<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 June 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
--------------------------------------------------------------------------------
             (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 June 30, 2002, 2,820,100 shares
of $.0001 par value common stock were outstanding.

<PAGE>

                         ANDEAN DEVELOPMENT CORPORATION



                                      INDEX



Part I.    Financial Information.                                             3


Item 1.    Financial Statements (Unaudited).                                  3


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


Part II.   Other Information.                                                19

                                        2

<PAGE>

                         ANDEAN DEVELOPMENT CORPORATION

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 six months ended June 30, 2002 are not necessarily
          indicative of the results of operations for a full year or of future
          periods.

                                       3

<PAGE>

                         ANDEAN DEVELOPMENT CORPORATION

                           Consolidated Balance Sheets

                       June 30, 2002 and December 31, 2001

<TABLE>
<CAPTION>
                                       A S S E T S

                                                        June 30, 2002   December 31, 2001
                                                         (Unaudited)        (Audited)
                                                       ---------------  -----------------
<S>                                                     <C>             <C>
Current Assets:
   Cash                                                   $    2,227       $      931
   Accounts receivable                                       118,966          185,687
   Notes receivable                                          251,441          327,911
   Other current assets                                      207,728          168,279
                                                          ----------       ----------

         Total Current Assets                                580,362          682,808
                                                          ----------       ----------

Property, Plant and Equipment, net                           339,170          379,842
                                                          ----------       ----------

Other Assets:
   Notes receivable from related party and others          1,346,730        1,415,273
   Investment in unconsolidated subsidiaries                   2,543            2,543
   Advances under agreement                                  271,406          264,231
                                                          ----------       ----------

                                                           1,620,679        1,682,047
                                                          ----------       ----------

                                                          $2,540,211       $2,744,697
                                                          ==========       ==========
</TABLE>

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

                                            4

<PAGE>

                 ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES

                     Consolidated Balance Sheets (Continued)

                       June 30, 2002 and December 31, 2001



                      LIABILITIES AND SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                 June 30, 2002       December 31, 2001
                                                                  (Unaudited)            (Audited)
                                                                 -------------       -----------------
<S>                                                              <C>                 <C>
Current Liabilities:
   Obligations with banks                                        $      14,842         $       35,310
   Accounts payable and accrued expenses                                74,717                 98,237
   Due to related parties                                               12,044                 49,203
   Current portion of long-term debt                                    34,205                 34,923
   Income taxes payable                                                 11,098                     -
                                                                 -------------         --------------

         Total Current Liabilities                                     146,906                217,673
                                                                 -------------         --------------

Long-Term Liabilities:
   Long-term debt, excluding current portion                            73,282                 75,503
   Staff severance indemnities                                          39,704                 39,427
                                                                 -------------         --------------

                                                                       112,986                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                                              (3,177,508)            (3,105,509)
   Accumulated other comprehensive (loss)                             (395,147)              (338,885)
                                                                 -------------         --------------

         Total Shareholders' Equity                                  2,087,814              2,216,075
                                                                 -------------         --------------

                                                                 $   2,540,211         $    2,744,697
                                                                 =============         ==============
</TABLE>

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

                                       5

<PAGE>

                         ANDEAN DEVELOPMENT CORPORATION

                      Consolidated Statements of Operations

                    Three Months Ended June 30, 2002 and 2001

<TABLE>
<CAPTION>
                                                                       2002             2001
                                                                   -------------    -------------
                                                                    (Unaudited)      (Unaudited)
                                                                    -----------      -----------
<S>                                                                <C>               <C>
Revenues from Operations:
   Revenues                                                        $    40,434       $   263,601
   Cost of operations                                                  (25,842)          (35,192)
                                                                   -----------       -----------

Gross Profit                                                            14,592           228,409

Selling and Administrative Expenses                                    (31,720)          (64,052)
                                                                   -----------       -----------

Income (Loss) from Operations                                          (17,128)          164,357
                                                                   -----------       -----------

Other Expenses, net                                                    (63,159)          (59,277)
                                                                   -----------       -----------

(Loss) Income Before Income Taxes and Minority Interest                (80,287)          105,080

Income Taxes                                                                 -           (15,499)
                                                                   -----------       -----------

(Loss) Income Before Minority Interest                                 (80,287)           89,581

Minority Interest                                                            -             1,525
                                                                   -----------       -----------

Net (Loss) Income                                                      (80,287)           91,106

Other Comprehensive (Loss) Income:
   Foreign currency translation adjustment                              (1,825)           13,647
                                                                   -----------       -----------

Comprehensive Income                                               $   (82,112)      $   104,753
                                                                   ===========       ===========


Net (Loss) Income per Common Share                                 $      (.03)      $       .04
                                                                   ===========       ===========

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

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

                                       6

<PAGE>

                         ANDEAN DEVELOPMENT CORPORATION

                      Consolidated Statements of Operations

                     Six Months Ended June 30, 2002 and 2001

<TABLE>
<CAPTION>
                                                                               2002                   2001
                                                                           -------------          -------------
                                                                            (Unaudited)            (Unaudited)
                                                                             ---------              ---------
<S>                                                                      <C>                    <C>
Revenues from Operations:
   Revenues                                                                $     142,508          $     513,601
   Cost of operations                                                            (56,259)               (73,397)
                                                                           -------------          -------------

Gross Profit                                                                      86,249                440,204

Selling and Administrative Expenses                                              (65,859)              (251,771)
                                                                           -------------          -------------

Income from Operations                                                            20,390                188,433
                                                                           -------------          -------------

Other Expenses, net                                                              (92,389)               (50,619)
                                                                           -------------          -------------

(Loss) Income Before Income Taxes and Minority Interest                          (71,999)               137,814

Income Taxes                                                                           -                (30,872)
                                                                           -------------          -------------

(Loss) Income Before Minority Interest                                           (71,999)               106,942

Minority Interest                                                                      -                 12,379
                                                                           -------------          -------------

Net (Loss) Income                                                                (71,999)               119,321

Other Comprehensive (Loss):
   Foreign currency translation adjustment                                       (56,262)               (82,263)
                                                                           -------------          -------------

Comprehensive Income                                                       $    (128,261)         $      37,058
                                                                           =============          =============


Net (Loss) Income per Common Share                                         $        (.05)         $         .01
                                                                           =============          =============

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

                                       7

<PAGE>

                         ANDEAN DEVELOPMENT CORPORATION

                 Consolidated Statements of Shareholders' Equity

                         Six Months Ended June 30, 2002

<TABLE>
<CAPTION>
                                                                                               Accumulated Other        Total
                                            Common          Additional        Accumulated       Comprehensive       Shareholders'
                                            Stock         Paid-In Capital       Deficit         Income (Loss)          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)                              -                    -          (71,999)                  -            (71,999)

Foreign currency translation
  adjustment (Unaudited)                          -                    -                -             (56,262)           (56,262)
                                           --------       --------------     ------------       -------------        -----------

Balance at June 30, 2002 (Unaudited)       $    282       $    5,660,187     $ (3,177,508)      $    (395,147)       $ 2,087,814
                                           ========       ==============     ============       =============        ===========
</TABLE>

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

                                        8

<PAGE>

                         ANDEAN DEVELOPMENT CORPORATION

                      Consolidated Statements of Cash Flows

                     Six Months Ended June 30, 2002 and 2001

<TABLE>
<CAPTION>
                                                                   2002             2001
                                                               -----------       -----------
                                                               (Unaudited)       (Unaudited)
                                                               -----------       -----------
<S>                                                            <C>               <C>
Cash Flows from Operating Activities:
   Net (loss) income                                           $   (71,999)      $   119,321
   Adjustments to reconcile net (loss) income to net cash
    provided by (used in) operating activities:
     Depreciation and amortization                                  40,672            40,673
     Translation adjustment                                        (56,262)          (82,263)
     Minority interest                                              (3,514)         (380,585)
     Changes in assets and liabilities:
       (Increase) decrease in:
         Accounts receivable                                        66,721         2,413,338
         Inventory                                                       -            51,408
         Other current assets                                      (39,449)           15,931
         Notes receivable                                           76,470           185,140
         Advances under agreement                                   (7,175)          126,805
       Increase (decrease) in:
         Accounts payable and accrued expenses                     (23,520)       (1,527,760)
         Income taxes payable                                       11,098            12,016
         Staff severance                                               277            (1,619)
                                                               -----------       -----------

Net Cash Provided by Operating Activities                           (6,681)          972,405
                                                               -----------       -----------

Cash Flows from Investing Activities:
   Purchase of fixed assets                                              -           (18,806)
   Investment in unconsolidated subsidiaries                             -           225,995
                                                               -----------       -----------

Net Cash Provided by Investing Activities                                -           207,189
                                                               -----------       -----------
</TABLE>

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

                                       9

<PAGE>

                         ANDEAN DEVELOPMENT CORPORATION

                Consolidated Statements of Cash Flows (Continued)

                     Six Months Ended June 30, 2002 and 2001

<TABLE>
<CAPTION>
                                                              2002          2001
                                                          -----------    -----------
                                                          (Unaudited)    (Unaudited)
                                                          -----------    -----------
<S>                                                       <C>            <C>
Cash Flows from Financing Activities:
   Borrowings from (advances to) related parties               31,384    $  (314,366)
   Payments on notes payable to bank                          (20,468)      (948,602)
   Principal payments on long-term debt                        (2,939)             -
   Reduction of capital                                             -        (64,133)
                                                          -----------    -----------

Net Cash (Used in) Financing Activities                         7,977     (1,327,101)
                                                          -----------    -----------

Net Increase (decrease) in Cash                                 1,296       (147,507)

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

Cash at End of Period                                     $     2,227    $    66,082
                                                          ===========    ===========


Supplemental Disclosure of Cash Flow Information:
   Cash paid during the period for interest               $         -    $     5,697
   Cash paid during the period for taxes                            -         30,872

Supplemental Disclosure of Non-Cash
 Financing Activities:

   Rescinded Dividends                                              -       (423,018)
</TABLE>

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

                                       10

<PAGE>

                         ANDEAN DEVELOPMENT CORPORATION

                   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 June 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

                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

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 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.

                                       12

<PAGE>

                         ANDEAN DEVELOPMENT CORPORATION

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

                      AND RESULTS OF OPERATIONS (CONTINUED)

     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 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

                                       13

<PAGE>

                         ANDEAN DEVELOPMENT CORPORATION

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

                      AND RESULTS OF OPERATIONS (CONTINUED)

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.

                                       14

<PAGE>

                         ANDEAN DEVELOPMENT CORPORATION

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

                      AND RESULTS OF OPERATIONS (CONTINUED)


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

Gross Revenues and Costs of Operations

Gross Revenues decreased from $263,601 for the three months ended June 30, 2001
to $40,434 for the three months ended June 30, 2002, a decrease of $233,167. The
decrease in gross revenues is a result of the sale of certain subsidiaries
during 2001, reduced revenues in the core business as a consequence of the
financial instability of the markets in South America, and the loss in revenues
from Consonni as a consequence of the sale of the Company's interest in
Consonni.

Cost of Operations decreased from $35,192 for the three months ended June 30,
2001 to $25,842 for the three months ended June 30, 2002, a decrease of $9,350.
This decrease comes primarily from a decrease in operational costs following the
sale of certain subsidiaries during 2001, reduced costs of operations as a
consequence of the reduced revenues in the core business as a consequence of the
financial instability of the markets in South America, and the decrease in
revenues resulting from the sale of the Company's interest in Consonni.

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

Selling and Administrative Expenses decreased from $64,052 for the three months
ended June 30, 2001 to $31,720 for the three months ended June 30, 2002. This
decrease comes primarily from a decrease in operational costs following the sale
of certain subsidiaries during 2001 and reduced expenses as a consequence of the
reduced revenues in the core business as a consequence of the financial
instability of the markets in South America

Income (Loss) from Operations decreased from $164,357 for the three months ended
June 30, 2001 to a loss of ($17,128) for the three months ended June 30, 2002.
This decrease comes primarily from a decrease in income following the sale of
certain subsidiaries during 2001 and reduced income from operations as a
consequence of the reduced revenues in the core business as a consequence of the
financial instability of the markets in South America

Other Expenses increased from $59,277 for the three months ended June 30, 2001
to $63,159, an increase of $3,882. This comes primarily from a decrease in
depreciation of Consonni's equipment and in the reductions of some costs due to
the sale of the Company's interest in Consonni.

                                       15

<PAGE>

                         ANDEAN DEVELOPMENT CORPORATION

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

                      AND RESULTS OF OPERATIONS (CONTINUED)


Net Income and Income Tax

Net Income decreased from income of $91,106 for the three months ended June 30,
2001 to a loss of ($80,287) for the three months ended June 30, 2002.

Income Tax decreased from $15,499 for the three months ended June 30, 2001 to
$-0- for the three months ended June 30, 2002.

           FINANCIAL CONDITION AND RESULTS OF OPERATIONS COMPARISON OF
        SIX MONTHS ENDED JUNE 30, 2002 TO SIX MONTHS ENDED JUNE 30, 2001

Gross Revenues and Cost of Operations

Gross revenues decreased from $513,601 for the six months ended June 30, 2001 to
$142,508 for the six months ended June 30, 2002, a decrease of $371,093. The
decrease in gross revenues is a result of the sale of certain subsidiaries
during 2001, reduced revenues in the core business as a consequence of the
financial instability of the markets in South America, and the loss in revenues
from Consonni as a consequence of the sale of the Company's interest in
Consonni.

Cost of Operations decreased from $73,397 for the six months ended June 30, 2001
to $56,259 for the six months ended June 30, 2002, a decrease of $17,138. This
decrease comes primarily from a decrease in operational costs following the sale
of certain subsidiaries during 2001, reduced costs of operations as a
consequence of the reduced revenues in the core business as a consequence of the
financial instability of the markets in South America, and the decrease in
revenues resulting from the sale of the Company's interest in Consonni.

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

Selling and Administrative Expenses decreased from $251,771 for the six months
ended June 30, 2001 to $65,859 for the six months ended June 30, 2002 a decrease
of $185,912. This decrease comes primarily from a decrease in operational costs
following the sale of certain subsidiaries during 2001 and reduced expenses as a
consequence of the reduced revenues in the core business as a consequence of the
financial instability of the markets in South America

Income from Operations decreased from $188,433 for the six months ended June 30,
2001 to $20,390 for the six months ended June 30, 2002, a decrease of $168,043.
This decrease comes primarily from a decrease in income following the sale of
certain subsidiaries during

                                       16

<PAGE>

                         ANDEAN DEVELOPMENT CORPORATION

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

                      AND RESULTS OF OPERATIONS (CONTINUED)


2001 and reduced income from operations as a consequence of the reduced revenues
in the core business as a consequence of the financial instability of the
markets in South America.

Other expenses increased from net expenses of $50,619 for the six months ended
June 30, 2001 to net expenses of $92,389 for the six months ended June 30, 2002,
an increase of $41,770. This comes primarily from a decrease in depreciation of
Consonni's equipment and in the reductions of some costs due to the sale of the
Company's interest in Consonni.

Net Income and Income Tax

Income before income taxes decreased from $137,814 for the six months ended June
30, 2001 to a loss of $(71,999) for the six months ended June 30, 2002, and
taxes were reduced in the same period from $30,872 to $-0-. In the same period
the corresponding portion of the Minority Interest decreased from $12,379 to
$-0-. As a consequence of the previous figures, the net income of the Company
decreased in the period from $119,321 to $(71,999).

Liquidity and Capital Resources

The Company has financed its operations and other working capital requirements
principally from operating cash flow.

Current Assets

Cash and short-term investments increased from $931 as of December 31, 2001 to
$2,227 for the six month period ended June 30, 2002, an increase of $1,296. As
of December 31, 2001 and for the six month period ended June 30, 2002, the
Company had no short-term investments

Accounts receivable decreased from $185,687 at December 31, 2001 to $118,966 for
the six month period ended June 30, 2002, a decrease of $66,721. This decrease
comes primarily from a decrease in accounts receivable following the sale of
certain subsidiaries during 2000, the sale of most of the Company's interest in
Consonni and reduced accounts receivables as a consequence of the reduced
revenues in the core business as a consequence of the financial instability of
the markets in South America

Notes receivable decreased from $327,911 as of December 31, 2001 to $251,441 for
the six month period ended June 30, 2002, a decrease of $76,470. Other current
assets increased from $168,279 as of December 31, 2001 to $207,728 for the six
month period ended June 30, 2002, an increase of $39,449.

                                       17

<PAGE>

                         ANDEAN DEVELOPMENT CORPORATION

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

                      AND RESULTS OF OPERATIONS (CONTINUED)


Total current assets decreased from $682,808 at December 31, 2001 to $580,362
for the six month period ended June 30, 2002, a decrease of $102,446. This
decrease was primarily due to the sale of certain subsidiaries during 2000.

Property, plant and equipment decreased from $379,842 at December 31, 2001 to
$339,170 for the six month period ended June 30, 2002, a decrease of $40,672.

Other assets decreased from $1,682,047 at December 31, 2001 to $1,620,679 for
the six month period ended June 30, 2002, a decrease of $61,368. This decrease
is primarily the result of a write off of goodwill and the sale of some
subsidiaries during 2000.

Liabilities

Current liabilities decreased from $217,673 at December 31, 2001, to $146,906
for the six month period ended June 30, 2002. This decrease comes primarily from
a decrease in liabilities following the sale of certain subsidiaries during
fiscal 2000 and the sale of the Company's interest in Consonni.

Long-term liabilities decreased from $114,930 at December 31, 2001 to $112,986
at the six month period ended June 30, 2002, due to the Company's decision to
rescind a declared dividend.

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 June 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.

                                       18

<PAGE>

                         ANDEAN DEVELOPMENT CORPORATION

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 included in this Form 10-QSB:

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

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

     (b)  Reports on Form 8-K

          None

                                       19

<PAGE>

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

Dated: August 13, 2002
                                  /s/ Pedro Pablo Errazuriz
                                  ----------------------------------------------
                                  Pedro Pablo Errazuriz, President and
                                  Chief Executive Officer



Dated: August 13, 2002
                                  /s/ Jose Luis Yrarrazaval
                                  ----------------------------------------------
                                  Jose Luis Yrarrazaval, Chief Financial Officer

                                       20

<PAGE>

                                  Exhibit Index

                               Exhibit Description

Exhibit Number

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

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