10QSB 1 edform10-qsb.txt FORM 10-QSB QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB (Mark One) X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2003 TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ____________ Commission File Number 2-93277-D MEDIZONE INTERNATIONAL, INC. (Exact name of small business issuer as specified in its charter) Nevada 87-0412648 (State or other jurisdiction (IRS Employer Identification No.) of incorporation or organization) 144 Buena Vista P.O. Box 742 Stinson Beach, CA 94970 (Address of principal executive offices) (415) 868-0300 (Issuer's telephone number) At May 9, 2003, there were 158,805,387 shares of the issuer's common stock issued and outstanding. Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X] MEDIZONE INTERNATIONAL, INC. FORM 10-QSB INDEX March 31, 2003 Page Number Part I -- Financial Information Item 1 -- Financial Statements Consolidated Balance Sheets: March 31, 2003 (Unaudited) and December 31, 2002.....................1 Consolidated Statements of Operations (Unaudited): For the Three Months Ended March 31, 2003 and 2002...................2 Consolidated Statements of Cash Flow (Unaudited) For the Three Months Ended March 31, 2003 and 2002...................3 Notes to the Consolidated Financial Statements...................5 Item 2--Management's Discussion and Analysis or Plan of Operation.............8 Item 3-- Controls and Procedures..............................................9 Part II -- Other Information Item 1-- Legal Proceedings....................................................9 Item 2-- Changes in Securities and Use of Proceeds...........................10 Item 6-- Exhibits and Reports on Form 8-K....................................10 PART I -- FINANCIAL INFORMATION Item 1. Financial Statements MEDIZONE INTERNATIONAL, INC. AND SUBSIDIARIES (A Development Stage Company) Consolidated Balance Sheets
ASSETS March 31, December 31, 2003 2002 --------------------- -------------------- (Unaudited) CURRENT ASSETS Cash $ - $ 72 ------------------------------------------- Total Current Assets - 72 ------------------------------------------- PROPERTY AND EQUIPMENT (Net) 4,288 5,475 ------------------------------------------- OTHER ASSETS Receivable from affiliate, net - - ------------------------------------------- Total Other Assets - - ------------------------------------------- TOTAL ASSETS $ 4,288 $ 5,547 =========================================== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES Bank overdraft $ 261 $ - Accounts payable 606,458 598,735 Advances from shareholders 1,000 5,057 Accrued expenses 1,057,676 980,444 Notes payable 280,491 303,491 ------------------------------------------- Total Current Liabilities 1,945,886 1,887,727 ------------------------------------------- Total Liabilities 1,945,886 1,887,727 ------------------------------------------- STOCKHOLDERS' EQUITY (DEFICIT) Common stock, 250,000,000 shares authorized of $0.001 par value, 158,605,387 and 157,745,387 shares issued and outstanding, respectively 158,605 157,745 Additional paid-in capital 15,735,690 15,693,550 Deficit accumulated during the development stage (17,835,893) (17,733,475) ------------------------------------------- Total Stockholders' Equity (Deficit) (1,941,598) (1,882,180) ------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 4,288 $ 5,547 ===========================================
The accompanying notes are an integral part of these consolidated financial statements. 1 MEDIZONE INTERNATIONAL, INC. AND SUBSIDIARIES (A Development Stage Company) Consolidated Statements of Operations (Unaudited)
From Inception For the on January 31, Three Months Ended 1986 Through March 31, March 31, -------------------------------------- 2003 2002 2003 ------------------------------------------------------------ REVENUES $ - $ - $ 133,349 ------------------------------------------------------------ EXPENSES Cost of sales - - 103,790 Research and development - 21,152 2,685,788 General and administrative 95,317 120,221 13,450,771 Expense on extension of warrants - - 1,866,857 Bad debt expense - - 48,947 Depreciation and amortization 1,187 1,188 43,708 ------------------------------------------------------------ Total Expenses 96,504 142,561 18,199,861 ------------------------------------------------------------ Loss from Operations (96,504) (142,561) (18,066,512) ------------------------------------------------------------ OTHER INCOME (EXPENSES) Minority interest in loss 26,091 Other income 19,780 Gain on sale of subsidiary 208,417 Interest expense (5,914) (5,914) (918,407) ------------------------------------------------------------ Total Other Income (Expenses) (5,914) (5,914) (664,119) ------------------------------------------------------------ LOSS BEFORE EXTRAORDINARY ITEMS (102,418) (148,475) (18,730,631) ------------------------------------------------------------ EXTRAORDINARY ITEMS Lawsuit settlement - - 415,000 Debt forgiveness - - 479,738 ------------------------------------------------------------ Total Extraordinary Items - - 894,738 ------------------------------------------------------------ NET LOSS $ (102,418) $ (148,475) $ (17,835,893) ============================================================ BASIC LOSS PER SHARE $ (0.00) $ (0.00) ====================================== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 158,226,943 155,404,686 ======================================
The accompanying notes are an integral part of these consolidated financial statements. 2 MEDIZONE INTERNATIONAL, INC. AND SUBSIDIARIES (A Development Stage Company) Consolidated Statements of Cash Flows (Unaudited)
From Inception on January 31, For the Three Months Ended 1986 Through March 31, March 31, -------------------------------------- 2003 2002 2003 ----------------- ----------------- ------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (102,418) $ (148,475) $ (17,835,893) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,187 1,188 43,708 Stock issued for services - - 3,086,916 Expense for extension of warrants below market value - - 1,866,857 Bad debt expense - - 48,947 Minority interest in loss - - (26,091) Loss on disposal of assets - - 693,752 Gain on settlement of debt - - (188,510) Gain on lawsuit settlement - - (415,000) Changes in assets and liabilities: (Increase) decrease in prepaid expenses and deposits - - (48,947) Increase (decrease) in accounts payable 7,723 3,366 1,000,988 Increase (decrease) in accrued expenses 77,232 49,191 1,480,698 ------------------------ ----------------- ----------------------- Net Cash Used by Operating Activities (16,276) (94,730) (10,292,575) ------------------------ ----------------- ----------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Organization costs - - (8,904) Purchase of fixed assets - - (39,090) ------------------------ ----------------- ----------------------- Net Cash Used by Investing Activities - - (47,994) ------------------------ ----------------- ----------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Bank overdraft 261 (8) 261 Proceeds from lawsuit settlement - - 415,000 Principal payments on notes payable - - (192,774) Cash received from notes payable - - 1,129,518 Advances from shareholders - 5,337 10,344 Payment on shareholder advances (4,057) - (4,057) Capital contributions - - 421,847 Stock issuance costs - - (105,312) Increase in minority interest - - 14,470 Issuance of common stock for cash 20,000 100,000 8,651,272 ------------------------ ----------------- ----------------------- Net Cash Provided by Financing Activities 16,204 105,329 10,340,569 ------------------------ ----------------- ----------------------- NET INCREASE (DECREASE) IN CASH (72) 10,599 - CASH AT BEGINNING OF PERIOD 72 - - ------------------------ ----------------- ----------------------- CASH AT END OF PERIOD $ - $ 10,599 $ - ======================== ================= =======================
The accompanying notes are an integral part of these consolidated financial statements. 3 MEDIZONE INTERNATIONAL, INC. AND SUBSIDIARIES (A Development Stage Company) Consolidated Statements of Cash Flows (Continued) (Unaudited)
From Inception on January 31, For the Three Months Ended 1986 Through March 31, March 31, ------------------------------------------- 2003 2002 2003 ---------------------- ------------------ -------------------- SUPPLEMENTAL CASH FLOW INFORMATION CASH PAID FOR: Interest $ - $ - $ 26,483 Income taxes $ - $ - $ - NON-CASH FINANCING ACTIVITIES Stock issued for services $ - $ - $ 3,086,916 Stock issued for conversion of debt $ 23,000 $ - $ 4,139,230 Stock issued for license agreement and patent $ $ $ 693,752
The accompanying notes are an integral part of these consolidated financial statements. 4 MEDIZONE INTERNATIONAL, INC. AND SUBSIDIARIES (A Development Stage Company) Notes to the Consolidated Financial Statements March 31, 2003 and December 31, 2002 NOTE 1 - BASIS OF PRESENTATION The financial information included herein is unaudited and has been prepared consistent with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, these financial statements do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. These statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's annual report on Form 10-KSB for the year ended December 31, 2002. In the opinion of management, these financial statements contain all adjustments (consisting solely of normal recurring adjustments) that are, in the opinion of management, necessary for a fair statement of results for the interim period presented. The results of operations for the three months ended March 31, 2003 and 2002 are not necessarily indicative of the results to be expected for the full year. NOTE 2 - LOSS PER SHARE Following is a reconciliation of the numerators of the basic and diluted loss per share for the three months ended March 31, 2003 and 2002:
For the Three Months Ended March 31, 2003 2002 ------------------ ------------------ Net loss available to common shareholders $ (102,418) $ (148,475) ================= ================== Weighted average shares 158,226,943 155,404,686 Effect of dilutive securities - - ------------------ ------------------ 158,226,943 155,404,686 Basic loss per share (based on weighted average shares) $ (0.00) $ (0.00) ================== ==================
Common stock equivalents, consisting of warrants and options, have not been included in the calculation as their effect is antidilutive for the periods presented. NOTE 3 - GOING CONCERN The Company's consolidated financial statements are prepared using generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred significant losses from its inception through March 31, 2003, which have resulted in an accumulated deficit of $17,835,893 at March 31, 2003. The Company does have an established source of funds sufficient to cover its operating costs, has a working capital deficit of approximately $1,946,000, has relied exclusively on debt and equity financing, accordingly, there is substantial doubt about its ability to continue as a going concern. Continuation of the Company as a going concern is dependent upon obtaining additional capital, obtaining the requisite approvals from the FDA and/or the EU for the marketing of ozone-related products and equipment, and ultimately, upon the Company's attaining profitable operations. The Company will require a substantial amount of additional funds to complete the development 5 MEDIZONE INTERNATIONAL, INC. AND SUBSIDIARIES (A Development Stage Company) Notes to the Consolidated Financial Statements March 31, 2003 and December 31, 2002 NOTE 3 - GOING CONCERN (Continued) of its products, to establish manufacturing facilities, to build a sales and marketing organization and to fund additional losses, which the Company expects to incur over the next several years. Because ozone-generation for the purposes of interfacing with blood and blood products is regarded as a new drug delivery system, the Company is precluded from selling or distributing its drug or the Medizone Technology in the United States until after FDA approval has been granted. In order to obtain FDA approval, the Company will be required to submit a New Drug Application ("NDA") for review by the FDA and provide medical and scientific evidence sufficient to demonstrate that the drug and the Medizone Technology has been successfully used in pre-clinical studies followed by three phases of well-controlled clinical studies using human volunteer subjects. The FDA will not grant an NDA unless it contains sufficient medical evidence and data to permit a body of qualified and experienced scientists to conclude that the new drug product is safe and effective for its recommended and proposed medical uses. Historically, the FDA has held a strong bias against treating humans with ozone, due largely to issues of safety. In order to initiate the first phase (i.e., Phase I) of human clinical trials required as part of an NDA, an applicant must submit to the FDA an application for an Investigational New Drug Exemption ("IND"), which contains adequate information to satisfy the FDA that human clinical trials can be conducted without exposing the volunteer human subjects to an unreasonable risk of illness or injury. The Company submitted an IND application (assigned to the Company by its former president) to the FDA on October 6,1985, and requested FDA approval to commence human clinical trials using ozone-oxygen to inactivate HIV. The FDA deemed the IND application to be incomplete, and required the Company to conduct additional animal studies prior to commencing a large animal study and human trials. In September 1994, after not receiving responses to requests for information from the Company, the FDA inactivated the Company's IND. The Company has no present plans to commence a large animal study, which would require, as a precursor, additional small animal and laboratory work. Accordingly, there can be no assurance that the Company's IND application will ever be reopened. Until an NDA had been granted to the Company, it may not distribute ozone-generating devices, except to researchers who agree to follow FDA guidelines, and provided the devices are labeled as "Investigational Devices." Because ozone has been used to treat humans in Europe for at least 30 years, the EU is more accepting of human clinical trials of ozone therapies being conducted than is the United States. Accordingly, management believes that the Company should pursue the option of conducting human clinical trials in Europe, using stringent protocols that will meet EU standards, with a view to utilizing the results of such a trial in an effort to obtain EU approval, to market the product in Europe and to reopen the Company's FDA file. The management of the Company intends to seek additional funding which will be utilized to fund additional research and continue operations. The Company recognizes that, if it is unable to raise additional capital, it may find it necessary to substantially reduce or cease operations. The ability of the Company to continue as a going concern is dependent on its ability to successfully accomplish the plan described in the preceding paragraphs and eventually attain profitable operations. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of these uncertainties. 6 MEDIZONE INTERNATIONAL, INC. AND SUBSIDIARIES (A Development Stage Company) Notes to the Consolidated Financial Statements March 31, 2003 and December 31, 2002 NOTE 4 - STOCK TRANSACTIONS During the three months ended March 31, 2003, the Company issued 400,000 shares of common stock at $0.05 per share for total proceeds of $20,000. The Company also granted the investors warrants to purchase 400,000 shares of stock at $0.05 per share, exercisable over a two-year term. The market price of the common stock was $0.05 per share on the date of the issuance of the shares and grant of the warrants. Also during the three months ended March 31, 2003, the Company issued 460,000 shares of common stock at $0.05 per share in lieu of a note payable totaling $23,000. On February 5, 2003 and again on April 10, 2003, the Board of Directors of the Company agreed to extend the expiration date on certain outstanding warrants and options to purchase common stock as follows:
New Dates Warrants/Options Exercise Price of Expiration ---------------------- --------------------- ------------------------ 750,000 $ 0.20 July 10, 2003 250,000 $ 0.20 July 10, 2003 400,000 $ 0.15 July 10, 2003 166,666 $ 0.15 July 10, 2003 555,555 $ 0.18 July 10, 2003 250,000 $ 0.55 July 10, 2003 The following warrants were also outstanding as of March 31, 2003: Warrants Exercise Price Expiration Date ---------------------- --------------------- ------------------------ 1,000,000 $ 0.10 March 25, 2004 250,000 $ 0.10 May 22, 2004
The Company estimates the fair value of each stock award or expiration extension at the grant date or extension date by using the Black-Scholes option-pricing model pursuant to FASB Statement 123, "Accounting for Stock-Based Compensation". Under the provisions of SFAS 123, no additional expense was recorded at February 5, 2003 or April 10, 2003 under the Black-Scholes option pricing model for these warrant and option extensions. NOTE 5 - COMMITMENTS AND CONTINGENCIES The Company is subject to certain claims and lawsuits arising in the normal course of business. In the opinion of management, uninsured losses, if any, resulting from the ultimate resolution of these matters will not have a material effect on the Company's financial position, results of operations, or cash flows. NOTE 6- SUBSEQUENT EVENTS Subsequent to March 31, 2003, the Company issued 265,000 shares of common stock to a director at $0.05 per share for cash of $13,250. The Company also issued 100,000 shares of common stock to an officer for services rendered valued at $5,000. 7 Item 2. Management's Discussion and Analysis or Plan of Operation The following discussion and analysis of financial condition and results of operations should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and Notes thereto appearing elsewhere in this Quarterly Report on Form 10-QSB. Medizone International, Inc., a Nevada corporation ("Medizone") organized in 1986, is a development stage company. To date our principal business has been limited to (i) seeking regulatory approval of a precise mixture of ozone and oxygen called MEDIZONE(R) (sometimes referred to in this report as the "Drug"), and our process of inactivating lipid enveloped viruses for the intended purpose of decontaminating blood and blood products and assisting in the treatment of certain diseases; and (ii) developing or acquiring the related technology and equipment for the medical application of our products, including our drug production and delivery system (the "Medizone Technology"). The Drug is intended to be used as a therapeutic drug in humans to inactivate certain viruses, and thereby afford a treatment for certain viral diseases including Human Immunodeficiency Virus (the AIDS-related virus), Hepatitis B, Hepatitis C, Epstein-Barr, herpes and cytomegalovirus), and to decontaminate blood and blood products. Results of Operations From its inception in January 1986, Medizone International has been a development stage company primarily engaged in research into the medical uses of ozone. We have not generated, and cannot predict when or if we will generate revenues or sufficient cash flow to fund our continuing operations. Three Months Ended March 31, 2003 and 2002 There were no sales during the quarters ended March 31, 2003 or 2002. We made no expenditures for research and development in the first quarter of 2003, compared to research and development expenditures of $21,152 during the first quarter of 2002. Since inception we have spent a total of $2,685,788 for research and development. General and administrative expenses in the first quarter of 2003 were $95,317 compared to $120,221 during the first quarter of 2002. These expenses include professional fees, payroll, insurance costs and travel expenses. Interest expense accrued during the three months ended March 31, 2003 and during the three months ended March 31, 2002 was $5,914. Liquidity and Capital Resources At March 31, 2003, we had a working capital deficiency of $1,945,886 and stockholders' deficit of $1,941,598. At December 31, 2002, we had a working capital deficiency of $1,887,655 and stockholders' deficit of $1,882,180. Net cash used in operating activities during the quarter ended March 31, 2003 was $16,276. Cash of $16,204 was provided during the first quarter of 2003 primarily from the sale and issuance of common stock. During the three months ended March 31, 2002, there was net cash used in operating activities of $94,730. Cash of $105,329 was provided in the first three months of 2002 by the sale and issuance of common stock. Subsequent to the end of the quarter covered by this report, the Company sold 165,000 shares of common stock to a director of the Company for proceeds to the Company of $8,250. The Company continues to require additional funding to enable it to operate and to fund research necessary to make the appropriate regulatory application and continue operations. We expect that these funds will be provided by the sale of our securities. We recognize that, if we are unable to raise additional capital, we may find it necessary to substantially reduce, or cease operations. 8 Forward-Looking Statements and Risks Affecting the Company The statements contained in this Report on Form 10-QSB that are not purely historical are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act. These statements regard our expectations, hopes, beliefs, anticipations, commitments, intentions and strategies regarding the future. They may be identified by the use of the words or phrases "believes," "expects," "anticipates," "should," "plans," "estimates," and "potential," among others. Forward-looking statements include, but are not limited to, statements contained in Management's Discussion and Analysis of or Plan of Operation regarding our financial performance, revenue and expense levels in the future and the sufficiency of existing assets to fund future operations and capital spending needs. Actual results could differ materially from the anticipated results or other expectations expressed in such forward-looking statements for the reasons detailed in our Annual Report on Form 10-KSB for the year ended December 31, 2002 under the headings "Description of Business" and "Risk Factors." The fact that some of the risk factors may be the same or similar to past reports filed with the Securities and Exchange Commission means only that the risks are present in multiple periods. We believe that many of the risks detailed here and in our SEC filings are part of doing business in the industry in which we operate and compete and will likely be present in all periods reported. The fact that certain risks are endemic to the industry does not lessen their significance. The forward-looking statements contained in this report are made as of the date of this Report and we assume no obligation to update them or to update the reasons why actual results could differ from those projected in such forward-looking statements. Among others, risks and uncertainties that may affect our the business, financial condition, performance, development, and results of operations include: o Rigorous government scrutiny and regulation of our products and planned products; o Potential effects of adverse publicity regarding ozone and related technologies or industries; o Failure to sustain or manage growth including the failure to continue to develop new products; and o The ability to obtain needed financing. Item 3. Controls and Procedures Within 90 days prior to the date of filing this report, an evaluation was performed under the supervision and with the participation of the Company's management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-14(c) of the Exchange Act). Based on and as of the time of such evaluation, the Company's management, including the Chief Executive Officer and Chief Financial Officer, concluded that the Company's disclosure controls and procedures were effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's reports filed or submitted by it under the Exchange Act. There have been no significant changes in the Company's internal controls or in other factors that could significantly affect internal controls subsequent to the time of such evaluation. Part II -- Other Information Item 1. Legal Proceedings The following developments occurred in litigation involving the Company since the date of the Company's last report filed with the Securities and Exchange Commission. Killian vs. Medizone International, Inc., (Civil No. C014525, in the United States District Court, Northern District of California). This lawsuit was settled on April 25, 2003. In connection with the settlement, the Company and Dr. Marshall, its Chief Operating Officer, will receive a full release. Under the terms of the settlement agreement, the Company paid the plaintiffs $1,000 and agreed to post a statement on the Company's website as follows: "Medizone International has recently learned that some of the credentials claimed by William Hitt, a former director of Medizone, may not be accurate. Medizone does not endorse William Hitt or the William Hitt Center." 9 Item 2. Changes in Securities and Use of Proceeds During the three months ended March 31, 2003, the Company sold 400,000 shares of common stock to a director and his son-in-law at $0.05 per share, for gross proceeds of $20,000. We also granted these investors warrants to purchase 400,000 shares of stock at $0.05 per share, exercisable over a two-year term. Also during the three months ended March 31, 2003, the Company issued 460,000 shares of common stock at $0.05 per share in lieu of a note payable totaling $23,000. On April 11, 2003, we sold 100,000 shares to a director for $5,000 and granted the director a warrant to purchase 100,000 shares of common stock at $0.05 per share, exercisable over a two-year period. Also on April 11, 2003, we issued 100,000 shares of common stock to an officer for services rendered valued at $5,000. On May 2, 2003, we sold 165,000 shares to a director for $8,250 and granted the director a warrant to purchase 165,000 shares of common stock at $0.05 per share, exercisable over a two-year term. The shares in these transactions were sold without registration under the Securities Act of 1933, as amended, in reliance upon an exemption under the Securities Act for private sales of securities by issuers to accredited persons. The purchasers were accredited investors as that term is defined by Regulation D and related rules promulgated under the Securities Act by the Securities and Exchange Commission. The shares are restricted shares, meaning that they may not be resold or distributed by the holders in the absence of an effective registration statement or an exemption from registration under the Securities Act. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits. The following exhibits are filed herewith pursuant to Rule 601 of Regulation S-B or are incorporated by reference to previous filings. Exhibit # Description 2 Agreement and Plan of Reorganization dated March 12, 1986 (2) 3.1 Articles of Incorporation of Company (2) 3.2 Bylaws (2) 3.3 Articles of Amendment to Company's Articles of Incorporation (3) 10.1 Loan agreement with Messrs. McGrath and Watrous dated as of November 16, 1992 (4) 10.2 Loan Agreements between Medizone and John Kells, George Handel and John Pealer, executed as of June 11, 1993 (and promissory notes) (4) 10.3 Agreement for Sale and Purchase of Shares in Medizone New Zealand Limited between Richard G. Solomon and Medizone International, Inc., dated June 22, 1995 (5) 10.4 Shareholders' Agreement relating to Medizone New Zealand Limited between and among Solwin Investments Limited, Medizone International, Inc. and Medizone New Zealand Limited, dated June 22, 1995 (5) 10.5 Licensing Agreement between Medizone International, Inc. and MNZ, dated June 22, 1995 (5) 10.6 Managing Agent Agreement between Medizone International, Inc. and Medizone New Zealand Limited, dated June 22, 1995 (5) 10.7 Funding commitment letter from Groundell Trust (6) 10.8 Letter re: change in certifying accountants (6) 99.1 Certifications of Edwin G. Marshall, President and CEO and Steve M. Hanni CFO, pursuant to Section 906 of The Sarbanes-Oxley Act Of 2002 (filed herewith). (1) Incorporated by reference to annual report on form 10-K for the year ended December 31, 1998. (2) Incorporated by reference to registration statement on Form S-18 (Registration No. 2-93277-D), effective May 14, 1985. (3) Incorporated by reference to annual report on Form 10-K for the period ended December 31, 1986. (4) Incorporated by reference to annual report on Form 10-K for the period ended December 31, 1992. (5) Incorporated by reference to current report on Form 8-K, dated June 22, 1995. (6) Incorporated by reference to annual report on Form 10-KSB for the period ended December 31, 2001. (b) Reports on Form 8-K. No current reports on Form 8-K were filed during the three months ended March 31, 2003. 10 SIGNATURES 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. MEDIZONE INTERNATIONAL, INC. (Registrant) /s/ Edwin G. Marshall ------------------------------------------------ Edwin G. Marshall, Chairman and Chief Executive Officer (Principal Executive Officer) /s/ Steve M. Hanni ------------------------------------------------ Steve M. Hanni, Chief Financial Officer (Principal Accounting Officer) May 15, 2003 CERTIFICATIONS I, Edwin G. Marshall certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Medizone nternational, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 15, 2003 /s/ Edwin G. Marshall ----------------------------------- Edwin G. Marshall President and Chief Executive Officer 12 I, Steve M. Hanni certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Medizone International, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 15, 2003 /s/ Steve M. Hanni ------------------------------- Steve M. Hanni Chief Financial Officer 13