FORM 10-QSB

For the quarterly period ended: September 30, 2003

For the transition period from ________ to _________

Commission file number 0-32051

WESTSPHERE ASSET CORPORATION, INC.
(Exact name of small business issuer
as specified in its charter)

Telephone (403) 290-0264
(Issuer's telephone number)

NOT APPLICABLE
(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 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.

State the number of shares outstanding of each of the issuer's classes of common equity, as of the last practicable date:

29,564,640 shares of Common Stock, no par value, as of October 28, 2003.

Transitional Small Business Disclosure Format
(check one): Yes No X

September 30, 2003

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The accompanying notes are an integral part of these statements.

F-1

The accompanying notes are an integral part of these statements.

F-2

The accompanying notes are an integral part of these statements.

F-3

The accompanying notes are an integral part of these statements.

F-4

F-5 

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

During the three (3) month period of operations ended September 30, 2003, Westsphere and its subsidiaries generated a net loss from operations of $90,877, while net income from operations of $40,624 were realized for the same period from the previous year. The total revenue earned during the third quarter of year 2003 decreased by $105,911 to $680,025 from total revenue earned during the same period from the previous year of $785,936. This decrease in revenue was primarily due to an a significant drop in sales of equipment and supplies, partially offset by an increase in residual and interchange income. The drop in sales of equipment and supplies was due to the introduction of a new program, Rent-to-Own, whereby Westsphere's subsidiary Vencash collects monthly rent payments plus applicable taxes. The increase in residual and interchange income was due to the discovery program which was introduced in the latter part of the year 2002 and partially from sales during the year. Westsphere's gross margin has increased from 32% to 35%. Westsphere's total administrative expenses for the third quarter of 2003 increased to $330,867 from $212,836 from the previous year. Most of such increase was caused by an increase in total cost of salaries and benefits from $98,044 to a total of $158,714. The increase in salaries and benefits is due to hiring additional sales and marketing staffs to promote new marketing programs and additional administrative staffs to handle the increase in volume of transactions and paperwork There was also an increase in consulting fees from the third quarter of year 2002 from $3,588 to a total of $27,889 during the third quarter of year 2003, which was due to new management contracts to officers of the company. Other expenses also increased from the third quarter of year 2002 of $53,127 to $82,363 during the third quarter of year 2003, which was primarily due to promotion materials and increase in travel expenses to promote new programs.

During the nine (9) month period ended September 30, 2003, Westsphere and its subsidiaries generated a net loss from operations of $104,109, while net loss from operations of $56,268 were realized for the same period from the previous year. The total revenue earned for the nine (9) month period of year 2003 increased by $51,357 to $1,981,699 from total revenue earned during the same period from the previous year of $1,930,342. This increase in revenue was primarily due to a drop in sales of equipment and supplies, partially offset by an increase in residual and interchange income. The increase in residual and interchange income mainly came from the results of the discovery program which was introduced at the end of year 2002. The decrease in sales of equipment and supplies was due to a slow down in sales during the first six (6) month period and the new marketing program - Rent-To-Own which was introduced in the third quarter, whereby Westsphere's subsidiary Vencash collects monthly rent payments plus applicable taxes. Westsphere's gross margin has increased from 36% to 40%. Westsphere's total administrative expenses for the nine (9) month period of year 2003 increased to $912,813 from $761,341 from the previous year. This increase was mainly caused by an increase in total cost of salaries and benefits from $277,942 to $409,121. The increase in salaries and benefits is due to the hiring of additional sales and marketing staff to promote new marketing programs, and additional administrative staff to handle the increase in the volume of transactions and paperwork. There was also an increase in consulting fees from $65,270 for the nine (9) month period of the year 2002 to $114,565 during the nine (9) month period of year 2003, which is due to new management contracts to officer of the company commencing April 1, 2003. Other expenses also increased from $202,610 for the nine (9) month period of year 2002 to $211,315 for the nine (9) month period of year 2003, which was primarily due to promotional materials and travel expenses to promote new programs.

Westsphere and its subsidiaries currently generate sufficient cash flow to cover all of its consolidated operating expenses. During the three month period of operations ended September 30, 2003, Westsphere's subsidiary Vencash raised $36,668 by way of a demand loan from an existing shareholder of Westsphere, with interest accruing at the rate of 15% per annum on the outstanding balance. The purpose of the loan was to cover a Vencash short term payable.

In order to grow Westsphere's businesses of ATM machines, Financing/Leasing and POS machines, Westsphere is dependent upon private placements, loans and/or joint venture arrangements. Westsphere's profit is expected to be generated by the surcharges collected from ATM machines, the sale of ATM machines, sale of POS machines and the collection of Finance/Lease charges.

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During the nine (9) month period ended September 30, 2003, Westsphere's total assets decreased to $1,677,250 from $1,711,112 as at December 31, 2002. This decrease is primarily due to decrease in inventory on hand. As of September 30, 2003, Westsphere's current liabilities totaled $525,016 and consisted of accounts payable of $124,898 to suppliers for the purchase of ATM machines and POS machines, accounts payable to related parties in the amount of $234,523, a bank loan in the amount of $165,321 and $274 due for deposits payable. Long-term liabilities as at September 30, 2003 consist of $107,104 in convertible debentures, $244,858 in shareholders loan and non-current lease obligations of $8,947.

Shareholders' equity as of September 30, 2003 was $781,948, inclusive of an accumulated loss from operations of $794,946, as compared to shareholders equity of $721,369 as of December 31, 2002. Total issued and outstanding share capital as of the period ended September 30, 2003 was 29,564,640 common shares as compared to a total of 28,568,140 common shares as of December 31, 2002.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Within 90 days prior to the date of this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon the foregoing, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures are effective in connection with the filing of this Quarterly Report on Form 10-Q for the quarter ended September 30, 2003.

There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any significant deficiencies or material weaknesses of internal controls that would require corrective action.

Prior to the filing date of this quarterly report, the Company had not adopted a complete set of written policies, controls and procedures. The Company is now developing such written document and expects that in the process of such undertaking it will discover internal control policies and practices that the Company should implement and follow that are not part of its current practice.

None. 

ITEM 2. CHANGES IN SECURITIES

None.

None.

None.

On April 1, 2003, Westsphere entered into a written agreement with Douglas MacDonald to continue to serve as Westsphere's President and Chief Executive Officer for two years. Pursuant to the terms of this agreement, Mr. MacDonald will be paid $13,187 per year, payable in twelve equal monthly installments. Mr. McDonald will receive additional compensation under Westsphere's Executive Compensation/Bonus Plan. Mr. MacDonald will also receives full medical, dental and health benefits paid by Westsphere and an expense account.

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Mr. MacDonald and his corporation, MacDonald & Associates Gaming Specialists Inc. also entered into agreements with Westsphere's subsidiaries, Westsphere Financial Ltd. and Vencash Capital Corporation, to provide Mr. MacDonald's services of Chief Executive Officer to such subsidiaries for two years. Vencash Capital Corporation will pay Mr. MacDonald's corporation $32,967 per year in twelve equal installments, along with an expense account and participation in the Vencash Executive Compensation/Bonus Plan. Westsphere Financial Ltd. will pay Mr. MacDonald's corporation $28,571 per year in twelve equal monthly installments, an expense account, participation in Westsphere Financial Ltd's Executive Compensation/Bonus Plan and $110 per month in an office accommodation and reimbursement for telephone, facsimile and internet services supplied to Westsphere Financial Ltd. by Mr. MacDonald's corporation. Westsphere Financial Ltd. will also provide Mr. MacDonald a vehicle allowance of $0.33 per kilometer, full medical, dental and health benefits and a living accommodation while working in the Calgary area in an amount mutually acceptable to all parties.

1. Exhibits - See Exhibit Index below.
2. Reports on Form 8-K - none.  

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 authorized.

WESTSPHERE ASSET CORPORATION, INC. 

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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