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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-QSB
Quarterly report under section 13(d) or 15(d) of
the Securities Exchange Act of 1934
for the quarterly period ending June 30, 2000
Commission File Number: 000-28415
International Environmental Management, Inc.
(Exact name of Small Business Issuer as specified in its charter)
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NEVADA 65-0861102
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(State or other jurisdiction (IRS Employee
of incorporation or organization) Identification Number)
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5801 Wiley Street Hollywood Florida 33023
(Address of principal executive offices and Zip code)
(954) 961-3033
(Issuer's Telephone Number)
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirement for the past 90 days.
Yes X No
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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: June 30, 2000 - 3,500,000 Common
Shares, $.001 par value.
Transitional Small Business Disclosure Format: (check one)
Yes No X
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INDEX
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PART I. FINANCIAL INFORMATION 3
Item 1. Financial Statements 3
Balance Sheets 3
Liabilities and Shareholders's Equity 4
Statements of Operations 5
Statements of Cash Flow 6
Statement of Operations - Quarter 7
Notes to Financial Statements 8
Item 2. Management's Discussion and Analysis or Plan of Operation 9-10
PART II. Other Information 11
Item 6. Reports of Form 8-K 11
Signatures 12
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PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
The following sets forth the financial statements for the second
quarter 1999 compared to the second quarter of 2000. The financial statements
should be read in conjunction with the Company's Form 10-KSB for the year ended
December 31, 1999.
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
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ASSETS JUNE 30, DECEMBER 31,
2000 1999
(UNAUDITED) (AUDITED)
Current Assets:
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Cash and Cash Equivalents $ 73 $1571
Inventory 9,015 19,167
Loans Receivable 15,227 0
Total Current Assets 24,315 20,738
Property, Plant and Equipment (Net of $8,929 and $5,859
accumulated depreciation at March 31, 2000 and
December 31, 1999) 164,333 170,473
Other Assets:
Organizational Costs (Net of $733 and $693 accumulated
amortization at March 31, 2000 and December 31, 1999) 5,688 5,983
Deposits 340 340
Total Other Assets 6,028 6,323
Total Assets $ 194,676 $ 197,534
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LIABILITIES AND STOCKHOLDER'S EQUITY
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Current Liabilities:
Cash Overdraft $ 1,169 $ 2,818
Accounts Payable and Accrued Expenses 51,855 14,987
Customer Deposits 18,785 18,152
Notes Payable - Current Portion 27,045 0
Total Current Liabilities 98,854 35,957
Long Term Liabilities:
Notes Payable 145,884 187,433
Total Liabilities 244,738 223,390
Stockholders' Equity:
Common Stock, $.001 Par Value; 25,000,000
Shares Authorized; 3,500,000 Issued and
Outstanding 3,500 3,500
Additional Paid In Capital 679,471 679,471
Accumulated Deficit (531,388) (411,182)
Accumulated Deficit During Development Stage (171,145) (171,145)
(19,562) 100,644
Less: Subscriptions Receivable (30,500) (126,500)
Total Equity (50,062) (25,856)
Total Liabilities and Stockholders' Equity $ 194,676 $ 197,534
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INTERNATIONAL ENVIRONMENTAL MANAGEMENT INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR
THE SIX MONTHS ENDED JUNE 30, 2000
(UNAUDITED)
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2000 1999
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Revenues $ 468,134 $ 278,504
Cost of Goods Sold 348,090 190,039
Gross Profit 120,044 88,465
Other General and Administrative Expenses 230,652 56,458
Total Operating Expenses 230,652 56,458
Income (Loss) Before Other Income (Expense) and
Provision for Income Taxes (110,608) 32,007
Interest Expense 9,598 20,831
Net Income (Loss) $(120,206) $ 11,176
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Loss Per Common Share $(0.0343) $ 0.0059
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Weighted Average Common Shares Outstanding 3,500,000 1,900,000
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INTERNATIONAL ENVIRONMENTAL MANAGEMENT INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(UNAUDITED)
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2000 1999
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Cash Flow from Operating Activities:
Net (Loss) $(120,206) $ 11,176
Adjustments to Reconcile Net Loss to Net Cash Used For
Operating Activities:
Depreciation and Amortization 6,435 4,342
Changes in Assets and Liabilities:
(Increase) Decrease in Inventory 10,152 (473)
(Increase) Decrease in Loans to Stockholders (15,227) 0
Increase (Decrease) in Cash Overdraft (1,649) (2,831)
Increase (Decrease) in Other Assets (494)
Increase (Decrease) in Accounts Payable and Accrued Expenses 36,868 (20,481)
Increase (Decrease) in Customer Deposits 633 (4,406)
Net Cash Used in Operating Activities (82,994) (13,167)
Cash Flow from Financing Activities:
Proceeds from Common Stock 0 40,000
Reduction in Notes Payable (14,505) (28,689)
Decrease in Subscriptions Receivable 96,000 0
Net Cash Used in Financing Activities 81,496 11,311
Net increase (decrease) in Cash (1,498) (1,856)
Cash - Beginning 1,571 1,856
Cash - Ending $ 73 $ 0
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INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC AND SUBSIDIARY
CONDENSED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30
(UNAUDITED)
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2000 1999
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Revenues $ 226,994 $ 125,235
Cost of Goods Sold $ 164,109 $ 85,726
Gross Profit 62,885 39,509
Other General and Administrative Expenses 106,883 32,626
Total Operating Expenses 106,883 32,626
Income (Loss) Before Other Income (Expense) and
Provision for Income Taxes (43,998) 6,883
Interest Expense 4,412 6,926
Income (Loss) before Provision for Income Taxes (48,410) (43)
Provision for Income Taxes 0 0
Net Income $ (48,410) $ (43)
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Loss Per Common Share $ (0.0138) nil
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Weighted Average Common Shares Outstanding 3,500,000 1,900,000
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INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000 (UNAUDITED)
GENERAL
Basis of Presentation - The unaudited condensed consolidated financial
statements include the accounts of the Company and its subsidiary. Intercompany
balances have been eliminated in consolidation.
Interim Financial Information - The financial information contained herein is
unaudited but includes all normal and recurring adjustments which, in the
opinion of management, are necessary to present fairly the information set
forth. The unaudited condensed consolidated financial statements should be read
in conjunction with the consolidated financial statements, which are included in
the Company's Annual Report on Form 10-KSB for the year ended December 31, 1999.
The Company's results for interim periods are not necessarily indicative of
results to be expected for the fiscal year of the Company ending December 31,
2000. The Company believes that this Quarterly Report filed on Form 10-QSB is
representative of its financial position, its results of operations and its cash
flows for the periods ended June 30, 2000 and 1999 covered thereby.
Comprehensive Income - In June 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 130 ("SFAS 130"),
"Reporting Comprehensive Income." SFAS 130 requires companies to disclose
comprehensive income and its components. The Company currently has no items of
other comprehensive income and therefore SFAS 130 does not apply.
Legal Proceedings - The Company is not currently party to any legal proceedings.
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ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion is intended to assist in an understanding of
the Company's results of operations for the second quarter of 1999 compared to
the second quarter of 2000.
Forward-Looking Information
This report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of its
management as well as assumptions made by and information currently available to
its management. When used in this report, the words "anticipate", "believe",
"estimate", "expect", "intend", "plan", and similar expressions as they relate
to the Company or its management, are intended to identify forward-looking
statements. These statements reflect management's current view of the Company
with respect to future events and are subject to certain risks, uncertainties,
and assumptions. Should any of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those described in this report as anticipated, estimated or
expected. The Company's realization of its business aims could be materially and
adversely affected by risks and uncertainties, including but not limited to
economic, competitive, governmental and technological factors affecting the
Company's operations, markets, products, services, prices and other factors.
Results of Operations
IEMI's net revenues for Q2 2000 increased by 81% compared to Q2 1999 (The 1999
numbers for comparison are Broward Recycling, prior to the acquisition by IEMI
in June of 1999).
The Company's significant revenue improvement is almost entirely directly
related to local sales and marketing efforts and expansion of its international
business segments. During the first quarter, 2000, IEMI started recycling cruise
ship aluminum cans from international (mainly Caribbean) ports, which is
continuing and has also started its own pick up service for a targeted
commercial customer group.
The Company expects revenue for the third quarter of 2000 to continue to grow at
this accelerated rate. Revenue is partly a function of the mix of recyclable
material types and the instability of the metals markets, which is difficult to
predict. Revenue is also subject to the impact of the economic conditions in the
various geographic regions that the Company services, both domestically and
internationally. The Company is on target to exceed $1.0 million in sales and
expects to reach this Year 2000 business objective.
IEMI's loss for Q2 2000 was expected and on target at ($44,000). On a per share
basis, the Company lost $ (.03) per common share in Q2 2000 versus nil in the
same period, 1999. The loss in the second quarter is reduced from the first
quarter by $22,000. The Company's
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administrative expenses have increased significantly, year over year, due to its
current business plan and model.
The loss is attributable to the expansion and acquisition plan the Company has
put forward for the year 2000. That process has translated into very expensive
general and administrative expenses. Without the acquisition expenses, the
Company would have been profitable in the second quarter. The Company has filed
its 10K-SB with the Securities and Exchange Commission and has made three
amendments to that filing.
The Company expects the gross profit percentage to increase several points in
the third quarter and for that trend to continue during the remainder of 2000.
IEMI's gross margin percentages in any period varies dependent on the product
mix, as well as the need of the metals market, supply and demand. The Company is
implementing new cost control measures to increase gross margin. Various other
factors such as metals yield and inventory levels will also continue to affect
the amount of cost of sales and the variability of gross margin percentages.
A worst case scenario involving a critical supplier of raw materials would be
the partial or complete shutdown of the supplier and its resulting inability to
provide materials to the Company on a timely basis. Where efforts to work with
suppliers continue, contingency planning has emphasized the identification of
secondary sources.
Spending on its acquisition plan will continue throughout 2000.
The Company does not expect a change in tax rate and anticipates no corporate
income tax for year 2000.
The Company became a fully reporting firm on February 6, 2000.
IEMI is not currently party to any legal proceedings.
The Company continues to receive financial support from its venture capitalist
and is committed to receiving funds in excess of $350,000 during the year 2000.
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PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8K
NONE
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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.
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC.
By: /s/ Harold Solomon
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Harold Solomon
President
Dated: September 22, 2000
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