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               SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C. 20549

                          FORM 10-KSB/A
                         Amendment No. 1

        Annual Report Pursuant to Section 13 or 15(d) of
               the Securities Exchange Act of 1934

For the Fiscal Year Ended           Commission File No. 0-27520
December 31, 2001

                     SDC International, Inc.
     ------------------------------------------------------
     (Exact name of registrant as specified in its charter)

         Delaware                                   75-2583767
-------------------------------              ----------------------
(State or other jurisdiction of              (IRS Employer Id. No.)
incorporation or organization)

          231 Bradley Place
         Palm Beach, Florida                         33480
----------------------------------------           ----------
(Address of principal executive offices)           (zip code)


Registrant's telephone number, including area code: (561) 882-9300


   Securities registered pursuant to Section 12(b) of the Act:

                              None
                        ----------------
                        (Title of Class)

   Securities registered pursuant to Section 12(g) of the Act:

                  Common Stock, $.001 par value
                  -----------------------------
                        (Title of Class)

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].

Indicate  by  check  mark  if  disclosure  of  delinquent  filers
pursuant  to Item 405 of Regulation S-B is not contained  herein,
and will not be contained, to the best of registrant's knowledge,
in  definitive  proxy or information statements  incorporated  by
reference  in  Part III of this Form 10-KSB or any  amendment  to
this Form 10-KSB. [ ].

The  aggregate  market value of the voting  stock  held  by  non-
affiliates  of the registrant, based upon the closing sale  price
of  the Common Stock on May 27, 2003 as reported on the over-the-
counter  US market was approximately $11,822,053.  As of May  27,
2003  the registrant had outstanding 22,187,987 shares of  Common
Stock.


<PAGE>
                     SDC International, Inc.
                           Form 10-KSB
                        Table of Contents
Part I                                                   Page No.

Item 1    Description of Business.......................    1

Item 2    Description of Property.......................    11

Item 3    Legal Proceedings.............................    11

Item 4    Submission of Matters to a Vote of
          Security Holders..............................    11
Part II

Item 5    Market for Common Equity and Related
          Stockholder Matters...........................    12

Item 6    Management's Discussion and Analysis of
          Plan of Operation.............................    15

Item 7    Financial Statements..........................    24

Item 8    Changes in and Disagreements with
          Accountants on Accounting and
          Financial Disclosure..........................    25
Part III

Item 9    Directors, Executive Officers, Promoters
          and Control Persons; Compliance with
          Section 16(a) of the Exchange Act.............    26


Item 10   Executive Compensation........................    28

Item 11   Security Ownership of Certain Beneficial
          Owners and Management and Related
          Stockholder Matters...........................    31

Item 12   Certain Relationships and Related
          Transactions..................................    33

Item 13   Exhibits, List and Reports on Form 8-K........    35

Signatures..............................................    38

Certifications Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002..........................    39


<PAGE>



                             PART I

  Certain  statements  in  this Annual  Report  on  Form  10-KSB,
including   certain  statements  contained  in   "Business"   and
"Management's  Discussion and Analysis  or  Plan  of  Operation,"
constitute  "forward-looking statements" within  the  meaning  of
Section  27A  of  the  Securities Act of 1933,  as  amended,  and
Section  21E of the Securities Exchange Act of 1934, as  amended.
The  words  or  phrases "can be", "expects", "may  affect",  "may
depend", "believes", "estimate", "project", and similar words and
phrases are intended to identify such forward-looking statements.
Such forward-looking statements are subject to various known  and
unknown  risks  and  uncertainties and we caution  you  that  any
forward-looking information provided by us or on  our  behalf  is
not  a  guarantee of future performance. Our actual results could
differ  materially from those anticipated by such forward-looking
statements  due to a number of factors, some of which are  beyond
our  control, in addition to those risks discussed below  and  in
our  other public filings, press releases and statements  by  our
management,  including (i) the highly competitive nature  of  the
truck  manufacturing  industry,  (ii)  changes  in  domestic  and
foreign  economic  and market conditions,  (iii)  the  effect  of
federal,  state  and  foreign  regulation  on  our  business  and
(iv) our ability to obtain additional capital or financing.   All
such  forward-looking statements are current only as of the  date
on  which  such  statements were made.  We do not  undertake  any
obligation  to publicly update any forward-looking  statement  to
reflect events or circumstances after the date on which any  such
statement  is  made or to reflect the occurrence of unanticipated
events.

  We  refer to SDC International, Inc. throughout this report  as
"SDC," "registrant," "we" or "us."

Item 1.   Description of Business

Overview and Background

  We  were  formed  in  Delaware in 1994  to  market,  sell,  and
finance    Eastern   and   Central   European   industrial    and
transportation products such as diesel generators,  co-generation
equipment,   electric   metering  systems,  on/off-road   trucks,
tractors, and transport equipment such as buses, trolleys, trams,
and  airfreight  containers.   However,  as  we  began  marketing
efforts,  we learned that products would not be delivered  in  an
acceptable  time period to our customers because of the  lack  of
working  capital of the product manufacturers.  Moreover, through
our  direct  involvement  in  marketing  alliances  and  business
transactions  in  Central and Eastern Europe, we  concluded  that
many  manufacturing  companies within that  geographic  area  had
shortages  of  marketing skills and financial capability.   As  a
result,  we  decided  to  seek  internal  positions,  either   by
acquisition  or  joint  venture,  within  targeted  manufacturing
companies  to  assure better financial capability  and  marketing
skills.   In 1997, we acquired Golden Grove Business,  Inc.,  the
exclusive   distributor  of  Tatra,  a.s.  products  in   certain
countries in South and Central America.

  Our  strategy has further evolved into acquiring and  operating
companies  in  Central  Europe  that  manufacture  high  quality,
globally  distributed  industrial  and  transport  equipment  and
products.   Towards this end, on December 28, 2001, we  completed
our  first  major  transaction of this type when  we  acquired  a
majority  interest  in Tatra.  We initially  acquired  91.61%  of
Tatra  and currently own 51% of the outstanding shares  of  Tatra
and operate Tatra as our principal business.

Tatra

  Overview and History

  Tatra  vehicles are internationally known as primarily off-road
heavy  duty trucks for use in rough terrain and difficult climate
conditions. Tatra trucks have won the Paris-Dakar Rally  six  out
of  the  last  seven  years and defeated Man  and  Daimler-Benz's
Mercedes trucks to win the prestigious FIA European Truck  Racing
Cup 2001.

  The  Tatra  factory was founded in 1850 and in 1898  the  first
truck   carrying   2.5   tons   of  payload   was   manufactured.
Historically,  Tatra  has been a prime supplier  of  on/off  road
heavy-duty  vehicles  to  the former Soviet  Union,  Eastern  and
Central  Europe, India and China.  From 1986 to 1990, Tatra  sold
more  than 15,000 trucks a year. However, many of these countries
in  which Tatra had historically directed its sales efforts  have
suffered   poor  economic  conditions  and  challenging  business
environments   following   the  fall   of   their   Communist-led



                               -1-

<PAGE>


governments and collapse of their economic systems.  As a result,
the  demand for new Tatra trucks in these countries has  declined
and Tatra's sales have significantly fallen.

  The  Tatra  factory has also been struggling  with  a  lack  of
operating  capital for several years and was burdened  with  bank
loans  of up to $120 million.  In 1998, Tatra's bank credit lines
were   cancelled,   production  dropped  and  revenue   decreased
substantially. In 1999, Tatra reported a loss of $20 million.  In
June  2000, these bank loans were converted into equity of Tatra.
In  2000,  Tatra reported revenue of approximately  $147  million
compared  to  $105  million in 1999, assets  of  more  than  $140
million and a profit of about $5.0 million on shipments of almost
1,800 trucks compared to a loss of approximately $20 million  for
1999,  after taking approximately $27 million in write-downs  and
special one-time charges.

  Our Business and Technology

  The  unique feature of Tatra trucks is a solid central backbone
tube  with  swing  half axles.  The Tatra design enables  quicker
passage over rough terrain with significantly less vibration than
that  from  more  traditional designs.   The  swing  half  axles,
together  with the central backbone tube system, create a  stable
base  for  a  superstructure resistant to side oscillation.   The
trucks are offered in 4 by 4, 6 by 6, 8 by 8, 10 by 10 and 12  by
12  configurations with turbocharged diesel engines.   The  Tatra
transmission  is mechanical with a pneumatic gear shift  booster,
ten   forward  and  two  reverse  speeds.   Tatra  has  ISO  9001
certification,  evidencing  compliance  with  quality   standards
established    by    the    International    Organization     for
Standardization, and Tatra trucks meet all EURO III regulations.

  Tatra  assembles trucks from various components.  Approximately
65%  of  the  components  used  are  made  by  Tatra  or  Tatra's
automotive component manufacturing subsidiaries.  Tatra purchases
other  components such as tires, electronics, glass  and  related
components  from  various  third parties  and  steel  from  steel
producers  located in the Czech Republic.  Approximately  62%  of
manufacturing  materials  is  purchased  from  within  the  Czech
Republic.  Tatra  is not dependent on any single manufacturer  or
supplier for its component parts or steel.

  The  main  products  of  Tatra are  used  for  both  civil  and
military   applications.   The  specific  military   applications
include  using  the  Tatra chassis and cab to hold  dump  bodies,
flatbeds,   water  or  fuel  tanks,  troop  carrier  seating   or
electronics.   The  special  chassis  technology   is   used   in
construction   vehicles,   fire  fighting   vehicles   and   road
maintenance  vehicles.  Civil trucks, called "JAMAL,"  are  heavy
duty  dump  trucks  that are used for the most difficult  working
conditions.   Trucks  for  military  use,  called  "ARMAX,"   and
military   special   purpose  vehicles  called   "FORCE,"   offer
customized  platforms  and special bodies for  specific  military
applications.  Tatra's products for civil applications  are  sold
to the Czech Republic, Republic of Slovakia, People's Republic of
China  and India.  Tatra's chassis and cab are sold for  military
applications  to  military  procurement  agencies  in  the  Czech
Republic,  the  Republic of Slovakia, India and the  United  Arab
Emirates.  Approximately 39% of sales for the year ended 2000 and
34% of sales for the year ended 2001 were to the military market.

  Tatra  manages and evaluates its operations in four  reportable
segments,  as follows:  the truck segment, the services  segment,
the energy segment and the automotive components segment.

  *    Truck Segment

  Tatra  is  an  OEM  for trucks, and automotive  and  industrial
machines.   As  described  above, Tatra trucks  have  a  uniquely
designed chassis that enables quicker passage over rough  terrain
with significantly less vibration than that from more traditional
designs.   The  Tatra  chassis  is used  for  both  civilian  and
military applications.

  *    Services Segment

  The   services   segment  includes  transportation,   catering,
accommodation  and  import  services.  Transportation,  shipping,
freight  and  trade related services associated with vehicle  and
machinery manufacturing are handled by their respective operating
segments.  Certain services are generally unrelated to the  basic
business  of  truck  manufacturing  but  were  common   to   many
industrial  operations in planned economies, and were managed  by
Tatra  prior  to  the SDC acquisition.  During 2002,  several  of
these  activities were either discontinued or, when  appropriate,
absorbed into ongoing operations.

  *    Energy Segment

  The  energy segment is comprised of Energetica, a.s., a company
which  produces  electricity,  steam  and  heat.   It  sells  its
products  to Tatra (80%) and to the municipality in which  it  is
located  (20%) which then resells the power to individual  users,



                               -2-

<PAGE>


both  commercial  and  residential.  The company  uses  coal  for
electric production and also purchases electricity for resale.

  SDC   is   considering  divesting  this  operation   should   a
reasonable alternative be available.  The energy segment supplies
power that is essential for the operation of Tatra.  There are no
contracts  or agreements or other matters which may restrict  the
ability  to  improve its operations or profitability.  Similarly,
there are no impediments to the disposition of this segment other
than a lack of viable alternative purchasers of the business  and
the  requirement  that  Tatra continue to be  provided  with  the
required  energy.   Management has conducted  a  solicitation  of
potential  interested purchasers.  From the  list  of  interested
parties,   several   leading   candidates   were   selected   and
negotiations  are  currently  underway  which  may  lead   to   a
transaction.   Management  efforts to improve  current  operating
efficiency  in  this segment has been similar to efforts  in  all
business segments.

  *    Automotive Components Segment

  The  automotive component segment was originally  created  only
to  produce  components  for  Tatra trucks.   In  1995,  separate
subsidiaries  were  created to market  Tatra  trucks  to  outside
customers.   Management  believes that  these  subsidiaries  will
become  profitable as outside customers for automotive components
become a larger part of Tatra's overall revenues.

  For  further discussion on the profitability of these segments,
see the section entitled "Management's Discussion and Analysis of
Plan of Operation."

  The Tatra Acquisition

  Since  1997, SDC has been the exclusive distributor  for  Tatra
vehicles, accessories and spare parts in Colombia, with the right
of  first  refusal to become the exclusive distributor for  other
countries  in  South  and Central America.  In  1999,  the  Czech
government-owned  Konsolidacni Banka took over the  ownership  of
and  the process of selling Tatra by privatizing it in 1999.  The
government  was  seeking to sell Tatra as part of  a  process  of
privatization  whereby companies that were  traditionally  state-
owned  sought  to privatize so that they could benefit  from  the
flow of private capital markets in order to finance modernization
and  growth.   This  privatization, which was common  under  non-
communist  governments in Eastern Europe in the 1990's,  occurred
when  the  bank cancelled Tatra's long-term debt in exchange  for
91.61%  of  Tatra's equity.  This process is not analogous  to  a
U.S. bankruptcy liquidation.  Privatization of companies has been
necessary  for Eastern European countries seeking  entry  to  the
European Union.

  In   2000,   a  subsidiary  of  the  Konsolidacni  Banka,   the
Revitalization  Agency,  entered into a  confidential  memorandum
with  us  regarding the proposed sale of Tatra, and  negotiations
ensued.

  Our   Chairman  Ronald  Adams,  President  Milota  Srkal,   and
strategic  advisor  General Alexander Haig, Jr.  met  in  Prague,
Czech  Republic, with Prime Minister Milos Zeman, Deputy  Minster
of  Finance Jan Mladek, Deputy Minister of Foreign Affairs  Hynek
Kmonicek,  Minister  of  Defense  Jan  Vetchy,  and  Chairman  of
Konsolidacni  Banka  Kamil Ziegler to  propose  and  discuss  the
acquisition.   During  the  meetings, Messrs.  Adams,  Srkal  and
General  Haig discussed our operational, financial and  marketing
plans for Tatra and expressed our continued interest in acquiring
Tatra.

  On  August 28, 2000, we submitted our offer to acquire Tatra to
the  Czech  Consolidation Agency, the Czech government's  selling
agent which had been placed in charge of the sale of Tatra.   The
parties met throughout the first half of 2001 and we updated  our
due  diligence review of Tatra through June 2001.   On  June  28,
2001, we submitted our final and binding offer to purchase 91.61%
of  the shares of Tatra, representing all of Tatra's shares  that
were  owned by Konsolidacni Banka.  During July 2001 our bid  was
selected  and  we  began  contract negotiations  with  the  Czech
Consolidation Agency.  In October 2001, the Supervisory Board  of
the  Czech  Consolidation  Agency  approved  the  Share  Purchase
Agreement  and the Investment Agreement which had been previously
signed.   On November 7, 2001, the cabinet of the Czech  Republic
approved  the two agreements.  On December 28, 2001, we completed
the  acquisition  of  Tatra,  in concert  with  our  wholly-owned
subsidiary SDC Prague, s.r.o.

  Total   consideration  for  Tatra,  including  commitments   to
replace   financing   and  to  provide  future   financing,   was
approximately $33 million.  This included the purchase of  91.61%
of  Tatra's shares for $10.9 million cash, the replacement of  an
$11  million  working capital line of credit held  by  the  Czech
government,   and  the  commitment  by  us  to  invest,   through
subordinated loans or equity, approximately $12 million in  Tatra
during the year 2002.



                               -3-

<PAGE>


  Terex  Corporation,  a diversified global manufacturer  engaged
in  a  broad  range of construction, infrastructure  and  mining-
related  capital equipment manufacture and distribution, assisted
us  in financing the acquisition of the Tatra shares. As part  of
Terex's financing, we issued to Terex three 9% convertible  notes
in  the  aggregate principal amount of $12.9 million.   Of  this,
$4.8  million  of the aggregate principal amount became  due  and
payable  on  March 1, 2002.  As had been previously agreed,  upon
the  fulfillment of certain conditions, including  completion  of
the  Tatra acquisition, in early 2002 we sold to Terex 40.61%  of
Tatra's  issued  and  outstanding capital  stock  in  return  for
cancellation of the $4.8 million note.  The remaining  notes,  in
the  aggregate  principal  amount of $8.1  million,  are  due  on
December 31, 2004.  Upon the sale of Tatra shares to Terex, Terex
held  the right to convert up to $4 million of its notes  at  any
time  after  December 31, 2002 into shares of  our  common  stock
equal  to 12% of our outstanding common stock on a fully  diluted
basis.   This  right  was  extinguished by  mutual  agreement  in
December  2002.  As a result of these transactions, we  retain  a
controlling interest in 51% of Tatra's shares, Terex  acquired  a
40.61%  interest in Tatra's shares and the 8.39% remaining shares
of  Tatra  are  publicly-held.   The  publicly-held  shares  were
initially sold through a government coupon privatization of Tatra
shares in April 1992.

  Terex  also  assisted  us  with the  establishment  of  working
capital  credit  facilities for Tatra by loaning  $5  million  to
Tatra in 2002 as part of the share purchase agreement between SDC
and  Terex.   In consideration for Terex's role as our  strategic
advisor and for certain marketing and technology consulting  that
may  be rendered by Terex to us, we issued to Terex 1,256,837  of
our  common  shares, representing approximately 5% of our  issued
and  outstanding common shares.  Of these, 1,147,385 shares  were
issued on December 21, 2001 at the then market price of $0.75 per
share and 109,452 shares were issued on December 28, 2001 at  the
then  market  price  of $0.90 per share.  Terex's  obligation  to
provide  marketing  and  technology  consulting  services  is   a
contractual  obligation under the securities  purchase  agreement
between  SDC  and  Terex.  The specific types  of  marketing  and
technology consulting services referred to in the agreement  have
not been defined.

  Terex  did  not participate in the negotiations with the  Czech
government and was not involved in the acquisition process. Terex
has  been  a shareholder of SDC since November 16, 2000  and  has
played  a  strategic  advisor  role  to  SDC  providing  product,
technology  and  marketing consulting.   These  three  areas  are
ongoing,   primarily  for  Tatra  products  in  the  mining   and
construction industries as well as in assembly line operations of
Tatra.

  On   December   31,  2002  Tatra,  a.s.  signed  a   management
consulting  agreement with Terex Corporation in order to  provide
Tatra access to management experience, advice and assistance from
Terex,  and  to perform various managerial services in connection
with  its  operations.   An  experienced  Terex  executive,   Fil
Filipov,  who  previously served as President  of  several  Terex
operating  companies,  has taken responsibility  of  implementing
recommendations  from the consulting engagement.   The  agreement
calls for assistance in the administration and management of  the
business  of  the  company  under the supervision  of  the  Tatra
Supervisory Board and the Tatra Board of Directors.

  Strategy

  Our  strategy  is to restructure Tatra to become a  modern  and
customer-oriented  company.   Subject  to  obtaining   additional
capital,  we will seek to make additional investments in  Tatra's
truck  assembly  operations, as well  as  into  Tatra's  forging,
foundry  and  tool and stamping operations.  Management  believes
that   Tatra's   unique   design,  solid   construction,   simple
maintenance, product longevity and rugged-terrain efficiency also
make  its  trucks  ideal for markets in underdeveloped  countries
where  roads  are often poor and trucks are subjected  to  severe
climate conditions.

Competition

  We  believe that we compete largely on the basis of the quality
of  our trucks and on Tatra's unique chassis design.  The chassis
design  produces  the only central tube half swing-axle  designed
truck  in  production.   This  results  in  significant  enhanced
stability  in  difficult driving conditions  and  rough  terrain,
which is its primary selling feature.  Its other selling features
are  its  competitive  price compared to  other  trucks  used  in
similar applications, and the high quality manufacturing of Tatra
vehicles.

  Although  management  believes that the Tatra  special  chassis
technology is unique, the truck manufacturing industry in general
is  highly  competitive.   We compete with  several  other  truck
manufacturers in each of our markets, including global  alliances
among  some of the world's largest truck manufacturing companies.
Some  of  our main competitors include Volvo AB, Man AG, Daimler-
Benz  AG, Oshkosh Truck Corporation, Mack Trucks, Inc. and Scania
AB.   We  believe that competition is likely to intensify as  the
number  of  new  market  entrants increases.   A  number  of  our



                               -4-

<PAGE>


existing   and  potential  competitors  have  greater  financial,
marketing  and other resources than we have.  If our  competitors
devote significant additional resources to the provision of truck
manufacturing and distribution to the target customer  base,  our
business could be materially adversely affected.

Customers


  The  principal  customers  for  Tatra's  truck  and  automotive
components segments include original equipment manufacturers,  or
OEM's,   commercial   entities  and   military   and   government
procurement  agencies  in  the  Czech  Republic,  Russia,  India,
Slovakia and other foreign countries who acquire Tatra trucks for
civilian  applications, such as for the development  of  internal
infrastructures, and for military applications.

  For  the  year  ended December 31, 2001, 19% of  Tatra's  total
revenues  were generated in India from sales through Tatra  UDYOG
Limited, which is a joint venture that is fifty percent owned  by
Tatra.   This  joint venture seeks to expand the  sale  of  Tatra
products   in  India  and  surrounding  regions  by  establishing
manufacturing  operations in India, and by receiving  from  Venus
Udyog, its Indian partner, sales and marketing support for  Tatra
products  in  those  regions.  The parties  intend  to  assemble,
manufacture,  sell, service, maintain, design  and  modify  Tatra
trucks in India, Sri Lanka, Bangladesh, Nepal and other countries
as may be agreed to.

  Tatra's two largest customers in the truck segment in 2000  and
2001,   respectively,  were  Venus  Projects  Ltd.  (India)   and
Surgutneftegas   (Russia).    Venus   Projects   accounted    for
approximately 19% and 20% of Tatra's revenue for the  year  ended
December  31,  2001  and 2000, respectively,  and  Surgutneftegas
accounted  for approximately 16% and 19% of Tatra's  revenue  for
the year ended December 31, 2001 and 2000, respectively.

  Tatra's  three largest  customers in the automotive  components
segment  are  Skoda  Auto, A.S., Tatra Sipox,  A.S.  and  Karsit,
S.R.D.   No customer in this segment accounted for more than  10%
of  Tatra's  revenues for the year ended December  31,  2001  and
2001, respectively.

  Tatra's  three largest customers in the services  segment  were
Maersk  Intermodal Europe, S.R.O., Eurotrade, K.F.T. and Schstahl
Trade, S.R.D. No customer in this segment accounted for more than
10%  of Tatra's revenues for the year ended December 31, 2001 and
2001, respectively.

  The  primary  customers  of Tatra's energy  segment  are  Tatra
itself,  and the town of Koprivnice, where Tatra is located.   No
customer  in this segment accounted for more than 10% of  Tatra's
revenues  for  the  year  ended  December  31,  2001  and   2001,
respectively.

Marketing

     Tatra's  truck  products are sold primarily through  dealers
within  the  Czech and Slovak Republics and are sold, usually  as
fleets,  to  end-users in most other markets.  Tatra maintains  a
sales  and  marketing  department of  over  100  personnel.   The
automotive  components subsidiaries sell to OEM's through  direct
marketing efforts.

Government Regulation

  Under  Czech  Republic law, Tatra must maintain  a  license  to
export  products for military use.  This license must be  applied
for  at least annually by submitting an application form with the
appropriate office of the Czech government.  In order  to  obtain
the  license, Tatra must be majority owned by a Czech  person  or
entity. SDC Prague, s.r.o., a Czech limited liability company and
wholly  owned subsidiary of SDC, owns 51% of Tatra's shares.   In
addition,  Tatra  must  have a board of directors  consisting  of
Czech citizens without criminal record.  Although Tatra has never
been  denied  a  license, there is no guarantee  that  the  Czech
government  will grant the license each time it is  applied  for.
Approximately  39% of Tatra's revenues in 2001  were  from  sales
requiring  this  license and the failure of Tatra  to  obtain  or
maintain this license would severely impact our ability  to  sell
Tatra products, which would have a material adverse effect on our
financial condition, results from operations and business.

  In  addition to the license, Tatra must comply with the  normal
and  customary  regulations  related  to  the  transportation  of
vehicles.   However, the cost of obtaining and  maintaining  such
government approval or to comply with such government regulations
is not material.



                               -5-

<PAGE>


Research and Development

  Tatra's  research  and development activity, primarily  related
to  ongoing development of its proprietary truck chassis, totaled
$2.4 million in 2001 and $2.7 million in 2000.
Employees

  SDC  has  two full time employees and two part-time  employees.
As  of  December 31, 2001, Tatra and its subsidiaries  had  5,953
full  time  employees.  As of November 1,  2002,  Tatra  and  its
subsidiaries had 5,552 full time employees.

Intellectual Property

  Various  components of Tatra's chassis system are  patented  in
eight  countries,  including the United States  of  America,  and
Tatra  obtains new patents on updated technology that it develops
from  time to time.  Its current patents expire in years  ranging
from 2005 to 2016.  From time to time, Tatra incurs costs related
to  filing  for  new  patents and for  maintaining  its  existing
patents.   These costs are not material and are expensed  at  the
time that they are incurred.

Recent Developments

  In  addition  to  the management consulting agreement  that  we
entered  into  with  Terex on December 31, 2002,  as  more  fully
described  in  the  section  entitled  "Business",  we  note  the
following recent developments.

  Milota Srkal resigned as Chairman of the Board of Directors  of
Tatra  in  January 2003.  In addition, Jan Ludva  resigned  as  a
member  of the Board of Directors of Tatra, Henry Kiefer resigned
as  General  Manager  of  Tatra, and  John  Prikryl  resigned  as
Managing Director of Tatra's manufacturing subsidiaries.  Two new
members  of  the Board of Directors of Tatra have been appointed:
Francis Frontisek Tarzek, as Director of Operations of Tatra, and
Igor Vlcek, as Chief Financial Officer of Tatra.

  In  January 2003, Thomas B. Walker was hired as Chief Financial
Officer  of  SDC on a part time basis.  Mr. Walker  has  over  25
years  of senior executive experience in financial management  in
the   financial   services  industry  with  large,  multinational
corporations   having   multiple   domestic   and   international
locations.

  In  December  2002,  Drummond  Bell  resigned  from  the  audit
committee  and  from the board of directors of the  Company.   In
February  2003,  Zachary Shipley was appointed to  the  board  of
directors and to the audit committee of the Company. Mr.  Shipley
has  been an officer and director of Oxbow Corporation since  its
founding in 1983 and its Vice President of Finance since 1986.


















                               -6-

<PAGE>


  Risk Factors

  You  should  carefully  consider the  risks  and  uncertainties
described below and the other information in this filing.  If any
of  these  risks or uncertainties actually occur,  our  business,
financial  condition  or operating results  could  be  materially
harmed and could adversely affect the value of your investment in
us.

Shares of our common stock have a limited trading market.

There  is a limited public trading market for the shares  of  our
common stock.  We cannot assure you about:

     *    the liquidity of the market for our shares;

     *    the ability of stockholders to sell their shares; or

     *    the  price at  which stockholders would be able to sell
          their shares.

Our common shares are  not listed  on any exchange.  We intend to
seek relisting as soon as we have satisfied our filing
requirements with the SEC.


We do not intend to pay dividends in the foreseeable future.

We  currently intend to retain any earnings to support our growth
strategy  and  do not anticipate paying dividends on  our  common
stock  in  the foreseeable future.  Our ability to pay  dividends
depends  in  part on our receipt of dividends or  other  payments
from our operating subsidiaries.  We have no operations ourselves
and   depend  on  our  operating  subsidiaries  for  cash.    Our
subsidiaries are also subject to restrictions on their ability to
transfer cash to us.


We have had  operating losses since our inception, and losses may
continue for the next several years.

We  have  had significant net operating losses and negative  cash
flow from operations.  We expect to continue to incur significant
operating losses and have negative cash flow from operations  for
at  least  the  next year as we expand our existing  capabilities
with  Tatra.   We  cannot  assure  you  that  our  revenues  from
operations  will be adequate to achieve or sustain  profitability
or to generate positive cash flow.


We  have a  limited operating history  upon which to evaluate our
performance.

We  acquired  Tatra,  representing our principal  operations,  in
December  2001.   Accordingly,  our  shareholders  have   limited
historical financial and operating information about us to use in
evaluating our past and anticipated performance.


Our acquisition strategy creates new risks and uncertainties.

Our  new  focus  on acquiring and developing joint  ventures  and
associations with strategic manufacturers creates new  risks  and
uncertainties.   We  are dependent upon the  execution  of  joint
venture  or  acquisition  agreements,  our  ability  to  complete
satisfactory  due  diligence, present  financial  information  in
accordance  with  required applicable accounting principles,  and
arrange financing for targeted transactions.  Additionally, there
is  the  continued risk of political instability in the countries
in  which we now or hereafter may conduct our business, which may
result in a loss of our assets located there.


We anticipate significant future capital requirements.

We will need significant amounts of capital over the next several
years to:

     *   develop and expand our Tatra operations;

     *   fund working capital needs and debt service obligations;
         and




                               -7-

<PAGE>


     *   take advantage of opportunities, including international
         expansion, acquisitions of businesses or investments in,
         or  strategic   alliances   with,   companies  that  are
         complementary to its current operations.

We  intend  to  seek capital through accessing  debt  and  equity
capital markets depending upon prevailing market conditions  and,
eventually, through internally generated cash flow.

However,  we  cannot  assure you that we will produce  sufficient
internally  generated  cash flow or raise sufficient  capital  to
fund our business plan on acceptable terms, if at all.  Moreover,
the  amount  of, and the terms and conditions of the  instruments
relating to our outstanding indebtedness may restrict our ability
to  raise additional capital.  Future sales of common stock could
also result in substantial dilution to our existing shareholders.
Failure  to  generate  internally or raise sufficient  funds  may
require  us  to delay, abandon or reduce the scope of our  future
expansion, which could have a material adverse effect on us.


Our growth and acquisition strategy could strain our resources.

We  have a limited operating history and rapid growth which could
strain  our  management, operating and financial resources.   Our
ability  to manage growth and expansion effectively will  require
continued  implementation of, and improvements to, our  operating
and  financial systems and will require us to expand,  train  and
manage  our  employee base.  Furthermore, our ability  to  expand
successfully will, among other things, depend upon our ability to
identify suitable acquisition candidates and arrive at prices and
terms  that are attractive to us.  We may also depend on consents
from  third parties, including regulatory authorities.  We cannot
assure you that our systems, procedures and controls or financial
resources will be adequate, or that our management will keep pace
with  this  growth.   We  also cannot assure  you  that  we  will
successfully consummate any acquisitions on acceptable terms,  or
at  all.   If  we  are  unable  to manage  growth  and  expansion
effectively, we could be materially adversely affected.


Future acquisitions  could dilute  shareholders and involve other
risks.

We  intend  to  pursue  acquisitions of  complementary  services,
technologies   or  businesses,  although  we  have   no   present
understandings,  commitments or agreements with  respect  to  any
acquisitions.  Acquisitions could result in dilutive issuances of
equity   securities,  the  incurrence  of  debt  and   contingent
liabilities   and   increased  impairment  and/or   amortization.
Acquisitions  involve numerous risks, including  difficulties  in
assimilating the operations, technologies, services and  products
of  the  acquired  companies  and the diversion  of  management's
attention from other business concerns. Accordingly, acquisitions
could have a material adverse effect on us.


Our success  depends on market acceptance of, and demand for, our
products.

Our   success  will  depend  heavily  on  the  extent  to   which
prospective customers purchase our products.  To succeed,  demand
for  our products must increase significantly in existing markets
and there must be strong demand for products that we introduce in
the  future.   Customer  demand, however, is  uncertain  and  our
success in creating demand will be subject to business, economic,
regulatory  and competitive factors that are beyond our  control.
Failure  to  gain  a significant level of market  acceptance  for
current or planned products could have a material adverse  effect
on us.


The truck manufacturing industry is highly competitive.

We believe that we compete largely on the basis of the quality of
our  trucks  and on Tatra's unique chassis design.   The  chassis
design  produces  the only central tube half swing-axle  designed
truck  in  production.   This  results  in  significant  enhanced
stability  in  difficult driving conditions  and  rough  terrain,
which is its primary selling feature.  Its other selling features
are  its  competitive  price compared to  other  trucks  used  in
similar applications, and the high quality manufacturing of Tatra
vehicles.



                               -8-

<PAGE>


Although  management  believes that  the  Tatra  special  chassis
technology is unique, the truck manufacturing industry in general
is  highly  competitive.   We compete with  several  other  truck
manufacturers in each of our markets, including global  alliances
among  some of the world's largest truck manufacturing companies.
Some  of  our main competitors include Volvo AB, Man AG, Daimler-
Benz  AG, Oshkosh Truck Corporation, Mack Trucks, Inc. and Scania
AB.   We  believe that competition is likely to intensify as  the
number  of  new  market  entrants increases.   A  number  of  our
existing   and  potential  competitors  have  greater  financial,
marketing  and other resources than we have.  If our  competitors
devote significant additional resources to the provision of truck
manufacturing and distribution to the target customer  base,  our
business could be materially adversely affected.


We are dependent upon certain suppliers for custom made
components for our trucks.

Because our trucks are based upon a unique engineering design, we
rely  on  numerous  outside  suppliers  to  deliver  custom  made
components for our trucks.  If any of these suppliers are  unable
to  deliver these custom made components, we will need to develop
new relationships with, and purchase these components from, other
suppliers.  If this occurs, we are likely to face delays  in  the
manufacture  and  shipment  of our trucks,  which  could  have  a
material  adverse  effect upon our business, financial  condition
and results from operations.


Departure of key personnel could harm our business.

We  are  managed by a small number of key executive officers  and
operating  personnel.  Further, we believe that our success  will
depend,  in  large  part, on our ability to  attract  and  retain
skilled  and  qualified personnel with experience  in  the  truck
manufacturing industry.  These employees are in great demand  and
are often subject to competing offers of employment.  The loss of
key personnel could have a material adverse effect on us.


We depend on our operating subsidiaries for cash.  Our
subsidiaries may be limited in their ability to make funds
available to us for the payment of debt and other obligations.

We  do  not  hold any significant assets that will generate  cash
other than our direct and indirect interests in our subsidiaries,
which  conduct all of our operations.  Our cash flow and  ability
to  meet  our obligations will depend upon the cash flow  of  our
operating  subsidiaries  and  the  payment  of  funds  by   these
operating   subsidiaries  to  us.   Our  operating  subsidiaries'
ability to make any payments to us will depend on their earnings,
business  and  tax  considerations and  legal  restrictions.   In
addition,  our  loan  agreement with Terex prohibits  Tatra  from
making  certain cash distributions to SDC and our agreement  with
the  government of the Czech Republic prohibits SDC from removing
the  assets of Tatra during the year 2002.  Also, pursuant  to  a
credit  facility between Tatra and ABN AMRO, Tatra is  prohibited
from  paying  any dividends to SDC as long as any obligations  of
Tatra under this credit facility are outstanding.


Because our operations are conducted outside the United States,
we are subject to special economic and political risks, including
inflation, foreign exchange fluctuations, foreign regulatory
approvals and foreign taxes.

Substantially  all  of  our current and  planned  operations  are
outside  the  United  States.  Our manufacturing  operations  and
headquarters are in the Czech Republic, and we conduct  sales  in
the  Czech Republic, Slovakia, Hungary, Russia, India and  China.
Accordingly,  we  are subject to economic, political  and  social
instability  and  other  risks  not  typical  of  investments  in
businesses conducted in the United States.

      Currency Risk and Exchange Controls.  Our financial results
have  been,  and  may  continue  to  be,  adversely  affected  by
fluctuations in the relative values of the currencies in which we
conduct  business.   We may be materially adversely  affected  by
these factors.

      Dependence  on Local Economies; Inflation.   The  Company's
operations depend upon the economies of the markets in  which  it
operates.   These  markets include countries  with  economies  in
various stages of development or structural reform, some of which
are  subject  to rapid fluctuations in terms of consumer  prices,
employment  levels,  gross  domestic  product  and  interest  and
foreign  exchange  rates.  The Company may  be  subject  to  such



                               -9-

<PAGE>


fluctuations in the local economies in which it operates.  To the
extent  such  fluctuations  have an  effect  on  the  ability  of
subscribers to pay for the Company's service, the growth  of  the
Company's  services in such markets could be impacted negatively.
Many  of  the countries in which the Company operates, or expects
to  operate,  do  not  have established credit  bureaus,  thereby
making  it  more  difficult  for the  Company  to  ascertain  the
creditworthiness  of  potential  subscribers.   Accordingly,  the
Company  may  experience a higher level of bad debt expense  than
otherwise would be the case.

      Tax  Risks  Associated  with Foreign  Operations.   We  are
developing  a plan to structure our operations based  on  certain
assumptions  about  various tax laws, U.S. and international  tax
treaty  developments, international currency exchange and capital
repatriation  laws and other relevant laws of a variety  of  non-
U.S. jurisdictions.  In particular, since we have operations that
are  conducted outside of the United States by SDC Prague, s.r.o.
and  Tatra,  we  are potentially subject to tax in  both  foreign
jurisdictions  and  the  United States.   Therefore  we  rely  on
existing  tax treaties as well as on the tax laws of  the  United
States  and  foreign jurisdictions to prevent double taxation  of
income.   While  management believes these  assumptions  will  be
correct,  we  cannot assure you that taxing or other  authorities
would  reach  the  same conclusion about the plan  we  ultimately
adopt.    We   could  suffer  adverse  tax  and  other  financial
consequences  if these assumptions are incorrect or the  relevant
treaties or laws were changed or modified.

      Enforcement of Agreements.  A number of the agreements  SDC
enters  into  with  its non-United States subsidiaries,  dealers,
subscribers  and  agents are governed by the  laws  of,  and  are
subject  to  dispute  resolution in the  courts  of,  or  through
arbitration  proceedings in, the country or region in  which  the
operation  is  located.   The Company cannot  accurately  predict
whether  such  forum  will  provide  it  with  an  effective  and
efficient  means  of resolving disputes that  may  arise  in  the
future.   Even  if the Company is able to obtain  a  satisfactory
decision through arbitration or a court proceeding, it could have
difficulty  enforcing any award or judgment on  a  timely  basis.
The  Company's ability to obtain or enforce relief in the  United
States is uncertain.

       Foreign  Corrupt  Practices  Act.   As  a  United   States
corporation,  SDC is subject to the regulations  imposed  by  the
Foreign  Corrupt  Practices  Act (the  "FCPA"),  which  generally
prohibits  United States companies and their intermediaries  from
making improper payments to foreign officials for the purpose  of
obtaining  or  keeping  business.   Any  determination  that  the
Company  has  violated  the FCPA would have  a  material  adverse
effect on the Company.

     Changes in Country Policy; Change in Regulatory Agencies and
Political  Structures.  Under Czech law,  Tatra  is  required  to
obtain  a  license  to export products for military  use.   Tatra
applies for this license annually and the impact of not obtaining
the  license on Tatra's exports would be significant.  There  can
be no assurances that the Czech government will continue to grant
the   license.    See  the  section  titled  "Business-Government
Regulation."

      The  governments of the countries in with which we  conduct
business vary widely with respect to structure, constitution  and
stability.   While Central and Eastern European governments  have
historically exercised extensive influence over their  economies,
the role of government has declined as countries have liberalized
their political structures and economies.  However, there can  be
no   assurance   that  future  developments  in  the   government
administration  of  local  economies  would  not  materially  and
adversely impair the Company's business and financial condition.


Distribution and other payments to us from our subsidiaries and
affiliates may be subject to foreign taxes, and distributions by
us to non-U.S. shareholders may be subject to U.S. withholding
taxes.

We   receive  distributions  of  earnings  and  other   payments,
including  interest, from our subsidiaries and  affiliates  which
may  be subject to withholding taxes imposed by the jurisdictions
in  which  these entities are formed or operating.   These  taxes
would  reduce the amount of after-tax cash we would receive  from
these  entities.   In  general, a United States  corporation  may
claim a foreign tax credit against its federal income tax expense
for  these foreign withholding taxes and for foreign income taxes
paid directly by foreign corporate entities in which it owns  10%
or  more  of the voting stock.  Our ability to claim foreign  tax
credits and to utilize net foreign losses is, however, subject to
numerous limitations, and we may incur incremental tax costs as a
result of these limitations or because we are not in a tax-paying
position  in  the  United States.  We may  also  be  required  to
include  in  our  income  for United States  federal  income  tax
purposes  our  proportionate share of certain earnings  of  those
foreign corporate subsidiaries that are classified as "controlled
foreign  corporations"  without regard to  whether  distributions
have   been  actually  received  from  those  subsidiaries.    In
addition, our distributions to shareholders residing outside  the
United States may be subject to U.S. withholding taxes.



                               -10-

<PAGE>



Labor unions in the Czech Republic may increase our expenses.

While  all  of  our  operations are currently unionized,  we  may
experience strikes or other types of conflicts with labor  unions
or  our  personnel, which could adversely affect our  operations.
In  addition, the government of the Czech Republic has, at times,
actively  regulated cross-border transactions, including  placing
limitations on imported goods.  These regulations may  result  in
delivery delays and increased equipment costs for us.



Item 2.   Description of Property

  Until  the  end of 2001, we rented office space from our  Chief
Executive  Officer,  Mr. Adams, on a month  to  month  basis  and
through  our subsidiary, SDC Prague, s.r.o., we leased an  office
at  Vaclavske nam. 66, Prague, Czech Republic, for our activities
in  the Czech Republic.  Our rental expense for these offices was
$37,000 for 2001.  Currently, our primary offices where corporate
and  executive functions are performed are located at 231 Bradley
Place,   Palm  Beach,  FL  33480.   These  offices   consist   of
approximately  1,330  square feet, and our annual  office  rental
payments total approximately $51,000, and are payable on a  month
to month basis.

  We  also own a 600 acre facility, containing a 5 million square
foot  factory  with  manufacturing and office facilities  and  an
automotive test track in the town of Koprivnice, Czech  Republic.
This property is insured.

  We   believe  that  our  existing  offices,  manufacturing  and
related  facilities are adequate for the foreseeable  future  and
that,  depending on additional products and sales, similar and/or
additional  offices and locations can be acquired  on  reasonable
terms.



Item 3.   Legal Proceedings

  In  August 2002, an action was commenced against SDC and Ronald
A.  Adams  in the Supreme Court of New York, Suffolk  County,  by
Steven  Scarano,  a  former consultant, and  Rainmakers  Inc.,  a
company  he  purports  to  control.  In  a  complaint  served  in
February  2003,  the plaintiffs alleged breach  of  a  consulting
agreement,   intentional  interference  with   contract   rights,
violations   of   unspecified  "Federal  Securities   Laws"   and
fraudulent   inducement,  and  seek  damages   of   approximately
$721,000.  On March 3, 2003, defendants removed the action to the
United States District Court of the Eastern District of New York.
On  March  10, 2003, defendants served an answer to the complaint
denying  the material allegations of the complaint and  asserting
several affirmative defenses.  We believe that this action  lacks
merit and intend to defend it vigorously.



Item 4.   Submission of Matters to a Vote of Security Holders

  None.














                               -11-

<PAGE>


                              Part II

Item 5.  Market For Common Equity and Related Stockholder Matters

  Our  Certificate of Incorporation authorizes 25,000,000  shares
of  common  stock,  $.001  par value, and  25,000,000  shares  of
preferred  stock, $.001 par value.  As of May 27,  2003,  we  had
22,187,987 shares of common stock issued and outstanding  and  no
shares of preferred stock issued and outstanding.

  Price Range of Common Stock

  Our  common stock was approved on July 29, 1996 by the National
Association of Securities Dealers (NASD) for trading on  the  OTC
Bulletin  Board under the symbol SDCN.  Prior to that time  there
was   no  public  market  for  our  common  stock.   Because   we
encountered unforeseen difficulties converting Czech to US  GAAP,
our  SEC  filings were delayed, and on May 23, 2002,  our  common
stock  was  delisted  from  the OTC  Bulletin  Board.   Effective
May  24,  2002,  our stock began trading on the  over-the-counter
market under the symbol SDCN.

  The  following table sets forth, for the periods indicated, the
high  and  low  bid prices for the common stock, as  reported  by
Yahoo  Finance on the OTC Bulletin Board from January 1, 2000  to
May  22, 2002 and on the over-the-counter US market from May  24,
2002 to May 27, 2003.

<TABLE>
<CAPTION>
                                               Price Range
                                              High      Low
<S>                                          <C>       <C>

2000
First Quarter                                $2.03     $0.94
Second Quarter                               $1.28     $0.63
Third Quarter                                $2.76     $0.69
Fourth Quarter                               $1.53     $0.56

2001                                          High      Low
First Quarter                                $1.13     $0.54
Second Quarter                               $1.21     $0.44
Third Quarter                                $1.00     $0.51
Fourth Quarter                               $0.90     $0.53

2002                                          High      Low
First Quarter                                $1.60     $0.76
Second Quarter                               $1.56     $0.65
Third Quarter                                $1.20     $0.65
Fourth Quarter                               $0.90     $0.60

2003                                          High      Low
First Quarter                                $0.81     $0.40
Second Quarter (through May 27, 2003)        $0.90     $0.40
</TABLE>

  The  foregoing quotations reflect inter-dealer prices,  without
retail  mark-up, mark-down or commission, and may  not  represent
actual transactions.  As of May 27, 2003, the closing sale  price
of  our  common stock was $0.61 per share. There were 296 holders
of  record  as  of May 27, 2003. We believe that  the  number  of
beneficial  owners is substantially greater than  the  number  of
record  holders, because a large portion of common stock is  held
in broker "street names."



                               -12-

<PAGE>


  We  have  paid no dividends on our common stock and we  do  not
expect  to pay cash dividends in the foreseeable future.  SDC  is
not under any contractual restriction as to our present or future
ability  to  pay  dividends. We currently intend  to  retain  any
future  earnings  to  finance the growth and development  of  our
business.

Recent Sales of Unregistered Securities

     Set  forth  below is information regarding the issuance  and
sales  of our unregistered common stock for the four years ending
December  31, 2002.  None of these sales involved the use  of  an
underwriter.   All  of  the sales were exempt  from  registration
under  Section 4(2) of the Securities Act.  All of the purchasers
are  "accredited investors" within the meaning of Rule 501(a)  of
Regulation  D promulgated under the Securities Act.  The  Company
relied on the representations of the purchasers to this effect at
the time of purchase.

<TABLE>
<CAPTION>

Date                Number of Shares           Date                Number of Shares       Date                  Number of Shares
                       Issued/Sold                                    Issued/Sold                                  Issued/Sold
<S>                 <C>                        <C>                 <C>                    <C>                   <C>
January 8, 1999        90,000                  November 16, 2000      50,000              December 28, 2001        531,000
January 26, 1999       50,000                  December 7, 2000       15,000              January 9, 2002          15,000
March 9, 1999          34,000                  December 8, 2000       10,000              February 1, 2002         925,000
March 15, 1999         621,040                 December 20, 2000      10,000              February 11, 2001        15,000
April 5, 1999          15,000                  January 5, 2001        516,000             February 12, 2002        50,000
April 6, 1999          150,000                 January 17, 2001       50,000              February 13, 2002        109,452
April 8, 1999          15,000                  January 23, 2001       500,000             February 14, 2002        18,000
April 9, 1999          125,000                 February 8, 2001       125,000             February 22, 2002        25,000
May 28, 1999           12,500                  February 13, 2001      15,000              March 12, 2002           15,000
June 8, 1999           25,000                  February 21, 2001      8,000               April 2, 2002            15,000
June 15, 1999          24,000                  March 8, 2001          15,000              April 5, 2002            10,000
July 19, 1999          82,290                  March 13, 2001         8,000               May 1, 2002              15,000
August 19, 1999        25,000                  April 6, 2001          15,000              May 14, 2002             428,571
August 27, 1999        175,000(1)              April 17, 2001         18,000              May 29, 2002             29,412
September 22, 1999     70,000                  April 23, 2001         150,000             June 3, 2002             15,000
October 4, 1999        220,000                 May 8, 2001            15,000              July 2, 2002             15,000
November 18, 1999      34,864                  May 22, 2001           6,000               August 2, 2002           15,000
December 14, 1999      71,594                  May 29, 2001           450,000(2)          August 27, 2002          6,000
January 7, 2000        26,000                  May 30, 2001           400,000             September 4, 2002        15,000
February 22, 2000      216,000                 June 7, 2001           15,000              September 13, 2002       120,000
February 24, 2000      100,000                 June 11, 2001          27,500
March 29, 2000         739,700                 June 28, 2001          250,000(3)
April 14, 2000         200,000                 July 2, 2001           1,100,000(4)
April 18, 2000         200,000                 July 6, 2001           300,000
April 24, 2000         30,000                  July 16, 2001          365,000
June 2, 2000           15,000                  July 24, 2001          200,000
June 22, 2000          31,617                  August 2, 2001         6,250
July 5, 2000           100,000                 August 8, 2001         15,000
July 10, 2000          15,000                  August 24, 2001        300,000
July 12, 2000          50,000                  August 30, 2001        225,000(5)
July 24, 2000          110,000                 September 14, 2001     15,000
August 7, 2000         40,000                  September 20, 2001     11,047
August 10, 2000        379,167                 September 26, 2001     11,500
August 22, 2000        50,000                  October 8, 2001        15,000
September 1, 2000      113,461                 October 19, 2001       250,000
September 6, 2000      210,684                 October 24. 2001       50,000
September 8, 2000      15,000                  November 5, 2001       100,000
September 29, 2000     200,000                 November 12, 2001      390,000
</TABLE>




                               -13-

<PAGE>

<TABLE>
<CAPTION>

Date                Number of Shares           Date                Number of Shares       Date                  Number of Shares
                       Issued/Sold                                    Issued/Sold                                  Issued/Sold
<S>                 <C>                        <C>                 <C>                    <C>                   <C>

October 10, 2000       15,000                  December 10, 2001      15,000
November 9, 2000       15,000                  December 21, 2001      1,147,385

</TABLE>
-----------------------

(1) All 175,000 shares were issued to General Haig later returned
and  cancelled pursuant to the terms of a new advisory  agreement
between  the  Company and General Haig filed herewith.   The  new
advisory agreement provided for the grant of 300,000 fully vested
options to purchase common stock at a price of $.40 per share and
100,000  options to purchase common stock at a price of $.40  per
share  which  would vest upon General Haig becoming  a  director.
See  the  section  entitled  "Certain Relationships  and  Related
Transactions."

(2) 40,000  of  these  450,000  shares were  later  returned  and
cancelled  when an investor, Saul Strulovic, decided  to  rescind
his  investment  in the Company.  We refunded his investment  and
allowed  him to keep 10,000 of the 50,000 shares originally  sold
as compensation for the temporary use of proceeds.

(3) These  250,000   shares   were  issued  in  error  and   were
subsequently  returned to the Company and cancelled  in  exchange
for the correct issuance of 1,000,000 shares on July 2, 2001.

(4) 1,000,000 shares are being held in escrow as collateral for a
$500,000 note to Ronald Adams, who in turn loaned $500,000 to the
Company.   750,000 of these shares were returned to SDC  in  2002
when the notes were satisfied.

(5) All 225,000 shares issued to General Haig were later returned
and  cancelled pursuant to the terms of a new advisory  agreement
between  the  Company and General Haig filed herewith.   The  new
advisory agreement provided for the grant of 300,000 fully vested
options to purchase common stock at a price of $.40 per share and
100,000  options to purchase common stock at a price of $.40  per
share  which  would vest upon General Haig becoming  a  director.
See  the  section  entitled  "Certain Relationships  and  Related
Transactions."









                               -14-

<PAGE>


Item  6.    Management's  Discussion  and  Analysis  of  Plan  of
            Operation

  The  following  discussion should be read in  conjunction  with
our  financial statements and notes to those statements and other
financial information appearing elsewhere in this Annual  Report.
In  addition to historical information, the following  discussion
and  other  parts  of this Annual Report contain  forward-looking
information that involves risks and uncertainties.

Overview

  We  follow Statement of Financial Accounting Standard  ("SFAS")
No. 141, "Business Combinations", and SFAS No. 142, "Goodwill and
Other  Intangible Assets", in accounting for the  excess  of  the
fair  value  of  the assets we acquired over the price  we  paid.
This is known as "negative goodwill". Under these pronouncements,
negative  goodwill has been allocated upon the  consolidation  of
SDC  and Tatra as a reduction of approximately $44 million of the
carrying  value  of  fixed  assets of  Tatra.   In  other  words,
according  to  the  financial statements  using  the  appropriate
purchase accounting methodology, we acquired Tatra for about  $44
million  less  than  its  net book value.   We  believe  that  we
acquired  Tatra  at less than its net book value because  of  the
following  factors:  we paid cash as part of the purchase  price,
we  agreed  to invest an additional $13 million more at  a  later
date.  We agreed to maintain the name Tatra, and SDC's management
team  was experienced in the automotive industry.  The commitment
to  invest additional funds at a later date was an important step
in the acquisition plan since Tatra had over $120 million of bank
debt, access to additional operating capital in the form of  debt
or  equity  was limited and Tatra had been unable to provide  the
required   working  capital  necessary  to  achieve  its   growth
objectives.   See the section entitled "Business."   Furthermore,
we  were  one of the only two companies competing in  the  tender
that  were approved as finalists by the bank by the December  31,
2001 deadline to sell Tatra that had been imposed by the European
Union Anti-Monopoly Office in the Czech Republic.  Therefore,  we
were  required upon consolidation of Tatra, to write down Tatra's
assets by that amount on the financial statements of SDC.   As  a
result,  SDC's  consolidated financials will  have  approximately
$4.3  million less in annual depreciation expense, and therefore,
$4.3 million towards additional annual earnings in the future.

  The  preliminary allocation of the purchase price of the assets
acquired  and  liabilities assumed based on  the  fair  value  of
TATRA,  a.s.  was  as  follows  (expressed  in  thousands  of  US
dollars):

                  -----------------------------------------------
                  Cash acquired                        $   3,634
                  Trade accounts receivable               20,181
                  Inventories                             38,774
                  Other current assets                     9,509
                  Property, plant and equipment, after
                  allocation of negative goodwill         24,483
                  Other assets                             3,200
                  Notes payable to banks                 (15,274)
                  Trade accounts payable                 (24,243)
                  Accrued expenses                       (10,749)
                  Contractual obligation - current        (9,089)
                  Other current liabilities              (11,352)
                  Minority interest                       (5,526)
                  Contractual obligation - noncurrent     (7,803)
                  Other liabilities                       (2,740)
                  -----------------------------------------------
                                                        $ 13,005
                  ===============================================



                               -15-

<PAGE>


Results of Operations of SDC International (Without Giving Effect
to the Acquisition of Tatra)

  We  discuss  the  results of operations of SDC separately  from
those  of Tatra, and without giving any effect to the acquisition
of  Tatra  because  we did not acquire Tatra until  December  28,
2001.  We believe this provides a more accurate presentation when
comparing SDC's 2001 results to its 2000 results.

  In  the  past few years, we have devoted substantially  all  of
our  time and effort to negotiating the acquisition of Tatra  and
arranging  strategic alliances related to the Tatra  acquisition.
Therefore,  our revenues to date are not the result of  marketing
efforts  but rather were obtained by receiving small  orders  for
goods  that  were  easily sourced and delivered to  our  existing
customers.  We record revenue when products are shipped.  For the
year ended December 31, 2000, we recorded revenue of $70,000 from
the  sale  of miscellaneous replacement parts and we recorded  no
revenue for the year ended December 31, 2001.

  Our  operating expenses for the year ended December  31,  2001,
were  $9,049,000  compared  to $1,338,000  for  the  year  ending
December  31,  2000.  Our net loss was $9,964,000  for  the  year
ended December 31, 2001 compared to a net loss of $1,852,000  for
the year ended December 31, 2000. In 2001, the large increase  in
costs,  and the resulting loss, were due primarily to an increase
of  $5,513,000  in  non-cash charges for  expenses  paid  by  the
issuance of common stock and options (the stock issued was valued
at the market value at issuance and the options were valued using
the  intrinsic  method  for  employee and  non-employee  director
options  and  the  Black-Scholes option  pricing  for  all  other
options),   the  activities  and  costs  related  to  the   Tatra
acquisition of approximately $3,645,000 (including $1,694,000  of
non-cash  charges as noted above)  which were not included  as  a
cost  of the acquisition as they were incurred prior to the final
approval  of  the  purchase  by the Czech  government  and  minor
reductions  in other corporate costs as a result of cost  savings
efforts  in  light  of our lack of income from  operations.   The
costs related to the Tatra acquisition included compensation fees
and  expenses  that were contingent upon closing the  acquisition
and  were  based  on  contracted amounts.  Our  interest  expense
increased to $863,000 in 2001 from $480,000 in 2000 as  a  result
of  increased  borrowing  related to our  acquisition  of  Tatra,
particularly with respect to a loan obtained for our bid deposit.
Our increase in interest expense included an increase of $473,000
in  non-cash charges for common stock (valued at the market value
at issuance) issued as additional compensation in connection with
loans.   We  recognized a loss of $52,000 in 2001 resulting  from
the June 30, 2000 disposal of our Bolivian subsidiary Skobol.  We
had  sold  Skobol for a note in the amount of $150,000.  Payments
of  $50,000 plus interest at 6% per year was due on each of  June
30,  2001,  2002 and 2003.  SDC had not received any payments  on
the  note at the June 30, 2001, so $52,000 for the carrying value
of  the  note was written off at June 30, 2001 which equaled  the
carrying  amount of the investment at the time of sale.   As  SDC
had  no history with the purchaser, or any other reasonable basis
for  estimating the degree of collectibility of the note received
in  the sale, SDC determined that it would recognize gain on  the
sale  of  the  subsidiary  only to the extent  proceeds  received
exceeded the carrying value.

  Our  loss  for  2001 included the following other indirect  and
internal expenses, as mentioned above, not included as a cost  of
acquisition:

     *     non-cash  charges for financing costs,  marketing  and
           technical  assistance costs and due diligence expenses
           paid in  connection with  the issuance of common stock
           and options of $1,694,000;

     *     performance bonuses and  related  taxes of  $1,667,000
           due to management; and

     *     other  costs  and  professional  fees of approximately
           $284,000.

Results of Operations of Tatra

  Prior  to  our  acquisition  of Tatra  on  December  28,  2001,
Tatra's  operations  were  significantly  influenced  by  several
negative   factors.  The  first  factor  was  Tatra's   uncertain
ownership  structure  (as  a result  of  the  acquisitions  of  a
substantial  portion of Tatra's stock, first by  the  bank  as  a
noteholder of SDC, then by the Czech government as guarantors  of
the  bank)  and  the  resulting uncertainty of  Tatra's  business
partners  regarding Tatra's future. Uncertainty of the  ownership
structure  also limited Tatra's potential to receive  any  short-
term  financing. The ownership structure was resolved at the  end
of  the  year  when we acquired our interest in  Tatra.   Tatra's
revenues  for  2001 totalled approximately $152 million  and  its
2001 net profit was approximately $5.8 million.

  Operations   during   the  year  2001  were   also   negatively
influenced  by  considerable  fluctuations  in  the   sales   and
revenues,  which  reduced  production  efficiency  and   capacity
utilization.   Our sales fluctuate from quarter to quarter  as  a
result  of buying policies by certain of our customers.  We  have
little ability to influence these buying patterns and continue to



                               -16-

<PAGE>


try  to  mitigate the fluctuations by cultivating new  customers.
Total  annual sales in 2001 increased $4.7 million or  3.2%  from
2000.

  Tatra  manages and evaluates its operations in four  reportable
segments:  truck, service, energy and automotive components.  The
truck  segment designs, develops and manufactures on and off-road
heavy-duty vehicles for commercial and military applications.  It
also  manufactures parts for machinery and vehicles. The  service
segment  provides transport, catering, accommodation  and  import
services.  The  energy segment provides heat and hot  water.  The
automotive  components segment designs, develops and manufactures
products   and  components  for  the  automotive  industry.   The
operating segments are managed and evaluated separately  as  each
offers  different  products and serves  different  markets.   The
accounting  policies of the reportable segments are the  same  as
those   described  in  the  summary  of  significant   accounting
policies.   Management evaluates performance based upon operating
earnings before interest and income taxes.

  The  truck  segment and automotive components segment  together
comprise 96.7% of the revenues of Tatra.  The overall increase in
sales  resulted  from increases in sales of  the  truck  segment,
which  increased  $5.2  million  or  4.6%  from  2000,  and   the
automotive  components segment which increased  $1.4  million  or
5.0% from 2000.  These two segments accounted for 76.7% and 20.0%
of  sales  in  2001,  and  75.6% and  19.6%  of  sales  in  2000.
Increases   in  the  sales  of  both  the  truck  and  automotive
components  segments resulted from increased marketing activities
by  Tatra.   Increases  in revenue in 2001  were  the  result  of
increases  in units sold due to linking certain negotiated  price
discounts for customers who ordered and purchased larger  numbers
of units.

  The  other two segments, service and energy, accounted for 1.2%
and  2.1%  in  2001,  and  2.9% and 1.8% in  2000,  respectively.
Service  revenue decreased $2.4 million or 56.3% from 2000  as  a
result  of  Tatra's  decision to reduce, divest  or  cease  these
operations and the corresponding reduction in efforts  to  market
and sell such services.  Energy revenue increased $.5 million  or
17.6%  from  2000  as  a result of increases in  Tatra's  pricing
structure resulting from increased raw material costs.

  Truck Segment

  Tatra  is  an  OEM  for trucks, and automotive  and  industrial
machines.  As described in the section entitled "Business", Tatra
trucks  have  a  uniquely designed chassis that  enables  quicker
passage over rough terrain with significantly less vibration than
that  from more traditional designs.  The Tatra chassis  is  used
for  both  civilian and military applications.  See  the  section
entitled "Business - The Business and Technology."

  Total  revenue  for  this segment in 2001 was  $116.7  million,
which  represented 76.7% of consolidated total revenue of  $152.1
million,   compared  to  revenue  of  $111.5  million  in   2000.
Operating  income in 2001 was approximately $3.5  million,  while
operating income for the consolidated company was $6.6 million in
2001,  which  represented 53.0% of the $152.1  million  in  total
operating  income.   Operating income in 2000  was  approximately
$2.9 million.

  Services Segment

  The   services   segment  includes  transportation,   catering,
accommodation  and  import  services.  Transportation,  shipping,
freight  and  trade related services associated with vehicle  and
machinery manufacturing are handled by their respective operating
segments.  Certain services are generally unrelated to the  basic
business  of  truck  manufacturing  but  were  common   to   many
industrial  operations in planned economies, and were managed  by
Tatra  prior  to  the SDC acquisition.  During 2002,  several  of
these  activities were either discontinued or, when  appropriate,
absorbed into ongoing operations.

  Total  revenue  for the services segment was  $1.9  million  in
2001,  compared  to revenue of $4.3 million in  2000.   In  2001,
total operating income was approximately $0.3 million compared to
($1.2) million in 2000.

  Energy Segment

  The  energy segment is comprised of Energetica, a.s., a company
which  produces  electricity,  steam  and  heat.   It  sells  its
products  to Tatra (80%) and to the municipality in which  it  is
located  (20%) which then resells the power to individual  users,
both  commercial  and  residential.  The company  uses  coal  for
electric production and also purchases electricity for resale.



                               -16-

<PAGE>


  Total  revenue for the energy segment was $3.2 million in  2001
compared   to  $2.7  million  in  2000.  Operating   income   was
approximately $0.8 million in 2001 compared to approximately $0.3
million in 2000.

  SDC  would  elect  to divest this segment should  a  reasonable
alternative be available.  The energy segment supplies power that
is  essential for the operation of Tatra.  There are no contracts
or  agreements or other matters which may restrict the ability to
improve its operations or profitability.  Similarly, there are no
impediments to the disposition of this segment other than a  lack
of   viable  alternative  purchasers  of  the  business  and  the
requirement that Tatra continue to be provided with the  required
energy  to  conduct  its business.  Management  has  conducted  a
solicitation of potential interested purchasers.  From  the  list
of  interested parties, several leading candidates were  selected
and  negotiations  are currently underway which  may  lead  to  a
transaction.   Management  efforts to improve  current  operating
efficiency  in  this segment has been similar to efforts  in  all
business segments.

  Automotive Components Segment

  The  automotive component segment was originally  created  only
to  produce  components  for  Tatra trucks.   In  1995,  separate
subsidiaries  were  created to market  Tatra  trucks  to  outside
customers.   Management  believes that  these  subsidiaries  will
become  profitable as outside customers for automotive components
become a larger part of Tatra's overall revenues.

  Total  revenue from this segment increased to $30.4 million  in
2001,  an  increase of $1.4 million from $28.9 million  in  2000.
Total  revenue from the automotive components segment represented
approximately 20.0% and approximately 19.6% of total consolidated
revenue   for  the  years  ended  2001  and  2000,  respectively.
Operating income in 2001 was approximately $2.1 million  compared
to  approximately  $1.8  million in 2000.   Consistent  with  the
objectives  of  management,  growth  in  total  revenue  for  the
automotive  components  segment at  approximately  5.0%  in  2001
outpaced the 3.2% increase in consolidated total revenue.

  Uneven sales and, therefore, uneven production during the  year
strongly  affected Tatra's inventories, which reduced  cash  flow
and affected our costs of sales and gross profit.

  In  spite of the negative factors influencing the operations of
Tatra  in  2001,  and the increased costs as a result  of  uneven
production cycles, our operating income increased $2.9 million or
76.7%  from  2000.   The overall increase in 2001  resulted  from
increases  in  operating  income  in  the  truck  and  automotive
components  segments by $0.6 million and $0.3 million,  or  20.1%
and  13.7%, respectively, compared to operating income  in  2000.
These  increases  in operating income resulted  from  efforts  to
reduce  overhead  by  reducing our labor costs  by  reducing  our
number of workers and renegotiating with suppliers to lower costs
of  materials.   While total revenue in the energy  and  services
segments  in  2001  decreased $1.9 million from  2000,  operating
income  for  these segments increased by $2.0 million.  Operating
income in the energy segment increased $0.8 million in 2001  from
$0.3  million  in 2000, and in the services segment increased  to
$0.3 million in 2001 from ($1.2) million in 2000.

  Overall,  cost of revenues increased $3.3 million or 2.9%  from
2000.   Cost  of  revenues  increased  less  than  our  revenues,
resulting in an increase of gross profit of $1.4 million or 4.1%.
Our  gross profit as a percentage of revenues remained relatively
constant,  23.3%  for 2001 versus 23.1% for  2000.   Our  selling
general  and  administrative expenses decreased $1.7  million  or
6.7%  while our engineering costs increased $.3 million or  6.2%.
The  decrease in administrative expenses resulted from reductions
in  overhead  personnel costs.  There were no known  or  expected
material  savings  that have resulted from  these  reductions  in
overhead personnel cost.

  Other  income (expense) decreased $2.0 million or  153.6%  from
2000.   This  decrease  was  primarily  from  other  items  which
decreased $1.9 million to ($0.4) million in 2001 compared to $1.5
million  in 2000.  Other income (expense) items in 2000  included
approximately $1.5 million in income resulting from a  waiver  of
interest  payments.  A gain of $1.3 million on  the  disposal  of
subsidiaries  was recognized in 2000 and none was  recognized  in
2001.  Interest expense remained relatively constant in 2000  and
2001,  while  interest income decreased a  net  decrease  of  $.1
million.    Our  share  of  income  resulting  from  subsidiaries
accounted  for on the equity method (whereby we only recognize  a
portion  of the income in proportion to our ownership percentage)
decreased  from $0.2 million to no material income  (expense)  in
2001.  The change in the results of subsidiaries accounted for on
the equity method is largely the consequence of the loss recorded
in  Tatra Udyog, Ltd., India.  The increase in the loss of  Tatra
Udyog in 2001 was due to higher interest charges paid to banks as
a result of extending longer credit terms to customers, discounts
offered  to  customers  to  be  competitive,  increased  cost  of
materials as a result of the weaker Indian Rupee, and an increase
in depreciation charges.  The losses recorded by Tatra Udyog were




                             -18-

<PAGE>


largely   offset  by  either  gains  in  other  subsidiaries   or
accounting adjustments.  Income from foreign exchange rate  gains
and  losses increased $1.4 million to $0.7 million in  2001  from
($0.7)  million in 2000 due to fluctuation in the  various  world
currencies.

  As  a  result  of  all of the above items, Tatra's  net  income
increased  to $5.8 million in 2001 from $5.0 million in  2000,  a
change of approximately $0.9 million or 17.6% from 2000.

  Capital Investment in Machinery and Equipment

  Tatra  made  capital investments of approximately $7.3  million
in  2001.   The  new capital investments were made  primarily  in
manufacturing technology through the acquisition of  machine-tool
centers  enabling  the flexibility of working capacities  and  an
increase  in manufacturing quality. Capital investment  was  also
made in controlling and information technologies.  In particular,
in  2001,  a  capital  investment of $0.9  million  was  made  in
"controlling   technologies".    Controlling   technologies   are
management  information systems designed to assist  in  improving
the  efficiency  of the Company and networks for BAAN  Enterprise
Resource  Planning (ERP) software applications.  All  investments
were financed from Tatra's cash flow.

  Discontinuation of Non-Strategic Tatra Subsidiaries

  As  was  previously  planned, in 2000  Tatra  began  to  divest
several non-strategic and failing small subsidiaries.  The  total
losses  for 2000 from these subsidiaries were approximately  $1.2
million.   Bankruptcy proceedings for non-strategic  subsidiaries
TATRA Poibor, SHT Novy Jiein, and SHT DIZ and liquidation of non-
strategic  subsidiaries  TATRA ND and TRA  DO  BRASIL  LTDA  were
initiated  by Tatra prior to our acquisition and should  have  no
material  effect of us.  This is because, under Czech  bankruptcy
law,  once these subsidiaries petitioned for bankruptcy and  upon
writing   down  any  value  that  may  remain  on  the  financial
statements,  all  activity of these subsidiaries  ceased.   As  a
result of our loss of control of these subsidiaries in accordance
with  FAS  94  no  amounts  relating to  these  subsidiaries  are
included   in  our  financial  statements.   Furthermore,   these
proceedings  were  petitioned  in  2000,  at  which  time   these
subsidiaries  were  removed from the balance sheet  and  the  net
liabilities  resulted in recording of a net gain of approximately
$1.3  million.   In  2000,  the results of  operations  of  these
subsidiaries  up  to  the  time of  filing  for  bankruptcy  were
included in the statement of operations.  Since then, there  have
been   no   transactions  with  these  subsidiaries.   Bankruptcy
proceedings  in the Czech Republic is a long term legal  process,
and  thus,  as  of February 2003, the process has  not  yet  been
completed, with a completion date still being unknown.

Liquidity And Capital Resources

  Tatra

  In  connection  with  our acquisition  of  Tatra,  we  followed
Statement  of  Financial Accounting Standards ("SFAS")  No.  141,
"Business  Combinations", and SFAS No. 142, "Goodwill  and  Other
Intangible  Assets", in accounting for the  excess  of  the  fair
value  of  the assets acquired in the Tatra acquisition over  the
price we paid the Czech government for our shares of Tatra.  When
the purchase price is less than the net book value of the company
being  purchased, the difference is known as "negative goodwill".
Under  the  SFAS  pronouncements,  negative  goodwill  has   been
allocated upon consolidation of Tatra's financial statements into
SDC's  as  a  reduction of the carrying value  of  fixed  assets.
Since we acquired Tatra for about $44 million less than its  book
value,  we  were  required,  upon consolidation,  to  write  down
Tatra's  assets  by  that  amount on the  consolidated  financial
statements  of  SDC.   This  will result  in  approximately  $4.3
million less in annual depreciation on a consolidated basis, and,
therefore,  approximately $4.3 million more  towards  our  annual
earnings in the future.

  Tatra's  operating activities for the year ended  December  31,
2001  provided  net cash of approximately $2.8  million,  whereas
Tatra's operating activities for the year ended December 31, 2000
provided net cash of approximately $8.3 million, providing a year-
to-year  decrease of approximately $5.5 million.  This  decrease,
despite  increases  in accounts payable and net  income,  results
from increases in accounts receivable and inventory (decrease  of
cash  provided  and  increase  of cash  used)  and  decreases  in
liabilities and accruals.  The increase in accounts receivable is
mostly  due to an increase in truck sales at year-end which  were
more  than twice the monthly average for the prior eleven months.
Inventories  increased due to the increase  in  truck  production
material  supplies  for sales contracted  earlier  in  the  year.
Tatra's net cash used in investing activities for 2001, primarily
for  new machinery and equipment, decreased to approximately $4.1
million  compared to $4.8 million in 2000, due to a reduction  in
the resources available for such expenditures.  Net cash provided
by  financing activities in the year ended December 31, 2001  was
approximately  $1.98  million  compared  to  net  cash  used   in
financing activities of approximately $2.03 million for the  year



                             -19-

<PAGE>


ended  December 31, 2000 as a result of increase in net  proceeds
received  from  notes  payable and lines of credit  during  2001.
Total  cash at December 31, 2001 increased to approximately  $3.6
million from approximately $2.8 million at December 31, 2000.

  Approximately  80% of Tatra's products are sold in  US  dollars
and   approximately  80%  of  its  costs  are  in  Czech  koruna.
Therefore, currency exchange rates may have a significant  effect
on  sales  and  profitability.  In the future,  we  plan  to  use
currency hedging operations to attempt to minimize any effect  of
currency  exchange rate changes according to orders and  purchase
contracts for our products. Although SDC maintains a bank account
in  Czech  currency within the Czech Republic  for  paying  SDC's
local  expenses, the amount on deposit in the account is  usually
small  and, therefore, fluctuation in the currency exchange rates
should not have a significant effect on our company.

  In  1996,  Tatra  entered into a sales  contract  with  General
Headquarters  -  U.A.E.  Armed Forces,  Abu  Dhabi,  United  Arab
Emirates for the sale of heavy-duty vehicles and spare parts. The
contract included an unconditional bank guarantee of 10%  of  the
contract value to be valid until three months after the  date  of
the  final  acceptance certificate of the last partial  delivery.
Thereafter, the guarantee would be reduced to 5% of the  contract
value  and  would stay valid for 12 months from the last  partial
delivery.   The  UAE  has  been  disputing  payment  for  Tatra's
delivery of certain equipment for maintenance and repair services
and  as  a  result,  has not delivered a confirmation  letter  on
fulfillment  of  the contract and insists on maintaining  a  bank
guarantee that authorizes it to ask the bank to release the  bank
guarantee in its favor without Tatra's preliminary approval.   In
connection  with  its  potential liability related  to  the  bank
guarantee,  Tatra  has reserved  up  to  $9.1  million,   and  in
connection  with the obligations to meet the  offset requirements
has reserved $7.8 million.    Tatra   will   fund  the  aggregate
cash outflow of approximately $16.89 million from its operations,
bank loans  and other  resources available to it at the time that
the outflow is required.

  American  Truck Company is a joint venture which was formed  in
2002 and is owned equally by Tatra (Tatra USA), Terex Corporation
and STV USA.  It is designed to sell trucks primarily to military
organizations within the Untied States government or  its  allies
under financial programs whereby the foreign government uses  the
trucks but the United States government pays for the trucks.  The
trucks  to  be sold by American Truck Company are a  basic  Tatra
designed  and manufactured chassis which is shipped to  Terex  in
the  United  States where an American made engine,  transmission,
electronics,  tires,  and  other parts  are  assembled  onto  the
chassis  so  that the completed truck is more than  51%  American
labor or components.  To date, no sales have been made.  However,
on  April  14,  2003, the Company announced that  American  Truck
Company  was selected as the preferred bidder by the Ministry  of
Defense  of  Israel (IMOD) to supply the Israeli  Defense  Forces
with  315  Medium  Tactical trucks and associated  support.   The
anticipated  value  of this order is in excess  of  $50  million.
Tatra  has  contributed $50,000 to Tatra USA as paid in  capital,
and there is a commitment to lend up to $650,000 to Tatra USA  on
a  long term unsecured basis of which approximately $311,000  has
been  drawn.  Tatra USA has in turn, loaned $650,000 to the joint
venture and has paid approximately $50,000 in legal expenses  for
the  formation  and contractual agreements between  Tatra,  Tatra
USA, Terex, STV USA and American Truck Company.

  SDC consolidated

  Because  of  SDC's acquisition of Tatra at a  price  below  the
actual  shareholders'  equity  of  Tatra,  the  use  of  purchase
accounting for the acquisition of Tatra has a direct and material
effect  on  the  presentation of financial ratios, liquidity  and
capital  resources  of SDC on a consolidated  basis.  (See  first
paragraph  under "Liquidity and Capital Resources" above.)  On  a
consolidated basis, as of December 31, 2001, we had a net working
capital   deficit   of  approximately  $8.3  million.    However,
excluding  shareholder loans, which we have in the past  mutually
extended,  refinanced or converted into equity, the  net  working
deficit  decreases to approximately $2.6 million.  Our  net  cash
provided  by our consolidated operating activities for  the  year
ended  December 31, 2001 amounted to approximately $0.7  million,
an  increase  of approximately $1.9 million from the  year  ended
December  31, 2000 in which we used cash in operating  activities
of  approximately  $1.2 million.  Our use of cash  for  operating
activities decreased despite the significant increase in our  net
loss  as  most of our 2001 expenses were either non-cash expenses
paid with common stock, options or warrants of approximately $6.5
million,  or  were items which were accrued as evidenced  by  the
increase   in   accounts   payable  and   accrued   expenses   of
approximately $4 million.  Net cash used in investing  activities
during  2001 consisted mostly of approximately $9.4 million  used
in  our acquisition of Tatra, the purchase price plus cash  costs
of  acquisition  of  approximately  $13  million  less  the  cash
acquired  of  approximately $3.6 million.  Net cash  provided  by
financing  activities  in the year ended December  31,  2001  was
approximately  $12.4  million  compared  to  approximately   $1.0
million  for  the year ended December 31, 2000.  The increase  of



                             -20-

<PAGE>


approximately  $11.4  million in net cash provided  by  financing
activities  resulted from increased net loan proceeds  (primarily
used to acquire Tatra), sales of common stock and the exercise of
options  in excess of cash from the same sources in 2000.   Total
cash at December 31, 2001 increased to approximately $3.7 million
from $56,000 at December 31, 2000.

  General

  Management  is evaluating our current and projected cash  needs
to   determine  if  our  current  financial  situation  will   be
sufficient  to meet our needs.  If we continue according  to  our
present  growth  plans,  we  are  likely  to  require  additional
financing  and  capital.   We  are  actively  exploring  possible
sources  of  additional  capital and we  are  reviewing  possible
methods  to  obtain  additional  capital,  as  needed.   If   our
operating  unit,  Tatra, grows according to  our  business  plan,
additional  capital will be needed in order to attain the  levels
of  revenue in the plan.  There is no assurance that financing or
capital  will  be available at the time when the capital  may  be
needed.   Our  business,  financial condition  and  results  from
operations  may be materially adversely affected if  we  fail  to
obtain any necessary financing or capital.

  Our  borrowings from Terex subject us to certain  restrictions,
so  long  as the obligations are outstanding, relating to,  among
other  things,  restrictions  against  payment  of  certain  cash
distributions  by Tatra to SDC, incurrence by us or  any  of  our
subsidiaries of new indebtedness in excess of $2 million  without
the  prior  written  consent of Terex, and  usual  and  customary
covenants  such as requiring SDC and its subsidiaries  to  comply
with applicable laws, payment of taxes and restrictions on merger
unless the surviving entity shall have assumed obligations  under
the  loan  agreement in writing. There are no customary financial
covenants such as EBIDTA and current ratio.

  Our  obligation  to  repay $4.8 million of our  loan  to  Terex
outstanding at December 31, 2001 was satisfied, by the  terms  of
the agreement, by transferring to Terex the 40.61% owned directly
by us.  The remaining notes, in the aggregate principal amount of
$8.1  million, are due on December 31, 2004.  Upon  the  sale  of
Tatra  shares to Terex, Terex held the right to convert up to  $4
million  of  its notes at any time after December 31,  2002  into
shares of our common stock equal to 12% of our outstanding common
stock  on a fully diluted basis.  This right was extinguished  by
mutual  agreement in December 2002.  Terex also assisted us  with
the  establishment of working capital credit facilities for Tatra
by  loaning  $5  million to Tatra in 2002 as part  of  the  share
purchase  agreement between SDC and Terex.  See also the  section
entitled "Business - The Tatra Acquisition".

  Our  agreement to acquire Tatra also requires us to infuse cash
through   capital  or  subordinated  loans  in  the   amount   of
approximately  $13  million. On January 13,  2003,  SDC  received
certification  from  the  Czech  Consolidation  Agency   of   the
government  of the Czech Republic that the $13 million investment
in Tatra has been satisfied.  Such amounts can be either provided
by  us or obtained by us from new or existing investors or new or
existing  lenders.   At December 31, 2001 we were  in  compliance
with  all related covenants.  Failure to comply with any  of  the
debt  covenants could adversely affect our liquidity and  ability
to meet capital resource needs.

  In  addition,  under  a  new  management  consulting  agreement
among SDC, Tatra and Terex which was entered into on December 31,
2002, Terex personnel  will assist in  the management of the day-
to-day operations of Tatra.   The objective of  this agreement is
to  improve  Tatra's  operations  and  financial  flexibility  by
reorganizing   and    consolidating   manufacturing   facilities,
outsourcing some of  Tatra  parts  and  components  and  reducing
overhead.  The Terex team will be led by  Fil Filipov,  President
of Terex Crane, who  has extensive  operating  experience in  the
industry.  We have no  other agreements  between Terex and us, or
Terex  and  Tatra  besides  this  joint  venture  and  the  notes
mentioned above.

  In  February  2003, SDC entered into a subordination  agreement
whereby it agreed to subordinate debt owed to it by Tatra to  ABN
AMRO  as a condition to increasing Tatra's line of credit to  $10
million  under  its  facility with ABN  AMRO.   A  condition  for
entering  into this facility was that Tatra not pay dividends  to
its SDC for the entire duration of any obligations of Tatra under
the credit facility.

  We  believe  that our long-term liquidity and capital  resource
needs  will  continue  to  be provided by  funds  from  operating
activities,   supplemented  by  borrowings  under  existing   and
additional credit facilities, and from the issuance from time  to
time  of  shares of our capital stock.  We consider  debt  and/or
equity  offerings  to  properly manage our  total  capitalization
position.  We  also  consider,  from  time  to  time,  new  joint
ventures,   alliances,   divestitures   and   acquisitions,   the
implementation  of which could impact our liquidity  and  capital



                             -21-

<PAGE>


resource  requirements.   However, there  is  no  assurance  that
financing  or  capital will be available at  the  time  when  the
capital  may  be  needed  to  meet our  needs  for  liquidity  or
additional  capital.  The failure to obtain additional  financing
or  capital when needed will have a material adverse effect  upon
our business, financial condition and results of operations.

  Contractual obligations

  The  following  table summarizes the general timing  of  future
payments  as  of  December 31, 2001 under  our  outstanding  loan
agreements,    and   under   lease   agreements   that    include
noncancellable terms.

<TABLE>
<CAPTION>
   Contractual Obligations                                Payments Due by Period
                                       -----------------------------------------------------------
                                        Totals       2002      2003 to 2005     2006    Thereafter
                                       --------    --------    ------------   -------   ----------
<S>                                    <C>         <C>         <C>            <C>       <C>
   (in thousands)
   Related party acquisition debt      $ 10,915    $  4,845       $  6,070    $     -    $     -
   Other related party debt                 857         857
   Capital lease                            825         392            356         21         56
   Operating leases                       3,670         838          2,148        684
   Other long-term obligations              912         456            456          -          -
                                       --------    --------       --------    -------   --------
   Total                               $ 17,179    $  7,388       $  9,030    $   705    $    56
                                       ========    ========       ========    =======   ========
</TABLE>


<TABLE>
<CAPTION>
   Other Commercial Commitments          Total        Amount of Commitment Expiration by Period
                                         Amount    -----------------------------------------------
                                       Committed     2002      2003 to 2005     2006    Thereafter
                                       ---------   --------    ------------   -------   ----------
<S>                                    <C>         <C>         <C>            <C>       <C>
   (in thousands)
   Lines of credit                     $  3,946    $  3,946    $         -    $     -   $      -
   Revolving loans - Government          11,328      11,328
   Standby letters of credit                  -
   Contractual guarantees                16,892       9,089          7,803
   Standby repurchase obligations             -
   Other commercial commitments           2,375           -          2,375          -          -
                                       --------    --------       --------    -------   --------
   Total                               $ 34,541    $ 24,363       $ 10,178    $     -   $      -
                                       ========    ========       ========    =======   ========
</TABLE>

  Accounting policies

CRITICAL ACCOUNTING POLICIES

  On  December  12, 2001, the Securities and Exchange  Commission
(the  "SEC")  issued Financial Reporting Release  No.  60,  which
suggests a discussion of the critical accounting policies used by
companies in the preparation of their financial statements.  Note
1   to  the  Financial  Statements  includes  a  summary  of  the
significant accounting policies used by SDC in the preparation of
its  financial  statements.   SDC  believes  that  the  following
critical accounting policies affect the significant judgments and
estimates used in the preparation of SDC's consolidated financial
statements.

  The  discussion and analysis of SDC's financial  condition  and
results of operations are based upon SDC's consolidated financial
statements,   which  have  been  prepared  in   accordance   with
accounting principles generally accepted in the United States  of
America.   The preparation of these financial statements requires
that  management make estimates and assumptions that  affect  the
reported amounts of assets and liabilities, revenues and expenses
and  the related disclosure of contingent assets and liabilities.
On  an  ongoing  basis,  management  evaluates  these  estimates.
Management   bases  its  estimates  on  historical   data,   when
available,   professional   advice,   experience   and    various
assumptions  that  are  believed  to  be  reasonable  under   the
circumstances, the combined results of which form the  basis  for
making  judgments  about the carrying values of  the  assets  and
liabilities.  Actual results could differ from these estimates.



                             -22-

<PAGE>


  Revenue  from the sale of products is recorded at the time  the
goods are shipped.  Revenue from freight charged to customers  is
recognized  when products are shipped.  Provisions for discounts,
customer  returns and other adjustments are provided for  in  the
period the related sales are recorded based upon historical data.

  SDC  reviews the carrying values of its long-lived  assets  for
possible  impairment whenever events or changes in  circumstances
indicate  that  the  carrying amount of the  assets  may  not  be
recoverable.   SDC  assesses recoverability of  these  assets  by
estimating  future  nondiscounted  cash  flows.   Any  long-lived
assets  held  for  disposal are reported at the  lower  of  their
carrying amounts or fair values less cost to sell.

RECENT ACCOUNTING PRONOUNCEMENTS

  In   July  2001,  the  Financial  Accounting  Standards   Board
("FASB")  issued SFAS No. 141, "Business Combinations", and  SFAS
No. 142, "Goodwill and Other Intangible Assets."

  SFAS  No.  141  addresses the accounting for and  reporting  of
business combinations and requires that all business combinations
be  accounted  for  using the purchase method of  accounting  for
acquisitions  and eliminates the use of the pooling method.  This
Statement  applies to all business combinations  initiated  after
June 30, 2001. The adoption of this new standard was used in  the
acquisition of Tatra by SDC as discussed in Note 2.

  SFAS  No. 142 addresses financial accounting and reporting  for
acquired  goodwill  and other intangible assets.  This  Statement
changes  the accounting for goodwill from an amortization  method
to  an  impairment-only  method. The  amortization  of  goodwill,
including  goodwill recorded in past business combinations,  will
cease  upon  adoption of this Statement, which  will  begin  with
SDC's  fiscal  year beginning January 1, 2002. However,  goodwill
and  intangible  assets  acquired after June  30,  2001  will  be
subject  to immediate adoption of the Statement. The adoption  of
this new standard was used in the acquisition of Tatra by SDC  as
discussed in Note 2.

  In  July  2001,  the FASB issued SFAS No. 143, "Accounting  for
Asset  Retirement  Obligations." SFAS No. 143 requires  liability
recognition  for  obligations associated with the  retirement  of
tangible  long-lived assets and the associated  asset  retirement
costs.  SDC is required to adopt the provisions of SFAS  No.  143
beginning  with its fiscal year that starts January 1, 2003.  SDC
does  not  expect  that adoption of SFAS  No.  143  will  have  a
material effect on its consolidated financial statements.

  In  August 2001, the FASB issued SFAS No. 144, "Accounting  for
the  Impairment or Disposal of Long-Lived Asset".  SFAS  No.  144
addresses  financial accounting and reporting for the  impairment
or  disposal  of long-lived assets. This Statement requires  that
long-lived assets be reviewed for impairment whenever  events  or
changes in circumstances indicate that the carrying amount of  an
asset may not be recoverable. Recoverability of assets to be held
and used is measured by a comparison of the carrying amount of an
asset  to future net cash flows expected to be generated  by  the
asset.  If  the carrying amount of an asset exceeds its estimated
future  cash  flows, an impairment charge is  recognized  by  the
amount by which the carrying amount of the asset exceeds the fair
value of the asset. SFAS No. 144 requires companies to separately
report  discontinued operations and extends that reporting  to  a
component of an entity that either has been disposed of (by sale,
abandonment, or in a distribution to owners) or is classified  as
held for sale. Assets to be disposed of are reported at the lower
of  the carrying amount or fair value less costs to sell. SDC  is
required to adopt SFAS No. 144 on January 1, 2002.

  In  April  2002,  the FASB issued SFAS No. 145, "Rescission  of
FASB  Statements  No. 4, 44 and 64, Amendment of  FASB  Statement
No.  13,  and Technical Corrections". SFAS No. 145 rescinds  SFAS
No. 4, which required all gains and losses from extinguishment of
debt  to  be  aggregated  and,  if  material,  classified  as  an
extraordinary  item,  net  of related income  tax  effect.  As  a
result,  the criteria in APB Opinion No. 30 will now be  used  to
classify those gains and losses. SFAS No. 64 amended SFAS No.  4,
and is no longer necessary because SFAS No. 4 has been rescinded.

  SFAS  No. 145 amends SFAS No. 13 to require that certain  lease
modifications  that  have  economic  effects  similar  to   sale-
leaseback  transactions be accounted for in the  same  manner  as
sale-leaseback  transactions, SFAS No. 145 also  makes  technical
corrections  to existing pronouncements. While those  corrections
are not substantive in nature, in some instances, they may change
accounting  practice. SFAS No. 145 is required to be applied  for



                             -23-

<PAGE>

fiscal  years beginning after May 15, 2002. The adoption of  this
Statement  is  not expected to have a material  effect  on  SDC's
financial statements.

  In  June  2002,  the FASB issued SFAS No. 146, "Accounting  for
Costs Associated with Exit or Disposal Activities". SFAS No.  146
requires that a liability for a cost associated with an  exit  or
disposal  activity be recognized when the liability is  incurred.
This  Statement also establishes that fair value is the objective
for  initial measurement of the liability. The provisions of this
Statement are effective for exit or disposal activities that  are
initiated after December 31, 2002. The adoption of this Statement
is  not  expected  to have a material effect on  SDC's  financial
statements.

Item 7.   Financial Statements

  The  financial statements required by Item 7 of the Form 10-KSB
are included in this Annual Report beginning on Page F-1.




















                             -24-

<PAGE>


Item 8.   Changes in and Disagreements with Accountants on
          Accounting and Financial Disclosure

     On  April  16,  2002, KPMG Ceska republika, s.r.o.  ("KPMG")
resigned as the Company's independent public accountants.

     KPMG  was  engaged  on  January 15,  2002  to serve  as  the
Company's  independent  public  accountants for the  fiscal  year
ended December 31, 2001.  On February 22, 2002, KPMG delivered to
the  Company  a  report  (the "Tatra Report")  on  the  financial
statements of  Tatra, a.s.,  a majority-owned  subsidiary  of the
Company and  also  the parent  company  of a  group of  operating
subsidiaries   through   which   Tatra   conducts   its  business
(collectively  with  Tatra,  the  "Tatra  Group").   The  Company
acquired its equity interest in the Tatra Group in December 2001.
The Tatra Report was qualified as follows:

     1)   In the Tatra Report,  KPMG drew  attention to Note V to
          Tatra's  consolidated  financial statements.  Note V to
          Tatra's  consolidated  financial  statements (i) states
          that significant measures were  carried out in 2000 and
          2001 which resulted in an increase in equity through an
          increase   in  registered  capital  and  conversion  of
          receivables  from major shareholders, and (ii) outlines
          the process in  2001  whereby the Company  acquired its
          equity   interest  in   Tatra,   and   further   states
          management's  belief  that  these  changes  in  Tatra's
          capital and ownership  structure  removed doubts  as to
          whether the Tatra  Group would be able to continue as a
          going concern as  stated in  previous years'  financial
          statements.

     2)   In the Tatra Report,  KPMG drew attention  to Note I of
          Tatra's consolidated financial statements, which states
          that a qualified audit  opinion has been issued  on the
          financial statements of the  following companies in the
          Tatra Group: Slevarna Tatra, a.s., Kovarna Tatra, a.s.,
          Energetika  Tatra, a.s., Narad'ovna Tatra, spol. sr.o.,
          Doprava Tatra,  spol.sr.o.,  and  Tatratest, spol.sr.o.
          KPMG  further  noted  in  the Tatra  Report  that  such
          qualifications had been  taken into  account during the
          preparation    of   Tatra's    consolidated   financial
          statements.   Note I to Tatra's consolidated  financial
          statements states  that the qualified auditor's opinion
          issued with respect  to the financial statements of the
          foregoing companies in the Tatra  Group was issued with
          respect to  the  evaluation  of their  respective fixed
          assets.  Note I further states that, due to such assets
          having been  transferred within  the Tatra Group in the
          past, the  qualifications do not have any impact on the
          consolidated financial  statement  of Tatra,  since the
          relevant transactions  have already  been  reflected in
          prior accounting periods.

     Other  than  as  specifically  set  forth in  the  foregoing
paragraphs with  respect  to  the Tatra  Group,  KPMG  issued  no
reports with respect to the Company during KPMG's  tenure as  the
Company's  independent  public  accountants.   Accordingly, there
were  no  reports  issued  by  KPMG  with respect to  the Company
containing any adverse opinion or  a disclaimer  of opinion,  nor
were  there  any  such   reports  qualified  or  modified  as  to
uncertainty, audit scope or accounting principles.

     During  KPMG's tenure as  the Company's  independent  public
accountants,  there were no disagreements at any time between the
Company  and  KPMG  on any  matter  of  accounting principles  or
practices, financial statement disclosure, or  auditing  scope or
procedure,   which   disagreements,   if  not  resolved  to   the
satisfaction of KPMG, would have caused them to make reference to
the subject matter of the disagreements in connection with  their
report on the financial statement of the Company.

     On  July  2, 2002, the Company appointed BDO CS s.r.o.,  the
Czech  Republic affiliate of BDO International, to serve  as  the
independent auditor for the Company and its subsidiary Tatra.




                             -25-

<PAGE>

                            PART III

Item 9.   Directors, Executive Officers, Promoters and Control
          Persons; Compliance with Section 16(a) of the Exchange
          Act

<TABLE>
<CAPTION>

Name                               Age         Position
----                               ---         --------
<S>                                <C>         <C>

Ronald A. Adams                    52          Chairman of the Board, Chief
                                               Executive Officer and Director

Milota K. Srkal                    57          President, Chief Operating
                                               Officer and Director

Thomas B. Walker                   61          Chief Financial Officer

Henry S. Green, Jr.                70          Secretary and Director

General Alexander M. Haig, Jr.     78          Director

Zachary K. Shipley                 50          Director

Henry Kiefer                       61          General Manager and Chief
                                               Operating Officer of Tatra

John Prikyl                        62          General Manager of Tatra
                                               Subsidiaries
</TABLE>

  All  directors  hold office until the next  annual  meeting  of
stockholders  or until their successors are elected and  qualify.
Vacancies  on  the  Board  of Directors  may  be  filled  by  the
remaining directors.  Officers are elected annually, and serve at
the  discretion of the Board of Directors.  There are  no  family
relationships between or among any officers or directors of SDC.

  Ronald  A. Adams has been the Chairman, Chief Executive Officer
and  a  director of SDC since 1994.  From 1986 through  1996,  he
served  as  President of Worth Capital Group.  From 1996  through
2001,  he  served  as  a Financial Advisor to  Double  Seal  Ring
Company  and, from 1994 to 1996, as a Financial Advisor to  Skoda
Diesel.    Both   of  these  entities  are  among  the   founding
shareholders of SDC.  For the 14 years prior to 1986,  Mr.  Adams
was  Chief  Executive  Officer of Haltom  Manufacturing  Company,
engaged  in  manufacturing of corporate  recognition  items.   He
attended  the  University of Oklahoma and  graduated  from  Texas
Christian University, where he performed post-graduate studies.

  Milota  K.  Srkal  has  been  the  President,  Chief  Operating
Officer  and  a  director  of  SDC since  1998.   Mr.  Srkal  was
President  and Founder of Golden Grove Business, Inc.,  which  we
refer  to  as  GGB, the Tatra distributor in certain Central  and
South American countries.  GGB merged into SDC in 1997.  Prior to
founding  GGB, Mr. Srkal was associated with Frederic R.  Harris,
Inc.,  an  international construction and  management  firm.   He
served as its Senior Vice President until resigning to found GGB.

  Thomas  B. Walker has been Chief Financial Officer, on  a  part
time  basis, of SDC since January 2003.  Since 1994,  Mr.  Walker
has  been  the  owner and Principal of First Palm Beach  Advisory
Co., Inc., a Registered Investment Advisor and financial services
consulting  firm  through which he has provided asset  management
and consulting services for domestic and foreign institutions and
individuals.   Since 1998, Mr. Walker, through  assignments  with
Tatum CFO Partners, LLP, has provided services as Chief Financial
Officer  for  various  clients including  Bank  United  of  Coral
Gables,  Florida,  Indian  River National  Bank  of  Vero  Beach,
Florida,  MerchantOnline.com of Boca Raton, Florida and 186K.Net,
Co.  of  Boca Raton, Florida. Prior to that, in 1998  Mr.  Walker
provided international bank consulting services in Kazakhstan for
a US AID-sponsored technical banking mission.  From 1996 to 1998,
he  served  as Chief Financial Officer of Pointe Bank, a  Florida
bank.   Other  past positions include Chairman  of  the  Advisory
Board  of  Brown Brothers Harriman & Co. in Palm Beach,  Florida;
Chairman,  President and CEO of the First National Bank  of  Palm
Beach,   the  private  banking  division  of  Southeast   Banking



                             -26-

<PAGE>


Corporation; CFO of the National Bank of Georgia in Atlanta;  CFO
of  Central Bank of Denver in Denver, Colorado; and Treasurer  of
Southeast Banking Corporation in Miami, Florida.

  Henry  S.  Green, Jr., has been Secretary of SDC since December
1996  and  a  director since 1994. In 2002, Mr. Green retired  as
Chairman and President of Double Seal Ring Company where  he  had
been employed since 1955 and had served as a director since 1978.
Double  Seal,  founded  in 1931, manufactures  industrial  piston
rings  such as those used in industrial equipment and diesel  and
gas   generating  sets.   He  is  a  graduate  of  the   Business
Administration School at Oklahoma State University  and  attended
the United States Naval Command School.

  General  Alexander  M. Haig, Jr.  has been a  director  of  SDC
since  January  2002.   Since May 1999  General  Haig  served  as
Strategic  Advisor to SDC.  For more than the  past  five  years,
General Haig has been Chairman and owner of Worldwide Associates,
Inc.,  a  Washington,  D.C.  based  international  advisory  firm
assisting  domestic  and  international corporations  in  gaining
market entry and venture capital activities, public speaking  and
writing.   General  Haig  is host of his  own  weekly  television
program,  "World  Business Review" and serves  on  the  board  of
directors of MGM Mirage, Inc., Metro-Goldwyn-Mayer, Inc., Indevus
Pharmaceuticals, Inc. and Compuserve Interactive  Services,  Inc.
General  Haig served as White House Chief of Staff from  1973  to
1974;  Supreme Allied Commander of NATO from 1974  to  1979;  and
United States Secretary of State from 1981 to 1982.  In addition,
he  served  as  President and Chief Operating Officer  of  United
Technologies  Corporation from 1979 to  1981  and  remains  as  a
consultant.

  Zachary  K.  Shipley has been a director since  February  2003.
Mr.  Shipley  was  an officer and director of  Oxbow  Corporation
since  its  founding  in 1983 and its Vice President  of  Finance
since 1986.  Mr. Shipley received his A.B. degree cum laude  from
Harvard  College  in Cambridge, Massachusetts, in  1974  and  his
M.B.A.  from  Harvard  Business School in 1980.   Before  joining
Oxbow,  Mr.  Shipley  was a consultant with  Bain  &  Company  in
Boston, Massachusetts.

  Henry  Kiefer joined SDC as General Manager and Chief Operating
Officer of Tatra in January 2002.  Prior thereto, Mr. Kiefer  was
employed  for  thirty-two  years by  PACCAR,  a  manufacturer  of
product  lines such as Kenworth and Peterbilt.  Mr. Kiefer  began
his  career  with the Kenworth division of PACCAR and  served  as
Managing  Director  of PACCAR Australia, President  and  Managing
Director  of PACCAR U.K., and as the General Manager of  Kenworth
Truck.  He is a graduate of the University of Washington and  the
Stanford University Executive Program.

  John  Prikryl joined SDC in January 2002 as General Manager  of
Tatra's foundry, forging and tool and stamping subsidiaries which
are   prime   component  suppliers  to  Tatra's  truck   assembly
operations.  For more than the past five years, prior to  joining
SDC,  Mr.  Prikryl was General Manager of Canada's largest  steel
wire  manufacturer,  Stelwire  Ltd.   At  Stelwire,  he  led  its
turnaround  in the early 1990's and brought the $200 million  per
year   operation  to  profitability  while  establishing  quality
standards  of ISO 9002 and ISO 9000 certification for  the  steel
wire  company's  two  manufacturing plants.  Mr.  Prikryl  joined
Stelwire's  parent company, Stelco, twenty years ago, and  before
that  worked  as  an  engineer at steel companies  in  the  Czech
Republic and Austria.

Compliance with Section 16(a) of the Exchange Act

  Section  16(a)  of  the Securities Exchange  Act  of  1934,  as
amended  requires SDC's officers and directors, and  persons  who
own  more than ten percent of a registered class of SDC's  equity
securities, to file reports of ownership and changes in ownership
with  the  SEC.  Officers, directors and greater than ten-percent
stockholders are required by SEC regulation to furnish  SDC  with
copies of all Section 16(a) reports that they file.

  For  each of the fiscal years ended December 31, 2002 and 2001,
each of Ronald A. Adams, Milota K. Srkal, Henry S. Green, Jr. and
General  Alexander M. Haig, Jr. did not timely file a Form  5  as
required by Section 16(a) of the Exchange Act.

  For   each  of  Messrs.  Adams,  Srkal  and  General  Haig  two
transactions were not timely reported, for each of Messrs.  Green
and Walker one transaction was not timely reported.




                             -27-

<PAGE>


Item 10.   Executive Compensation

  The  following table sets forth the total compensation paid  or
accrued  for  the years ended December 31, 2002, 2001,  2000  and
1999  for  SDC's  Chief Executive Officer during the  year  ended
December  31,  2001  and  2002 and its  most  highly  compensated
executive officers, other than its Chief Executive Officer, whose
salary  and bonus for the fiscal years ended December  31,  2002,
2001, 2000 and 1999 were in excess of $100,000 each.

<TABLE>
<CAPTION>
                                       Summary Compensation Table
                                       --------------------------

                                     Annual Compensation                Long Term Compensation
                          ------------------------------------------  -------------------------
                                                                               Awards
                          ---------------------------------------------------------------------
Name and                  Year    Salary     Bonus         Other      Restricted     Securities
Principal                           $          $          Annual         Stock       Underlying
Position                                               Compensation   Awards ($)      Options/
                                                          ($)(1)                      SARs(#)
-----------------------------------------------------------------------------------------------
<S>                       <C>     <C>       <C>        <C>            <C>            <C>
Ronald A. Adams(1)        2002    300,000     --            --             --             --
                          2001    156,000   500,000         --             --        1,582,250
Chief Executive Officer   2000    156,000     --            --             --             --
                          1999    156,000     --            --             --             --
-----------------------------------------------------------------------------------------------

Milota K. Srkal(1)        2002    300,000     --            --             --             --
                          2001    156,000   500,000         --             --         1,582,250
Chief Operating Officer   2000    156,000     --          20,295           --             --
                          1999    156,000     --            --           326,000          --
-----------------------------------------------------------------------------------------------
</TABLE>

(1)  In each of the years ended December 31, 2002, 2001, 2000 and
1999, Messrs.  Adams and  Srkal  received  normal  and reasonable
automobile, medical insurance and business expense reimbursements
or payments made on their behalf for business related expenses.

Option Grants for the Year Ended December 31, 2001 and 2002

     The  following  table  sets forth grants  of  stock  options
during  the year ended December 31, 2001 to anyone who served  as
Chief  Executive  Officer  and its four most  highly  compensated
executive officers, other than its Chief Executive Officer. There
were no stock options granted in 2002.


<TABLE>
<CAPTION>
                      Common Stock      % of Total                      Market Price
                       Underlying     Options Granted     Exercise      of Shares on   Expiration
Name                 Options Granted    to Employees   Price Per Share  Date of Grant    Date
----                 ---------------  ---------------  ---------------  ------------   ----------
<S>                  <C>              <C>              <C>              <C>            <C>
Ronald  A. Adams        1,582,250           35%            $0.10            $0.84      12/28/2011
Milota  K. Srkal        1,582,250           35%            $0.10            $0.84      12/28/2011
</TABLE>

Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values

  The   following  table  provides  certain  summary  information
concerning  stock options held as of December 31, 2002  by  SDC's
Chief  Executive  Officer  and its four most  highly  compensated
executive  officers, other than its Chief Executive  Officer.  No
options were exercised during fiscal 2002 or 2001 by any  of  the
officers.

<TABLE>
<CAPTION>
                                                               Value of Unexercised
                       Number of Securities Underlying         In-The-Money Options
                           Unexercised Options #              at Fiscal Year-End($)(1)
                       -------------------------------      ----------------------------
Name                   Exercisable       Unexercisable      Exercisable    Unexercisable
----                   -----------       -------------      -----------    -------------
<S>                    <C>               <C>                <C>            <C>

Ronald A. Adams         1,582,250               0           1,186,687.50         N/A
Milota K. Srkal         1,582,250               0           1,186,687.50         N/A
</TABLE>


                             -28-

<PAGE>


(1)  Based  upon the closing  sale price  on December 31, 2002 of
$0.85  per share,  as reported on the  over-the-counter  Bulletin
Board and the exercise price per option.

Stock Option Plan

  SDC  established  a 2001 Non-Qualified Stock Option  Plan  (the
"2001  Plan")  and  a 2000 Non-Qualified Stock Option  Plan  (the
"2000  Plan")  authorizing the board of directors  or  the  Stock
Option Committee of the board of directors to issue from time  to
time on the Corporation's behalf options to employees, directors,
consultants or representatives of SDC or any company  that  is  a
party  to  a  consulting  agreement  with  SDC.   The  2001  Plan
authorizes the issuance of options representing up to  2  million
shares  and  the  2000  Plan authorizes the issuance  of  options
representing up to 500,000 shares.  The maximum number of  shares
issuable pursuant to each plan has been issued.

Employment Contracts and Directors Compensation

  In  October  2001, SDC entered into employment agreements  with
Mr.  Adams  and Mr. Srkal, pursuant to which Mr. Adams serves  as
Chief  Executive Officer of SDC and Mr. Srkal serves as President
of  SDC. The term of each employment agreement is for a period of
three years and is automatically extended, on each anniversary of
the effective date, for an additional one year term unless either
party  provides  notice  to the other party,  during  the  60-day
period  prior  to the anniversary of the effective  date  of  the
applicable  employment agreement, of its or  his  desire  not  to
extend  the agreement. Under these agreements, each of Mr.  Adams
and  Mr.  Srkal  currently  receives an  annual  base  salary  of
$300,000 subject to adjustments for cost-of-living increases  and
other  increases  as determined by the board  of  directors.   In
addition,  each of Mr. Adams and Mr. Srkal may be entitled  to  a
bonus to be determined by the board of directors depending on the
revenues  and net profits of Tatra.  On July 18, 2000, the  board
granted to each of Messrs. Adams and Srkal options (the number to
be  determined upon closing of the Tatra acquisition) to purchase
shares of common stock of SDC.  In connection with this grant, on
December  28,  2001,  upon completion of the  Tatra  acquisition,
1,582,250 options to purchase shares of common stock of SDC  were
issued  to  each  of Messrs. Adams and Srkal.   The  options  are
exercisable at an exercise price of $0.10 per share, and  may  be
exercised  in whole or in part, at any time after the closing  of
the  acquisition of Tatra, from time to time for a period of  ten
years.

  If  either Mr. Adams or Mr. Srkal is terminated for any reason,
he,  his heirs or assigns shall be entitled to receive his normal
compensation  through the date of termination.  If employment  is
terminated  by reason of voluntary resignation, for cause,  death
or disability during the term of the agreement, SDC shall pay the
executive  all unpaid amounts of salary and bonus  to  which  the
executive  is  entitled prorata to the date  of  the  executive's
termination,  and  all unpaid amounts to which the  executive  is
entitled  under any compensatory or benefit plan or other  fringe
benefit.   In addition, if employment is terminated by reason  of
voluntary resignation, for cause, death or disability during  the
term of the agreement, all unvested options granted expire as  of
the  termination. If either Mr. Adams' or Mr. Srkal's  employment
is  terminated for any reason other than a voluntary resignation,
for  cause, death or disability during the term of the  agreement
other than following a change of control, he will be entitled  to
receive a lump sum payment in an amount equal to the sum  of  (A)
three times his annual salary plus (B) three times the amount  of
his  bonus,  if  any  for the previous year.   In  addition,  all
options  that had not vested on or prior to the termination  will
accelerate  and become immediately exercisable.   If  either  Mr.
Adams'  or  Mr. Srkal's employment is terminated for  any  reason
other   than  a  voluntary  resignation,  for  cause,  death   or
disability during the term of the agreement following a change of
control, he will be entitled to receive a lump sum payment in  an
amount equal to the sum of (A) three times his annual salary plus
(B)  three times the greater of (i) the bonuses received  by  him
during  the twelve months immediately preceding the date  of  the
termination  and (ii) the average of the annual bonuses  received
by  him  during  the two-year period preceding the  date  of  the
termination plus (C) an amount equal to the present value of  any
benefits that would have been payable to him had he continued  as
an employee of SDC for an additional two years.  In addition, all
options  that had not vested on or prior to the termination  will
accelerate and become immediately exercisable.

  On January 23, 2003,  SDC entered  into an employment agreement
with  Thomas B. Walker  pursuant  to which  Mr. Walker  agreed to
undertake  the g eneral  and  active  duties  of Chief  Financial
Officer of SDC  on a  part time basis beginning February 1, 2003.
The  term of  Mr. Walker's  employment agreement is  one year  in
exchange  for a salary  of $10,000  per month, of which a portion
would  be  allocated  to  Tatum  CFO  Partners, LLP,  a  national
partnership  of  CFOs of  which  Mr. Walker is an equity partner.
Under  the terms of the  agreement, Mr. Walker will receive up to


                             -29-

<PAGE>


240,000 options  to purchase common  stock of SDC upon the  terms
and conditions of a stock option  agreement to be executed by the
parties.   Twenty  thousand shares  shall vest  monthly, of which
10,000 options shall vest at an exercise price  of $.75 per share
and 10,000 shares  shall vest  at an exercise  price of $1.00 per
share, for the  term of this agreement.  Tatum  CFO Partners will
receive  25% of  the shares  awarded  to  Mr. Walker  under  this
agreement.

  Directors  who  are not employees of SDC receive  a  director's
fee of $5,000 for each quarterly board meeting, committee meeting
or  special  meetings  attended in person  and  reimbursement  of
expenses  incurred to attend these meetings.   Directors  do  not
receive compensation for telephonic meetings.




















                             -30-

<PAGE>


Item 11. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters

  The  following table contains information as of April 15, 2003,
as  to the number of shares of common stock which is beneficially
owned   by  (i)  each  of  the  persons  listed  on  the  Summary
Compensation  Table  appearing earlier in  this  report  or  each
entity  known by SDC to own beneficially more than  5%  of  SDC's
Common  Stock,  (ii) each person who is a Director  of  SDC,  and
(iii)  all  persons as a group who are Directors and Officers  of
SDC,  and as to the percentage of the outstanding shares held  by
said  individuals or entities. There is only one issued class  of
security of SDC, Common Stock, as of May 27, 2003.

<TABLE>
<CAPTION>

Title of Class:  Common Shares


                     Ownership of Common Stock
                     -------------------------

Name and Address of                Number of Shares       Percentage of
Beneficial Owner (1)                  Owned (2)        Outstanding Shares(2)
----------------------------------------------------------------------------
<S>                                <C>                 <C>

Ronald A. Adams (3)
231 Bradley Place
Palm Beach, FL 33480                  2,314,550                9.74%

Milota K. Srkal (4)
231 Bradley Place
Palm Beach, FL 33480                  2,284,250                9.61%

Henry S. Green, Jr. (5)
c/o The Entrepreneur's Source
3300 Joyce Drive, Suite C
Ft. Worth, TX 76116                     304,284                1.37%

Alexander M. Haig, Jr. (6)
1155 15th Street, N. W.,
Suite 800
Washington, DC 20005                    505,000                2.24%

Thomas B. Walker (7)
231 Bradley Place
Palm Beach, FL 33480                     61,000                 *

Somerset Capital Partners, L.P.(8)
10 East 40th Street,
Suite 4101
New York, NY  10016                   1,510,450                6.81%

Venus Projects Ltd. (9)
36 Paradise Road
Richmond, Surrey TW9 1SE
United Kingdom                        1,407,571                6.34%

Sam Eyde (10)
28 Byron Circle
Lansing, MI  48913                    2,350,000               10.16%

Terex Corporation
c/o Eric I. Cohen
Senior Vice President
500 Post Road East,
Suite 320
Westport, CT 06880                    1,306,837                5.89%

All Officers and Directors
as a Group
(includes 6 persons) (11)             5,469,084               19.27%
------------------------------
</TABLE>



                             -31-

<PAGE>


* Less than 1%.

(1)  Except  as  otherwise  indicated,  SDC  believes  that   the
     beneficial  owners of Common Stock listed  above,  based  on
     information  furnished by  such owners, have sole investment
     and  voting power  with  respect  to such shares, subject to
     community  property   laws   where  applicable.   Beneficial
     ownership is determined in accordance with the  rules of the
     Securities and Exchange  Commission and  generally  includes
     voting or investment power with respect to securities.

(2)  Includes  shares issuable pursuant to currently  exercisable
     options.   The   percentage   calculations   are  based   on
     22,187,987 shares of common stock outstanding  as of May 27,
     2003.

(3)  Includes  500,000  shares received on May  1,  1994  by  WCG
     Holdings, Inc., a company  controlled by  Mr. Adams;  30,300
     shares  owned  by Zephyr  Offshore, Inc., a company that Mr.
     Adams  may  be deemed to control; 150,000 shares acquired on
     June  20, 2000;   1,582,250   shares  issuable  pursuant  to
     currently exercisable options; and 52,000 shares acquired on
     the open market  between  September 26, 2001 and October 10,
     2001.
(4)  Includes  27,840 shares received on April 24,  1997  through
     the merger of  GGB  into SDC;  100,000  shares  acquired  on
     December 1, 1997;  372,160  shares  acquired on February 23,
     1999;   1,582,250  shares  issuable  pursuant  to  currently
     exercisable  options; and 52,000 shares acquired on the open
     market between September 26, 2001 and October 10, 2001.

(5)  Includes 202,684 shares issued  in 1994 to Double Seal  Ring
     Company, Inc., which is  controlled by  Mr. Green's  family;
     100,000  shares  issuable  pursuant to currently exercisable
     options; and 1,600 shares purchased in the open market.

(6)  Includes 5,000 shares purchased on October 3, 2001;  100,000
     shares  issued on May 19, 1999; and 400,000 shares  issuable
     pursuant to currently exercisable options.

(7)  Includes   60,000  shares  issuable  pursuant  to  currently
     exercisable options; and 1,000 shares purchased in the  open
     market.

(8)  The  shares  reported  herein were  originally  reported  as
     beneficially owned by Schaenen Capital Management,  LLC,  an
     affiliate  of  Emanon  Partners.   As  of December 31, 2002,
     Schaenen   Capital  Management, LLC   merged  into  Somerset
     Capital  Advisers, LLC.  Voting and  dispositive  power over
     these  shares  is shared  with  Somerset  Capital  Partners,
     L.P. and Somerset  Capital Management, LLC, and with Michael
     Schaenen,  Louis G. Markatos  and F. Tracy Lavery,  each  of
     whom are managing members of Somerset Capital Advisers, LLC.
     Pursuant to certain loan  agreements with the Company,  from
     January 2000 t o date, a  monthly issuance  of 15,000 shares
     has  been  made  to  Somerset  Capital Advisers, LLC.   This
     monthly  issuance remains in  effect to date and will remain
     in  effect  until  such  time  as  a  registration statement
     covering  all of  these  shares is  filed.  See  the section
     entitled "Certain Relationships and Related Transactions."

(9)  The principal of Venus Projects Ltd. is Mr. Ravi Rishi.

(10) Includes  950,000  shares  issuable  pursuant  to  currently
     exercisable warrants that are held by Mr. Eyde or affiliates
     of Mr. Eyde.

(11) Includes  Messrs.  Adams,  Srkal, Green,  Haig,  Walker  and
     Shipley,   comprising   all of  the  current  directors  and
     officers  of  SDC.   The  number  of shares  owned  and  the
     percentage  of outstanding  shares in columns two and three,
     respectively,  consist of  the  interests  of Messrs. Adams,
     Srkal,  Green, Haig and Walker as  a group.  At  the time of
     this  filing,  Mr. Shipley  does not have  own any shares or
     have any other beneficial interests in SDC.




                             -32-

<PAGE>


Item 12. Certain Relationships and Related Transactions

  SDC  and  General  Haig  are parties  to  a  Strategic  Advisor
Agreement  pursuant  to  which  General  Haig  provides  advisory
services  to  SDC.   In September, 2001, General  Haig  was  paid
$85,000  by  SDC  for services previously rendered  by  him.   In
addition,  in  September 2001, SDC and General Haig  renewed  the
Strategic  Advisor Agreement.  In consideration for renewing  the
agreement,  on September 9, 2001, General Haig was  issued  fully
vested  stock options to purchase 300,000 shares of common  stock
of  SDC  at  an  exercise price of $0.40 per  share  and  100,000
options  to  purchase common stock at a price of $0.40 per  share
which  vested  upon General Haig becoming a director  of  SDC  in
January  2002.   In  addition,  pursuant  to  the  terms  of  the
Strategic  Advisor Agreement, General Haig will  be  entitled  to
receive  between one and two percent of the total gross  contract
amount  of  any  contract entered into  by  SDC  or  any  of  its
subsidiaries  which was obtained through the efforts  of  General
Haig.

  Mr.  Adams  served  as  a Financial Advisor  to  the  Board  of
Directors of Double Seal Ring Company, Inc., a company controlled
by  Henry S. Green, a Director of SDC, until it was sold in 2002.
Mr. Adams received a monthly payment for such services of $3,000.
Until the end of 2001, SDC leased its executive office on a month
to   month  basis  from  Mr.  Adams.   Rent  expense  under   the
arrangement  amounted to $24,000 during each of the  years  ended
December 31, 2001 and 2000.

  On  September  11,  2000, SDC paid Mr. Srkal $20,295  to  cover
taxes  owed  for 372,160 restricted shares of common stock  which
were  issued  to  him on February 23, 1999 in  consideration  for
services  rendered.  On September 25, 2001,  Mr.  Adams  and  Mr.
Srkal  issued SDC a 9% note in the principal amount of  $100,000,
payable in 18 months.

  During  1999 and 2000, SDC issued to Sam Eyde three  promissory
notes  totaling $550,000, initially due within 180 days,  all  in
2000.   These  notes  bear interest at  14%  per  year  and  were
originally due within 180 days.  The first extended maturity date
of  these  notes  was August 9, 2000, and they were  subsequently
extended to July 30, 2002.  At December 31, 2001, the notes  plus
accrued interest of $159,000 were outstanding.  During 2000,  SDC
issued  to  Mr.  Eyde  32,500 shares of common  stock  valued  at
$24,375, the quoted market price, to extend the due date  of  the
notes.  During 2002, in consideration for extending the due  date
of  the  notes  to June 30, 2003, SDC issued to Mr. Eyde  100,000
warrants to purchase shares of common stock of SDC at an exercise
price  of $.75 per share.  The warrants are exercisable from  the
date of issue through December 31, 2003.

  On  June  28,  2001, SDC issued to Ron Adams a promissory  note
totaling  $500,000, bearing interest at 14% per year.  This  note
was  payable on September 30, 2001.  As of December 31, 2001, the
remaining  outstanding balance of the note and  accrued  interest
totaled  $148,000.   In  connection with  this  note,  Mr.  Adams
borrowed   approximately   $500,000  from   Joseph   Neumann,   a
stockholder of SDC, bearing interest at 14% per year and  payable
on September 30, 2001.  This note was secured by 1,000,000 shares
of  common  stock of SDC and a personal guaranty from Mr.  Adams.
Upon  repayment  of  the balance of the note, 750,000  shares  of
common  stock  will be returned to SDC and the  stockholder  will
hold  the  remaining 250,000 shares.  In addition, in  connection
with  the extension of the maturity date of this note, SDC agreed
to  issue to the stockholder an additional 250,000 common shares.
The  borrowings related to these loans were fully paid in January
2002.

  In  June  1998, SDC entered into an agreement for an  unsecured
$500,000  line  of  credit with an affiliate of Emanon  Partners.
The  line of credit had an interest rate of 14% per year and  was
payable on December 31, 1999. Upon default, and as agreed  to  in
the  note issued under the line of credit, on March 2, 2000,  the
noteholder  converted  the note, totaling $500,000  plus  accrued
interest  of  $114,000 at a rate of $1.00 per share into  614,110
shares of common stock. Under the terms of an agreement to extend
the  maturity date to December 31, 1999 and in consideration  for
such  extension, 216,000 shares of common stock, were  issued  to
the  noteholder  during 2000.  In addition, during  2000,  Emanon
also  converted a note originally entered into in June 1998  with
an   outstanding  principal  balance  of  $100,000  plus  accrued
interest of $25,660 into 125,660 shares of common stock valued at
$125,660, which was the quoted market price.  In connection  with
these  borrowings,  SDC committed to issuing  to  Emanon  or  its
affiliate  Schaenen Capital Management, LLC,  15,000  shares  per
month until such time as a registration statement covering all of
these shares has been filed.  No registration statement has  been
filed  to  date and this obligation is ongoing.  As a  result  of
this  commitment,  SDC  issued 180,000 shares  to  Emanon  or  an
affiliate of Emanon in each of 2000 and 2001, valued at  $202,445
and $130,002, respectively.



                             -33-

<PAGE>


      In  connection with the acquisition of Tatra, SDC  received
financing from a strategic shareholder, Terex Corporation, in the
amount  of  approximately  $10.9 million.   As  part  of  Terex's
financing, we issued to Terex three 9% convertible notes  in  the
aggregate  principal amount of $12.9 million. Messrs.  Adams  and
Srkal  personally  guaranteed these notes at the  time  of  their
issuance.  These guarantees were subsequently released after  the
shares  of  SDC  were  issued to Terex.  Of the  notes  aggregate
principal  amount of $10.9 million, $4.8 million became  due  and
payable  on  March 1, 2002.  As had been previously agreed,  upon
the  fulfillment of certain conditions, including  completion  of
the  Tatra acquisition, in early 2002 we sold to Terex 40.61%  of
Tatra's  issued  and  outstanding capital  stock  in  return  for
cancellation of the $4.8 million note.  Each of the  second  note
in  the aggregate principal amount of $6.1 million and the  third
note  in the aggregate principal amount of $2 million (which  was
advanced  in  2002),  are due and payable on December  31,  2004.
Upon  the sale of Tatra shares to Terex, Terex held the right  to
convert  up  to  $4  million  of its  notes  at  any  time  after
December 31, 2002 into shares of our common stock equal to 12% of
our  outstanding  common stock on a fully  diluted  basis.   This
right was extinguished by mutual agreement in December 2002.   As
a  result of these transactions, we retain a controlling interest
in  51%  of  Tatra's shares, Terex acquired a 40.61% interest  in
Tatra's  shares  and  the 8.39% remaining  shares  of  Tatra  are
publicly-held.   The  publicly-held shares  were  initially  sold
through  a  government coupon privatization of  Tatra  shares  in
April 1992.

  Terex  also  assisted  us  with the  establishment  of  working
capital  credit  facilities for Tatra by loaning  $5  million  to
Tatra in 2002 as part of the share purchase agreement between SDC
and  Terex.   In consideration for Terex's role as our  strategic
advisor and for certain marketing and technology consulting  that
may  be rendered by Terex to us, we issued to Terex 1,256,837  of
our  common  shares, representing approximately 5% of our  issued
and  outstanding common shares.  Of these, 1,147,385 shares  were
issued on December 21, 2001 at the then market price of $0.75 per
share and 109,452 shares were issued on December 28, 2001 at  the
then  market  price  of $0.90 per share.  Terex's  obligation  to
provide  marketing  and  technology  consulting  services  is   a
contractual  obligation under the securities  purchase  agreement
between  SDC  and  Terex.  The specific types  of  marketing  and
technology consulting services referred to in the agreement  have
not been defined.

     Under a new management consulting agreement among SDC, Tatra
and  Terex  which  was entered into on December 31,  2002,  Terex
personnel  will  assist  in  the  management  of  the  day-to-day
operations  of  Tatra.   The objective of this  agreement  is  to
improve   Tatra's   operations  and  financial   flexibility   by
reorganizing   and   consolidating   manufacturing    facilities,
outsourcing  some  of  Tatra parts and  components  and  reducing
overhead.   The Terex team will be led by Fil Filipov,  President
of  Terex  Crane, who has extensive operating experience  in  the
industry.

     In  2002,  SDC issued two promissory notes to Venus Projects
Ltd.  in the aggregate principal amount of $590,000, each bearing
interest  at  9% per year.  The first note, which was  issued  on
June 27, 2002 in the aggregate principal amount of $390,000,  was
originally due and payable on June 27, 2003 and its maturity date
was  subsequently extended to October 1, 2004.  The second  note,
which  was issued on September 4, 2002 in the aggregate principal
amount  of  $200,000, was originally due and payable on  December
31,  2002, and its maturity date was extended to March  31,  2003
and subsequently to October 1, 2004.











                             -34-

<PAGE>


Item 13. Exhibits, Material Agreements and Reports on Form 8-K

       (a)  The  following exhibits are filed  as  part  of  this
            registration statement:
<TABLE>
<CAPTION>

Exhibit No.   Description                                     Location
-----------   -----------                                     --------
<S>           <C>                                             <C>
    3.1       Amended and Restated Certificate of             Incorporated by reference to
              Incorporation of SDC                            exhibit to SDC's Form S-8 dated
                                                              December 28, 2000 (No. 333-52882)

    3.2       By-laws of SDC                                  Incorporated by reference to
                                                              exhibit to SDC's Form 10-SB dated
                                                              January 8, 1996

   10.1       Shareholder Agreement by, between and           Incorporated by reference to
              among SKODA Diesel, a.s., Worth Capital         exhibit to SDC's Form 10-SB dated
              Group, Inc. and Double Seal Ring Company,       January 8, 1996
              Inc. dated as of April 21, 1994


   10.2       Exclusive Agency Agreement by and between       Incorporated by reference to
              SKODA Diesel, a.s. and SDC dated as of          exhibit to SDC's Form 10-SB dated
              April 21, 1994                                  January 8, 1996

   10.3       Bill of Sale and Transfer by and between        Incorporated by reference to
              SKODA Diesel, a.s. and SDC dated as of          exhibit to SDC's Form 10-SB dated
              November 29, 1994                               January 8, 1996

   10.4       Expert's Opinion on the technical state         Incorporated by reference to
              and the evaluation of the production            exhibit to SDC's Form 10-SB dated
              equipment for SDC dated April 1995              January 8, 1996

   10.5       Agreement to Merge Golden Grove Business,       Incorporated by reference to
              Inc. into SDC dated as of January 31, 1997      exhibit to SDC's Form 10-KSB for
                                                              the year ended August 31, 1997

   10.6       Exclusive Agency Agreement by and between       Incorporated by reference to
              Metall Kraft and SDC dated as of August 21,     exhibit to SDC's Form 10-KSB for
              1997                                            the year ended August 31, 1997

   10.7       Purchase and Sale Agreement by and between      Incorporated by reference to
              SDC and Motokov International, Joint Stock      exhibit to SDC's Form 10-KSB for
              Company dated as of November 18, 1997           the year ended August 31, 1997

   10.8       Executive Employment Agreement between SDC      *
              and Ronald A. Adams dated as of October
              1, 2001

   10.9       Executive Employment Agreement between SDC      *
              and Milota K. Srkal dated as of October 1,
              2001

   10.10      Strategic Advisor Agreement between SDC         Filed herewith
              and General Alexander M. Haig, Jr. dated
              May 14, 1999

   10.11      Letter Agreement between SDC and General        Filed herewith
              Alexander M. Haig, Jr. dated September 9,
              2001

   10.12      Joint Venture Agreement between Tatra a.s.      Filed herewith
              and Venus Udyog (India) Limited dated April
              4, 1997

   10.13      Form of Letter of Subordination from SDC to     Filed herewith
              ABN AMRO Bank N.V. dated February 2003
</TABLE>

                             -35-

<PAGE>

<TABLE>
<CAPTION>
<S>           <C>                                             <C>

   10.14      Management Consulting Agreement between         Filed herewith
              Tatra, a.s. and Terex Corporation dated
              December 31, 2002

   10.15      Stock Purchase Agreement between SDC, SDC       Filed herewith
              Prague s.r.o. and Terex Corporation dated
              December 27, 2001

   10.16      Loan Agreement between SDC and Terex            Filed herewith
              Corporation dated December 27, 2001

   10.17      Modification and Amendment No. 1 to Loan        Filed herewith
              Agreement between Terex Corporation, Tatra
              a.s., SDC, and SDC Prague s.r.o. dated
              February 20, 2002

   16.1       Letter from KPMG Ceska republika, s.r.o.        Incorporated by reference to
              to the Securities and Exchange Commission       exhibit to SDC's Form 8-K/A filed
              dated May 17, 2002                              on May 21, 2002

   21.1       Subsidiaries of the registrant                  Filed herewith

   99.1       Certification of CEO pursuant to Section        Filed herewith
              906 of the Sarbanes-Oxley Act of 2002

   99.2       Certification of CFO pursuant to Section        Filed herewith
              906 of the Sarbanes-Oxley Act of 2002

*  Previously filed.
</TABLE>

    (b)  Reports of Form 8-K

         No reports on Form 8-K were filed by SDC during its last
quarter for the year ended December 31, 2001.  However, SDC filed
the following Current Reports on Form 8-K since December 31, 2001
to the date of the filing of this report:

A.   On January 14, 2002, SDC filed a Form 8-K announcing that it
     completed  and   closed  its   acquisition  from  the  Czech
     Government's  Consolidation  Agency of  a 91.61% interest in
     the Czech Republic's specialty-truck  manufacturing company,
     Tatra.

B.   On January 22, 2002,  SDC  filed a Form 8-K d isclosing that
     the  Board  of Directors determined  to  replace  Richard A.
     Eisner & Company, LLP,  SDC's independent public accountants
     for  the  fiscal year ending  December 31, 2000,  with  KPMG
     Ceska  republika,  s.r.o.,  as  SDC's   independent   public
     accountants for its fiscal year ending December 31, 2001.

C.   On February 12, 2002, SDC filed a Form 8-K/A disclosing that
     on January 15, 2002 the Board of Directors dismissed Richard
     A.   Eisner  &  Company, LLP,   SDC's   independent   public
     accountants  for the  fiscal  years ending December 31, 2000
     and 1999 and engaged  KPMG Ceska  republika, s.r.o. as SDC's
     independent  public  accountants for  the fiscal year ending
     December 31, 2001. The Form  8-K/A  stated that  SDC has not
     had any discussions nor received any written opinion or oral
     advice from KPMG Ceska republika, s.r.o. during the two most
     recent fiscal years  and any subsequent interim  period with
     respect to either the  application of  accounting principles
     to a specified transaction, either completed or proposed, or
     as to the type of audit  opinion that  might be  rendered on
     SDC's financial statements.

D.   On  April  23,  2002, SDC  filed  a Form 8-K  reporting  the
     resignation  of  KPMG  Ceska   republika, s.r.o.  as   SDC's
     independent public accountants.



                             -36-

<PAGE>


E.   On May 21, 2002, SDC filed a Form 8-K/A disclosing a  letter
     SDC received  addressed to the SEC  dated May 17, 2002  from
     KPMG  Ceska  republika, s.r.o.  The  letter stated that KPMG
     Ceska republika, s.r.o.  disagrees with  the statements made
     by SDC in the initial Form 8-K dated April 16, 2002.

F.   On July 3, 2002, SDC filed a Form 8-K disclosing that it has
     selected  international  accounting firm BDO c.s., s.r.o. to
     serve as  the independent auditor for SDC and its subsidiary
     Tatra.























<PAGE>                       -37-





















                             SDC International, Inc.
                                 and Subsidiaries





















===========================================================================

                                       Consolidated Financial Statements
as of December 31, 2001 and for the years ended December 31, 2001 and 2000



                                                                        F-1
<PAGE>




                                                    SDC International, Inc.
                                                           and Subsidiaries

                                                                   Contents

===========================================================================



Independent auditors' reports                                    F-3 - F-4

Consolidated financial statements:
   Balance sheet                                                    F-5
   Statement of operations                                          F-6
   Statement of stockholders' deficit                               F-7
   Statement of cash flows                                          F-8
   Notes to consolidated financial statements                    F-9 - F-41
















                                                                        F-2

<PAGE>





Independent Auditors' Report

The Board of Directors and Stockholders
SDC International, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheet of SDC
International, Inc. and Subsidiaries as of December 31, 2001, and the
related consolidated statements of operations, stockholders' deficit,
and cash flows for the year then ended. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated
financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of SDC International, Inc. and Subsidiaries as of December 31, 2001,
and the results of their operations and their cash flows for the year
then ended, in conformity with accounting principles generally
accepted in the United States of America.



   /s/ BDO CS s.r.o.


November 8, 2002

BDO CS s.r.o.
Prague, Czech Republic











                                                                        F-3

<PAGE>



Independent Auditors' Report

The Board of Directors and Stockholders
SDC International, Inc.
Palm Beach, Florida

We have audited the consolidated statements of operations,
stockholders' deficit and cash flows of SDC International, Inc. for
the year ended December 31, 2000. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated
financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements of SDC
International, Inc. referred to above, present fairly, in all material
respects, the results of its operations and its cash flows for the
year ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States of America.


/s/  Eisner LLP (formerly
     Richard A. Eisner & Company, LLP)

New York, New York
February 7, 2001



                                                                        F-4

<PAGE>




                                                      SDC International, Inc.
                                                             and Subsidiaries

                                                   Consolidated Balance Sheet
                                                 (In thousands of US dollars)

=============================================================================

December 31, 2001
-----------------------------------------------------------------------------
Assets
Current:
  Cash and cash equivalents                                     $   3,661
  Trade accounts receivable, net of allowance for
    doubtful accounts of $6,553                                    20,181
  Inventories (Note 3)                                             38,774
  Amounts due from affiliated companies (Note 7(a))                 4,094
  Other current assets                                              5,415
-----------------------------------------------------------------------------
    Total current assets                                           72,125

Property, plant and equipment, net (Note 4)                        24,483
Investments in affiliated companies                                 1,035
Other assets                                                        2,167
-----------------------------------------------------------------------------
                                                                $  99,810
=============================================================================
Liabilities and Stockholders' Deficit
Current liabilities:
  Notes payable to banks (Note 6)                               $  15,274
  Current installments of obligations under capital leases
   (Note 5)                                                           351
  Due to related parties (Note 7(b))                                5,702
  Trade accounts payable                                           32,373
  Accrued expenses                                                 16,900
  Current portion of contractual obligation (Note 11)               9,089
  Amounts due to affiliated companies (Note 7(a))                     740
-----------------------------------------------------------------------------
     Total current liabilities                                     80,429

Due to related parties, net of current portion (Note 7(b))          6,070
Contractual obligation, net of current portion (Note 11)            7,803
Other liabilities                                                   2,375
Obligations under capital leases, net of current
 installments (Note 5)                                                365
-----------------------------------------------------------------------------
    Total liabilities                                              97,042
-----------------------------------------------------------------------------

Commitments and contingencies (Note 11)
Minority interest                                                   5,526
-----------------------------------------------------------------------------
Stockholders' deficit:
  Preferred stock, $.001 par value, 25,000,000 shares
   authorized, none issued or outstanding (Note 8)                      -
  Common stock, $.001 par value, 25,000,000 shares authorized,
   17,719,885 shares issued and outstanding (Note 8)                   18
  Additional paid-in capital (Note 8)                              25,612
  Common stock to be issued (Note 8)                                  369
  Escrow stock (Note 7)                                              (510)
  Accumulated deficit                                             (28,147)
  Note receivable from stockholders (Note 9)                         (100)
-----------------------------------------------------------------------------
     Total stockholders' deficit                                   (2,758)
-----------------------------------------------------------------------------
                                                                $  99,810
=============================================================================


                 See accompanying notes to consolidated financial statements.


                                                                          F-5

<PAGE>


                                                      SDC International, Inc.
                                                             and Subsidiaries


                                         Consolidated Statement of Operations
                (in thousands of US dollars, except share and per share data)
=============================================================================

<TABLE>
<CAPTION>

Year ended December 31,                                   2001      2000
-----------------------------------------------------------------------------
<S>                                                    <C>         <C>

Revenues                                               $     -     $      70
Cost of revenues                                             -            79
-----------------------------------------------------------------------------
Gross loss                                                   -            (9)
Selling, general and administrative expenses,
 including $5,748 and $235 paid by issuance of
 stock, respectively                                     9,049         1,338
-----------------------------------------------------------------------------
     Loss from operations before interest expense       (9,049)       (1,347)

Interest expense, net of interest income of $5 and
 $2,including $756 and $283 paid by issuance of
 stock and amortization of debt discount of $-0-
 and $103, respectively                                    863           480
-----------------------------------------------------------------------------
     Loss from continuing operations                    (9,912)       (1,827)
Discontinued operations (Note 12):
  Loss on sale (2001) and operations (2000) of
  discontinued subsidiary                                  (52)          (25)
-----------------------------------------------------------------------------
Net loss                                             $  (9,964)    $  (1,852)
=============================================================================

Per share - basic and diluted:
  Loss from continuing operations                    $    (.73)    $    (.19)
=============================================================================
Weighted average shares outstanding                  13,586,000     9,605,000
=============================================================================

</TABLE>
                 See accompanying notes to consolidated financial statements.










                                                                          F-6


<PAGE>

                                                      SDC International, Inc.
                                                             and Subsidiaries


                              Consolidated Statement of Stockholders' Deficit
                (in thousands of US dollars, except share and per share data)
                                                                     (Note 8)
=============================================================================
<TABLE>
<CAPTION>

Years ended December 31, 2001 and 2000
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Accumulated
                                                                                                   foreign       Note
                                    Common Stock,   Additional    Common                          currency    receivable
                                      par value       paid-in    stock to   Escrow  Accumulated  translation    from
                                 Shares     Amount    capital    be issued  stock   deficit      adjustment  stockholders   Total
-----------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>        <C>    <C>          <C>         <C>     <C>          <C>         <C>          <C>

Balance, January 1, 2000          7,745,004 $    8  $ 14,505    $   918     $    -  $  (16,331)  $     24    $     -      $   (876)
Issuance of common stock in                                                                                               --------
 connection with loan agreements    250,000      -       283          -          -           -          -          -           283
Issuance of common stock to
 consultants and employees
 for services                       195,000      -       235          -          -           -          -          -           235
Issuance of common stock in
 repayment of short-term
 loans and accrued interest         938,054      1       850          -          -           -          -          -           851
Issuance of common stock
 payable                            457,000      -       918       (918)         -           -          -          -             -
Sale of common stock              1,396,645      2       828          -          -           -          -          -           830
Return of shares by officers
 of the Company                    (100,000)     -         -          -          -           -          -          -             -
Comprehensive loss:
Foreign currency translation
 adjustment                               -      -         -          -          -           -        (24)         -           (24)
Net loss for the year                     -      -         -          -          -      (1,852)         -          -        (1,852)
                                                                                                                          ---------
Total comprehensive loss                                                                                           -        (1,876)
                                                                                                                          ---------
-----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2000       10,881,703     11    17,619          -          -     (18,183)         -          -          (553)
Issuance of common stock in
 connection with loan agreements    690,000      1       530          -          -           -          -          -           531
Common stock to be issued in
 connection with loan agreements
 (250,000 shares)                         -      -         -        225          -           -          -          -           225
Issuance of common stock to
 consultants and employees for
 services                         2,448,182      3     1,736          -          -           -          -          -         1,739
Common stock to be issued to
 consultants and employees for
 services (159,452 shares)                -      -         -        144          -           -          -          -           144
Issuance of options and warrants
 to purchase common stock to
 consultants and employees for
 services                                 -      -     3,865          -          -           -          -          -         3,865
Issuance of options to purchase
 common stock to consultant in
 cancellation of common stock      (175,000)     -         -          -          -           -          -          -             -
Issuance of common stock as
 collateral for loan and held
 in escrow                          750,000      -       510          -       (510)          -          -          -             -
Sale of common stock              1,725,000      2       703          -          -           -          -          -           705
Issuance of common stock upon
 exercise of options              1,400,000      1       649          -          -           -          -          -           650
Net loss for the year                     -      -         -          -          -      (9,964)         -          -        (9,964)
Due from stockholders                     -      -         -          -          -           -          -       (100)         (100)
-----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2001       17,719,885 $   18  $ 25,612    $   369     $ (510) $  (28,147)  $      -    $  (100)     $ (2,758)
===================================================================================================================================

</TABLE>

                 See accompanying notes to consolidated financial statements.

                                                                          F-7

<PAGE>


                                                      SDC International, Inc.
                                                             and Subsidiaries

                                         Consolidated Statement of Cash Flows
                                                 (in thousands of US dollars)
=============================================================================
<TABLE>
<CAPTION>

Year ended December 31,                                          2001       2000
----------------------------------------------------------------------------------
<S>                                                            <C>        <C>

Cash flows from operating activities:
  Net loss                                                     $(9,964)   $(1,852)
  Adjustments to reconcile net loss to net cash
    provided by (used in) operating activities:
      Depreciation and amortization                                  1          2
      Amortization of debt discount and interest
        expense paid in stock                                      756        386
      Expenses paid by issuance of stock and options             5,748        235
      Loss on sale of discontinued subsidiary                       52         25
      Loss on impairment of fixed assets                             2          -
      Change in assets and liabilities, net of
        acquisition of
       TATRA:
         Inventory                                                  11         63
         Prepaid expenses and other current assets                   -         15
         Accrued interest receivable                                (2)         -
         Accounts payable and accrued expenses                   3,994       (179)
         Accrued interest payable                                  112         96
----------------------------------------------------------------------------------
         Net cash provided by (used in) operating activities       710     (1,209)
----------------------------------------------------------------------------------
Cash flows from investing activities:
  TATRA acquisition costs                                      (13,005)         -
  Cash acquired from acquisition of TATRA                        3,634          -
  Loans to stockholders                                           (100)         -
  Decrease in restricted cash                                        -         81
----------------------------------------------------------------------------------
         Net cash provided by (used in) investing activities    (9,471)        81
----------------------------------------------------------------------------------
Cash flows from financing activities:
  Proceeds from notes payable                                   10,904          -
  Proceeds of loans from related parties                           500        200
  Repayment of loans from related parties                         (393)       (17)
  Proceeds from exercise of options                                650          -
  Proceeds from sale of stock, net                                 705        830
----------------------------------------------------------------------------------
         Net cash provided by financing activities              12,366      1,013
----------------------------------------------------------------------------------
Net increase (decrease) in cash                                  3,605       (115)
Cash, beginning of year                                             56        171
----------------------------------------------------------------------------------
Cash, end of year                                              $ 3,661    $    56
==================================================================================
Supplemental disclosures of noncash investing
  and financing activities:
    Issuance of common stock in payment of stockholder
      loans and accrued interest                               $     -    $   851
    Common stock issued or issuable in connection with
      extension of or entering into stockholder loans                -        283
==================================================================================
</TABLE>

                 See accompanying notes to consolidated financial statements.


                                                                          F-8

<PAGE>


                                                   SDC International, Inc.
                                                          and Subsidiaries

                                Notes to Consolidated Financial Statements
             (in thousands of US dollars, except share and per share data)
--------------------------------------------------------------------------


1.  Summary of     (a)   Description of Business
    Significant
    Accounting           Through December 2000, SDC
    Policies             International, Inc. (the "Company"),
                         marketed, sold, and financed a full
                         complement of Eastern and Central
                         European industrial products such as
                         diesel generators, co-generation
                         equipment, electric metering systems, on
                         and off-road heavy vehicles and
                         airfreight containers. At the end of
                         2001, as discussed in Note 2, the
                         Company acquired TATRA, a.s. ("TATRA"),
                         a joint stock company located in
                         Koprivnice, Czech Republic. The Company
                         is a manufacturer of on-and off-road
                         heavy-duty vehicles for commercial and
                         military applications. The Company also
                         manufactures parts for heavy-duty
                         machinery and vehicles.

                   (b)   Principles of Consolidation

                         The consolidated financial statements
                         include the accounts of the Company and its
                         majority-owned subsidiaries. All
                         significant intercompany balances and
                         transactions have been eliminated in
                         consolidation.

                         The equity method of accounting is used
                         when the Company has a 20% to 50% interest
                         in other companies. Under the equity
                         method, original investments are recorded
                         at cost and adjusted by the Company's share
                         of undistributed earnings or losses of
                         these companies.

                         Other investments are accounted for by the
                         cost method. The Company recognizes a loss
                         when there is a loss in value in the investment,
                         which is other than a temporary decline.



                                                                        F-9

<PAGE>



                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------


                   (c)   Net Loss Per Share

                         In calculating basic and diluted net loss per
                         share, the Company uses the weighted average
                         number of common shares outstanding plus common
                         shares issuable from the date of commitment.
                         Shares held as in escrow  as collateral for loans
                         have not been included in the computation of
                         weighted average shares outstanding. For the
                         years ended December 31, 2001 and 2000, shares
                         issuable upon exercise of outstanding options
                         and warrants were 6,268,069 and 50,000,
                         respectively. These options and warrants
                         have not been included in the computation of
                         diluted net loss per share as their effect is
                         antidilutive.

                   (d)   Foreign Currency

                         The reporting currency for the Company is the
                         U.S. dollar. The functional currency of the
                         Company's subsidiaries in the Czech Republic is
                         the Czech Koruna ("CZK").

                         Balance sheet amounts are translated to the
                         dollar from the local functional
                         currency at year-end exchange rates, while
                         statements of operations amounts in local
                         functional currency are translated using average
                         exchange rates.

                         The consolidated statement of cash flows
                         was translated to US dollars using the
                         weighted average exchange rate, with the
                         exception of material non-routine
                         transactions, which have been translated
                         using the exchange rate at the date of
                         transaction. The effect of exchange rate
                         changes on cash balances is presented as a
                         separate part of reconciliation of the
                         changes in cash and cash equivalents.
                         Translation gains or losses, if material,
                         are recorded as a separate component of
                         stockholders' deficit. Currency gains or
                         losses on transactions denominated in a
                         currency other than an entity's functional
                         currency are recorded in the results of
                         operations.

                                                                        F-10


<PAGE>



                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------

                   (e)   Use of Estimates

                         The preparation of financial statements in
                         conformity with generally accepted
                         accounting principles requires management
                         to make estimates and assumptions that
                         affect the reported amounts of assets and
                         liabilities and disclosure of contingent
                         assets and liabilities at the date of the
                         financial statements and the reported
                         amounts of revenues and expenses during the
                         reporting period. Actual results could
                         differ from those estimates.

                   (f)   Cash Equivalents

                         For purposes of the consolidated statements of
                         cash flows, the Company considers all investments
                         with an original maturity of three months or
                         less on their acquisition date to be cash
                         equivalents.

                   (g)   Inventories
                         Inventories are stated at the lower of cost or
                         market. The Company uses standard costs, which
                         approximate actual costs based on the
                         weighted-average cost method for all inventories.

                   (h)   Financial Instruments and Concentration of
                         Credit Risk

                         The carrying value of cash, cash
                         equivalents, accounts receivable, accounts
                         payable and accrued expenses approximates
                         their estimated fair value due to the
                         relative short maturity of these
                         instruments. The carrying value of debt
                         and capital lease obligations approximates
                         estimated fair value based on the market
                         interest rates available to the Company
                         for debt of similar risk and maturities.


                                                                       F-11

<PAGE>



                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------

                         Financial instruments, which potentially
                         subject the Company to concentrations of
                         credit risk, consist principally of cash and
                         cash equivalents and trade accounts receivable.
                         The Company maintains its cash and cash
                         equivalents with high quality financial
                         institutions. Concentration of credit risk
                         with respect to trade accounts receivable
                         are limited due to the fact that the
                         Company requires letters of credit for high
                         value orders. The residual receivables
                         credit risk is controlled through credit
                         approvals, monitoring procedures and
                         establishment of a reserve for doubtful
                         accounts.

                   (i)   Property, Plant and Equipment

                         Property, plant and equipment are stated at
                         cost.  Plant and equipment under capital leases
                         are stated at the present value of minimum lease
                         payments.

                         Depreciation is calculated on the straight-line
                         method over the estimated useful lives of the
                         assets. Plant and equipment held under capital
                         leases are amortized utilizing the straight-
                         line method over the estimated useful lives of the
                         assets. Land is not depreciated. Expected useful
                         lives of major classes of depreciable assets
                         are as follows:

                         --------------------------------------------------
                         Buildings                              30-50 years
                         Machinery and equipment                 4-15 years
                         Motor vehicles                          4-15 years
                         Other assets                               4 years
                         --------------------------------------------------

                   (j)   Revenue Recognition

                         Revenue, which consists principally of sales of
                         truck equipment and spare parts, is recognized when
                         products are shipped. Sales in 2000 consisted of
                         shipments to one truck customer and one parts
                         customer in the Czech Republic, representing 73%
                         and 27% of sales, respectively. There were no
                         sales in 2001 as the Company concentrated its
                         efforts on the acquisition of TATRA (see Note 2).



                                                                       F-12


<PAGE>



                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------


                         TATRA sells heavy duty vehicles, parts for heavy-
                         duty vehicles, automobiles, machinery, heat and hot
                         water, and operates a hotel.  Products revenue is
                         recognized after the following events: the receipt
                         of a non-cancelable purchase order or signing of a
                         binding contract; shipment of the product and
                         acceptance by the customer; transfer of title and
                         risk of loss; the sales price is fixed or
                         determinable, and collection of sales price is
                         reasonably assured.

                         Occasionally, the Company enters into long-term
                         contracts with multiple element deliverables. In
                         accordance with provisions of Statement of
                         Position 81-1, the Company follows the units-of-
                         delivery method of accounting for these
                         contracts. This method recognizes, as revenue,
                         the contract price of the units delivered during
                         the period and, as the cost of earned revenue,
                         the costs allocable to the delivered units.

                         Revenue from heat and hot water is recognized when
                         delivered. Revenue generated from providing hotel
                         services is recognized when services are provided.

                   (k)   Research and Development and Advertising

                         Research and development and advertising costs
                         are expensed as incurred.

                   (l)   Comprehensive Income

                         The Company reports comprehensive income or loss
                         in accordance with the provisions of Statement
                         of Financial Accounting Standards ("SFAS") No.
                         130, "Reporting Comprehensive Income." SFAS
                         No. 130 establishes standards for reporting
                         comprehensive income and loss and its
                         components in financial statements. For the
                         Company, the primary differences between
                         reported net income and comprehensive
                         income relates to foreign currency
                         translation adjustments. Tax effects of
                         comprehensive income or losstranslation
                         adjustments are not considered material for
                         any periods presented.


                                                                       F-13


<PAGE>



                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------

                   (m)   Income Taxes

                         In accordance with SFAS No. 109, "Accounting for
                         Income Taxes", deferred income taxes are
                         recognized for the tax consequences of "temporary
                         differences" by applying enacted statutory tax rates
                         applicable to future years to differences between
                         the financial statement carrying amounts and the
                         tax bases of existing assets and liabilities. The
                         effect on deferred taxes of a change in tax
                         rates is recognized in income in the period that
                         includes the enactment date.

                         Valuation allowances are established when necessary
                         to reduce deferred tax assets to the amount
                         expected to be realized.

                   (n)   Long-Lived Assets

                         In accordance with Statement of Financial Accounting
                         Standards ("SFAS") No. 121 "Accounting for the
                         Impairment of Long Lived Assets and of Long-
                         Lived Assets to be Disposed Of", long-lived
                         assets, such as equipment and improvements,
                         are evaluated to determine whether there
                         are any impairment losses. If indicators of
                         impairment were present, and the estimated
                         undiscounted future cash flows were not
                         expected to be sufficient to recover the
                         asset's carrying amount, an impairment loss
                         would be charged to expense in the period
                         identified. No impairment losses have been
                         necessary through December 31, 2001.

                   (o)   Recent Accounting Pronouncements

                         In July 2001, the Financial Accounting
                         Standards Board ("FASB") issued SFAS
                         No. 141, "Business Combinations", and SFAS
                         No. 142, "Goodwill and Other Intangible
                         Assets."


                                                                       F-14

<PAGE>



                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------


                         SFAS No. 141 addresses the accounting for
                         and reporting of business combinations and
                         requires that all business combinations be
                         accounted for using the purchase method of
                         accounting for acquisitions and eliminates
                         the use of the pooling method. This
                         Statement applies to all business
                         combinations initiated after June 30, 2001.
                         The adoption of this new standard was used
                         in the acquisition of TATRA.

                         SFAS No. 142 addresses financial accounting and
                         reporting for acquired goodwill and other
                         intangible assets. This Statement changes the
                         accounting for goodwill from an amortization method
                         to an impairment-only method. The amortization of
                         goodwill, including goodwill recorded in past
                         business combinations, will cease upon adoption
                         of this Statement, which will begin with the
                         Company's fiscal year beginning January 1, 2002.
                         However, goodwill and intangible assets acquired
                         after June 30, 2001 will be subject to immediate
                         adoption of the Statement. The adoption of this
                         new standard was used in the acquisition of TATRA.

                         In July 2001, the FASB issued SFAS No. 143,
                         "Accounting for Asset Retirement Obligations."
                         SFAS No. 143 requires liability recognition for
                         obligations associated with the retirement of
                         tangible long lived assets and the associated
                         asset retirement costs. The Company is required to
                         adopt the provisions of SFAS No. 143
                         beginning with its fiscal year that starts
                         January 1, 2003. The Company does not expect that
                         adoption of SFAS No. 143 will have a material
                         effect on its consolidated financial statements.


                                                                       F-15

<PAGE>



                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------

                         In August, 2001, the FASB issued SFAS No. 144,
                         "Accounting for the Impairment or Disposal of
                         Long-Lived Asset". SFAS No. 144 addresses
                         financial accounting and reporting for the
                         impairment or disposal of long-lived assets. This
                         Statement requires that long-lived assets be
                         reviewed for impairment whenever events or changes
                         in circumstances indicate that the carrying amount
                         of an asset may not be recoverable. Recoverability
                         of assets to be held and used is measured by a
                         comparison of the carrying amount of an asset to
                         future net cash flows expected to be generated
                         by the asset. If the carrying amount of an asset
                         exceeds its estimated future cash flows, an
                         impairment charge is recognized by the
                         amount by which the carrying amount of the asset
                         exceeds the fair value of the asset. SFAS No. 144
                         requires companies to separately report
                         discontinued operations and extends that reporting
                         to a component of an entity that either has been
                         disposed of (by sale, abandonment, or in a
                         distribution to owners) or is classified as held
                         for sale. Assets to be disposed of are reported
                         at the lower of the carrying amount or fair value
                         less costs to sell. The Company is required
                         to adopt SFAS No. 144 on January 1, 2002.

                         In April 2002, the FASB issued SFAS Statement
                         No. 145, "Rescission of FASB Statements No. 4, 44
                         and 64, Amendment of FASB Statement
                         No. 13 and Technical Corrections". SFAS No.
                         145 rescinds SFAS No. 4, which required all
                         gains and losses from extinguishment of
                         debt to be aggregated and, if material,
                         classified as an extraordinary item, net of
                         related income tax effect. As a result, the
                         criteria in APB Opinion No. 30 will now be
                         used to classify those gains and losses.
                         SFAS No. 64 amended SFAS
                         No. 4 and is no longer necessary because
                         SFAS No. 4 has been rescinded.


                                                                       F-16

<PAGE>



                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------


                         SFAS No. 145 amends SFAS Statement No. 13
                         to require that certain lease modifications
                         that have economic effects similar to sale-
                         leaseback transactions be accounted for in
                         the  same manner as sale-leaseback
                         transactions. SFAS No. 145 also makes
                         technical corrections to existing
                         pronouncements. While those corrections are
                         not substantive in nature, in some
                         instances, they may change accounting
                         practice. SFAS No. 145 is required to be
                         applied for fiscal years beginning after
                         May 15, 2002. The adoption of this
                         Statement is not expected to have a
                         material effect on the Company's financial
                         statements.

                         In June 2002, the FASB issued SFAS Statement
                         No. 146, "Accounting for Costs Associated with
                         Exit or Disposal Activities". SFAS No. 146
                         requires that a liability for a cost associated
                         with an exit or disposal activity be recognized
                         when the liability is incurred. This Statement
                         also established that fair value is the objective
                         for initial measurement of the liability. The
                         provisions of this Statement are effective for
                         exit or disposal activities that are initiated
                         after December 31, 2002.  The adoption of this
                         Statement is not expected to have a material
                         effect on the Company's financial statements.

                   (p)   Reclassifications

                         Certain amounts in 2000 have been reclassified to
                         conform to the 2001 presentation.


                                                                       F-17


<PAGE>



                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------
                                                 SDC International, Inc.
                                                     and Subsidiaries


2.  Acquisition    On December 28, 2001, the Company and its
                   subsidiary, SDC Prague, closed on its
                   acquisition of 91.61% of the outstanding
                   stock of TATRA, a truck and military
                   applications manufacturer in the Czech
                   Republic. The results of TATRA's operations
                   have been included in the consolidated
                   statements since that date, though there
                   were no activities from December 28 to
                   December 31, 2001. As a result of the
                   acquisition, the Company is expected to be
                   the leading supplier of on- and off-road
                   heavy-duty vehicles for commercial and
                   military applications in Eastern and
                   Central Europe. As discussed below, such
                   ownership was reduced to 51% after year-
                   end. In addition to the cash purchase price
                   of $10,904, the Company committed to
                   refinancing the existing notes
                   (approximately $10.8 million) held by the
                   Czech government's finance agency and also
                   committed to making certain cash infusions
                   into TATRA, including $11.78 million during
                   the twelve month period following the acquisition.

                   The Company financed its acquisition with three 9%
                   notes totaling $12.9 million from Terex Corporation
                   ("Strategic Partner"). The three notes were
                   for; (i)  $4.8 million, due March 1, 2002,
                   (ii)  $6.1 million, convertible, see below, due
                   December 31, 2004 and (iii) $2 million, convertible,
                   see below, (advanced in 2002) due December 31, 2004.
                   The three notes are secured by; (i)  a personal
                   guarantee from the Company's Chairman and from its
                   President, (ii)  the Company's interest in
                   TATRA, and (iii)  100% of the stock in SDC Prague.
                   In connection therewith, upon the completion of certain
                   conditions, the Company was committed to selling to the
                   Strategic Partner 40.61% of TATRA in return for
                   cancellation of the $4.8 million note and the
                   cancellation of the personal guarantee provision
                   (i) above. Such sale was made in early 2002. As a result
                   of the sale, a loss was recognized to the extent that
                   40.61% of TATRA's net assets exceeded the purchase
                   price of $4.8 million. Only 51% of TATRA's
                   net income will be included in the 2002
                   results of operations. Up to $4 million of
                   the outstanding balance of the remaining
                   second and third notes are convertible, at
                   any time after December 31, 2002, into
                   shares of common stock equal to 12% of the
                   outstanding common stock of the Company, on
                   a fully diluted basis, as defined.


                                                                       F-18


<PAGE>



                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------

                   The Company follows SFAS No. 141, "Business
                   Combinations", and SFAS No. 142, "Goodwill
                   and Other Intangible Assets", in accounting
                   for the excess of fair value of assets
                   acquired over the price paid (negative
                   goodwill). Due to the immateriality of
                   equity investments and other assets,
                   negative goodwill has been allocated as a
                   reduction of fixed assets of approximately $44,000.

                   The preliminary allocation of the purchase
                   price of the assets acquired and liabilities
                   assumed based on the fair value of TATRA was

                   as follows:
                   --------------------------------------------------------
                   Cash acquired                                 $   3,634
                   Trade accounts receivable                        20,181
                   Inventories                                      38,774
                   Other current assets                              9,509
                   Property, plant and equipment, after
                    allocation of negative goodwill                 24,483
                   Other assets                                      3,200
                   Notes payable to banks                          (15,274)
                   Trade accounts payable                          (24,243)
                   Accrued expenses                                (10,749)
                   Contractual obligation - current                 (9,089)
                   Other current liabilities                       (11,352)
                   Minority interest                                (5,526)
                   Contractual obligation - noncurrent              (7,803)
                   Other liabilities                                (2,740)
                   -------------------------------------------------------
                                                                  $ 13,005
                   =======================================================

                   Costs related to the acquisition, consisting primarily
                   of professional fees, totaled approximately $2,101.
                   These costs have been included in the calculation of
                   total purchase price and have been reflected in
                   the allocation among the assets acquired and liabilities
                   assumed.

                                                                       F-19


<PAGE>



                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------

                   The following unaudited pro forma information presents
                   a summary of the results of operations of the Company
                   assuming the acquisition of 91.61% of TATRA occurred on
                   January 1, 2000.

<TABLE>
<CAPTION>
                   December 31,                    2001          2000
                   --------------------------------------------------------
<S>                <C>                           <C>           <C>
                   Revenue                       $152,130      $147,504
                   Net income (loss)               (1,837)        5,709
                   Net income (loss) per common
                     share - basic and diluted       (.14)          .59
                   ========================================================
</TABLE>

3. Inventories     At December 31, 2001 inventories consisted of the
                   following:

                   --------------------------------------------------------
                   Raw materials                               $ 17,472
                   Work-in-progress                              11,409
                   Finished goods                                 9,855
                   Merchandise                                       38
                   --------------------------------------------------------
                    Inventories                                $ 38,774
                   ========================================================


4. Property,       At December 31, 2001, property, plant and equipment
   Plant and       consisted of the following:
   Equipment
                   --------------------------------------------------------
                   Land                                        $     996
                   Buildings                                      13,900
                   Machinery and equipment                         7,524
                   Motor vehicles                                    114
                   Other assets                                      807
                   Construction-in-progress                        1,142
                   --------------------------------------------------------
                                                                  24,483
                   Accumulated depreciation and amortization
                   --------------------------------------------------------
                   Property, plant and equipment, net          $  24,483
                   ========================================================


                                                                       F-20


<PAGE>



                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------


                   The amounts were stated after allocation of
                   negative goodwill. New bases were
                   established and since TATRA was owned for 3
                   days, depreciation and amortization were zero.

5.  Leases         The Company is obligated under capital leases covering
                   certain machinery and equipment, and several
                   noncancelable operating leases of its Czech
                   operations. At December 31, 2001, the gross
                   amount of plant and equipment and related
                   accumulated amortization recorded under
                   capital leases were $2,320 and $784, respectively.

                   Rental expense for operating leases,
                   including office space (see Note 11(a)), was
                   $37 and $45 for the years ended December 31,
                   2001 and 2000, respectively. The Company
                   also has several noncancelable operating
                   leases, primarily for equipment in the Czech Republic.

                   Future minimum lease payments under
                   noncancelable operating leases and future
                   minimum capital lease payments as of
                   December 31, 2001 are:

<TABLE>
<CAPTION>
                                                   Capital
                   Year ending December 31,        leases    Operating leases
                   ----------------------------------------------------------
                   <S>                             <C>       <C>
                   2002                            $   392     $    838
                   2003                                232          739
                   2004                                 78          725
                   2005                                 46          684
                   2006                                 21          684
                   Later years, through 2009            56            -
                   -----------------------------  ----------  -----------
                   Total minimum lease payments        825      $ 3,670
                                                              ===========
                   Less amount representing
                   interest                           (109)
                                                  ----------
                   Present value of net minimum
                    capital lease payments             716
                   Less current installments of
                    obligations under capital
                    leases                            (351)
                                                  ----------
                   Obligations under capital
                    leases, excluding current
                    installments                   $   365
                   ==========================================================

</TABLE>
                                                                        F-21


<PAGE>




                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------


6.  Notes Payable        The Company has two revolving loans from a
    to Banks             government-owned bank. Both loans bear interest
                         at the Prague Interbank Offered Rate ("PRIBOR")
                         plus 2.7%.  At December 31, 2001, PRIBOR was at
                         4.69%.  All loans may become due and payable
                         immediately at the option of the lender upon
                         the occurrence of the following events.

                         The Company fails to make their scheduled
                         payment on the due date or three days
                         after the due date; the Company
                         becomes insolvent or a bankruptcy,
                         liquidation or similar proceeding is
                         commenced; substantial change in the legal
                         standing of the Company, including break-up
                         or substantial asset divestiture or
                         substantial change in ownership (at least
                         40%) of the Company; the Company defaults
                         in performance of any other agreement
                         between the Company and the bank or a third
                         party in an amount in excess of CZK
                         5,000,000 (approximately US $138); if there
                         is a material adverse change in the assets,
                         operating or financial conditions of the
                         client which, in the opinion of the bank,
                         may affect the ability of the Company to
                         fulfill its obligation to the bank, and if
                         the Company's guarantee has a decrease in
                         value or expires, the Company has 10
                         calendar days to replace the guarantee
                         after which the loan is payable immediately
                         plus a penalty of CZK 2,000,000
                         (approximately US $55).

                         As of December 31, 2001 the outstanding balance
                         of the loans and accrued interest thereof
                         totaled $11,328. The loans are pledged on the
                         Company's land, buildings and receivables. In
                         January 2002, the Company refinanced these
                         loans with a new loan obtained from a
                         commercial bank, which was obtained on similar
                         terms.

                         In addition, the Company has a credit
                         facility with a bank for borrowings
                         not to exceed 200 million CZK,
                         approximately $5,536. The credit line
                         is due on demand and bears interest at
                         LIBOR plus 1.5%. At December 31, 2001,
                         LIBOR was at 3.34%. All loans are
                         collateralized by the Company's accounts
                         receivable, as defined in the agreement. At
                         December 31, 2001, the Company had borrowed
                         $3,946 against the facility. On April 18,
                         2002, the Company amended the existing
                         agreement to provide for borrowings up to
                         400 million CZK, approximately $11,073.


                                                                       F-22


<PAGE>



                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------


7.  Related Party  (a) Due From/To Related Parties
    Transactions
                       Transactions with related parties consist
                       primarily of sales and purchase transactions
                       with unconsolidated affiliates. As of December 31,
                       2001, the amounts due from and to these
                       affiliates were $4,094 and $740.

                   (b) Loans from Stockholders

                       (i) At December 31, 2001, the Company had three
                           promissory notes with stated interest rates
                           of 14% per annum outstanding, totaling $550 plus
                           accrued interest of $159, with a certain
                           stockholder. These notes were entered into
                           during 1999 and 2000 and were originally due
                           within 180 days, all in 2000. In connection
                           with these promissory notes, during 1999, the
                           Company committed to issue 80,000 shares
                           (issued during 2000) valued at the commitment
                           date at $150, which were recorded as debt
                           discount. The remaining balance of the debt
                           discount of $103 was amortized to interest
                           expense during 2000. In connection with
                           extending the maturity date of these notes,
                           during 2000, the Company issued 32,500 common
                           shares valued at $24 (quoted market value).
                           This amount was recorded as a debt discount and
                           amortized to interest expense over the extended
                           maturity of the notes. These notes bear interest
                           at 14% per annum and are payable on July 30,
                           2002. In 2002, in connection with a further
                           extension of the maturity of the notes, the
                           Company issued warrants to this stockholder
                           to purchase 100,000 common shares of the
                           Company at an exercise price of $.75 per
                           share, deemed fair market value, exercisable
                           from issue date through December 31, 2003.
                           The warrants will be recorded at fair market
                           value, as determined utilizing the
                           Black-Scholes option - pricing model, as a debt
                           discount and amortized from the date of entering
                           into the agreement through the extended
                           maturity date of the notes.


                                                                       F-23


<PAGE>



                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------

                     (ii)  On June 28, 2001, in connection with the
                           Company's bid deposit for the TATRA acquisition,
                           the Company signed a promissory note totaling
                           $500 with its Chairman with a stated interest
                           rate of 14% per annum and maturing on September
                           30, 2001. The Chairman entered into a
                           substantially similar note with a certain
                           shareholder, with the Company securing that
                           note with 1,000,000 common shares of the Company
                           which have been issued and are recorded on the
                           accompanying balance sheet as escrow stock. The
                           note to the certain shareholder was further
                           secured by a personal guarantee and personal
                           real property of the Chairman. As of December
                           31, 2001, the remaining outstanding balance of
                           the loan and accrued interest thereof totaled
                           $148.  Upon repayment, 750,000 common shares,
                           valued at $510 (quoted market price), will be
                           returned to the Company and the certain
                           shareholder will retain the remaining 250,000
                           common shares, valued at $170 (quoted market
                           price). This amount was amortized to interest
                           expense over the period to maturity. In
                           connection with the extension of the maturity
                           date of the note to the Chairman and the note
                           to the certain shareholder, the Company
                           committed to issue to the certain shareholder
                           an additional 250,000 common shares, valued
                           at $225 (quoted market price at date of
                           commitment). Such amount was amortized to
                           interest expense over the period of the
                           extension. The note was fully paid in
                           January 2002.

                   (iii)   On December 27, 2001, the Company entered into
                           an agreement with a Strategic Partner with
                           regards to the acquisition of TATRA for
                           $10,904 (see Note 2). As of December 31, 2001,
                           the outstanding balance of borrowings with
                           the Strategic Partner as discussed in Note 2
                           was $4.8 million due March 1, 2002, and
                           $6.1 million due December 31, 2004. As of
                           December 31, 2001, accrued interest was $11.


                                                                       F-24


<PAGE>



                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------

                     (iv)  In 2000, the Company had an unsecured $500 line
                           of credit from a stockholder with the stated
                           interest rate of 14% per annum. The line of
                           credit originated in 1998 and provided that the
                           principal and interest, at the stockholder's
                           option, could be converted into common stock
                           at $1.00 per share. In connection with the
                           conversion feature, the Company recorded a
                           beneficial conversion of $500 representing the
                           excess of the fair value at the date of issue
                           of the shares the notes were convertible into
                           over the proceeds of the note, which was
                           amortized to interest expense over the period
                           until maturity. Principal and interest were
                           payable on December 3, 1998. In connection with
                           the extension of the maturity date of the note
                           to December 31, 1999, 216,000 common shares
                           (54,000 shares quarterly beginning the 4th
                           quarter of 1998), valued at $466 (quoted
                           market price), were committed to be issued to
                           the stockholder. Such shares were issued
                           during February 2000. On March 2, 2000, the
                           stockholder converted the note, totaling $500
                           plus accrued interest of $114, at a rate of
                           $1.00 per share into 614,110 common shares. In
                           addition, the Company committed to issuing
                           15,000 shares monthly beginning April 1999
                           until such time as a registration statement
                           covering all of these shares has been filed.
                           Shares issued are valued at the beginning of
                           each month at the then market price, totaling
                           $742 recorded as additional financing expense,
                           $277 in 1999, $202 in 2000, $130 in 2001, and
                           $133 during the nine months ended September
                           30, 2002.

                      (v)  In 2001, the Company returned an investment of
                           $50 to an investor. In consideration for the
                           temporary use of this investment, the Company
                           issued 10,000 shares valued at $6.

                                                                       F-25


<PAGE>


                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------


                     (vi)  In addition, the Company had three promissory
                           notes totaling $200 that originated in 1998,
                           1999 and 2000, with stated interest rates of
                           14% per annum. During 2000, holders of these
                           notes converted their notes plus accrued
                           interest of $37 into 323,944 shares of common
                           stock valued at $237, which was the quoted
                           market price. One of these notes provided that
                           the principal and interest, at the
                           stockholder's option, could be converted into
                           common stock at $1.00 per share. In connection
                           with the conversion feature, the Company
                           recorded a beneficial conversion of $81
                           representing the excess of the fair value at
                           the date of issue of the shares the notes were
                           convertible into over the proceeds of the
                           note, which was amortized  to interest expense
                           over the period until maturity (December 1998).
                           The remaining two notes were convertible into
                           common stock only upon default and, as a
                           result, no beneficial conversion was recorded
                           for these notes.

                   For the period ended December 31, 2001, interest
                   expense for the notes amounted to $868 including
                   amortization of debt discount.

                   For the period ended December 31, 2000, interest
                   expense for the notes amounted to $482 including
                   amortization of debt discount.

8.  Stockholders'  (a)   Common Stock
    Deficit
                         During the year ended December 31, 2001,
                         the Company sold 1,725,000 common shares to
                         various investors, pursuant to Rule 505,
                         Regulation D, yielding proceeds of $705, net of
                         offering costs.

                                                                       F-26


<PAGE>

                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------

                         As of December 31, 2001, the Company issued
                         2,448,182 shares of restricted common stock in
                         connection with consulting services to the Company
                         valued at $1,739, which was the quoted market
                         price.  In addition, the Company had committed to
                         issuing 159,452, shares of restricted common
                         stock valued at $144, quoted market price, during
                         the year ended December 31, 2001 in connection
                         with consulting services to the Company.

                         During 2001, a certain consultant of the Company
                         decided to return 400,000 common shares (175,000
                         issued in 1999 and 225,000 issued in 2001) valued
                         at $252 on the date of exchange, to the Company
                         in exchange for 300,000 stock options, valued at
                         $153, which had an exercise price of $0.40. Since
                         the fair market value of the options was less
                         than the fair market value of the common stock
                         surrendered and less than the original
                         compensation expense recorded, no additional
                         expense was recorded for 2001.

                         On various dates in 2000, 1,396,645 common
                         shares, under Rule 505, Regulation D, were sold
                         to the investors yielding proceeds of $830,
                         net of offering costs. In addition, the Company
                         issued 95,000 of restricted common stock for
                         consulting services to the Company valued at
                         $123. During 2000, the Company received 100,000
                         common shares returned by a certain officer of
                         the Company.  These shares were issued as
                         collateral for a loan. At the time of
                         repayment, the shares were returned to the
                         Company and cancelled.  Such amount was
                         recorded as a reduction in the par value.

                         During 2000, the Company issued 26,000
                         common shares valued at $26 in connection
                         with options exercised in 1999.

                                                                       F-27


<PAGE>

                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------

                         On December 27, 2000, the Company amended
                         its certificate of incorporation to
                         increase the shares it is authorized to
                         issue to 50,000,000 consisting of
                         25,000,000 shares of common stock and
                         25,000,000 shares of preferred stock. The
                         preferred stock may be issued in one or
                         more series with such rights, preferences,
                         privileges and restrictions as shall be
                         fixed by the Company's Board of Directors
                         from time to time.

                   (b)   Stock Options

                         The Company established two Nonqualified
                         Stock Option Plans in 1997 and 1998
                         pursuant to which 1,250,000 shares of
                         common stock are reserved for issuance upon
                         the exercise of options, designated as
                         nonqualified options. During 2001 and 2000,
                         the Company established additional
                         Nonqualified Stock Option Plans (the "2001
                         Plan" and "2000 Plan") pursuant to which
                         2,500,000 shares of common stock are
                         reserved for issuance. At the discretion of
                         the Company's Board of Directors,
                         nonqualified options (whether or not they
                         are under the Plans) may be granted to
                         consultants, directors, employees, officers
                         or anyone who performs services for the
                         Company. The option prices have been
                         determined by the Board of Directors at the
                         time any options are granted.

                         Options granted under the Plans expire not
                         more than ten years from the date of grant.
                         Generally, options vest immediately on the
                         date of grant.

                                                                       F-28

<PAGE>

                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------


                         In 2001, the Company granted employees and
                         non-employee directors options to purchase
                         4,463,069 common shares at exercise prices
                         of $0.10 to $1.00 per share. The excess of
                         the fair market value over the exercise price
                         of the options on the date of grant, in the
                         amount of $2,585, was charged to expense. In
                         addition, the Company granted consultants
                         options to purchase 2,205,000 common shares,
                         which had exercise prices of $0.25 to $2.50.
                         The fair market value of the options using
                         the Black-Scholes pricing model, in the amount of
                         $1,056, was charged to expense. 1,400,000 options,
                         which had exercise prices of $0.25 to $0.50,
                         were exercised immediately in 2001, and 400,000
                         options with an exercise price of $.404 per share
                         expired unexercised. The Company estimates the
                         fair value of each option grant at the grant date
                         using the Black-Scholes option-pricing model
                         with the following weighted-average assumptions:
                         no dividends paid; expected volatility of
                         100%-130%, weighted average risk-free interest rate
                         of 2.245%-4.5%, and expected lives of 1 to 5 years.
                         Proceeds resulting from the exercise of stock
                         options amounted to $650 for the period ended
                         December 31, 2001. As of December 31, 2001,
                         4,868,069 options, which had exercise prices of
                         $0.10 to $2.50, were outstanding.

                         In 2000, the Company granted consultants options to
                         purchase 100,000 common shares at an exercise price
                         of $-0- per share. 100,000 options were exercised
                         immediately in 2000. As the options had no exercise
                         price, the fair market value of the stock equaled
                         the fair market value of the options on the date
                         of grant, in the amount of $112, and was charged
                         to expense.


                                                                       F-29


<PAGE>

                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------

                   The Company follows APB Opinion No. 25 and related
                   interpretations in accounting for its options granted
                   to employees by recording as compensation expense
                   the excess of the fair market value over the exercise
                   price per share as of the date of grant. Under APB
                   Opinion No. 25, when the exercise price of the
                   Company's employee stock options equals the fair
                   value of the underlying stock on the date of grant, no
                   compensation is recognized.

                   SFAS No. 123, "Accounting for Stock-Based Compensation",
                   requires the Company to provide pro forma information
                   regarding net income and earnings per share as if
                   compensation cost for the Company's stock options
                   granted to employees had been determined in accordance
                   with the fair value-based method prescribed in SFAS
                   No. 123. The Company estimates the fair value of each
                   option grant at the grant date using the Black-Scholes
                   option-pricing model with the following weighted-
                   average assumptions used for grants in 2001 and 2000:
                   no dividends paid; expected volatility of 129.1% and
                   100%, respectively, weighted average risk-free
                   interest rate of 4.2% and 4.5%, respectively, and
                   expected lives of .25 to 5 years and one year,
                   respectively.

                   Under the accounting provisions of SFAS No. 123, the
                   Company's net loss would have been increased to the pro
                   forma amounts indicated below:

<TABLE>
<CAPTION>
                                                     2001       2000
                   -------------------------------------------------------
                   <S>                             <C>        <C>
                   Net loss:
                       As reported                 $(9,964)   $(1,852)
                       Pro forma                   (10,587)    (1,852)
                       Net loss per share (basic
                        and diluted):
                        As reported                $  (.73)   $  (.19)
                        Pro forma                     (.78)      (.19)
                   =======================================================
</TABLE>

                                                                       F-30


<PAGE>


                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------

                         The weighted average fair value of options granted
                         was $.68 and $1.13 per option granted for the
                         years ended December 31, 2001 and 2000,
                         respectively.

                         A summary of stock option activity is as follows:

<TABLE>
<CAPTION>
                                                                                           Weighted
                                                                                           average
                                                                Option      Price range    exercise
                                                                shares      per share      price
                         -----------------------------------------------------------------------------
                         <S>                                  <S>           <C>            <C>
                         Employees
                         Outstanding,
                           December 31, 2000                          -     $        -     $  -
                         Granted                              4,463,069     $.10-$1.00     $.34
                         Exercised                                    -     $        -     $  -
                         Expired                                      -     $        -     $  -
                         Cancelled                                    -     $        -     $  -
                         -----------------------------------------------------------------------------
                         Outstanding,
                           December 31, 2001                  4,463,069     $.10-$1.00     $.34
                         =============================================================================
                         Non-employees
                         Outstanding,
                           January 1, 2000                            -     $        -     $  -
                         Granted                                100,000     $        -     $  -
                         Exercised                              100,000     $        -     $  -
                         Cancelled                                    -     $        -     $  -
                         -----------------------------------------------------------------------------
                         Outstanding,
                           December 31, 2000                           -     $        -     $  -
                         Granted                              2,205,000     $.25-$2.50     $.52
                         Exercised                           (1,400,000)    $ .25-$.50     $.46
                         Expired                               (400,000)    $      .40     $.40
                         Cancelled                                    -     $        -     $  -
                         -----------------------------------------------------------------------------
                         Outstanding,
                           December 31, 2001                    405,000     $.40-$2.50     $.85
                         =============================================================================
</TABLE>


                                                                        F-31


<PAGE>


                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------



The following table summarizes information about stock options
outstanding at December 31, 2001:

<TABLE>
<CAPTION>
                                     Options outstanding                                    Options exercisable
                     --------------------------------------------------   -------------------------------------------------
                                      Weighted                                           Weighted
                                      average     Weighted   Weighted                    average       Weighted   Weighted
                                     remaining     average    average                    remaining     average    average
                       Number       contractual   exercise     fair       Number        contractual    exercise    fair
Exercise Price       Outstanding       life         price      value      exercisable       life         price     value
---------------------------------------------------------------------------------------------------------------------------
<S>                  <C>            <C>           <C>        <C>          <C>           <C>            <C>        <C>
Employees
  $ .10              3,164,500          8.99      $  .10     $  .87        3,164,500        8.99       $  .10     $  .87
  $ .40                100,000          8.69      $  .40     $  .51          100,000        8.69       $  .40     $  .51
  $ .75-$1.00        1,198,569          2.35      $  .96     $  .54          744,674        2.86       $  .93     $  .54
---------------------------------------------------------------------------------------------------------------------------
December 31, 2001    4,463,069          7.20      $  .34     $  .77        4,009,174        7.85       $  .26     $  .80
===========================================================================================================================

Non-employees
  $ .40               300,000           8.69      $  .40     $  .51          300,000        8.69       $  .40     $  .51
  $2.00-2.50          105,000            .10      $  .44     $  .06          105,000         .10       $  .44     $  .06
---------------------------------------------------------------------------------------------------------------------------
December 31, 2001     405,000           6.57      $  .85     $  .46          405,000        6.57       $  .85     $  .46
===========================================================================================================================
</TABLE>


                                                                       F-32


<PAGE>


                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------


                   (c)   Warrants

                         As of December 31, 2001 and 2000, the Company
                         has outstanding warrants to purchase a total of
                         1,400,000 shares and 50,000 shares of common
                         stock, respectively, at exercise prices of
                         $1.34 and $2.50 per share, respectively, which
                         expire in 2002 and 2003. The fair value of the
                         1,400,000 warrants outstanding as of December
                         31, 2001 was $224 and charged to expense. These
                         warrants were issued to a service provider for
                         consulting services rendered during the year.
                         The Company used the Black-Scholes model and the
                         following weighted average assumptions to
                         estimate the value of these warrants:  no
                         dividends paid, expected volatility of 130%,
                         weighted average risk-free interest rate of
                         1.98%, and expected life of .5 years. 50,000
                         warrants which had been issued to consultants
                         during 1998 were cancelled during 2001.

9.  Note           The Company has a note receivable from its Chairman
    Receivable     and its President secured by shares of the Company's
    From           common stock at December 31, 2001, aggregating $100,
    Stockholders   which bears interest at a rate of 9% per annum. The
                   outstanding principal and interest will be due and
                   payable in 2003 or upon the sale of certain shares of
                   common stock, as defined in the agreement.

10. Income Taxes   Deferred tax assets represent the future tax
                   return consequences of net operating loss carryforwards
                   and differences between the financial statement and tax
                   bases of assets and liabilities, stock-based
                   acquisitions and compensation.

                   At December 31, 2001, the Company has net
                   operating loss carryforwards for Federal income tax
                   purposes of approximately $13,462 expiring in the
                   years 2009 through 2021.



                                                                       F-33


<PAGE>


                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------

                   The reconciliation of the income tax benefit
                   applicable to continuing operations computed at the
                   Federal statutory tax rate to the income tax benefit in
                   the consolidated statement of operations for both the
                   years included December 31, 2001 and 2000 is as follows:


                   --------------------------------------------------------
                   Federal statutory tax benefit                   (34%)
                   Increase in valuation allowance                  34
                   --------------------------------------------------------
                   Income tax benefit in statement of
                     operations                                      -%
                   ========================================================


                   As of December 31, 2001, the net deferred tax
                   asset of the Company consists of the following:

                   --------------------------------------------------------
                   Deferred tax assets:
                     Net operating loss carryforwards           $ 4,516
                     Capital loss carryforwards                      61
                     Temporary book-tax differences
                       (primarily stock-based
                       compensation)                              4,592
                     Valuation allowance                         (9,169)
                   --------------------------------------------------------
                   Net deferred tax asset                       $     -
                   ========================================================


                   At December 31, 2001, a valuation allowance has
                   been provided to offset the deferred tax asset since
                   management could not determine that it was more likely
                   than not that the benefit of the deferred tax asset
                   would be realized. Increases in the valuation
                   allowance amounted to $3,317 and $545 during the
                   years ended December 31, 2001 and 2000, respectively.
                   As a result of the changes in ownership resulting from
                   the various sales and issuances of stock, the Company
                   may be unable to utilize some or substantially all of
                   its previously available net operating loss
                   carryforwards in accordance with the provisions of
                   Section 382 of the Internal Revenue Code.




                                                                       F-34


<PAGE>


                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------


                   As of December 31, 2001, the net deferred tax
                   asset of TATRA consists of the following:

                   --------------------------------------------------------
                   Deferred tax assets:
                     Nondeductible accruals and allowances
                       for accounts receivable                  $ 12,074
                     Plant and equipment, principally due
                       to differences in depreciation              1,044
                     Net operating loss carryforwards             18,698
                     Investment allowance carried forward            778
                     Other                                          (130)
                   --------------------------------------------------------
                   Total gross deferred tax assets                32,464
                   Less:  Valuation allowance                    (32,464)
                   --------------------------------------------------------
                   Net deferred tax asset                       $      -
                   ========================================================


                   TATRA has net operating loss carryforwards of
                   $60,317 (expiring at various dates through 2008) to
                   offset Czech based future taxable income of TATRA and
                   its subsidiaries.

11. Commitments    (a)   Lease Agreement
    and
    Contingencies        The Company leases its executive office on a
                         month-to-month basis from its Chief Executive
                         Officer. Rent expense under the arrangement
                         amounted to $24 during each of the years ended
                         December 31, 2001 and 2000.

                         In addition, the Company leases an office in
                         the Czech Republic on a month-to-month basis.
                         The rent expense was $11 for each of the years
                         ended December 31, 2001 and 2000.

                   (b)   Executive Compensation

                         For each of the years ended December 31, 2001
                         and 2000, the Company incurred a management
                         compensation expense of $156 payable to its
                         Chief Executive Officer and $156 payable to its
                         President.



                                                                       F-35


<PAGE>


                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------

                         During 2001, the Company entered into
                         employment agreements with two key executives.
                         The employment agreements provide for minimum
                         aggregate annual base salaries of $365 plus
                         bonuses of $91 and other perquisites commonly
                         found in such agreements. The employment
                         agreements expire on December 31, 2003.

                   (c)   Incentive Compensation

                         In connection with the negotiation to purchase
                         TATRA, on July 18, 2000 the Company's Board of
                         Directors approved incentive stock and cash
                         bonuses to be paid to the Company's chairman
                         and its president as follows: (i) stock options
                         were granted which are exercisable at $.10 per
                         share, in a number of shares required to
                         bring the number of shares owned by each
                         officer to 10% each of the Company's
                         outstanding stock at the time of the closing of
                         the planned TATRA acquisition, including any
                         shares issued which are related to the funding
                         of the acquisition. Such options are
                         exercisable upon the closing of the acquisition
                         expiring ten years after such date (see
                         Note 8) and (ii) a cash bonus to be paid upon
                         the close of the acquisition of $500 to each
                         officer. The options were considered
                         performance condition options and required the
                         Company to take a non-cash charge ($2,585) to
                         earnings upon closing of the acquisition for
                         the difference between the exercise price and
                         the fair market value of the stock at the date
                         of acquisition (see Note 2). The cash bonus
                         payable of $1,000 and estimated taxes totaling
                         $667, are included in general and administration
                         expenses for the year ended December 31, 2001
                         and in accrued expenses at December 31, 2001.



                                                                       F-36


<PAGE>


                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------

                   (d)   Contractual Guarantee

                         In 1996, TATRA entered into a sales contract
                         with General Headquarters - U.A.E. ARMED FORCED,
                         ABU DHABI, United Arab Emirates ("UAE" or the
                         "customer") for sale of heavy-duty vehicles and
                         spare parts. The contract included an
                         unconditional bank guarantee of 10% of the
                         contract value to be valid until 3 months after
                         date of the final acceptance certificate of the
                         last partial delivery. Thereafter, the guarantee
                         should be reduced to 5% of the contract value
                         and will stay valid for 12 months from the last
                         partial delivery.

                         After the last delivery made by TATRA, UAE
                         issued a final acceptance certificate on March
                         6, 2000, and 3 months later the bank guarantee
                         was reduced by the initial 5%. However, UAE
                         issued an adverse statement that the initial
                         final acceptance certificate was not issued for
                         the last, but the 6th delivery only.  UAE
                         communicated that they did not consider the 6th
                         delivery to be the final delivery. TATRA is in
                         dispute with the customer regarding this
                         issue. While TATRA believes that the final
                         delivery was completed by delivery of all trucks
                         and spare parts, the customer argues that final
                         delivery would be completed by:

                         *   Delivery of complete documentation for 4th
                             line of service and repair
                         *   Completion of the practical training on 4th
                             line devices
                         *   Delivery of 4th line devices
                         *   Completion of contracted guarantee repairs

                         The crucial element of the contract, which
                         complicates the completion of the 4th line
                         documentation for service and repairs, is the
                         delivery of devices for repairs.



                                                                       F-37


<PAGE>


                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------

                         As a consequence of the above, there is a real
                         risk that the customer will utilize the bank
                         guarantee and TATRA will not be able to defend
                         this effectively. It is also not possible to
                         anticipate the result of following litigation. In
                         addition, according to the wording of the bank
                         guarantee, the customer has the right to ask the
                         bank for the guarantee utilization without any
                         preliminary approval of TATRA.

                         To evaluate the steps and behavior of the
                         customer, i.e., if the guarantee will be
                         utilized or not, is not possible. The customer's
                         decision can be influenced by many reasons
                         and conditions, which are outside TATRA's
                         influence and it is not possible to extrapolate
                         it based on the customer's previous practice to
                         other suppliers. It is also significant that the
                         deliveries were finished in the first half of
                         1998 and the slow resolution is not favorable
                         to TATRA.

                         Considering all relevant aspects, TATRA has
                         recorded a reserve of $9,089.

                         Pursuant to the contract, TATRA is also
                         obligated to take part in an offset program as
                         defined in the agreement. As TATRA is not
                         capable of meeting the offset program
                         requirements, a reserve of $7,803 was recorded.
                         The reserve represents an 8.5% penalty which
                         is payable in two payments of $2,295 and
                         $5,508 on February 12, 2003 and 2005,
                         respectively.




                                                                       F-38


<PAGE>


                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------

12.  Discontinued  On December 21, 1999, the Board of Directors of the
     Operations    Company authorized the sale of Skobol, a subsidiary
                   of the Company in Bolivia, and on June 30, 2000, the
                   Company sold its shares in Skobol in exchange for a
                   $150 note payable in three installments of $50 plus
                   interest at 6% on June 30, 2001, 2002 and 2003.
                   Accordingly, the results of operations of Skobol,
                   which are included in the accompanying financial
                   statements through the date of sale, are shown as
                   discontinued operations. Through December 31, 2001,
                   no payments were received on the note and the Company
                   has recognized a loss on sale of discontinued
                   subsidiary consisting of the carrying value of the
                   investment of $52.

                   Net sales of Skobol amounted to $51 in the year
                   ended December 31, 2000.

                   The functional currency of Skobol was its local
                   currency. Accordingly, the subsidiary's operations
                   were translated at average exchange rates during the
                   period included in the financial statements, and
                   assets and liabilities are translated at end-of-
                   period rates. Translation adjustments were included
                   as a separate component of stockholders' deficiency
                   through the date of sale. Gains and losses on
                   currency transactions denominated in other than the
                   local Bolivian currency are reflected in discontinued
                   operations.

13.  Segment       The Company follows SFAS No. 131, "Disclosures About
     Information   Segments of an Enterprise and Related Information",
                   which establishes standards for reporting and
                   displaying certain information of operating segments.
                   As discussed in Note 2, the Company acquired TATRA,
                   a Czech based corporation, on December 28, 2001. The
                   Company manages and evaluates its Czech operations
                   in four reportable segments: Truck, Service, Energy
                   and Automotive Components. The Truck segment
                   designs, develops and manufactures on and off-road
                   heavy-duty vehicles for commercial and military
                   applications. It also manufactures parts for
                   machinery and vehicles. The Service segment provides
                   transport, catering, accommodation and import
                   services. The Energy segment provides heat




                                                                       F-39


<PAGE>


                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------

                   and hot water. The Automotive Components segment
                   designs, develops and manufactures products and
                   components for the automotive industry.  The operating
                   segments are managed separately because each offers
                   different products and serves different markets. The
                   accounting policies of the reportable segments are the
                   same as those described in the summary of significant
                   accounting policies. Management evaluates performance
                   based upon operating earnings before interest and
                   income taxes.

                   Summarized financial information concerning the
                   Company's Czech based reportable segments is shown in
                   the following table. The following segment information
                   excludes assets of approximately $29 attributable to
                   the Company in the United States.

<TABLE>
<CAPTION>
                   December 31, 2001
                   --------------------------------------------------------------------
                                                                 Automotive
                                    Truck    Service   Energy    Components
                                   segment   segment   segment     segment      Total
                   <S>             <C>       <C>       <C>       <C>          <C>
                   Total assets    $55,669   $ 1,117   $10,939   $32,056      $99,781
                   ====================================================================
</TABLE>


                   2001                                          Long-lived
                                                                   assets
                   ----------------------------------------------------------
                   General information:
                      Czech Republic                               $24,483
                   ==========================================================


14. Subsequent     On February 21 and March 4, 2002, the Company received a
    Events         total of $5,000 as a loan from Terex Corporation
                   ("Terex"), a strategic stockholder of TATRA. The loan
                   bears interest equal to annual PRIBOR plus a commitment
                   fee of 2.5% of the outstanding balance of the loan.
                   Interest and the commitment fee are payable monthly in
                   arrears on the outstanding amount of the loan. The
                   outstanding principal amount, together with all unpaid
                   fees, shall be due and payable on May 19, 2003 or upon
                   earlier termination.


                                                                       F-40


<PAGE>


                                                    SDC International, Inc.
                                                           and Subsidiaries

                                 Notes to Consolidated Financial Statements
              (in thousands of US dollars, except share and per share data)
---------------------------------------------------------------------------

                   In February 2002, TATRA, through its
                   wholly-owned subsidiary, TATRA USA, formed a joint
                   venture, American Truck Company ("ATC") with Terex and
                   STV USA. Each party owns a third of the joint venture.
                   ATC was formed to sell trucks, primarily to military
                   organizations within the United States government or
                   its allies under financial programs whereby the
                   foreign government uses the trucks but the United
                   States government pays for the trucks.

                   To date, no sales have been made. TATRA has
                   contributed $50 to TATRA USA as paid-in capital and,
                   in February 2002, committed to lend up to $650 to
                   TATRA USA on a long-term unsecured basis of which
                   approximately $311 has been drawn. TATRA USA has, in
                   turn, loaned $650 to the joint venture and has paid
                   approximately $50 in legal expenses for the formation
                   and contractual agreements between TATRA, TATRA USA,
                   Terex, STV USA and ATC.














                                                                       F-41


<PAGE>

                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                               CONSOLIDATED FINANCIAL STATEMENTS
                                 AS OF DECEMBER 28, 2001 AND FOR THE YEARS ENDED
                                         DECEMBER 28, 2001 AND DECEMBER 31, 2000













                                                                            F-42


<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

================================================================================
                                               CONSOLIDATED FINANCIAL STATEMENTS
                                 AS OF DECEMBER 28, 2001 AND FOR THE YEARS ENDED
                                         DECEMBER 28, 2001 AND DECEMBER 31, 2000






















                                                                            F-43


<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                                                        CONTENTS

================================================================================

INDEPENDENT AUDITORS' REPORT                                              F-45

CONSOLIDATED FINANCIAL STATEMENTS:
   Balance sheet                                                          F-46
   Statements of operations                                               F-47
   Statements of stockholders' equity (deficit)                           F-48
   Statements of cash flows                                               F-49
   Notes to consolidated financial statements                          F-50-F-74













                                                                            F-44

<PAGE>


INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders TATRA, a.s.

We have audited the accompanying consolidated balance sheet of TATRA, a.s. and
Subsidiaries as of December 28, 2001, and the related consolidated statements of
operations, stockholders' equity (deficit), and cash flows for the period from
January 1, 2001 to December 28, 2001 and the year ended December 31, 2000. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of TATRA, a.s. and
Subsidiaries as of December 28, 2001, and the results of their operations and
their cash flows for the period from January 1, 2001 to December 28, 2001 and
the year ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States of America.

August 9, 2002

    /s/BDO CS s.r.o.

BDO CS s.r.o.
Prague, Czech Republic

                                                                            F-45

<PAGE>

                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                                      CONSOLIDATED BALANCE SHEET
                                                    (IN THOUSANDS OF US DOLLARS)

<TABLE>
<CAPTION>
===================================================================================

December 28, 2001
-----------------------------------------------------------------------------------
<S>                                                                       <C>
ASSETS
CURRENT:
   Cash and cash equivalents                                              $   3,634
   Trade accounts receivable, net of allowance for
     doubtful accounts of $6,553 (Note 5)                                    20,181
   Inventories (Note 2)                                                      38,774
   Amounts due from affiliated companies (Note 12)                            4,094
   Other current assets                                                       5,415
-----------------------------------------------------------------------------------
        TOTAL CURRENT ASSETS                                                 72,098
PROPERTY, PLANT AND EQUIPMENT, NET (NOTES 3, 5 AND 11)                       68,531
INVESTMENTS IN AFFILIATED COMPANIES                                           1,035
OTHER ASSETS                                                                  2,165
-----------------------------------------------------------------------------------
                                                                          $ 143,829
===================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Notes payable to banks (Note 5)                                        $  15,274
   Current installments of obligations under capital leases (Note 4)            351
   Trade accounts payable                                                    24,243
   Amounts due to affiliated companies (Note12)                                 740
   Accrued compensation and related liabilities                               2,619
   Current portion of contractual obligation (Note 9)                         9,089
   Accrued expenses                                                           8,130
   Other current liabilities                                                 10,260
-----------------------------------------------------------------------------------
        TOTAL CURRENT LIABILITIES                                            70,706
CONTRACTUAL OBLIGATION, EXCLUDING CURRENT PORTION (NOTE 9)                    7,803
OTHER LIABILITIES (NOTE 10)                                                   2,675
OBLIGATIONS UNDER CAPITAL LEASES, NET OF CURRENT INSTALLMENTS (NOTE 4)          365
-----------------------------------------------------------------------------------
        TOTAL LIABILITIES                                                    81,549
-----------------------------------------------------------------------------------
COMMITMENTS (NOTES 4, 9 AND 10)
MINORITY INTEREST                                                               328
-----------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY (NOTE 6):
   Common stock, 20,697,526 shares authorized, issued and outstanding        58,605
   Additional paid-in capital                                               204,082
   Accumulated deficit                                                     (212,467)
   Accumulated other comprehensive income                                    11,732
-----------------------------------------------------------------------------------
        TOTAL STOCKHOLDERS' EQUITY                                           61,952
-----------------------------------------------------------------------------------
                                                                          $ 143,829
===================================================================================
</TABLE>

                    See accompanying notes to consolidated financial statements.


                                                                            F-46
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                           CONSOLIDATED STATEMENTS OF OPERATIONS
                                                    (IN THOUSANDS OF US DOLLARS)
<TABLE>
<CAPTION>
============================================================================================
                                                        PERIOD FROM
                                                     JANUARY 1, 2001 TO      Year ended
                                                      DECEMBER 28, 2001   December 31, 2000
-------------------------------------------------------------------------------------------
<S>                                                       <C>                 <C>
REVENUE                                                   $ 152,130           $ 147,434
COST OF REVENUE                                             116,641             113,332
-------------------------------------------------------------------------------------------
        GROSS PROFIT                                         35,489              34,102
SELLING, GENERAL AND ADMINISTRATIVE (NOTE 11)                24,145              25,889
ENGINEERING                                                   4,780               4,499
-------------------------------------------------------------------------------------------
        OPERATING INCOME                                      6,564               3,714
OTHER INCOME (EXPENSE):
   Equity in income (loss) of affiliates                         (2)                222
   Gain on disposal of subsidiaries                              --               1,343
   Foreign exchange gains/(losses)                              689                (725)
   Minority interest in (income) loss
     of consolidated subsidiaries                               173                  (4)
   Interest income                                               33                 180
   Interest expense                                          (1,174)             (1,231)
   Other                                                       (420)              1,522
-------------------------------------------------------------------------------------------
        INCOME BEFORE PROVISION FOR INCOME TAXES              5,863               5,021
PROVISION FOR INCOME TAXES (NOTE 8)                              28                  61
-------------------------------------------------------------------------------------------
NET INCOME                                                $   5,835           $   4,960
============================================================================================
EARNINGS PER SHARE - BASIC                                $     .28           $     .37
============================================================================================
WEIGHTED AVERAGE SHARES OUTSTANDING                          20,698              13,447
============================================================================================
</TABLE>

                    See accompanying notes to consolidated financial statements.


                                                                            F-47
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
=================================================================================================================================

Period from January 1, 2001 to December 28, 2001 and year ended December 31, 2000
---------------------------------------------------------------------------------------------------------------------------------
                                                                        Accumulated                     Total
                              Common stock, par value     Additional       other                     stockholders'
                              ------------------------      paid-in    comprehensive   Accumulated      equity      Comprehensive
                                 Shares        Amount       capital        income        deficit       (deficit)       income
---------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>          <C>           <C>            <C>           <C>           <C>             <C>
BALANCE, JANUARY 1, 2000        4,418,055    $  38,724     $116,172       $ 6,193       $(223,262)    $ (62,173)
Issuance of shares for
   extinguishment of debt
   (Note 7)                    16,279,471      107,791           --            --              --       107,791
Comprehensive income:
   Translation adjustment              --           --           --         2,958              --         2,958       $2,958
   Net income for the year             --           --           --            --           4,960         4,960        4,960
                                                                                                                      ------
TOTAL COMPREHENSIVE INCOME                                                                                            $7,918
---------------------------------------------------------------------------------------------------------------       ======
BALANCE, DECEMBER 31, 2000     20,697,526      146,515      116,172         9,151        (218,302)       53,536
Change in par value                    --      (87,910)      87,910            --              --            --
Comprehensive income:
   Translation adjustment              --           --           --         2,581              --         2,581       $2,581
   Net income for the year             --           --           --            --           5,835         5,835        5,835
                                                                                                                      ------
TOTAL COMPREHENSIVE INCOME                                                                                            $8,416
---------------------------------------------------------------------------------------------------------------       ======
BALANCE, DECEMBER 28, 2001     20,697,526    $  58,605     $204,082       $11,732       $(212,467)    $  61,952
============================================================================================================================
</TABLE>

                    See accompanying notes to consolidated financial statements.

                                                                            F-48
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                    (IN THOUSANDS OF US DOLLARS)
<TABLE>
<CAPTION>
==================================================================================================================

                                                                                PERIOD FROM
                                                                            JANUARY 1, 2001 TO      Year ended
                                                                             DECEMBER 28, 2001   December 31, 2000
------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                                     $ 5,835           $   4,960
   Adjustments to reconcile net income to net cash provided by operating
      activities:
        Depreciation and amortization                                               6,830               6,422
        Gain on sale of property and equipment                                     (1,102)               (799)
        Bad debt expense                                                               --                 193
        Write down of inventory                                                       332                 272
        Equity in income of affiliates                                                  2                (222)
        Gain on disposal of subsidiaries                                               --              (1,343)
        Minority interest in (income) loss of consolidated subsidiaries              (173)                  4
        Assets write-down                                                           1,191                  50
        Gain on sale of investment in affiliates                                     (300)                 --
        Changes in operating assets and liabilities:
           Trade accounts receivable                                               (6,361)             13,464
           Inventories                                                             (4,024)             (2,814)
           Amounts due to and from affiliated companies                            (1,062)             (2,537)
           Other current and noncurrent assets                                       (428)             (2,406)
           Trade accounts payable                                                   5,162              (1,848)
           Other liabilities and accruals                                          (3,116)             (5,142)
------------------------------------------------------------------------------------------------------------------
                   NET CASH PROVIDED BY OPERATING ACTIVITIES                        2,786               8,254
------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Sale of investments in affiliated companies                                        745                  --
   Proceeds from sale of equipment                                                  1,641               1,633
   Affiliates' investments                                                            780               1,393
   Purchases of property and equipment                                             (7,254)             (7,848)
------------------------------------------------------------------------------------------------------------------
                   NET CASH USED IN INVESTING ACTIVITIES                           (4,088)             (4,822)
------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds (repayments) of notes payable                                           1,957              (2,026)
   Proceeds from minority interest                                                    395                  --
   Repayments of financial lease obligations                                         (355)                 --
------------------------------------------------------------------------------------------------------------------
                   NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES              1,997              (2,026)
------------------------------------------------------------------------------------------------------------------
NET INCREASE IN CASH AND CASH EQUIVALENTS                                             695               1,406
EFFECT OF EXCHANGE RATE CHANGES ON CASH                                               155                 (40)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                      2,784               1,418
------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                          $ 3,634           $   2,784
==================================================================================================================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid for interest                                                         $   872           $     972
   Cash paid for income taxes                                                         209                 473
   Property and equipment acquired under capital leases                               411                 781
   Common stock issued for debt extinguishment                                         --             107,791
==================================================================================================================
</TABLE>

                    See accompanying notes to consolidated financial statements.

                                                                            F-49
<PAGE>

                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

1. SUMMARY OF     (a) Description of Business
   SIGNIFICANT
   ACCOUNTING         TATRA, a.s. (the "Company") is a joint stock company
                      located in Koprivnice, Czech Republic. The Company is a
                      manufacturer of on-and off-road heavy-duty vehicles for
                      commercial and military applications. The Company also
                      manufactures parts for heavy-duty machinery and vehicles.
                      In addition, the Company provides heat and hot water to
                      commercial and residential properties.

                  (b) Reporting Periods and Comparability

                      The Company's fiscal year is a calendar year. On December
                      28, 2001, SDC International, Inc. acquired a majority
                      interest in the Company (Note 14). There have been no
                      significant transactions in the period from December 28,
                      2001 to December 31, 2001 and, accordingly, results of
                      operations and cash flows for the period from January 1,
                      2001 to December 28, 2001 are not significantly different
                      from those for the entire fiscal year 2001.

                  (c) Principles of Consolidation

                      The consolidated financial statements include the accounts
                      of the Company and its majority-owned subsidiaries. All
                      significant intercompany balances and transactions have
                      been eliminated in consolidation.

                      During 2000, four wholly-owned subsidiaries of the Company
                      were in bankruptcy proceedings. Effectively, the Company
                      lost control of the subsidiaries. As a result, net
                      liabilities of these subsidiaries were removed from the
                      consolidated balance sheet and a net gain of $1,343 on
                      disposal of these subsidiaries was recognized. The results
                      of operations of these subsidiaries up to the time of
                      filing for bankruptcy were included in the statement of
                      operations for fiscal 2000.

                                                                            F-50
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

                      The equity method of accounting is used when the Company
                      has a 20% to 50% interest in other companies. Under the
                      equity method, original investments are recorded at cost
                      and adjusted by the Company's share of undistributed
                      earnings or losses of these companies.

                      Other investments are accounted for by the cost method.
                      The Company recognizes a loss when there is a loss in
                      value in the investment, which is other than a temporary
                      decline.

                  (d) Earning Per Share

                      The average number of basic shares outstanding for years
                      2001 and 2000 includes only the weighted average number of
                      common shares outstanding for each year. The Company has
                      not issued any options or warrants.

                  (e) Foreign Currency

                      The consolidated financial statements are presented in
                      thousands of US dollars, unless otherwise stated. Czech
                      crown (CZK) is the Company's functional currency.
                      Transactions in foreign currencies are remeasured to the
                      functional currency at the foreign exchange rate ruling at
                      the date of the transaction. Monetary assets and
                      liabilities denominated in foreign currencies at the
                      balance sheet date are remeasured to functional currency
                      at the foreign exchange rate ruling at that date. Foreign
                      exchange differences arising on remeasurement to
                      functional currency are recognized in the statement of
                      operations.

                                                                            F-51
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

                      The accompanying consolidated financial statements were
                      translated to US dollars. Assets and liabilities are
                      translated from CZK to US dollars using the exchange rate
                      in effect at the balance sheet date. Revenues, expenses,
                      gains and losses are translated using the weighted average
                      exchange rate for the period, with the exception of
                      material non-routine transactions which have been
                      translated using the exchange rate at the date of
                      transaction. Resulting translation adjustment is reflected
                      as a separate component of stockholders' equity. The
                      consolidated statement of cash flows was translated to US
                      dollars using the weighted average exchange rate, with the
                      exception of material non-routine transactions, which have
                      been translated using the exchange rate at the date of
                      transaction. The effect of exchange rate changes on cash
                      balances is presented as a separate part of reconciliation
                      of the changes in cash and cash equivalents.

                  (f) Use of Estimates

                      Management of the Company has made a number of estimates
                      and assumptions relating to the reporting of assets and
                      liabilities and the disclosure of contingent assets and
                      liabilities to prepare these financial statements in
                      conformity with generally accepted accounting principles.
                      Actual results could differ from those estimates.

                  (g) Cash Equivalents

                      Cash equivalents at December 28, 2001 amounted to $3,634
                      and consist of money market funds and certificates of
                      deposits. For purposes of the consolidated statements of
                      cash flows, the Company considers all investments with an
                      original maturity of three months or less on their
                      acquisition date to be cash equivalents.

                  (h) Inventories

                      Inventories are stated at the lower of cost or market. The
                      Company uses standard costs, which approximate actual
                      costs based on the weighted-average cost method for all
                      inventories.

                                                                            F-52
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

                  (i) Financial Instruments and Concentration of Credit Risk

                      The carrying value of cash, cash equivalents, accounts
                      receivable, accounts payable and accrued expenses
                      approximates their estimated fair value due to the
                      relative short maturity of these instruments. The carrying
                      value of debt and capital lease obligations approximates
                      estimated fair value based on the market interest rates
                      available to the Company for debt of similar risk and
                      maturities.

                      Financial instruments, which potentially subject the
                      Company to concentrations of credit risk, consist
                      principally of cash and cash equivalents and trade
                      accounts receivable. The Company maintains its cash and
                      cash equivalents with high quality financial institutions.
                      Concentration of credit risk with respect to trade
                      accounts receivable are limited due to the fact that the
                      Company requires letters of credit for high value orders.
                      The residual receivables credit risk is controlled through
                      credit approvals, monitoring procedures and establishment
                      of a reserve for doubtful accounts.

                      The Company's customer base consists of commercial
                      businesses, government organizations, and primarily
                      military institutions. At December 28, 2001, no customer
                      accounted for more than 10% of trade accounts receivable.

                      The Company's sales and purchases are denominated
                      primarily in Czech crowns, US dollars, Euros and German
                      marks (from January 1, 2002 Euro). The Company does not
                      use derivative instruments to hedge its exposure to
                      foreign exchange risk.

                  (j) Property, Plant and Equipment

                      Property, plant and equipment are stated at cost. Plant
                      and equipment under capital leases are stated at the
                      present value of minimum lease payments.

                                                                            F-53
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

                      Depreciation is calculated on the straight-line method
                      over the estimated useful lives of the assets. Plant and
                      equipment held under capital leases are amortized straight
                      line over the estimated useful life of the asset. Land is
                      not depreciated. Expected useful lives of major classes of
                      depreciable assets are as follows:

                      ----------------------------------------------------------
                      Buildings                                      30-50 years
                      Machinery and equipment                         4-15 years
                      Motor vehicles                                  4-15 years
                      Other assets                                       8 years
                      ==========================================================

                  (k) Revenue Recognition

                      The Company's revenues consist of heavy-duty vehicles,
                      parts for heavy-duty vehicles, automobiles, machinery,
                      heat and hot water, and revenue generated from operating a
                      hotel.

                      The Company recognizes product revenue when it is realized
                      or realizable and earned, that occurs after the following
                      events: the receipt of a non-cancelable purchase order or
                      signing of a binding contract; shipment of the product and
                      acceptance by the customer; transfer of title and risk of
                      loss; the sales price is fixed or determinable, and
                      collection of sales price is reasonably assured.

                      Occasionally, the Company enters into long-term contracts
                      with multiple element deliverables. In accordance with
                      provisions of Statement of Position 81-1, the Company
                      follows the units-of-delivery method of accounting for
                      these contracts. These methods recognizes, as revenue, the
                      contract price of the units delivered during a period and,
                      as the cost of earned revenue, the costs allocable to the
                      delivered units.

                      Revenue from heat and hot water is recognized when
                      delivered. Revenue generated from providing hotel services
                      is recognized when services are provided.

                                                                            F-54
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

                  (l) Cost of Sales and Warranty Costs

                      Cost of sales consists primarily of costs of products
                      sold. The Company provides for the estimated costs that
                      may be incurred under product warranties when related
                      revenue is recognized. Related expense is included in cost
                      of sales.

                      The warranty accrual is estimated and booked quarterly.
                      The calculation is based on prior quarters' warranty
                      claims, average cost to repair the warranty claims, and
                      the number of trucks sold that has a valid warranty
                      outstanding. The Company's warranty period is typically 12
                      or 18 months, dependent on a product type, from the date
                      of sale to the customer. Warranty claims or returns after
                      this period are not permitted. At December 28, 2001, the
                      warranty accrual was $940.

                  (m) Shipping and Handling Costs

                      Shipping and handling costs billed to customers are
                      included in sales. Shipping costs associated with shipping
                      goods to customers are included in selling, general and
                      administrative expenses and totaled $2,021 and $2,385 in
                      the period from January 1, 2001 to December 28, 2001 and
                      fiscal year 2000, respectively.

                  (n) Research and Development and Advertising

                      Research and development and advertising costs are
                      expensed as incurred. Research and development costs
                      amounted to $2,432 and $2,679 in the period from January
                      1, 2001 to December 28, 2001 and fiscal year 2000,
                      respectively. Advertising and promotion costs amounted to
                      $728 and $492 in the period from January 1, 2001 to
                      December 28, 2001 and fiscal year 2000, respectively.

                                                                            F-55
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

                  (o) Comprehensive Income

                      The Company reports comprehensive income or loss in
                      accordance with the provisions of Statement of Financial
                      Accounting Standards ("SFAS") No. 130, "Reporting
                      Comprehensive Income." SFAS No. 130 establishes standards
                      for reporting comprehensive income and loss and its
                      components in financial statements. For the Company, the
                      difference between reported net income and comprehensive
                      income relates to foreign currency translation
                      adjustments. Tax effects of translation adjustments are
                      not considered material for any periods presented.

                  (p) Income Taxes

                      Income taxes are accounted for under the asset and
                      liability method. Deferred tax assets and liabilities are
                      recognized for the future tax consequences attributable to
                      differences between the financial statement carrying
                      amounts of existing assets and liabilities and their
                      respective tax bases and operating loss and tax credit
                      carryforwards. Deferred tax assets and liabilities are
                      measured using enacted tax rates expected to apply to
                      taxable income in the years in which those temporary
                      differences are expected to be recovered or settled. The
                      effect on deferred tax assets and liabilities of a change
                      in tax rates is recognized in income in the period that
                      includes the enactment date.

                      Valuation allowances are established when necessary to
                      reduce deferred tax assets to the amount expected to be
                      realized.

                                                                            F-56
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

                  (q) Impairment of Long-Lived Assets and Long-Lived
                      Assets to be Disposed Of

                      The Company accounts for long-lived assets in accordance
                      with the provisions of SFAS No. 121, "Accounting for the
                      Impairment of Long-Lived Assets and for Long-Lived Assets
                      to be Disposed Of." This Statement requires that
                      long-lived assets and certain identifiable intangibles be
                      reviewed for impairment whenever events or changes in
                      circumstances indicate that the carrying amount of an
                      asset may not be recoverable through the estimated
                      undiscounted future cash flows resulting from the use of
                      these assets. If such assets are considered to be
                      impaired, the impairment to be recognized is measured by
                      the amount by which the carrying amount of the assets
                      exceeds the fair value of the assets. Assets to be
                      disposed of are reported at the lower of the carrying
                      amount or fair value less costs to sell. At December 28,
                      2001, the Company recorded an impairment charge of $1,177
                      included in selling, general and administrative expenses
                      (Note 11).

                  (r) Recent Accounting Pronouncements

                      In July 2001, the Financial Accounting Standards Board
                      ("FASB") issued SFAS No. 141, "Business Combinations", and
                      SFAS No. 142, "Goodwill and Other Intangible Assets."

                      SFAS No. 141 addresses the accounting for and reporting of
                      business combinations and requires that all business
                      combinations be accounted for using the purchase method of
                      accounting for acquisitions and eliminates the use of the
                      pooling method. This Statement applies to all business
                      combinations initiated after June 30, 2001. The adoption
                      of this new standard was used in the sale of the Company
                      as discussed in Note 14.

                                                                            F-57
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

                      SFAS No. 142 addresses financial accounting and reporting
                      for acquired goodwill and other intangible assets. This
                      Statement changes the accounting for goodwill from an
                      amortization method to an impairment-only method. The
                      amortization of goodwill, including goodwill recorded in
                      past business combinations, will cease upon adoption of
                      this Statement, which will begin with the Company's fiscal
                      year beginning January 1, 2002. However, goodwill and
                      intangible assets acquired after June 30, 2001 will be
                      subject to immediate adoption of the Statement. The
                      adoption of this new standard was used in the sale of the
                      Company as discussed in Note 14.

                      In July 2001, the FASB issued SFAS No. 143, "Accounting
                      for Asset Retirement Obligations." SFAS No. 143 requires
                      liability recognition for obligations associated with the
                      retirement of tangible long-lived assets and the
                      associated asset retirement costs. The Company is required
                      to adopt the provisions of SFAS No. 143 beginning with its
                      fiscal year that starts January 1, 2003. The Company does
                      not expect that adoption of SFAS No. 143 will have a
                      material effect on its consolidated financial statements.

                                                                            F-58
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

                      In August, 2001, the FASB issued SFAS No. 144, "Accounting
                      for the Impairment or Disposal of Long-Lived Asset". SFAS
                      No. 144 addresses financial accounting and reporting for
                      the impairment or disposal of long-lived assets. This
                      Statement requires that long-lived assets be reviewed for
                      impairment whenever events or changes in circumstances
                      indicate that the carrying amount of an asset may not be
                      recoverable. Recoverability of assets to be held and used
                      is measured by a comparison of the carrying amount of an
                      asset to future net cash flows expected to be generated by
                      the asset. If the carrying amount of an asset exceeds its
                      estimated future cash flows, an impairment charge is
                      recognized by the amount by which the carrying amount of
                      the asset exceeds the fair value of the asset. SFAS No.
                      144 requires companies to separately report discontinued
                      operations and extends that reporting to a component of an
                      entity that either has been disposed of (by sale,
                      abandonment, or in a distribution to owners) or is
                      classified as held for sale. Assets to be disposed of are
                      reported at the lower of the carrying amount or fair value
                      less costs to sell. The Company is required to adopt SFAS
                      No. 144 on January 1, 2002.

                      In April 2002, the FASB issued SFAS No. 145, "Rescission
                      of FASB Statements No. 4, 44 and 64, Amendment of FASB
                      Statement No. 13, and Technical Corrections". SFAS No. 145
                      rescinds SFAS No. 4, which required all gains and losses
                      from extinguishment of debt to be aggregated and, if
                      material, classified as an extraordinary item, net of
                      related income tax effect. As a result, the criteria in
                      APB Opinion No. 30 will now be used to classify those
                      gains and losses. SFAS No. 64 amended SFAS No. 4, and is
                      no longer necessary because SFAS No. 4 has been rescinded.


                                                                            F-59
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

                      SFAS No. 145 amends SFAS No. 13 to require that certain
                      lease modifications that have economic effects similar to
                      sale-leaseback transactions be accounted for in the same
                      manner as sale-leaseback transactions, SFAS No. 145 also
                      makes technical corrections to existing pronouncements.
                      While those corrections are not substantive in nature, in
                      some instances, they may change accounting practice. SFAS
                      No. 145 is required to be applied for fiscal years
                      beginning after May 15, 2002. The adoption of this
                      Statement is not expected to have a material effect on the
                      Company's financial statements.

                      In June 2002, the FASB issued SFAS No. 146, "Accounting
                      for Costs Associated with Exit or Disposal Activities".
                      SFAS No. 146 requires that a liability for a cost
                      associated with an exit or disposal activity be recognized
                      when the liability is incurred. This Statement also
                      establishes that fair value is the objective for initial
                      measurement of the liability. The provisions of this
                      Statement are effective for exit or disposal activities
                      that are initiated after December 31, 2002. The adoption
                      of this Statement is not expected to have a material
                      effect on the Company's financial statements.

2. INVENTORIES    At December 28, 2001 inventories consisted of the following:

                  --------------------------------------------------------------
                  Raw materials                                          $17,820
                  Work-in-progress                                        11,409
                  Finished goods                                           9,855
                  Merchandise                                                 38
                  --------------------------------------------------------------
                                                                          39,122
                  Write-down of inventory                                    348
                  --------------------------------------------------------------
                  Inventories, net                                       $38,774
                  ==============================================================

                                                                            F-60
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

3. PROPERTY,      At December 28, 2001, property, plant and equipment consisted
   PLANT          of the following:
   AND
   EQUIPMENT      --------------------------------------------------------------
                  Land                                                 $  2,683
                  Buildings                                              75,649
                  Machinery and equipment                               126,446
                  Motor vehicles                                          1,033
                  Other assets                                            3,048
                  Construction-in-progress                                3,160
                  --------------------------------------------------------------
                                                                        212,019
                  Accumulated depreciation and amortization            (143,488)
                  --------------------------------------------------------------
                  Property, plant and equipment, net                   $ 68,531
                  ==============================================================

4. LEASES         The Company is obligated under capital leases covering certain
                  machinery and equipment. At December 28, 2001, the gross
                  amount of plant and equipment and related accumulated
                  amortization recorded under capital leases was $2,320 and
                  $784, respectively.

                  Amortization of assets held under capital leases is included
                  with depreciation expense and amounted to $320 and $184 for
                  the period from January 1, 2001 to December 28, 2001 and
                  fiscal year 2000, respectively.

                  The Company also has several noncancelable operating leases,
                  primarily for office equipment and office space. Rental
                  expense for operating leases was $880 and $816 for the period
                  from January 1, 2001 to December 28, 2001 and fiscal year
                  2000, respectively.


                                                                            F-61
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

                  Future minimum lease payments under capital leases and
                  noncancellable operating leases as of December 28, 2001 are:

                                                                       Operating
                  Year ending December 31,            Capital leases     leases
                  --------------------------------------------------------------
                  2002                                     $ 392        $  838
                  2003                                       232           739
                  2004                                        78           725
                  2005                                        46           684
                  2006                                        21           684
                  Later years, through 2009                   56            --
                  --------------------------------------------------------------
                  Total minimum lease payments               825        $3,670
                                                                        ======
                  Less amount representing interest         (109)
                                                           -------------------
                  Present value of net minimum capital       716
                    lease payments
                  Less current installments of
                    obligations under capital leases        (351)
                                                           -------------------
                  Obligations under capital leases,        $ 365
                    excluding current installments
                  ==============================================================

5. NOTES PAYABLE  In 1999, the Company obtained two revolving loans from a
   TO BANKS       government-owned bank. Both loans bear interest at the Prague
                  Interbank Offered Rate ("PRIBOR") plus 2.7%. At December 28,
                  2001, PRIBOR was at 4.69%. All loans may become due and
                  payable immediately at the option of the lenders upon the
                  occurrence of the following events: the Company fails to make
                  their scheduled payment on the due date or three days after
                  the due date; the Company becomes insolvent or a bankruptcy,
                  liquidation or similar proceeding is commenced; substantial
                  change in the legal standing of the Company, including
                  break-up or substantial asset divestiture or substantial
                  change in ownership (at least 40%) of the Company; the Company
                  defaults in performance of any other agreement between the
                  Company and the bank or a third party in an amount in excess
                  of CZK 5,000,000


                                                                            F-62
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

                  (approximately US$138,400); if there is a material adverse
                  change in the assets, operating or financial conditions of the
                  client which, in the opinion of the bank, may affect the
                  ability of the Company to fulfill its obligation to the bank,
                  and if the Company's guarantee has a decrease in value or
                  expires, the Company has 10 calendar days to replace the
                  guarantee after which the loan is payable immediately plus a
                  penalty of CZK 2,000,000 (approximately US$55,400). As at
                  December 28, 2001 the outstanding balance of the loans and
                  accrued interest thereof totaled $11,328. The loans are
                  pledged on the Company's land, buildings and receivables. In
                  January 2002, the Company refinanced these loans with a new
                  loan obtained from a commercial bank, which was obtained on
                  similar terms.

                  In addition, the Company has a credit facility with a bank for
                  borrowings not to exceed 200 million CZK, approximately
                  $5,536. The credit line is due on demand and bears interest at
                  LIBOR plus 1.5%. At December 28, 2001, LIBOR was at 2.45%. All
                  loans are collateralized by the Company's accounts receivable,
                  as defined in the agreement. At December 28, 2001, the Company
                  had borrowed $3,946 against the facility. On April 18, 2002,
                  the Company amended the existing agreement to provide for
                  borrowings up to 400 million CZK, approximately $11,073.

6. STOCKHOLDERS'  (a) Share Capital
   EQUITY
                      On June 12, 2000, the Company issued 16,279,471 shares as
                      consideration for extinguishment of debt at CZK 250 per
                      share (Note 7).

                      At December 28, 2001, the Company's authorized and
                      outstanding share capital consisted of 20,697,526 shares
                      with par value CZK 250 each.

                      During 2001, the par value of the Company's common stock
                      shares was reduced to CZK 100 per share and adjusted
                      accordingly.

                                                                            F-63
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

                  (b) Legal Reserve

                      In accordance with Czech law, joint stock companies are
                      required to establish a reserve fund for contingencies
                      against possible future losses and other events.
                      Contributions must be a minimum of 20% of after-tax profit
                      in the first year in which profits are made and 5% of
                      profits each year thereafter, until the fund reaches at
                      least 20% of share capital. The profit used as a basis for
                      this calculation is based on Czech accounting principles.
                      As at December 28, 2001, the balance of the legal reserve
                      amounted to $755 and is reflected as a component of
                      accumulated deficit in the accompanying consolidated
                      balance sheet.

7. DEBT           On June 12, 2000, the Company issued 16,279,471 common stock
   RESTRUCTURING  shares in full satisfaction for its outstanding loans. The
                  loans originated in years from 1993 to 1997 and were received
                  from government-owned banks. The loans were not convertible.
                  In July 2000, KRAS, a.s., a joint stock company owned by the
                  Company's major stockholder, Konsolidacni Banka Praha,
                  acquired the loans from the Company's creditors and
                  extinguished them in exchange for the common stock shares.

                  Because the loans were held by a majority stockholder, this
                  was treated as a capital transaction. As a result, the
                  carrying value of the loans, including interest, of $107,791,
                  was recorded as a credit to common stock for the year ended
                  December 31, 2000.


                                                                            F-64
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

8. INCOME TAXES   Income tax expense for the periods indicated consisted of the
                  following:

                                                   PERIOD FROM
                                                    JANUARY 1,
                                                      2001 TO       Year ended
                                                    DECEMBER 28,    December 31,
                                                        2001           2000
                  --------------------------------------------------------------
                  Current                                 $28           $61
                  ==============================================================

                  Income tax expense differs from income taxes computed at the
                  Czech corporate tax rate as follows:

                                                            2001          2000
                  --------------------------------------------------------------
                  Computed "expected" tax expense        $ 1,818       $ 1,557
                  Increase (reduction) in income
                    taxes resulting from:
                        Change in valuation
                          allowance                       (9,875)       (2,305)
                        Investment allowance not
                          reflected in financial
                          statements                          --            (3)
                        Expiration of tax losses
                          carried forward                  6,842            --
                        Nondeductible expenses:
                          Entertainment and meals             98            89
                          Shrinkage and other losses         704           170
                          Fines and penalties                164           463
                          Other                               25            49
                  Other                                      252            41
                  --------------------------------------------------------------
                                                         $    28       $    61
                  ==============================================================


                                                                            F-65
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

                  The tax effects of temporary differences that give rise to
                  significant portions of the deferred tax assets and deferred
                  tax liabilities are presented below:

                                                     DECEMBER 28,   December 31,
                                                         2001           2000
                  --------------------------------------------------------------
                  Deferred tax assets:
                     Nondeductible accruals and
                        allowances for accounts
                        receivable                     $ 12,074        $ 15,151
                     Plant and equipment,
                     principally due to
                     differences in depreciation          1,044              54
                     Net operating loss
                        carryforwards                    18,698          26,030
                     Investment allowance
                        carried forward                     778             626
                     Other                                 (130)            478
                  --------------------------------------------------------------
                  Total gross deferred tax assets        32,464          42,339
                  Less:  Valuation allowance            (32,464)        (42,339)
                  --------------------------------------------------------------
                  Net deferred tax asset               $     --        $     --
                  ==============================================================

                  The net change in the total valuation allowance for the period
                  from January 1, 2001 to December 28, 2001 was a decrease of
                  $9,875. In assessing the realizability of deferred tax assets,
                  management considers whether it is more likely than not that
                  some portion or all of the deferred tax assets will not be
                  realized. The ultimate realization of deferred tax assets is
                  dependent upon the generation of future taxable income during
                  the periods in which those temporary differences become
                  deductible. To support the Company's conclusion that a 100%
                  valuation allowance was required, management primarily
                  considered such factors as the Company's history of operating
                  losses, the nature of the Company's deferred tax assets, the
                  scheduled reversal of deferred tax liabilities and projected
                  future taxable income. Although management's operating plans
                  assume taxable and operating income in future periods,
                  management's evaluation of all the

                                                                            F-66
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

                  available evidence in assessing the realizability of the
                  deferred tax assets indicates that such plans are not
                  considered sufficient to overcome the available negative
                  evidence.

                  At December 28, 2001, the Company has the following net
                  operating loss carryforwards for corporate income tax
                  purposes:


                  Year of expiration                                      Amount
                  --------------------------------------------------------------
                  2002                                                   $   834
                  2003                                                    19,672
                  2004                                                       618
                  2005                                                    13,309
                  2006                                                    22,220
                  2007                                                     1,299
                  2008                                                     2,365
                  --------------------------------------------------------------
                                                                         $60,317
                  ==============================================================

                  These amounts are the combined net operating losses carried
                  forward in all consolidated subsidiaries included in these
                  consolidated financial statements. As tax consolidation is not
                  possible under Czech tax legislation, these losses are only
                  available to offset future taxable income of the subsidiary,
                  which incurred the losses.

                  The Company has carryforwards of investment allowance on the
                  acquisition of certain new capital assets of $2,511 which are
                  available to offset future taxable income, if any, over an
                  indefinite period.


                                                                            F-67
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

9. CONTRACTUAL    In 1996, the Company entered into a sales contract with
   OBLIGATION     General Headquarters - U.A.E. ARMED FORCED, ABU DHABI, United
                  Arab Emirates ("UAE" or the "customer") for sale of heavy-duty
                  vehicles and spare parts. The contract included an
                  unconditional bank guarantee of 10% of the contract value to
                  be valid until 3 months after date of the final acceptance
                  certificate of the last partial delivery. Thereafter, the
                  guarantee should be reduced to 5% of the contract value and
                  will stay valid for 12 months from the last partial delivery.

                  After the last delivery made by the Company, UAE issued a
                  final acceptance certificate on March 6, 2000, and 3 months
                  later the bank guarantee was reduced by the initial 5%.
                  However, UAE issued an adverse statement that the initial
                  final acceptance certificate was not issued for the last, but
                  the 6th delivery only. UAE communicated that they did not
                  consider the 6th delivery to be the final delivery. The
                  Company is in dispute with the customer regarding this issue.
                  While the Company believes that the final delivery was
                  completed by delivery of all trucks and spare parts, the
                  customer argues that final delivery would be completed by:

                  o   Delivery of complete documentation for 4th line of service
                      and repair

                  o   Completion of the practical training on 4th line devices

                  o   Delivery of 4th line devices

                  o   Completion of contracted guarantee repairs

                  The crucial element of the contract, which complicates the
                  completion of the 4th line documentation for service and
                  repairs, is the delivery of devices for repairs.

                  As a consequence of the above, there is a real risk that the
                  customer will utilize the bank guarantee and the Company will
                  not be able to defend this effectively. It is also not
                  possible to anticipate the result of following litigation. In
                  addition, according to the wording of the bank guarantee, the
                  customer has the right to ask the bank for the guarantee
                  utilization without any preliminary approval of the Company.


                                                                            F-68
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

                  To evaluate the steps and behavior of the customer, i.e., if
                  the guarantee will be utilized or not, is not possible. The
                  customer's decision can be influenced by many reasons and
                  conditions, which are outside the Company's influence and it
                  is not possible to extrapolate it based on the customer's
                  previous practice to other suppliers. It is also significant
                  that the deliveries were finished in the first half of 1998
                  and the slow resolution is not favorable to the Company.

                  Considering all relevant aspects, the Company has recorded a
                  reserve of $9,089.

                  Pursuant to the contract, the Company is also obligated to
                  take part in an offset program. As the Company is not capable
                  of meeting the offset program requirements, a reserve of
                  $7,803 was recorded. The reserve represents an 8.5% penalty
                  which is payable in two payments of $2,295 and $5,508 on
                  February 12, 2003 and 2005, respectively.

                  As of December 28, 2001, no other such contracts existed.


10. COMMITMENTS   Executive Compensation

                  The Company entered into employment agreements with two key
                  executives. The employment agreements provide for minimum
                  aggregate annual base salaries of $365 plus bonuses of $91 and
                  other perquisites commonly found in such agreements. The
                  employment agreements expire on December 31, 2003.


11. ASSETS        During 2001, the Company adopted a plan to dispose of a
    WRITE-DOWN    non-production building. The carrying amount of the building
                  was $886 and its fair value less cost to sell was $171.
                  Accordingly, the Company recognized an impairment charge in
                  the amount of $715 included in selling, general and
                  administrative expenses. At December 28, 2001, the building is
                  presented at fair value less cost to sell and included in the
                  balance of property, plant and equipment. Subsequent to
                  December 28, 2001, the Company entered into an agreement to
                  sell the building to a third party. There was no significant
                  gain or loss on the sale transaction.


                                                                            F-69
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

                  During 2001, the Company had four non-production buildings
                  which were not being used. Accordingly, the Company adopted a
                  plan to dispose of these buildings. The Company believes that
                  the fair value of these buildings is zero and, accordingly,
                  the carrying amount of the buildings in the amount of $462 was
                  written off, and included in selling, general and
                  administrative expenses.

12. RELATED       Transactions with related parties consist primarily of sales
    PARTY         and purchase transactions with unconsolidated affiliates.
    TRANSACTIONS
                  o   For the period ended December 28, 2001, and at December
                      31, 2000, sales to these affiliates were $7,914 and
                      $3,604, respectively. As of December 28, 2001, the amount
                      due from these affiliates was $4,094.

                  o   For the period ended December 28, 2001 and at December 31,
                      2000, purchases from these affiliates were $2,635 and
                      $3,730, respectively. As of December 28, 2001, the Company
                      owed these affiliates $740.

                  o   At December 31, 2000, the Company had a loan receivable of
                      approximately $1,800 from an affiliate who is in
                      bankruptcy proceedings. Accordingly, the loan was fully
                      reserved.

                  o   Prior to 2000, the Company was delinquent on their
                      payments of Social Security and health care fees to the
                      Czech government and, accordingly, was assessed interest
                      and penalties. In 2000, the Company become current on all
                      outstanding amounts and, through negotiations, the
                      government waived the interest and penalties. Accordingly,
                      the Company included the waived interest and penalties of
                      approximately $1,500 in other income (expense).

                                                                            F-70
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

13. SEGMENT       The Company follows SFAS No. 131, "Disclosures About Segments
    INFORMATION   of an Enterprise and Related Information", which establishes
                  standards for reporting and displaying certain information of
                  operating segments. The Company manages and evaluates its
                  operations in four reportable segments: Truck, Service, Energy
                  and Automotive Components. The Truck segment designs, develops
                  and manufactures on and off-road heavy-duty vehicles for
                  commercial and military applications. It also manufactures
                  parts for machinery and vehicles. The Service segment provides
                  transport, catering, accommodation and import services. The
                  Energy segment provides heat and hot water. The Automotive
                  Components segment designs, develops and manufactures products
                  and components for the automotive industry. The operating
                  segments are managed separately because each offers different
                  products and serves different markets. The accounting policies
                  of the reportable segments are the same as those described in
                  the summary of significant accounting policies. Management
                  evaluates performance based upon operating earnings before
                  interest and income taxes.

                  The Company had one customer (Venus Projects Ltd. (India))
                  which accounted for approximately 15% and 21% of revenue and
                  another customer (Surgutneftegas (Russia)) accounted for 16%
                  and 19% of revenue at December 31, 2001 and 2000,
                  respectively.


                                                                            F-71
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

                  Summarized financial information concerning the Company's
                  reportable segments is shown in the following table:
<TABLE>
<CAPTION>
                  DECEMBER 28, 2001
                  ------------------------------------------------------------------------------
                                                                           Automotive
                                       Truck      Service      Energy     Components
                                      segment     segment      segment      segment     Total
                  ------------------------------------------------------------------------------
                  <S>                <C>          <C>         <C>          <C>         <C>
                  Gross revenue      $121,976     $ 7,549     $ 15,520     $ 48,086    $193,131
                  Inter-segment
                    revenue            (5,294)     (5,687)     (12,319)     (17,701)    (41,001)
                  ------------------------------------------------------------------------------
                  Third party         116,682       1,862        3,201       30,385     152,130
                     revenue
                  Operating
                     income             3,453         258          773        2,080       6,564
                  Total assets         99,717       1,117       10,939       32,056     143,829
                  Depreciation
                    and
                    amortization        5,296         147          432          955       6,830
                  Capital
                    expenditures        5,412         282          133        1,427       7,254
                  ==============================================================================
</TABLE>

<TABLE>
<CAPTION>
                  DECEMBER 28, 2000
                  ------------------------------------------------------------------------------
                                                                           Automotive
                                       Truck      Service      Energy     Components
                                      segment     segment      segment      segment     Total
                  ------------------------------------------------------------------------------
                  <S>                <C>          <C>         <C>          <C>         <C>

                  Gross revenue      $116,924     $11,874     $ 13,605     $ 44,632    $187,035
                  Inter-segment
                    revenue            (5,414)     (7,616)     (10,884)     (15,687)    (39,601)
                  ------------------------------------------------------------------------------
                  Third party         111,510       4,258        2,721       28,945     147,434
                    revenue
                  Operating
                    income
                    (loss)              2,874      (1,244)         255        1,829       3,714
                  Total assets         92,217       1,347        9,116       25,062     127,742
                  Depreciation
                    and
                    amortization        4,841         105          527          949       6,422
                  Capital
                    expenditures        5,519         204          119        2,006       7,848
                  ==============================================================================
</TABLE>


                                                                            F-72
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

                                                    2001                  2000
                                           -----------------------    ----------
                                                        Long-lived
                                           Revenue(a)     assets      Revenue(a)
                  --------------------------------------------------------------
                  General information:
                     Czech Republic        $  39,600      $68,531      $  36,244
                     India                    28,730            -         29,551
                     Russia                   44,723            -         42,524
                     Slovakia                 12,249            -         11,725
                     Other foreign
                       countries              26,828            -         27,390
                  --------------------------------------------------------------
                  Total revenue             $152,130      $68,531       $147,434
                  ==============================================================

                  --------------
                  (a) Revenues are attributed to countries based on the location
                      of the customer.

14. SALE OF       On December 28, 2001, SDC International, Inc. and its wholly-
    COMPANY       owned subsidiary, SDC Prague, s.r.o. (collectively "SDC")
                  acquired a 91.61% interest in share capital of the Company
                  from the Czech Government's Consolidation Agency. The purchase
                  consideration consisted of $10,904 in cash, excluding
                  transaction costs. SDC also committed to refinance the
                  Company's bank debt of approximately $11,000, and to invest
                  financial capital in the amount of $11,780 within twelve
                  months following the date of the acquisition. On February 15,
                  2002, SDC sold 40.61% of the acquired shares to Terex
                  Corporation, a strategic shareholder of SDC. As a result of
                  this sale, a loss was recognized to the extent that 40.61% of
                  TATRA's net assets exceeded the purchase price of $4.8
                  million. The remaining shares of the Company, 8.39%, are held
                  by third parties domiciled in the Czech Republic.

15. SUBSEQUENT    On February 21 and March 4, 2002, the Company received a total
    EVENTS        of $5,000 as a loan from Terex Corporation, a strategic
                  partner. The loan bears interest equal to annual PRIBOR plus a
                  commitment fee of 2.5% of the outstanding balance of the loan.
                  Interest and the commitment fee are payable monthly in arrears
                  on the outstanding amount of the loan. The outstanding
                  principal amount, together with all unpaid fees, shall be due
                  and payable on May 19, 2003 or upon earlier termination.

                                                                            F-73
<PAGE>
                                                                     TATRA, A.S.
                                                                AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS OF US DOLLARS EXCEPT SHARE AND PER SHARE DATA)

================================================================================

                  In February 2002, TATRA through its wholly-owned subsidiary,
                  TATRA USA, formed a jointed venture, American Truck Company
                  ("ATC") with Terex Corporation and STV USA. Each party owns a
                  third of the joint venture. ATC was formed to sell trucks,
                  primarily to military organizations within the United States
                  government or its allies under financial programs whereby the
                  foreign government uses the trucks but the United States
                  government pays for the trucks.

                  To date, no sales have been made. TATRA has contributed $50 to
                  TATRA USA as paid-in capital, and in February 2002, committed
                  to lend up to $650 to TATRA USA on a long-term unsecured basis
                  of which approximately $311 has been drawn. TATRA USA has, in
                  turn, loaned $650 to the joint venture and has paid
                  approximately $50 in legal expenses for the formation and
                  contractual agreements between TATRA, TATRA USA, Terex
                  Corporation, STV USA and ATC.


                                                                            F-74
<PAGE>

                          SIGNATURES

  Pursuant  to  the requirements of Section 13 or  15(d)  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.

                               SDC INTERNATIONAL, INC.
                               (Registrant)

Date:  May 29, 2003            By: /s/Ronald A. Adams
                                  -------------------------------
                                  Ronald A. Adams
                                  Chief Executive Officer



Date:  May 30, 2003            By: /s/Thomas B. Walker
                                  -------------------------------
                                  Thomas B. Walker
                                  Chief Financial Officer

  Pursuant  to  the requirements of the Securities Act  of  1934,
this  report  has been signed below by the following  persons  on
behalf  of the registrant and in the capacities and on the  dates
indicated.

<TABLE>
<CAPTION>

Signature                     Capacity                          Date
---------                     --------                          ----
<S>                           <C>                               <C>

/s/Ronald A. Adams
-------------------------
Ronald A. Adams               Chairman of the Board, Chief
                              Executive Officer, and Director   May 29, 2003


-------------------------
Milota K. Srkal               President, Chief Operating
                              Officer and Director              May __, 2003

/s/Henry S. Green, Jr.
-------------------------
Henry S. Green, Jr.           Director                          May 30, 2003


/s/Gen. Alexander M. Haig
-------------------------     Director                          June 4, 2003
General Alexander M. Haig, Jr.


/s/Zachary K. Shipley
-------------------------
Zachary K. Shipley            Director                          May 31, 2003

</TABLE>




                             -38-

<PAGE>


                         CERTIFICATIONS

I, Ronald A. Adams, certify that:

1.  I   have  reviewed  this  annual  report  on  Form 10-KSB, as
    amended, of SDC International, Inc. (the "registrant");

2.  Based  on  my  knowledge, this annual report does not contain
    any untrue statement of a material fact  or omit  to state  a
    material fact necessary to make the statements made, in light
    of the circumstances under which such  statements  were made,
    not misleading  with  respect  to the period covered  by this
    annual report;

3.   Based on  my knowledge, the  financial statements, and other
     financial information included in this annual report, fairly
     present in all material respects  the  financial  condition,
     results of  operations  and  cash flows of the registrant as
     of, and for, the periods presented in this annual report;

4.   The  registrant's  other certifying  officer   and   I   are
     responsible   for  establishing  and maintaining  disclosure
     controls  and  procedures  (as defined in Exchange Act Rules
     13a-14  and  15d-14) for the registrant and we have:

     (a)   Designed  such  disclosure controls and procedures  to
           ensure  that  material  information  relating  to  the
           registrant,  including its  consolidated subsidiaries,
           is made known to us  by others within  those entities,
           particularly  during the period  in  which this annual
           report is being prepared;

     (b)   Evaluated   the  effectiveness  of  the   registrant's
           disclosure controls and procedures as of a date within
           90 days prior to the filing date of this annual report
           (the "Evaluation Date"); and

     (c)   Presented in  this annual report our conclusions about
           the  effectiveness  of  the  disclosure  controls  and
           procedures   based   on   our  evaluation  as  of  the
           Evaluation Date;

5.   The  registrant's other  certifying  officer  and   I   have
     disclosed, based on  our  most recent  evaluation,  to   the
     registrant's  auditors  and  the  audit  committee  of   the
     registrant's board   of   directors  (or  persons performing
     the equivalent function):

     (a)   All   significant  deficiencies  in   the  design   or
           operation  of internal  controls which could adversely
           affect  the  registrant's ability  to record, process,
           summarize   and   report  financial  data  and    have
           identified for the registrant's auditors any  material
           weaknesses in internal controls; and

     (b)   Any  fraud, whether  or  not  material,  that involves
           management   or    other   employees    who   have   a
           significant  role   in   the   registrant's   internal
           controls; and

6.   The  registrant's other  certifying  officer   and  I   have
     indicated  in  this annual  report whether or not there were
     significant changes in internal controls or in other factors
     that    could    significantly  a ffect   internal  controls
     subsequent to the Evaluation  Date, including any corrective
     actions with regard to significant deficiencies and material
     weaknesses.



Date : May 29, 2003               By: /s/Ronald A. Adams
                                     ----------------------------
                                     Ronald A. Adams
                                     Chief Executive Officer



                             -39-

<PAGE>



                         CERTIFICATIONS

I, Thomas B. Walker, certify that:

1.  I   have  reviewed  this  annual  report  on  Form 10-KSB, as
    amended, of SDC International, Inc. (the "registrant");

2.  Based  on  my  knowledge, this annual report does not contain
    any untrue statement of a material fact  or omit  to state  a
    material fact necessary to make the statements made, in light
    of the circumstances under which such  statements  were made,
    not misleading  with  respect  to the period covered  by this
    annual report;

3.   Based on  my knowledge, the  financial statements, and other
     financial information included in this annual report, fairly
     present in all material respects  the  financial  condition,
     results of  operations  and  cash flows of the registrant as
     of, and for, the periods presented in this annual report;

4.   The  registrant's  other certifying  officer   and   I   are
     responsible   for  establishing  and maintaining  disclosure
     controls  and  procedures  (as defined in Exchange Act Rules
     13a-14  and  15d-14) for the registrant and we have:

     (a)   Designed  such  disclosure controls and procedures  to
           ensure  that  material  information  relating  to  the
           registrant,  including its  consolidated subsidiaries,
           is made known to us  by others within  those entities,
           particularly  during the period  in  which this annual
           report is being prepared;

     (b)   Evaluated   the  effectiveness  of  the   registrant's
           disclosure controls and procedures as of a date within
           90 days prior to the filing date of this annual report
           (the "Evaluation Date"); and

     (c)   Presented in  this annual report our conclusions about
           the  effectiveness  of  the  disclosure  controls  and
           procedures   based   on   our  evaluation  as  of  the
           Evaluation Date;

5.   The  registrant's other  certifying  officer  and   I   have
     disclosed, based on  our  most recent  evaluation,  to   the
     registrant's  auditors  and  the  audit  committee  of   the
     registrant's board   of   directors  (or  persons performing
     the equivalent function):

     (a)   All   significant  deficiencies  in   the  design   or
           operation  of internal  controls which could adversely
           affect  the  registrant's ability  to record, process,
           summarize   and   report  financial  data  and    have
           identified for the registrant's auditors any  material
           weaknesses in internal controls; and

     (b)   Any  fraud, whether  or  not  material,  that involves
           management   or    other   employees    who   have   a
           significant  role   in   the   registrant's   internal
           controls; and

6.   The  registrant's other  certifying  officer   and  I   have
     indicated  in  this annual  report whether or not there were
     significant changes in internal controls or in other factors
     that    could    significantly  a ffect   internal  controls
     subsequent to the Evaluation  Date, including any corrective
     actions with regard to significant deficiencies and material
     weaknesses.



Date: May 30, 2003                  By: /s/Thomas B. Walker
                                       ---------------------------
                                       Thomas B. Walker
                                       Chief Financial Officer





                             -40-

<PAGE>

                           EXHIBIT INDEX
<TABLE>
<CAPTION>

Exhibit No.   Description                                     Location
-----------   -----------                                     --------
<S>           <C>                                             <C>
    3.1       Amended and Restated Certificate of             Incorporated by reference to
              Incorporation of SDC                            exhibit to SDC's Form S-8 dated
                                                              December 28, 2000 (No. 333-52882)

    3.2       By-laws of SDC                                  Incorporated by reference to
                                                              exhibit to SDC's Form 10-SB dated
                                                              January 8, 1996

   10.1       Shareholder Agreement by, between and           Incorporated by reference to
              among SKODA Diesel, a.s., Worth Capital         exhibit to SDC's Form 10-SB dated
              Group, Inc. and Double Seal Ring Company,       January 8, 1996
              Inc. dated as of April 21, 1994


   10.2       Exclusive Agency Agreement by and between       Incorporated by reference to
              SKODA Diesel, a.s. and SDC dated as of          exhibit to SDC's Form 10-SB dated
              April 21, 1994                                  January 8, 1996

   10.3       Bill of Sale and Transfer by and between        Incorporated by reference to
              SKODA Diesel, a.s. and SDC dated as of          exhibit to SDC's Form 10-SB dated
              November 29, 1994                               January 8, 1996

   10.4       Expert's Opinion on the technical state         Incorporated by reference to
              and the evaluation of the production            exhibit to SDC's Form 10-SB dated
              equipment for SDC dated April 1995              January 8, 1996

   10.5       Agreement to Merge Golden Grove Business,       Incorporated by reference to
              Inc. into SDC dated as of January 31, 1997      exhibit to SDC's Form 10-KSB for
                                                              the year ended August 31, 1997

   10.6       Exclusive Agency Agreement by and between       Incorporated by reference to
              Metall Kraft and SDC dated as of August 21,     exhibit to SDC's Form 10-KSB for
              1997                                            the year ended August 31, 1997

   10.7       Purchase and Sale Agreement by and between      Incorporated by reference to
              SDC and Motokov International, Joint Stock      exhibit to SDC's Form 10-KSB for
              Company dated as of November 18, 1997           the year ended August 31, 1997

   10.8       Executive Employment Agreement between SDC      *
              and Ronald A. Adams dated as of October
              1, 2001

   10.9       Executive Employment Agreement between SDC      *
              and Milota K. Srkal dated as of October 1,
              2001

   10.10      Strategic Advisor Agreement between SDC         Filed herewith
              and General Alexander M. Haig, Jr. dated
              May 14, 1999

   10.11      Letter Agreement between SDC and General        Filed herewith
              Alexander M. Haig, Jr. dated September 9,
              2001

   10.12      Joint Venture Agreement between Tatra a.s.      Filed herewith
              and Venus Udyog (India) Limited dated April
              4, 1997

</TABLE>

                             -41-

<PAGE>


<TABLE>
<CAPTION>
<S>           <C>                                             <C>

   10.13      Form of Letter of Subordination from SDC to     Filed herewith
              ABN AMRO Bank N.V. dated February 2003

   10.14      Management Consulting Agreement between         Filed herewith
              Tatra, a.s. and Terex Corporation dated
              December 31, 2002

   10.15      Stock Purchase Agreement between SDC, SDC       Filed herewith
              Prague s.r.o. and Terex Corporation dated
              December 27, 2001

   10.16      Loan Agreement between SDC and Terex            Filed herewith
              Corporation dated December 27, 2001

   10.17      Modification and Amendment No. 1 to Loan        Filed herewith
              Agreement between Terex Corporation, Tatra
              a.s., SDC, and SDC Prague s.r.o. dated
              February 20, 2002

   16.1       Letter from KPMG Ceska republika, s.r.o.        Incorporated by reference to
              to the Securities and Exchange Commission       exhibit to SDC's Form 8-K/A filed
              dated May 17, 2002                              on May 21, 2002

   21.1       Subsidiaries of the registrant                  Filed herewith

   99.1       Certification of CEO pursuant to Section        Filed herewith
              906 of the Sarbanes-Oxley Act of 2002

   99.2       Certification of CFO pursuant to Section        Filed herewith
              906 of the Sarbanes-Oxley Act of 2002

------------------------------

*  Previously filed.

</TABLE>



















                             -42-

<PAGE>