<PAGE>

                                   FORM 10-QSB

                        SECURITY AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

(Mark One)

     (X)    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2002.

     ( )    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from ___________________ to ______________________.

Commission file number: 33-90696

                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

FLORIDA                                          65-0648697
--------------------------------------------------------------------------------
State or other jurisdiction of                   (I.R.S. Employer
incorporation or organization                     Identification No.)

               1224 Washington Avenue, Miami Beach, Florida 33139
--------------------------------------------------------------------------------
 (Address of principal executive offices)                     (Zip Code)

Registrant's telephone number, including area code:  (305) 866-3360

         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 report(s), and has been subject to such
filing requirements for the past 90 days.

Yes         X                       No
     -----------------                  ----------

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. As of September 30, 2002, 2,820,100
shares of $.0001 par value common stock were outstanding.

<PAGE>

                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES

                                      INDEX

                                                                      Pages
                                                                     -------
Part I.   Financial Information.                                        3

Item 1.   Financial Statements (Unaudited).                             3

Item 2.   Management's Discussion and Analysis of Financial
           Condition and Results of Operations.                        12

Part II.  Other Information.                                           18

                                       2

<PAGE>

                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES

PART I    FINANCIAL INFORMATION

Item 1.   Financial Statements

          Certain information and footnote disclosures normally included in
          financial statements prepared in accordance with accounting
          principles generally accepted in the United States of America have
          been condensed or omitted pursuant to the rules and regulations of
          the Securities and Exchange Commission (the "Commission").
          Although the Company believes the disclosures made are adequate to
          make the information presented not misleading, and, in the opinion
          of management, all adjustments have been reflected which are
          necessary for a fair presentation of the information shown and the
          accompanying notes, these condensed unaudited financial statements
          should be read in conjunction with the audited financial
          statements for the year ended December 31, 2001. The results for
          the nine months ended September 30, 2002 are not necessarily
          indicative of the results of operations for a full year or of
          future periods.

                                       3

<PAGE>

                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES

                           Consolidated Balance Sheets

                    September 30, 2002 and December 31, 2001

                                     ASSETS

<TABLE>
<CAPTION>
                                                  September 30, 2002   December 31,
                                                      (Unaudited)          2001
                                                  ------------------   ------------
<S>                                               <C>                  <C>
Current Assets:
   Cash                                           $              484   $        931
   Accounts receivable                                        84,650        185,687
   Notes receivable                                          300,538        327,911
   Other current assets                                      192,658        168,279
                                                  ------------------   ------------

         Total Current Assets                                578,330        682,808
                                                  ------------------   ------------

Property, Plant and Equipment, net                           288,245        379,842
                                                  ------------------   ------------

Other Assets:
   Notes receivable from related party and others          1,191,093      1,415,273
   Investment in unconsolidated subsidiaries                   2,543          2,543
   Deposits and other                                        265,242        264,231
                                                  ------------------   ------------

                                                           1,458,878      1,682,047
                                                  ------------------   ------------

                                                  $        2,325,453   $  2,744,697
                                                  ==================   ============
</TABLE>

                                        4

<PAGE>

                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES

                     Consolidated Balance Sheets (Continued)

                    September 30, 2002 and December 31, 2001

                      LIABILITIES AND SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                          September 30, 2002    December 31,
                                                              (Unaudited)           2001
                                                          ------------------    ------------
<S>                                                       <C>                   <C>
Current Liabilities:
   Obligations with banks                                 $           13,376    $     35,310
   Accounts payable and accrued expenses                              54,405          98,237
   Due to related parties                                              1,569          49,203
   Current portion of long-term debt                                  22,010          34,923
   Income taxes payable                                               10,001               -
                                                          ------------------    ------------

         Total Current Liabilities                                   101,361         217,673
                                                          ------------------    ------------

Long-Term Liabilities:
   Long-term debt, excluding current portion                          65,810          75,503
   Staff severance indemnities                                        29,876          39,427
                                                          ------------------    ------------

                                                                      95,686         114,930
                                                          ------------------    ------------

Minority interest                                                    192,505         196,019
                                                          ------------------    ------------

Shareholders' Equity:
   Preferred stock, $.0001 par value, 5,000,000 shares
    authorized, 0 shares issued and outstanding                            -               -
   Common stock, $.0001 par value, 20,000,000 shares
    authorized, 2,820,100 shares issued and outstanding                  282             282
   Additional paid-in capital                                      5,660,187       5,660,187
   Accumulated deficit                                            (3,304,496)     (3,105,509)
   Accumulated other comprehensive (loss)                           (420,072)       (338,885)
                                                          ------------------    ------------

         Total Shareholders' Equity                                1,935,901       2,216,075
                                                          ------------------    ------------

                                                          $        2,325,453    $  2,744,697
                                                          ==================    ============
</TABLE>

                                        5

<PAGE>

                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES

                      Consolidated Statements of Operations

                 Three Months Ended September 30, 2002 and 2001

<TABLE>
<CAPTION>
                                                                       2002                 2001
                                                                -----------------     ---------------
<S>                                                             <C>                   <C>
Revenues from Operations:
 Revenues                                                       $          32,473     $       162,806
 Cost of operations                                                        (6,977)            (23,127)
                                                                -----------------     ---------------

Gross Profit                                                               25,496             139,679

Selling and Administrative Expenses                                       (95,547)            (72,165)
                                                                -----------------     ---------------

                                                                          (70,051)             67,514
                                                                -----------------     ---------------

Other Expenses, net                                                       (56,937)            (58,872)
                                                                -----------------     ---------------

(Loss) Income Before Income Taxes and Minority Interest                  (126,988)              8,642

Income Taxes                                                                    -              (6,565)
                                                                -----------------     ---------------

(Loss) Income Before Minority Interest                                   (126,988)              2,077

Minority Interest                                                               -               1,898
                                                                -----------------     ---------------

Net (Loss) Income                                                        (126,988)              3,975

Other Comprehensive Income (Loss):
 Foreign currency translation adjustment                                  (24,925)             38,199
                                                                -----------------     ---------------

Comprehensive (Loss) Income                                     $        (151,913)    $        42,174
                                                                =================     ===============


Net (Loss) Income per Common Share                              $            (.05)    $          .001
                                                                =================     ===============

Weighted Average Shares Outstanding                                     2,820,100           2,820,100
                                                                =================     ===============
</TABLE>

                                       6

<PAGE>

                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES

                      Consolidated Statements of Operations

                  Nine Months Ended September 30, 2002 and 2001

<TABLE>
<CAPTION>
                                                                        2002                  2001
                                                                 -----------------     ----------------
<S>                                                              <C>                   <C>
Revenues from Operations:
 Revenues                                                        $         174,981     $        676,407
 Cost of operations                                                        (63,236)             (96,524)
                                                                 -----------------     ----------------

Gross Profit                                                               111,745              579,883

Selling and Administrative Expenses                                       (161,406)            (323,936)
                                                                 -----------------     ----------------

                                                                           (49,661)             255,947
                                                                 -----------------     ----------------

Other Expenses, net                                                       (149,326)            (109,491)
                                                                 -----------------     ----------------

(Loss) Income Before Income Taxes and Minority Interest                   (198,987)             146,456

Income Taxes                                                                     -              (37,437)
                                                                 -----------------     ----------------

(Loss) Income Before Minority Interest                                    (198,987)             109,019

Minority Interest                                                                -               14,277
                                                                 -----------------     ----------------

Net (Loss) Income                                                         (198,987)             123,296

Other Comprehensive (Loss) Income:
 Foreign currency translation adjustment                                   (81,187)             (44,064)
                                                                 -----------------     ----------------

Comprehensive (Loss) Income                                      $        (280,174)    $         79,232
                                                                 =================     ================

Net (Loss) Income per Common Share                               $            (.10)    $            .04
                                                                 =================     ================

Weighted Average Shares Outstanding                                      2,820,100            2,820,100
                                                                 =================     ================
</TABLE>

                                       7

<PAGE>

                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES

                 Consolidated Statements of Shareholders' Equity

                      Nine Months Ended September 30, 2002

<TABLE>
<CAPTION>
                                   Common        Additional       Accumulated         Accumulated Other          Total
                                    Stock      Paid-In Capital      Deficit           Comprehensive Loss   Shareholders' Equity
                                 -----------   ---------------   ---------------      ------------------   --------------------
<S>                              <C>           <C>               <C>                  <C>                  <C>
Balance at December 31, 2001     $       282   $     5,660,187   $    (3,105,509)     $       (338,885)     $       2,216,075

Net loss (Unaudited)                       -                 -          (198,987)                    -               (198,987)

Foreign currency translation
  adjustment (Unaudited)                   -                 -                 -               (81,187)               (81,187)
                                 -----------   ---------------   ---------------      ----------------      -----------------

Balance at September 30,
  2002 (Unaudited)               $       282   $     5,660,187   $    (3,304,496)     $       (420,072)     $       1,935,901
                                 ===========   ===============   ===============      ================      =================
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                        8

<PAGE>

                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows

                  Nine Months Ended September 30, 2002 and 2001

<TABLE>
<CAPTION>
                                                               2002                  2001
                                                        ----------------        ---------------
<S>                                                     <C>                     <C>
Cash Flows from Operating Activities:
   Net (loss) income                                    $       (198,987)       $       123,296
   Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
     Depreciation and amortization                                86,263                 46,378
     Translation adjustment                                      (81,187)               (44,064)
     Minority interest                                            (3,514)              (376,163)
     Changes in assets and liabilities:
       (Increase) decrease in:
         Accounts receivable                                     101,037              2,411,838
         Inventory                                                     -                 51,408
         Other current assets                                    (24,379)               (23,739)
         Notes receivable                                         27,373                190,147
         Other assets                                             (1,011)              (184,597)
       Increase (decrease) in:
         Accounts payable and accrued expenses                   (43,832)            (1,537,692)
         Provision for severance indemnity                             -                (10,759)
         Income taxes payable                                     10,001                 17,389
         Staff severance                                          (9,551)                     -
                                                        ----------------        ---------------

Net Cash Provided by Operating Activities                       (137,787)               663,442
                                                        ----------------        ---------------

Cash Flows from Investing Activities:
   Purchase of fixed assets                                            -                (18,806)
   Proceeds of sale of fixed assets                                5,334                      -
   Proceeds from investment in
     unconsolidated subsidiaries                                       -                445,782
                                                        ----------------        ---------------

Net Cash Provided by Investing Activities                          5,334                426,976
                                                        ----------------        ---------------
</TABLE>

                                       9

<PAGE>

                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES

                Consolidated Statements of Cash Flows (Continued)

                  Nine Months Ended September 30, 2002 and 2001

<TABLE>
<CAPTION>
                                                                              2002                    2001
                                                                        ----------------       ------------------
<S>                                                                    <C>                      <C>
Cash Flows from Financing Activities:
   Borrowings from (advances to) related parties                        $        176,546       $         (285,691)
   (Payments on) proceeds from notes payable to bank                             (21,934)                (953,516)
   Principal payments on long-term debt                                          (22,606)                       -
   Reduction of capital                                                                -                  (64,133)
                                                                        ----------------       ------------------

Net Cash Provided by (Used in) Financing Activities                              132,006               (1,303,340)
                                                                        ----------------       ------------------

Net Decrease in Cash                                                                (447)                (212,922)

Cash at Beginning of Period                                                          931                  213,589
                                                                        ----------------       ------------------

Cash at End of Period                                                   $            484       $              667
                                                                        ================       ==================


Supplemental Disclosure of Cash Flow Information:
   Cash paid during the period for interest                             $         19,940       $            9,111
   Cash paid during the period for taxes                                               -                   37,437

Supplemental Disclosure of Non-Cash Financing
  Activities:
   Rescinded Dividends                                                                 -                  423,018
</TABLE>

                                       10

<PAGE>

                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Basis of Presentation - The quarterly financial information included
         herein is unaudited; however, such information reflects all adjustments
         (consisting solely of normal recurring adjustments) which are, in
         opinion of management, necessary for a fair statement of results for
         the interim period. For further information, refer to the financial
         statements and notes thereto included in the Company's form 10-KSB as
         of and for the year ended December 31, 2001.

         Functional Currency - The financial statements have been translated in
         accordance with the provisions set forth in Statement of Financial
         Accounting Standards No. 52, from Chilean pesos (the functional
         currency) into US dollars (the reporting currency).

         Earnings Per Common Share - Earnings per common share are based on the
         weighted average number of shares outstanding of 2,820,100 for the
         periods ended September 30, 2002 and 2001, respectively, after giving
         effect to common stock equivalents which consist of warrants issued
         with the initial public offering that would have a dilutive effect on
         earnings per share. Warrants issued with exercise prices greater than
         the existing market value of the company stock are deemed anti-dilutive
         and are not components of earnings per share.

                                       11

<PAGE>

                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

                       CONDITION AND RESULTS OF OPERATIONS

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

GENERAL

Management's Discussion and Analysis contains various "forward looking
statements" within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended, regarding future events or the future financial performance of
the Company that involve risks and uncertainties. Certain statements included in
this Form 10-QSB, including, without limitation, statements related to
anticipated cash flow sources and uses, and words including but not limited to,
"anticipates", "believes", "plans", "expects", "future" and similar statements
or expressions, identify forward looking statements. Any forward-looking
statements herein are subject to certain risks and uncertainties in the
Company's business, including but not limited to, reliance on key customers and
competition in its markets, market demand, product performance, technological
developments, maintenance of relationships with key suppliers, difficulties of
hiring or retaining key personnel and any changes in current accounting rules,
all of which may be beyond the control of the Company. The Company's actual
results could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including those set forth herein.

Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") should be read in conjunction with the consolidated
financial statements included herein. Further, this second quarterly report on
Form 10-QSB should be read in conjunction with the Company's Consolidated
Financial Statements and Notes to Consolidated Financial Statements included in
its 2001 Annual Report on Form 10-KSB. In addition, you are urged to read this
report in conjunction with the risk factors described herein.

GENERAL

           Andean Development Corporation ("ADC" or the "Company") was
incorporated in Florida on October 19, 1994 and is presently a holding company
for Errazuriz y Asociados Ingenieros S.A. ("AE&A"), and E&A Ingesis S.A.
("INA"), both Chilean corporations located in Santiago, Chile. Except as
otherwise specifically noted, ADC, AE&A and INA are collectively referred to
herein as the "Company."

           AE&A provides engineering and project management services for water
and energy related private and public works and provides technical assistance
for both turnkey and

                                       12

<PAGE>

                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)



non-turnkey major works, mainly related to the development and construction of
energy, water and sewage treatment projects in Chile. INA acts as the agent in
the sale of major electrical and mechanical equipment.

     INA is also developing, in a joint venture with genteAndina S.A., a Chilean
company specializing in education ("genteAndina S.A"), a communication network
and related software for (i) rural area remote education, and (ii) post graduate
professional education "at home" for Union leaders and key employees in Chile,
which, if successful, could be adopted and developed in other countries in South
America. On April 1, 2001, the Company executed an agreement with an unrelated
company, genteAndina, S. A. in which the Company will invest approximately
$500,000 in exchange for guaranteed interest income of 1/2% monthly and 35% of
the profits of genteAndina, S. A. genteAndina, S. A. will continue developing
the software and projects previously undertaken by the Company. As of December
31, 2001, approximately $425,000 was advanced to genteAndina, S. A. under this
agreement and is included in deposits and other in the accompanying consolidated
financial statements.

     The Company, supported by the government of Chile and by certain Chilean
institutions, is developing at the Company's cost:

          .    Software to be used to educate the school populations of
               indigenous rural communities located in isolated areas in the
               mountains of Chile or close to its coast line, and

          .    Software to teach leadership, and other related matters, to union
               leaders in Chile, highly qualified employees of the government of
               Chile, and to certain private industries such as Corporacion del
               Cobre de Chile, Chilean Copper Corporation ("Codelco").

     The Company has entered into an agreement with Codelco, through one of the
Company's sponsoring institutions, Fundacion Tucapel Jimenez Alfaro, by which
the Company will provide educational services to union leaders at Codelco's
Andina Division. Codelco is the industry leader in the Chilean mining industry
and the Company anticipates, but cannot guarantee, that once the Codelco project
proves successful, other Chilean companies will execute similar agreements.

     Currently, the Company is well positioned in its core business segment to
take advantage of an economic upturn in the large projects sector, since the
Company is well

                                       13

<PAGE>

                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)



established in its marketplace and has maintained customers who are established
in their specialties. However, as of the date herein, the economic conditions in
the South American market have delayed an anticipated economic upturn in the
large projects sector. No assurances can be given as to when such economic
upturn will transpire and how soon afterwards the Company will recognize
significant revenues from the core business sector. In the interim, the Company
is pursuing the development of the distant education business and maintaining
its strategic position in its core business sector to take advantage of any
upswing in the economic conditions in South America.

     The Company is also the majority owner (83.6%) of a non-operating
subsidiary, Consonni USA, Inc. ("Consonni"), the assets of which consist of cash
and notes receivables. In 2000, the Company sold the operating subsidiary of
Consonni.

     On August 31, 2001, the Company extended the expiration date of its
Redeemable Common Stock Purchase Warrants (the "Warrants") from November 13,
2001 to November 13, 2003. The Company originally issued the Warrants in
connection with a stock offering on Registration Statement Form SB-2 (SEC File
No. 333-90696) which was declared effective by the Securities and Exchange
Commission on November 13, 1996.

FINANCIAL CONDITION AND RESULTS OF OPERATIONS COMPARISON OF THREE MONTHS ENDED
SEPTEMBER 30, 2002 TO THREE MONTHS ENDED SEPTEMBER 30, 2001

Gross Revenues and Costs of Operations

Gross revenues decreased from $162,806 for the three months ended September 30,
2001 to $32,473 for the three months ended September 30, 2002, a decrease of
$130,333. The decrease in gross revenues is a result of the unfavorable economic
conditions in the South American market, particularly the large projects sector,
which have had an adverse impact on the Company's revenues from operations.

Cost of Operations decreased from $23,127 for the three months ended September
30, 2001 to $6,977 for the three months ended September 30, 2002, a decrease of
$16,150. This decrease is a direct consequence of the decrease in cost of
operations associated with the decrease in revenues.

                                       14

<PAGE>

                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)



Selling and Administrative Expenses, Incomes from Operations and Other Income
Expenses

Selling and Administrative Expenses increased from $72,165 for the three months
ended September 30, 2001 to $95,547 for the three months ended September 30,
2002, an increase of $23,382. This increase comes primarily from an increase in
expenses in projects associated with the core business that have not realized
revenues to date.

Income from Operations, decreased from $67,514 for the three months ended
September 30, 2001 to ($70,051) or the three months ended September 30, 2002,
primarily as a result of the decrease in revenues and the increase in selling
and administrative expenses.

Other (expenses) decreased from net expenses of $58,872 for the three months
ended September 30, 2001 to $56,957 expenses of for the three months ended
September 30, 2002.

Net Income and Income Tax

(Loss) Net Income before income taxes and minority interest decreased from
$8,642 for the three months ended September 30, 2001 to a loss of ($126,988) for
the three months ended September 30, 2002, primarily as a result of the decrease
in revenues from operations and the increase in selling and administrative
expenses.

Net income decreased from $3,975 or the three months ended September 30, 2001 to
a loss of ($126,988) for the three months ended September 30, 2002, primarily as
a result of the decrease in revenues and the increase in selling and
administrative expenses.

FINANCIAL CONDITION AND RESULTS OF OPERATIONS COMPARISON OF NINE MONTHS ENDED
SEPTEMBER 30, 2002 TO NINE MONTHS ENDED SEPTEMBER 30, 2001

Gross Revenues and Costs of Operations

Gross revenues decreased from $676,407 for the nine months ended September 30,
2001 to $174,981 for the nine months ended September 30, 2002, a decrease of
$501,426. The decrease in gross revenues is a result of the unfavorable economic
conditions in the South American market, particularly the large projects sector,
which have had an adverse impact on the Company's revenues from operations.

                                       15

<PAGE>

                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Cost of Operations decreased from $96,524 for the nine months ended September
30, 2001 to $63,236 for the nine months ended September 30, 2002, a decrease of
$33,288. This decrease is a direct consequence of the decrease in cost of
operations associated with the decrease in revenues.

Selling and Administrative Expenses, Incomes from Operations and Other Income
Expenses

Selling and Administrative Expenses decreased from $323,936 for the nine months
ended September 30, 2001 to $161,406 for the nine months ended September 30,
2002, a decrease of $162,530. This decrease comes primarily from an decrease in
expenses in projects associated with the core business in the first two quarters
of 2002.

Income from Operations, decreased from $255,947 for the nine months ended
September 30, 2001 to $(49,661) for the nine months ended September 30, 2002,
primarily as a result of the decrease in revenues from operations and the
increase in selling and administrative expenses.

Other expenses increased from net expenses of $109,491 for the nine months ended
September 30, 2001 to net expenses of $149,326 for the nine months ended
September 30, 2002 an increase of $39,835 due to an increase in other income.

Net (Loss) Income and Income Tax

Net Income before income taxes decreased from $146,456 for the nine months ended
September 30, 2001 to a net loss of $(198,987) for the nine months ended
September 30, 2002, and taxes decreased in the same period by $37,437. In the
same period the corresponding portion of the Minority Interest decreased by
$14,277. As a consequence of the previous figures, the net income of the Company
decreased in the period from $123,296 to $(198,987) based on the decreased on
the revenues from operation.

Liquidity and Capital Resources

The Company has financed its operations and other working capital requirements
from advances made by a major shareholder and collections of related party
receivables.

Current Assets

Cash and short-term investments decreased from $931 as of December 31, 2001 to
$484 for the nine months period ended September 30, 2002, a decrease of $447.

                                       16

<PAGE>

                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Accounts receivable decreased from $185,687 at December 31, 2001 to $84,650 for
the nine months period ended September 30, 2002, a decrease of $101,037. The
decrease in accounts receivables is a result of the unfavorable economic
conditions in the South American market, particularly the large projects sector,
which have had an adverse impact on the Company's revenues from operations and,
accordingly, the Company's accounts receivable.

Notes receivable and other current assets decreased from $496,190 as of December
31, 2001 to $493,196 for the nine months period ended September 30, 2002, a
decrease of $2,994.

Total current assets decreased from $682,808 at December 31, 2001 to $578,330
for the nine months period ended September 30, 2002 a decrease of $104,478.

Property, plant and equipment, net decreased from $379,842 at December 31, 2001
to $288,245 for the nine months period ended September 30, 2002, a decrease of
$91,597.

Other assets decreased from $1,682,047 at December 31, 2001 to $1,458,878 for
the nine months period ended September 30, 2002, a decrease of $223,169. This
decrease is primarily the result of collections made on notes receivables
arising on the sale of some subsidiaries during 2000.

Liabilities

Current liabilities decreased from $217,673 at December 31, 2001, to $101,361
for the nine months period ended September 30, 2002 a decrease of $116,312.

Long-term liabilities decreased from $114,930 at December 31, 2001 to $95,686 at
the nine months period ended September 30, 2002, a decrease of $19,244 due to
payment of long-term debt.

The Company anticipates that its cash requirements will continue to increase as
it continues to expend substantial resources to build its infrastructure,
develop its business plan and establish its sales and marketing network
operations, customer support and administrative organizations. The Company
currently anticipates that its available cash resources and cash generated from
operations will be sufficient to meet its presently anticipated working capital
and capital expenditure requirements for the next twelve months. As of September
30, 2002, there were no commitments for long- term capital expenditures. If the
Company is unable to maintain profitability, or seeks further expansion,
additional funding will become necessary. No assurances can be given that either
equity or debt financing will be available.

                                       17

<PAGE>

                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES

PART II

OTHER INFORMATION


Item 1.           Legal Proceedings

                  None.


Item 2.           Changes in Securities

                  None.


Item 3.           Defaults Upon Senior Securities

                  None.


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

                  None.


Item 5.           Other Information

                  None.

Item 6.           Exhibits and Reports on Form 8-K

                  (a)  The following Exhibits are filed as part of the Quarterly
                       Report on Form 10-QSB

                  99.1 Certification Pursuant to 18 U.S.C Section 1350, as
Adopted Pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002.

                  99.2 Certification Pursuant to 18 U.S.C Section 1350, as
Adopted Pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002.


                  (b)  Reports on Form 8-K:

                       None.

                                       18

<PAGE>

                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES


                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES



                  /s/ Pedro Pablo Errazuriz
                  --------------------------------------------------------------
                  Pedro Pablo Errazuriz, President and Chief Executive Officer


                  /s/ Jose Luis Yrarrazaval
                  --------------------------------------------------------------
                  Jose Luis Yrarrazaval, Chief Financial Officer

Date: November 14, 2002

                                       19

<PAGE>

                                  Exhibit Index

Exhibit Number                 Description

99.1 Certification Pursuant to 18 U.S.C Section 1350, as Adopted pursuant to
     Section 302 and 906 of the Sarbanes-Oxley Act of 2002.

99.2 Certification Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to
     Section 302 and 906 of the Sarbanes-Oxley Act of 2002.