable based on the interest in our products that we have seen while market-testing the last few weeks. And finally, the
company has no debt.
Feedback
If you have a question, please ask for an answer. As of today, I still have maybe 20 emails from shareholders to answer and then I will
be up-to-date. I definitely want to hear from you with your ideas or suggestions. The bigger our active network the better. Finally, please
don’t forget to interact on our various Facebook pages, because it’s a fast way of getting news and staying up-to-date. Also please click
on the individual project logos in this website and in the CheaperSimpler pages. There's plenty of information there.
Your support is always very motivating for us. We have survived a bad period. I am functioning again. The wheel turns. And after being
involved in maybe 50 start-ups over the last 30 years, I am enthusiastic about the new Eurasian businesses.
Sincerely,
EURASIAN HOLDINGS
Michael Harrop - CEO
http://www.harrop.info
Denver and Geneva, December 2010.
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