U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(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, 1995
__ TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to __________
Commission File Number: 0-6088
EARTH SCIENCES, INC.
- -------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Colorado 84-0503749
- -------------------------------------------------------------------
(State of other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
910 12th Street, Golden, Colorado 80401
- -------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(303)279-7641
- -------------
(Issuer's telephone number)
Not Applicable
- -------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reportd required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X ; No_____
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of October 27, 1995:
6,355,456 Shares of Common Stock, one cent par value.
Transitional Small Business Disclosure Format: Yes _____; No X
<TABLE>
FINANCIAL STATEMENTS
Earth Sciences, Inc. and Subsidiaries
Consolidated Balance Sheet
September 30, 1995
<CAPTION>
UNAUDITED
Assets (amounts in thousands)
<S>
Current assets: <C>
Cash, and cash equivalents $ 180
Certificates of deposit 475
Receivables 164
Prepaid expenses and other 41
------
Total current assets 860
Property, plant and equipment, at cost 16,726
Less accum. depr. and amort. (4,824)
------
Net property and equipment 11,902
------
$12,762
======
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable and current
installments of long-term debt $ 12
Accounts payable 3
Accrued expenses 47
------
Total current liabilities 62
Long-Term Liabilities:
Deferred revenues 9,382
Long-term debt, excluding current installments 622
Other liabilities 421
Accrued decommissioning liability 224
------
10,649
Stockholders' equity:
Common stock $.01 par value 63
Additional paid-in capital 6,392
Retained deficit (2,749)
Cumulative translation adjustments (1,654)
Treasury stock (1)
------
Total stockholders' equity 2,051
------
$12,762
======
</TABLE>
See accompanying notes.
<TABLE>
Earth Sciences, Inc. and Subsidiaries
Consolidated Statements of Operations
Three and Nine Months Ended September 30, 1995 and 1994
UNAUDITED
<CAPTION> 1995 1994
(amounts in thousands)
<S> <C> <C> <C> <C>
REVENUES:
Royalty income $ 254 728 236 721
Other 14 39 12 29
---- --- ---- ---
268 767 248 750
---- --- ---- ---
EXPENSES:
Operating 92 249 76 236
General and admin. 30 180 56 241
Interest expense 19 61 26 82
Loss on abandonment of
mineral property - - 196 196
Depr. and amort. 60 175 56 167
---- ---- --- ----
201 665 410 922
---- ---- --- ----
Net earnings (loss) $ 67 102 (162)(172)
===== === ===== ===
Net loss per common share $ .01 .02 (.03)(.03)
==== ==== ==========
Weighted average common
shares outstanding 6,355,456 5,904,522
========= =========
6,355,456 5,907,718
========= =========
</TABLE>
- -------------------------------------------------------------------
<TABLE>
Earth Sciences, Inc. and Subsidiaries
Consolidated Statements of Accumulated Deficit
Nine Months Ended September 30, 1995 and 1994
UNAUDITED
<CAPTION> 1995 1994
(amounts in thousands)
<S> <C> <C>
Retained deficit as of January 1 $ (2,851) (2,685)
Net earnings (loss) for the period 102 (172)
----- -----
Retained deficit as of September 30 $ (2,749) (2,857)
===== =====
</TABLE>
See accompanying notes.
<TABLE>
Earth Sciences, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 1995 and 1994
UNAUDITED
<CAPTION> 1995 1994
(amounts in thousands)
<S> <C> <C>
Cash flows from operating activities:
Cash received from customers $ 716 785
Cash paid to suppliers and employees (436) (464)
Dividends and interest received 21 5
Interest paid (30) (57)
----- -----
Net cash provided (used)
by operating activities 271 269
----- -----
Cash flows from financing activities:
Collection on notes receivable 60 140
Notes receivable funded (130) (140)
Payments on notes and long-term debt (139) (227)
Additional paid in capital 2 14
----- -----
Net cash used (207) (213)
----- -----
Cash flow from investing activities:
Capital expenditures (17) (67)
Sale of common stock - 571
Purchase of certificates of deposit (190) -
----- -----
Net cash provided (used) (207) 504
----- -----
Net increase (decrease) in cash and
cash equivalents (143) 560
Cash and cash equivalents at beginning
of period 323 66
----- -----
Cash and equivalents at end of period $ 180 626
===== =====
Reconciliation of net earnings (loss) to
net cash provided by operating activities:
Net earnings (loss) $ 102 (172)
Adjustments to reconcile
to net cash used in operations:
Loss on aband. of mineral property - 196
Depreciation and amortization 175 167
(Increase) decrease in receivables (30) 40
Decrease in other assets 2 21
Increase in payables 22 17
----- -----
Net cash provided (used) by
operating activities $ 271 269
===== =====
</TABLE>
See accompanying notes.
Earth Sciences, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
September 30, 1995
(1) General
The accompanying consolidated financial statements were
prepared in accordance with generally accepted accounting
principles and reflect all adjustments which are, in the opinion of
management, necessary for fair representation of the financial
results for the interim periods shown. Such statements should be
considered in conjunction with Registrant's 1994 Form 10-KSB.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
Management believes that existing working capital and the
continuing royalty income from the San Luis gold mine are
sufficient to fund existing operations. Private placements of
stock and private borrowing may be evaluated to fund increased
activities in Venezuela, at the Calgary extraction facility and/or
at the Calgary extraction facility.
Based on current estimates, the Calgary facility will require
approximately $5 million to re-start for the production of purified
phosphoric products, planned for 1996. Registrant expects to debt
finance those requirements through traditional sources. The search
for financing will proceed after the completion of feasibility and
marketing studies.
Registrant is funding the majority of cash costs of the
Venezuelan gold exploration activities. Activities planned on the
existing concession and on those concessions expected to be
acquired in the future can be met through existing working capital.
Registrant plans to raise the additional capital, if and when
needed, through further private placements of stock and joint
venture arrangements, if appropriate.
Cash flow from operations totaled $271,000 for the first nine
months of 1995 as compared to $269,000 for the same period in 1994.
Cash flow from financing activities in 1995 included funding and
collection on notes receivable of $130,000 and $60,000,
respectively and repayments on notes and long-term debt of
$139,000. Cash flow from investing activities included capital
expenditures of $17,000 and $67,000 in 1995 and 1994, respectively,
and in 1995, the purchase of certificates of deposit of $190,000.
In the first nine months of 1994, a total of $571,000 was raised
from Regulation S offerings to foreign investors and the private
placement of stock.
Results of Operations
Total revenues for the 1st nine months of 1995 were
approximately equal to the same period in 1994. Whereas gold
prices were somewhat lower, total ounces produced were somewhat
higher (54,360 oz. in 1995 vs. 53,000 in 1994) on production
achieved by Battle Mountain Gold Company at the San Luis gold mine
from which Registrant receives a 3 1/2% gross royalty.
Expenses for the 1st nine months of 1995 were less then for
the same period in 1994 due primarily to a $196,000 loss on
abandonment of mineral property recognized in 1994 and reduced
activity in Venezuela in 1995. The several land contracts for
which application has been made await approval as the Venezuelan
government sorts out its mineral policies for the area.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Reported in Item 3 of Registrant's 1994 Form 10-KSB.
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
No change from Item 13 of Registrant's 1994 Form 10-KSB.
Exhibit 27 - Financial Data Schedule
SIGNATURES
Pursuant to the requirements 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.
Earth Sciences, Inc.
Registrant
Date: October 27, 1995 /s/ Mark H. McKinnies
Mark H. McKinnies
President and Chief
Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 180
<SECURITIES> 0
<RECEIVABLES> 164
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 860
<PP&E> 16726
<DEPRECIATION> 4824
<TOTAL-ASSETS> 12762
<CURRENT-LIABILITIES> 62
<BONDS> 622
0
0
<COMMON> 63
<OTHER-SE> 2051
<TOTAL-LIABILITY-AND-EQUITY> 12762
<SALES> 0
<TOTAL-REVENUES> 767
<CGS> 0
<TOTAL-COSTS> 665
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 61
<INCOME-PRETAX> 102
<INCOME-TAX> 0
<INCOME-CONTINUING> 102
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 102
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
