UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934.
For the quarter ended July 31, 1999 Commission file number 000-25409
Sustainable Development International, Inc.
(Exact name of registrant as specified in its charter)
Nevada 86-0857752
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10240-124th Street, Suite 208
Edmonton, Alberta, Canada T5N 3W6
(Address of principal executive offices) (Zip Code)
(780) 488-9191
Registrant's telephone number, including area code
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 reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes No X
As of July 31, 1999, there were 13,720,000 shares of common stock
outstanding.
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INDEX
PART I - FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Statement of Loss and Deficit for three months 3
Ended July 31, 1999
Balance Sheet as of July 31, 1999 4
Statement of Changes in Financial Position for
the three months ended July 31, 1999 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation 6-8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 2. Changes in Securities 8
Item 3. Defaults by the Company upon its
Senior Securities 8
Item 4. Submission of Matter to a Vote of
Security Holders 8
Item 5. Other Information 8
Item 6. Exhibits and Reports of Form 8-K 8
SIGNATURES 9
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STTEMENT OF LOSS AND DEFICIT
JULY 31, 1999
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<S> <C>
Expenses
Advertising $ 352
Amortization 2,500
Consulting fees 1,000
Management fees 3,050
Office 88
Professional fees 2,087
Service Charges 62
Travel 4,480
-------------
$13,619
Net loss and deficit, end of period ($13,619)
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BALANCE SHEET
THREE MONTHS PERIOD ENDED JULY 31, 1999
<S> <C>
Assets
Current
Cash $176,790
Investment 55,549
Licensing agreement 288,335
-----------
$520,674
===========
Liabilities
Current
Payables and accruals $5,950
-----------
Shareholder's Equity
Capital stock 664,008
Deficit (149,284)
-----------
514,724
-----------
$520,674
===========
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STTEMENT OF CHANGES IN FINANCIAL POSITION
THREE MONTHS ENDED JULY 31, 1999
<S> <C>
Cash derived from (applied to):
Operating
Net loss $13,619
Amortisation 2,500
Change in non-cash operating working capital:
Payables and accruals 5,950
----------
22,069
Financing
Issuance of capital stock 0
Investing
Short term Investment - Enviro-Mining Inc. (4,693)
----------
Net decrease in cash and balance, end of period $17,376
==========
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The following discussion and analysis should be read in conjunction with
the Company's financial statements and the notes thereto contained
elsewhere in this filing.
Overview
SUSTAINABLE DEVELOPMENT INTERNATIONAL, INC., a Nevada corporation (the
"Company") is a development stage company formed in 1998 to encourage
innovative technologies in the environmental industries. The Company's goal
is to acquire technology rights and licenses from patent holders and
others, then secure a market, and raise sufficient capital to build, own,
and operate facilities throughout the world.
The Company is in the process of setting up a subsidiary company
called Umweltservice Europa GmbH to recycle waste lubrication oil. The
Company has obtained the rights in Germany from Enviro-Mining Inc. for
three technologies which when combined can produce a high grade low sulfur
diesel fuel meeting all European specifications under EN 590 legislation.
The EMI Process is a proven alternative to the present disposal methods by
converting automotive waste oil into light heating oil and high quality
diesel fuel.
The Company has added separate innovations to the processing package
to provide stability to the products and which meet the lower sulphur
standards required in Europe. The Company has combined these technologies
under the operating name of The EMI Process (EMI). The objective is to
purchase the most appropriate system, which will meet the operating,
technical, and business objectives to be operated by Umweltservice Europa
GmbH.
Results of Operations for the three months ended July 31, 1999
Total operating expenses from continuing operations were $13,619 for
the three months ended July 31, 1999, an 92 day period, as compared to the
operating expenses of $12,592 for the three months ended April 30, 1999, a
89 day period of the Company. Utilizing an average daily calculation of
operating expenses of $148.03 for the period ending July 31, 1999, and an
average daily calculation of operating expenses of $141.48 for the period
ending April 30, 1999, this represented a 5% increase in average daily
operating expenses.
The increase in expenses was primarily the result of the Company's
travel expenses during the period ending July 31, 1999.
Forward-Looking Statements and Associated Risks
This Quarterly Report on Form 10-QSB contains forward-looking
statements made pursuant to the safe harbor provisions of the Securities
Litigation Reform Act of 1995. These forward looking statements are based
largely on the Company's expectations and are subject to a number of risks
and uncertainties, many of which are beyond the Company's control,
including, but not limited to, economic, competitive and other factors
affecting the Company's operations, markets, products and services,
<PAGE>
expansion strategies and other factors discussed elsewhere in this report
and the documents filed by the Company with the Securities and Exchange
Commission. Actual results could differ materially from these forward-
looking statements. In light of these risks and uncertainties, there can
be no assurance that the forward-looking information contained in this
report will in fact prove accurate. The Company does not undertake any
obligation to revise these forward-looking statements to reflect future
events or circumstances.
Liquidity and Capital Reserves
As of July 31, 1999 (Unaudited)
As of July 31, 1999, the Company's assets were $520,674 and its
liabilities were $5,950 resulting in an excess of assets of $514,724. Cash
was $176,790 at July 31, 1999 as compared to cash of $194,166 on April
30,1999, a decrease of $17,376. This represented a 9% decrease in available
cash.
The Company has continued to fund its deficit cash flow from private
placements of the Company's common stock. It is anticipated that loans and
the sale of the Company's stock will continue until such time as the
Company generates sufficient revenues from its operations to cover
operating expenses.
Year 2000 Issues
In less than one year, computer systems and/or software used by many
Company's may need to be upgraded to accept four digit entries to
distinguish 21st century dates from 20th century dates. As is the case with
most other Company's using computers in their operations, the Company
recognizes the need to ensure that its operations will not be adversely
impacted by software and/or system failures related to such "Year 2000"
noncompliance. Within the past twelve months, the Company has been
upgrading components of its own internal computer and related information
and operational systems and continues to assess the need for further system
redesign and believes it is taking the appropriate steps to ensure Year
2000 compliance. Based on information currently available, the Company
believes that the costs associated with Year 2000 compliance, and the
consequences of incomplete or untimely resolution of the Year 2000 problem,
will not have a material adverse effect on the Company's business,
financial condition and results of operations in any given year. However,
even if the internal systems of the Company are not materially affected by
the Year 2000 problem, the Company's business, financial condition and
results of operations could be materially adversely affected through
disruption in the operation of the enterprises with which the Company
interacts. There can be no assurance that third party computer products
used by the Company are Year 2000 compliant. Further, even though the
Company believes that its current products are Year 2000 compliant, there
can be no assurance that under actual conditions such products will perform
as expected or that future products will be Year 2000 compliant.
<PAGE>
Any failure of the Company's products to be Year 2000 compliant could
result in the loss of or delay in market acceptance of the Company's
products and services, increased service and warranty costs to the Company
or payment by the Company of compensatory or other damages which could have
a material adverse effect on the Company's business, financial condition
and results of operations.
The Company being a development stage Company has readily available
hard copy accounting records, invoices, and other paper trails which will
be up dated prior to year end 1999. Since the Company has not commenced
substantial operations, third parties non compliance with the Year 2000
issue will have minimal impact on the Company. The Company, in contracting
with new vendors, manufactures, and plants is pre-establishing the third
party's compliance with Year 2000 issues.
PART II--OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None.
Item 3. Defaults by the Company upon its Senior Securities.
None.
Item 4. Submission of Matter to a Vote of Security Holders.
None
Item 5. Other Information.
On August 27, 1999 the Company was approved for trading by NASD for
quotation on the OTC Bulletin Board under the trading symbol "SUDI".
Item 6. Exhibits and Reports of Form 8--K.
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
SUSTAINABLE DEVELOPMENT
INTERNATIONAL, INC.
(Registrant)
By:/s/ Harold Jahn By:/s/ Garry R. Knull
Harold Jahn Garry R. Knull
Chairman, CEO, President Treasurer, CFO
Date: September 14, 1999 Date: September 14, 1999
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