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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 April 30, 2000 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) 488-9193
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 [X] No
As of April 30, 2000, there were 14,376,800 shares of common stock outstanding.
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INDEX
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION Page No.
<S> <C> <C>
Item 1. Financial Statements
Condensed Consolidated Statement of Loss and
Deficit for three months Ended April 30, 2000 3-4
Condensed Consolidated Balance Sheet
as of April 30, 2000 5
Condensed Consolidated Statement of Cash Flows for
the three months ended April 30, 2000 6
Notes to Condensed Consolidated Financial Statements 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation 9-12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults by the Company upon its
Senior Securities 11
Item 4. Submission of Matter to a Vote of
Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports of Form 8-K 11
SIGNATURES 12
</TABLE>
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SUSTAINABLE DEVELOPMENT INTERNATIONAL INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENT OF LOSS
(Expressed in U.S. Dollars)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ending April 30 2000 1999
-------------------------------------------------------------------------------
<S> <C> <C>
Expenses
Advertising 9,151 1,473
Amortization 5,786 2,500
Consulting fees 3,387 --
Management fees 22,175 1,400
Office 5,053 167
Professional fees 7,085 7,025
Service charges 873 27
Travel 1,224 --
Other 8,764 --
------------ ------------
63,498 12,592
------------ ------------
Net loss $ (63,498) $ (12,592)
============ ============
Net loss per share, basic and
diluted (Note 1) $ (0.0045) $ (0.0009)
============ ============
Weighted average shares, basic
and diluted 14,043,467 13,720,000
============ ============
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
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SUSTAINABLE DEVELOPMENT INTERNATIONAL INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENT OF LOSS
(Expressed in U.S. Dollars)
(Unaudited)
<TABLE>
<CAPTION>
6 months to 6 months to Cumulative to
April 30 April 30 April 30
2000 1999 2000
--------------------------------------------------------------------------------------
<S> <C> <C> <C>
Expenses
Advertising 14,333 4,139 14,750
Amortization 8,286 5,000 22,453
Consulting fees 3,387 7,151 111,229
Management fees 36,002 19,400 90,002
Office 6,589 913 8,317
Professional fees 16,601 14,668 60,463
Service charges 1,045 220 2,053
Travel 1,968 4,673 12,292
Other 12,221 -- 12,221
------------ ------------ ------------
100,432 56,164 333,780
------------ ------------ ------------
Other items
Loss on exploration -- -- 6,680
Gain on foreign exchange -- -- (8,776)
Interest on revenue -- -- (6,355)
------------ ------------ ------------
-- -- (8,451)
------------ ------------ ------------
Net loss $ (100,432) $ (56,164) $ (325,329)
============ ============ ============
Net loss per share, basic and
diluted (Note 1) $ (0.0072) $ (0.0041)
============ ============
Weighted average shares, basic
and diluted 13,924,533 13,716,667
============ ============
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
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SUSTAINABLE DEVELOPMENT INTERNATIONAL INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEET
(Expressed in U.S. Dollars)
(Unaudited)
<TABLE>
<CAPTION>
April 30 October 31
2000 1999
-------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current
Cash $ 137,918 $ 155,042
Deposit 16,925 16,925
Due from related party 40,406 94,764
Licensing agreements 1,560,964 285,833
Other asset 1,177 --
----------- -----------
$ 1,757,390 $ 552,564
=========== ===========
LIABILITIES
Current
Payables $ 738,361 $ 93,452
----------- -----------
SHAREHOLDERS' EQUITY
Capital stock (Note 2) 1,344,358 684,008
Deficit (325,329) (224,896)
----------- -----------
1,019,029 459,112
----------- -----------
$ 1,757,390 $ 552,564
=========== ===========
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
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SUSTAINABLE DEVELOPMENT INTERNATIONAL INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Expressed in U.S. Dollars)
(Unaudited)
<TABLE>
<CAPTION>
6 months ended 6 months ended
April 30 April 30
2000 1999
-------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in cash
OPERATING
Net loss $ (100,432) $ (56,164)
Amortization 8,286 5,000
----------- -----------
(92,146) (51,164)
Change in
Payables 644,908 (6,590)
----------- -----------
552,762 (57,754)
----------- -----------
FINANCING
Issuance of capital stock 660,350 --
Advances to related parties 54,358 (60,242)
----------- -----------
714,708 (60,242)
----------- -----------
INVESTING
Purchase of licensing agreements (1,283,417) --
Purchase of other asset (1,177) --
----------- -----------
(1,284,594) --
----------- -----------
Net decrease in cash (17,124) (117,996)
Cash
Beginning of period 155,042 330,053
----------- -----------
End of period $ 137,918 $ 212,057
=========== ===========
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
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SUSTAINABLE DEVELOPMENT INTERNATIONAL INC.
(A Development Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
(Unaudited)
April 30, 2000
--------------------------------------------------------------------------------
1. GENERAL
The unaudited condensed consolidated financial statements have been prepared on
the same basis as the audited consolidated financial statements and, in the
opinion of management, reflect all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation for each of the periods
presented. The results of operations for interim periods are not necessarily
indicative of results to be achieved for full fiscal years.
As contemplated by the Securities and Exchange Commission (SEC) under Rule 10-01
of Regulation S-X, the accompanying consolidated financial statements and
related footnotes have been condensed and do not contain certain information
that will be included in the Company's annual consolidated financial statements
and footnotes thereto. For further information, refer to the consolidated
financial statements and related footnotes for the year ended October 31, 1999
included in the Company's Annual Report on Form 10-KSB.
BASIS OF PRESENTATION
The condensed consolidated financial statements include the accounts of
Sustainable Development International Inc., its 70% owned subsidiary, Watergas
Inc., its 80% owned subsidiary, Intercontinental Granite Inc., and its 100%
owned subsidiary, Sustainable Health Inc.
INCOME TAXES
Income taxes for the interim periods were computed using the effective tax rate
estimated to be applicable for the full fiscal year, which is subject to ongoing
review and evaluation by management.
LOSS PER SHARE
The Company reports earnings per share in accordance with the provisions of SFAS
No. 128, Earnings Per Share. SFAS No. 128 requires presentation of basic and
diluted earnings per share in conjunction with the disclosure of the methodology
used in computing such earnings per share. Basic earnings per share excludes
dilution and is computed by dividing income available to common shares by the
weighted average common shares outstanding during the period. Diluted earnings
per share takes into account the potential dilution that could occur if
securities or other contracts to issue common stock were exercised and converted
into common stock.
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SUSTAINABLE DEVELOPMENT INTERNATIONAL INC.
(A Development Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
(Unaudited)
April 30, 2000
--------------------------------------------------------------------------------
2. CAPITAL STOCK
The company has the following changes to their issued share capital:
<TABLE>
<CAPTION>
Number of shares Dollar Value
---------------- ------------
<S> <C> <C>
At year ended October 31, 1999 13,720,000 $ 684,008
Common shares issued for services,
December, 1999 56,800 60,350
Pending regulatory approval - for
acquisition of subsidiary
Intercontinental Granite Inc. 100,000 100,000
Pending regulatory approval - for
acquisition of subsidiary Watergas Inc. 500,000 500,000
---------- ----------
Balance April 30, 2000 14,376,800 $1,344,358
========== ==========
</TABLE>
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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, is a
development stage company formed on May 27, 1998 to provide innovative
technologies, products and services to improve efficiency, quality and
environmental concerns in a variety of fields, with a particular emphasis on
solutions to environmental problems, reductions in energy consumption, health
and wellness and responsible resource development. The Company is divided into
five divisions: Energy, Sustainable Health, Funding, Natural Resources and
Alternative Energy.
On November 22, 1999, the company announced that it has incorporated
Intercontinental Granite Incorporated. The company will own 80% of the
outstanding common shares of International Granite Incorporated for nominal
consideration.
On December 16, 1999, the company entered into an agreement to form
Pro-Active Incorporated. The company will own 60% of Pro-Active Incorporated for
nominal consideration, which will manage health care information through the use
of integrated systems, customized databases and intelligent ID cards.
On January 14, 2000, the company acquired 22,500 acres of mineral claims
under a metallic and industrial mineral permit.
On March 21, 2000, the company entered into an agreement to form
Watergas Incorporated. The company will own 70% of Watergas Incorporated for
nominal consideration, which will be in the business of producing,
merchandising, marketing, distribution, promotion and selling of products
manufactured by The WGI Process (Hydrogen/Oxygen Generator).
Results of Operations for the three months ended April 30, 1999
Total operating expenses from continuing operations were $63,498 for the
three months ended April 30, 2000, a 89 day period, as compared to the operating
expenses of $224,896 for the period of inception of the Company through its year
end of October 31, 1999, a period of 522 days. Utilizing an average daily
calculation of operating expenses of $713.46 for the period ending April 30,
2000, and an average daily calculation of operating expenses of $473.38 for the
annual period ending October 31, 1999, this represented a 50% increase in
average daily operating expenses.
The increase in expenses was primarily the result of the Company
increasing its business activities in generating sales during the period ending
April 30, 2000.
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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, 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 April 30, 2000 (Unaudited)
As of April 30, 2000, the Company's assets were $1,757,390 and its
liabilities were $738,361, resulting in an excess of assets of $1,019,029. Cash
was $137,918 at April 30, 2000 as compared to cash of $155,042 on October 31,
1999, a decrease of $17,124. This represented a 12% decrease in available cash.
This decrease was primarily the result of an increase in operating expenses and
a cash deposit of $40,406 to Enviro-Mining for purposes of acquiring additional
oil related technologies.
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.
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Year 2000 Issues
Certain of the Company's computer systems and software may interpret the
year 2000 as some other date. The operating system generally employed by the
Company is Windows 95, which is year 2000 compliant. The networking, general
ledger and accounts payable and facility point-of-sale and software programs
require software updates or modifications to address the year 2000 problem. The
Company is further addressing the matter by replacing certain older computers
and installing off-the-shelf and other third-party software that is year 2000
compliant, at an estimated cost of less than $1,000. The Company anticipates
that installation of year 2000 compliant software and hardware will be completed
by the end of 1999. The Company does not believe that the year 2000 problem will
have a material affect on the Company's operations, however, no assurance can be
given that the software updates and new computers will resolve the problem as
scheduled or at all.
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.
None
Item 6. Exhibits and Reports of Form 8--K.
None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report on Form 10-QSB to be signed
on its behalf by the undersigned, thereunto duly authorized.
SUSTAINABLE DEVELOPMENT
INTERNATIONAL, INC.
(Registrant)
By: /s/ Harold Jahn By: /s/ Garry Knull
------------------------------- -------------------------------
Harold Jahn Garry R. Knull
Chairman, CEO, President Treasurer, CFO
Date: June 14, 2000 Date: June 14, 2000
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