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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 September 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: September 30, 2000 -
3,500,000 (three million five hundred thousand) 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 4-5
Statements of Cash Flow 5
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis or Plan of Operation 8-9
PART II. Other Information 9
Item 6. Reports of Form 8-K 9
Signatures 10
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PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
The following sets forth the financial statements for the third
quarter 1999 compared to the third 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 SEPTEMBER 30, DECEMBER 31,
2000 1999
(UNAUDITED) (AUDITED)
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Current Assets:
Cash and Cash Equivalents $ 0 $ 1,571
Inventory 9,835 19,167
Loans Receivable 21,743 0
Total Current Assets 31,578 20,738
Property, Plant and Equipment (Net of $118,131 and $108,920
accumulated depreciation at September 30, 2000 and
December 31, 1999) 161,263 170,473
Other Assets:
Organizational Costs (Net of $800 and $693 accumulated
amortization at September 30, 2000 and December 31, 1999) 0 107
Loan fees (Net of $855 and $534 accumulated amortization
at September 30, 2000 and December 31, 1999) 5,554 5,876
Deposits 340 340
Total Other Assets 5,894 6,323
Total Assets $ 198,735 $ 197,534
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LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Cash Overdraft $ 6,561 $ 2,818
Accounts Payable and Accrued Expenses 114,497 14,987
Customer Deposits 17,725 18,152
Notes Payable Current Portion 0 0
Total Current Liabilities 138,783 35,957
Long Term Liabilities:
Notes Payable 165,261 187,433
Total Liabilities 304,044 223,390
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 683,972 679,471
Accumulated Deficit (621,636) (411,182)
Accumulated Deficit During Development Stage (171,145) (171,145)
(105,309) 100,644
Less: Subscriptions Receivable 0 (126,500)
Total Equity (105,309) (25,856)
Total Liabilities and Stockholders' Equity $ 198,735 $ 197,534
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INTERNATIONAL ENVIRONMENTAL MANAGEMENT INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(UNAUDITED)
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2000 1999
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Revenues $ 690,057 $ 453,841
Cost of Goods Sold 520,471 316,896
Gross Profit 169,586 136,945
Other General and Administrative Expenses 365,632 270,843
Total Operating Expenses 365,632 270,843
Income (Loss) Before Other Income (Expense) and
Provision for Income Taxes (196,046) (133,898)
Interest Income 469 30
Interest Expense (14,877) (20,916)
Net Income (Loss) $(210,454) $(154,784)
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Loss Per Common Share $(0.0601) $ (0.0442)
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Weighted Average Common Shares Outstanding 3,500,000 3,500,000
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INTERNATIONAL ENVIRONMENTAL MANAGEMENT INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(UNAUDITED)
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2000 1999
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Cash Flow from Operating Activities:
Net (Loss) $(210,454) $(154,784)
Adjustments to Reconcile Net Loss to Net Cash Used For
Operating Activities:
Depreciation and Amortization 9,639 5,658
Changes in Assets and Liabilities:
(Increase) Decrease in Inventory 9,332 (172)
(Increase) Decrease in Loans to Stockholders (21,743) 0
Increase (Decrease) in Cash Overdraft 3,743 (3,411)
Increase (Decrease) in Accounts Payable and Accrued Expenses 99,510 (75,471)
Increase (Decrease) in Loans from Stockholders 0 (39,402)
Increase (Decrease) in Customer Deposits (427) (7,838)
Net Cash Used in Operating Activities (110,400) (275,420)
Cash Flow from Investing Activities
Acquisition of property, plant and equipment 0 (4,446)
Cash Flow from Financing Activities:
Proceeds from Common Stock 4,501 546,000
Reduction in Notes Payable (22,172) (61,474)
(Increase) Decrease in Subscriptions Receivable 126,500 (200,000)
Net Cash Used in Financing Activities 108,829 284, 526
Net increase (decrease) in Cash (1,571) 4,660
Cash Beginning 1,571 1,856
Cash - Beginning 0 6,516
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INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(UNAUDITED)
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2000 1999
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Revenues $ 221,923 $ 175,367
Cost of Goods Sold $ 172,380 $ 126,857
Gross Profit 49,543 48,510
Other General and Administrative Expenses 134,978 139,170
Total Operating Expenses 134,978 139,170
Income (Loss) Before Other Income (Expense) and
Provision for Income Taxes (85,435) (90,660)
Interest Income 275 0
Interest (Expense) (5,086) (8,503)
Income (Loss) before Provision for Income Taxes (90,246) (99,163)
Provision for Income Taxes 0 0
Net Income (Loss) $ (90,246) $ (99,163)
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Loss Per Common Share $ (0.0258) $ (0.0522)
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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
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 (UNAUDITED)
1. Basis of Presentation - The unaudited condensed consolidated financial
statements include the accounts of the Company and its subsidiaries.
Intercompany balances have been eliminated in consolidation.
2. 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 September 30,
2000 and 1999 covered thereby.
3. 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.
4. 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 third quarter of 1999 compared to
the third 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 Q3 2000 increased by 27% compared to Q3 1999.
(The 1999 numbers for comparison are Broward Recycling, acquired by IEMI in
June of 1998). This is the third straight quarter with at least double digit
revenue growth numbers.
The Company's revenue increase is almost 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 fourth 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 market,
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, despite the recent downturn in market prices for scrap materials.
IEMI's loss for Q3 2000 was expected and on target at ($90,000). On a
per share basis, the Company lost $ (.02) per common share in Q3 2000 versus $
(.05) in the same period, 1999.
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The loss in the third quarter is reduced from the first quarter by $ (.01) per
share. The Company's 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, which has resulted in expensive
general and administrative expenses. Without these acquisition expenses, the
Company would have been profitable in the third quarter of 2000. 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 a couple
of points in the fourth quarter and for that trend to continue during 2001.
IEMI's gross margin percentages in any period varies dependent on the product
mix, as well as the needs of the metals market, and supply and demand
conditions. The Company is implementing new cost control measures to increase
gross margins. 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 worse 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 continues, contingency planning has emphasized the
identification of secondary sources.
Spending on its acquisition plan will continue throughout the year
2000 and 2001.
The Company does not expect a change in tax rate and anticipates no
corporate income tax for the 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 $200,000 during
the remainder of year 2000.
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: November 21, 2000
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