-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G4Qm7Jao/62GH45XkDSU7AYDVy133lXakfus3lctieeMpkigOer9Eftl4uslpmzi 6fZPqcIl44BcjuGHhJyIRA== 0001021408-02-013995.txt : 20021114 0001021408-02-013995.hdr.sgml : 20021114 20021114083845 ACCESSION NUMBER: 0001021408-02-013995 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANDEAN DEVELOPMENT CORP CENTRAL INDEX KEY: 0000943184 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT [8700] IRS NUMBER: 650548697 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-28806 FILM NUMBER: 02821910 BUSINESS ADDRESS: STREET 1: 801 BRICKELL SQUARE STREET 2: SUITE 900 CITY: MIAMI STATE: FL ZIP: 33131 BUSINESS PHONE: 3053720056 MAIL ADDRESS: STREET 1: 600 BRICKELL AVE STREET 2: SUITE 301 B CITY: MIAMI STATE: FL ZIP: 33131 10QSB 1 d10qsb.txt FOR THE PERIOD ENDING 09/30/2002 FORM 10-QSB SECURITY AND EXCHANGE COMMISSION WASHINGTON, DC 20549 (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2002. ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from ___________________ to ______________________. Commission file number: 33-90696 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) FLORIDA 65-0648697 - -------------------------------------------------------------------------------- State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) 1224 Washington Avenue, Miami Beach, Florida 33139 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (305) 866-3360 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such report(s), and has been subject to such filing requirements for the past 90 days. Yes X No ----------------- ---------- APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. As of September 30, 2002, 2,820,100 shares of $.0001 par value common stock were outstanding. ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES INDEX Pages ------- Part I. Financial Information. 3 Item 1. Financial Statements (Unaudited). 3 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 12 Part II. Other Information. 18 2 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES PART I FINANCIAL INFORMATION Item 1. Financial Statements Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the "Commission"). Although the Company believes the disclosures made are adequate to make the information presented not misleading, and, in the opinion of management, all adjustments have been reflected which are necessary for a fair presentation of the information shown and the accompanying notes, these condensed unaudited financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2001. The results for the nine months ended September 30, 2002 are not necessarily indicative of the results of operations for a full year or of future periods. 3 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets September 30, 2002 and December 31, 2001 ASSETS
September 30, 2002 December 31, (Unaudited) 2001 ------------------ ------------ Current Assets: Cash $ 484 $ 931 Accounts receivable 84,650 185,687 Notes receivable 300,538 327,911 Other current assets 192,658 168,279 ------------------ ------------ Total Current Assets 578,330 682,808 ------------------ ------------ Property, Plant and Equipment, net 288,245 379,842 ------------------ ------------ Other Assets: Notes receivable from related party and others 1,191,093 1,415,273 Investment in unconsolidated subsidiaries 2,543 2,543 Deposits and other 265,242 264,231 ------------------ ------------ 1,458,878 1,682,047 ------------------ ------------ $ 2,325,453 $ 2,744,697 ================== ============
4 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets (Continued) September 30, 2002 and December 31, 2001 LIABILITIES AND SHAREHOLDERS' EQUITY
September 30, 2002 December 31, (Unaudited) 2001 ------------------ ------------ Current Liabilities: Obligations with banks $ 13,376 $ 35,310 Accounts payable and accrued expenses 54,405 98,237 Due to related parties 1,569 49,203 Current portion of long-term debt 22,010 34,923 Income taxes payable 10,001 - ------------------ ------------ Total Current Liabilities 101,361 217,673 ------------------ ------------ Long-Term Liabilities: Long-term debt, excluding current portion 65,810 75,503 Staff severance indemnities 29,876 39,427 ------------------ ------------ 95,686 114,930 ------------------ ------------ Minority interest 192,505 196,019 ------------------ ------------ Shareholders' Equity: Preferred stock, $.0001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding - - Common stock, $.0001 par value, 20,000,000 shares authorized, 2,820,100 shares issued and outstanding 282 282 Additional paid-in capital 5,660,187 5,660,187 Accumulated deficit (3,304,496) (3,105,509) Accumulated other comprehensive (loss) (420,072) (338,885) ------------------ ------------ Total Shareholders' Equity 1,935,901 2,216,075 ------------------ ------------ $ 2,325,453 $ 2,744,697 ================== ============
5 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations Three Months Ended September 30, 2002 and 2001
2002 2001 ----------------- --------------- Revenues from Operations: Revenues $ 32,473 $ 162,806 Cost of operations (6,977) (23,127) ----------------- --------------- Gross Profit 25,496 139,679 Selling and Administrative Expenses (95,547) (72,165) ----------------- --------------- (70,051) 67,514 ----------------- --------------- Other Expenses, net (56,937) (58,872) ----------------- --------------- (Loss) Income Before Income Taxes and Minority Interest (126,988) 8,642 Income Taxes - (6,565) ----------------- --------------- (Loss) Income Before Minority Interest (126,988) 2,077 Minority Interest - 1,898 ----------------- --------------- Net (Loss) Income (126,988) 3,975 Other Comprehensive Income (Loss): Foreign currency translation adjustment (24,925) 38,199 ----------------- --------------- Comprehensive (Loss) Income $ (151,913) $ 42,174 ================= =============== Net (Loss) Income per Common Share $ (.05) $ .001 ================= =============== Weighted Average Shares Outstanding 2,820,100 2,820,100 ================= ===============
6 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations Nine Months Ended September 30, 2002 and 2001
2002 2001 ----------------- ---------------- Revenues from Operations: Revenues $ 174,981 $ 676,407 Cost of operations (63,236) (96,524) ----------------- ---------------- Gross Profit 111,745 579,883 Selling and Administrative Expenses (161,406) (323,936) ----------------- ---------------- (49,661) 255,947 ----------------- ---------------- Other Expenses, net (149,326) (109,491) ----------------- ---------------- (Loss) Income Before Income Taxes and Minority Interest (198,987) 146,456 Income Taxes - (37,437) ----------------- ---------------- (Loss) Income Before Minority Interest (198,987) 109,019 Minority Interest - 14,277 ----------------- ---------------- Net (Loss) Income (198,987) 123,296 Other Comprehensive (Loss) Income: Foreign currency translation adjustment (81,187) (44,064) ----------------- ---------------- Comprehensive (Loss) Income $ (280,174) $ 79,232 ================= ================ Net (Loss) Income per Common Share $ (.10) $ .04 ================= ================ Weighted Average Shares Outstanding 2,820,100 2,820,100 ================= ================
7 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES Consolidated Statements of Shareholders' Equity Nine Months Ended September 30, 2002
Common Additional Accumulated Accumulated Other Total Stock Paid-In Capital Deficit Comprehensive Loss Shareholders' Equity ----------- --------------- --------------- ------------------ -------------------- Balance at December 31, 2001 $ 282 $ 5,660,187 $ (3,105,509) $ (338,885) $ 2,216,075 Net loss (Unaudited) - - (198,987) - (198,987) Foreign currency translation adjustment (Unaudited) - - - (81,187) (81,187) ----------- --------------- --------------- ---------------- ----------------- Balance at September 30, 2002 (Unaudited) $ 282 $ 5,660,187 $ (3,304,496) $ (420,072) $ 1,935,901 =========== =============== =============== ================ =================
The accompanying notes are an integral part of these financial statements. 8 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows Nine Months Ended September 30, 2002 and 2001
2002 2001 ---------------- --------------- Cash Flows from Operating Activities: Net (loss) income $ (198,987) $ 123,296 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 86,263 46,378 Translation adjustment (81,187) (44,064) Minority interest (3,514) (376,163) Changes in assets and liabilities: (Increase) decrease in: Accounts receivable 101,037 2,411,838 Inventory - 51,408 Other current assets (24,379) (23,739) Notes receivable 27,373 190,147 Other assets (1,011) (184,597) Increase (decrease) in: Accounts payable and accrued expenses (43,832) (1,537,692) Provision for severance indemnity - (10,759) Income taxes payable 10,001 17,389 Staff severance (9,551) - ---------------- --------------- Net Cash Provided by Operating Activities (137,787) 663,442 ---------------- --------------- Cash Flows from Investing Activities: Purchase of fixed assets - (18,806) Proceeds of sale of fixed assets 5,334 - Proceeds from investment in unconsolidated subsidiaries - 445,782 ---------------- --------------- Net Cash Provided by Investing Activities 5,334 426,976 ---------------- ---------------
9 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (Continued) Nine Months Ended September 30, 2002 and 2001
2002 2001 ---------------- ------------------ Cash Flows from Financing Activities: Borrowings from (advances to) related parties $ 176,546 $ (285,691) (Payments on) proceeds from notes payable to bank (21,934) (953,516) Principal payments on long-term debt (22,606) - Reduction of capital - (64,133) ---------------- ------------------ Net Cash Provided by (Used in) Financing Activities 132,006 (1,303,340) ---------------- ------------------ Net Decrease in Cash (447) (212,922) Cash at Beginning of Period 931 213,589 ---------------- ------------------ Cash at End of Period $ 484 $ 667 ================ ================== Supplemental Disclosure of Cash Flow Information: Cash paid during the period for interest $ 19,940 $ 9,111 Cash paid during the period for taxes - 37,437 Supplemental Disclosure of Non-Cash Financing Activities: Rescinded Dividends - 423,018
10 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - The quarterly financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in opinion of management, necessary for a fair statement of results for the interim period. For further information, refer to the financial statements and notes thereto included in the Company's form 10-KSB as of and for the year ended December 31, 2001. Functional Currency - The financial statements have been translated in accordance with the provisions set forth in Statement of Financial Accounting Standards No. 52, from Chilean pesos (the functional currency) into US dollars (the reporting currency). Earnings Per Common Share - Earnings per common share are based on the weighted average number of shares outstanding of 2,820,100 for the periods ended September 30, 2002 and 2001, respectively, after giving effect to common stock equivalents which consist of warrants issued with the initial public offering that would have a dilutive effect on earnings per share. Warrants issued with exercise prices greater than the existing market value of the company stock are deemed anti-dilutive and are not components of earnings per share. 11 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL Management's Discussion and Analysis contains various "forward looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding future events or the future financial performance of the Company that involve risks and uncertainties. Certain statements included in this Form 10-QSB, including, without limitation, statements related to anticipated cash flow sources and uses, and words including but not limited to, "anticipates", "believes", "plans", "expects", "future" and similar statements or expressions, identify forward looking statements. Any forward-looking statements herein are subject to certain risks and uncertainties in the Company's business, including but not limited to, reliance on key customers and competition in its markets, market demand, product performance, technological developments, maintenance of relationships with key suppliers, difficulties of hiring or retaining key personnel and any changes in current accounting rules, all of which may be beyond the control of the Company. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth herein. Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the consolidated financial statements included herein. Further, this second quarterly report on Form 10-QSB should be read in conjunction with the Company's Consolidated Financial Statements and Notes to Consolidated Financial Statements included in its 2001 Annual Report on Form 10-KSB. In addition, you are urged to read this report in conjunction with the risk factors described herein. GENERAL Andean Development Corporation ("ADC" or the "Company") was incorporated in Florida on October 19, 1994 and is presently a holding company for Errazuriz y Asociados Ingenieros S.A. ("AE&A"), and E&A Ingesis S.A. ("INA"), both Chilean corporations located in Santiago, Chile. Except as otherwise specifically noted, ADC, AE&A and INA are collectively referred to herein as the "Company." AE&A provides engineering and project management services for water and energy related private and public works and provides technical assistance for both turnkey and 12 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) non-turnkey major works, mainly related to the development and construction of energy, water and sewage treatment projects in Chile. INA acts as the agent in the sale of major electrical and mechanical equipment. INA is also developing, in a joint venture with genteAndina S.A., a Chilean company specializing in education ("genteAndina S.A"), a communication network and related software for (i) rural area remote education, and (ii) post graduate professional education "at home" for Union leaders and key employees in Chile, which, if successful, could be adopted and developed in other countries in South America. On April 1, 2001, the Company executed an agreement with an unrelated company, genteAndina, S. A. in which the Company will invest approximately $500,000 in exchange for guaranteed interest income of 1/2% monthly and 35% of the profits of genteAndina, S. A. genteAndina, S. A. will continue developing the software and projects previously undertaken by the Company. As of December 31, 2001, approximately $425,000 was advanced to genteAndina, S. A. under this agreement and is included in deposits and other in the accompanying consolidated financial statements. The Company, supported by the government of Chile and by certain Chilean institutions, is developing at the Company's cost: . Software to be used to educate the school populations of indigenous rural communities located in isolated areas in the mountains of Chile or close to its coast line, and . Software to teach leadership, and other related matters, to union leaders in Chile, highly qualified employees of the government of Chile, and to certain private industries such as Corporacion del Cobre de Chile, Chilean Copper Corporation ("Codelco"). The Company has entered into an agreement with Codelco, through one of the Company's sponsoring institutions, Fundacion Tucapel Jimenez Alfaro, by which the Company will provide educational services to union leaders at Codelco's Andina Division. Codelco is the industry leader in the Chilean mining industry and the Company anticipates, but cannot guarantee, that once the Codelco project proves successful, other Chilean companies will execute similar agreements. Currently, the Company is well positioned in its core business segment to take advantage of an economic upturn in the large projects sector, since the Company is well 13 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) established in its marketplace and has maintained customers who are established in their specialties. However, as of the date herein, the economic conditions in the South American market have delayed an anticipated economic upturn in the large projects sector. No assurances can be given as to when such economic upturn will transpire and how soon afterwards the Company will recognize significant revenues from the core business sector. In the interim, the Company is pursuing the development of the distant education business and maintaining its strategic position in its core business sector to take advantage of any upswing in the economic conditions in South America. The Company is also the majority owner (83.6%) of a non-operating subsidiary, Consonni USA, Inc. ("Consonni"), the assets of which consist of cash and notes receivables. In 2000, the Company sold the operating subsidiary of Consonni. On August 31, 2001, the Company extended the expiration date of its Redeemable Common Stock Purchase Warrants (the "Warrants") from November 13, 2001 to November 13, 2003. The Company originally issued the Warrants in connection with a stock offering on Registration Statement Form SB-2 (SEC File No. 333-90696) which was declared effective by the Securities and Exchange Commission on November 13, 1996. FINANCIAL CONDITION AND RESULTS OF OPERATIONS COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 2002 TO THREE MONTHS ENDED SEPTEMBER 30, 2001 Gross Revenues and Costs of Operations Gross revenues decreased from $162,806 for the three months ended September 30, 2001 to $32,473 for the three months ended September 30, 2002, a decrease of $130,333. The decrease in gross revenues is a result of the unfavorable economic conditions in the South American market, particularly the large projects sector, which have had an adverse impact on the Company's revenues from operations. Cost of Operations decreased from $23,127 for the three months ended September 30, 2001 to $6,977 for the three months ended September 30, 2002, a decrease of $16,150. This decrease is a direct consequence of the decrease in cost of operations associated with the decrease in revenues. 14 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) Selling and Administrative Expenses, Incomes from Operations and Other Income Expenses Selling and Administrative Expenses increased from $72,165 for the three months ended September 30, 2001 to $95,547 for the three months ended September 30, 2002, an increase of $23,382. This increase comes primarily from an increase in expenses in projects associated with the core business that have not realized revenues to date. Income from Operations, decreased from $67,514 for the three months ended September 30, 2001 to ($70,051) or the three months ended September 30, 2002, primarily as a result of the decrease in revenues and the increase in selling and administrative expenses. Other (expenses) decreased from net expenses of $58,872 for the three months ended September 30, 2001 to $56,957 expenses of for the three months ended September 30, 2002. Net Income and Income Tax (Loss) Net Income before income taxes and minority interest decreased from $8,642 for the three months ended September 30, 2001 to a loss of ($126,988) for the three months ended September 30, 2002, primarily as a result of the decrease in revenues from operations and the increase in selling and administrative expenses. Net income decreased from $3,975 or the three months ended September 30, 2001 to a loss of ($126,988) for the three months ended September 30, 2002, primarily as a result of the decrease in revenues and the increase in selling and administrative expenses. FINANCIAL CONDITION AND RESULTS OF OPERATIONS COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2002 TO NINE MONTHS ENDED SEPTEMBER 30, 2001 Gross Revenues and Costs of Operations Gross revenues decreased from $676,407 for the nine months ended September 30, 2001 to $174,981 for the nine months ended September 30, 2002, a decrease of $501,426. The decrease in gross revenues is a result of the unfavorable economic conditions in the South American market, particularly the large projects sector, which have had an adverse impact on the Company's revenues from operations. 15 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) Cost of Operations decreased from $96,524 for the nine months ended September 30, 2001 to $63,236 for the nine months ended September 30, 2002, a decrease of $33,288. This decrease is a direct consequence of the decrease in cost of operations associated with the decrease in revenues. Selling and Administrative Expenses, Incomes from Operations and Other Income Expenses Selling and Administrative Expenses decreased from $323,936 for the nine months ended September 30, 2001 to $161,406 for the nine months ended September 30, 2002, a decrease of $162,530. This decrease comes primarily from an decrease in expenses in projects associated with the core business in the first two quarters of 2002. Income from Operations, decreased from $255,947 for the nine months ended September 30, 2001 to $(49,661) for the nine months ended September 30, 2002, primarily as a result of the decrease in revenues from operations and the increase in selling and administrative expenses. Other expenses increased from net expenses of $109,491 for the nine months ended September 30, 2001 to net expenses of $149,326 for the nine months ended September 30, 2002 an increase of $39,835 due to an increase in other income. Net (Loss) Income and Income Tax Net Income before income taxes decreased from $146,456 for the nine months ended September 30, 2001 to a net loss of $(198,987) for the nine months ended September 30, 2002, and taxes decreased in the same period by $37,437. In the same period the corresponding portion of the Minority Interest decreased by $14,277. As a consequence of the previous figures, the net income of the Company decreased in the period from $123,296 to $(198,987) based on the decreased on the revenues from operation. Liquidity and Capital Resources The Company has financed its operations and other working capital requirements from advances made by a major shareholder and collections of related party receivables. Current Assets Cash and short-term investments decreased from $931 as of December 31, 2001 to $484 for the nine months period ended September 30, 2002, a decrease of $447. 16 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) Accounts receivable decreased from $185,687 at December 31, 2001 to $84,650 for the nine months period ended September 30, 2002, a decrease of $101,037. The decrease in accounts receivables is a result of the unfavorable economic conditions in the South American market, particularly the large projects sector, which have had an adverse impact on the Company's revenues from operations and, accordingly, the Company's accounts receivable. Notes receivable and other current assets decreased from $496,190 as of December 31, 2001 to $493,196 for the nine months period ended September 30, 2002, a decrease of $2,994. Total current assets decreased from $682,808 at December 31, 2001 to $578,330 for the nine months period ended September 30, 2002 a decrease of $104,478. Property, plant and equipment, net decreased from $379,842 at December 31, 2001 to $288,245 for the nine months period ended September 30, 2002, a decrease of $91,597. Other assets decreased from $1,682,047 at December 31, 2001 to $1,458,878 for the nine months period ended September 30, 2002, a decrease of $223,169. This decrease is primarily the result of collections made on notes receivables arising on the sale of some subsidiaries during 2000. Liabilities Current liabilities decreased from $217,673 at December 31, 2001, to $101,361 for the nine months period ended September 30, 2002 a decrease of $116,312. Long-term liabilities decreased from $114,930 at December 31, 2001 to $95,686 at the nine months period ended September 30, 2002, a decrease of $19,244 due to payment of long-term debt. The Company anticipates that its cash requirements will continue to increase as it continues to expend substantial resources to build its infrastructure, develop its business plan and establish its sales and marketing network operations, customer support and administrative organizations. The Company currently anticipates that its available cash resources and cash generated from operations will be sufficient to meet its presently anticipated working capital and capital expenditure requirements for the next twelve months. As of September 30, 2002, there were no commitments for long- term capital expenditures. If the Company is unable to maintain profitability, or seeks further expansion, additional funding will become necessary. No assurances can be given that either equity or debt financing will be available. 17 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES PART II OTHER INFORMATION Item 1. Legal Proceedings None. Item 2. Changes in Securities None. Item 3. Defaults Upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders None. Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K (a) The following Exhibits are filed as part of the Quarterly Report on Form 10-QSB 99.1 Certification Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002. 99.2 Certification Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002. (b) Reports on Form 8-K: None. 18 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES /s/ Pedro Pablo Errazuriz -------------------------------------------------------------- Pedro Pablo Errazuriz, President and Chief Executive Officer /s/ Jose Luis Yrarrazaval -------------------------------------------------------------- Jose Luis Yrarrazaval, Chief Financial Officer Date: November 14, 2002 19 Exhibit Index Exhibit Number Description 99.1 Certification Pursuant to 18 U.S.C Section 1350, as Adopted pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002. 99.2 Certification Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002. EX-99.1 3 dex991.txt CERTIFICATION - PRESIDENT AND CEO Exhibit 99.1 Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002. -------------------------------------------- In connection with the Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 on Form 10-Q of Andean Development Company (the "Company") for the period ended June 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Pedro Pablo Errazuriz, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Sec.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: November 14, 2002 /s/ Pedro Pablo Errazuriz ------------------------------------------------ Pedro Pablo Errazuriz, President and Chief Executive Officer EX-99.2 4 dex992.txt CERTIFICATION - CFO Exhibit 99.2 Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002. ------------------------------------------------ In connection with the Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 on Form 10-Q of Andean Development Corporation (the "Company") for the period ended June 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jose Luis Yrarrazaval, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Sec.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: November 14, 2002 /s/ Jose Luis Yrarrazaval ---------------------------------------------- Jose Luis Yrarrazaval, Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----