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 June 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
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(State of other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
910 12th Street, Golden, Colorado 80401
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(Address of principal executive offices) (Zip Code)
(303)279-7641
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(Issuer's telephone number)
Not Applicable
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(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 July 28, 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
June 30, 1995
<CAPTION>
UNAUDITED
Assets (amounts in thousands)
<S>
Current assets: <C>
Cash, and cash equivalents $ 342
Certificates of deposit 285
Receivables 155
Prepaid expenses and other 47
------
Total current assets 829
Property, plant and equipment, at cost 16,417
Less accum. depr. and amort. (4,677)
------
Net property and equipment 11,740
------
$12,569
======
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable and current
installments of long-term debt $ 14
Accounts payable 4
Accrued expenses 48
------
Total current liabilities 66
Long-Term Liabilities:
Deferred revenues 9,382
Long-term debt, excluding current installments 716
Other liabilities 407
Accrued decommissioning liability 219
------
10,724
Stockholders' equity:
Common stock $.01 par value 64
Additional paid-in capital 6,392
Retained deficit (2,816)
Cumulative translation adjustments (1,860)
Treasury stock (1)
------
Total stockholders' equity 1,779
------
$12,569
======
</TABLE>
See accompanying notes.
<TABLE>
Earth Sciences, Inc. and Subsidiaries
Consolidated Statements of Operations
Three and Six Months Ended June 30, 1995 and 1994
UNAUDITED
<CAPTION> 1995 1994
Qtr. 6 Mos. Qtr. 6 Mos.
(amounts in thousands)
<S> <C> <C> <C> <C>
REVENUES:
Royalty income $ 246 474 252 484
Other 15 25 9 18
----- ---- ---- -----
261 499 261 502
----- ---- ---- -----
EXPENSES:
Operating 76 157 71 160
General and administrative 70 150 95 185
Interest expense 21 42 28 57
Depreciation and amortization 58 115 56 111
----- ---- ---- -----
225 464 250 513
----- ---- ---- -----
Net earnings (loss) $ 36 35 11 (11)
===== ==== ===== =====
Net earnings (loss) per
common share $ .01 .01 .00 (.00)
===== ==== ==== =====
Weighted average common
shares outstanding 6,355,456 6,264,988
========= =========
6,355,456 5,904,522
========= =========
</TABLE>
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<TABLE>
Earth Sciences, Inc. and Subsidiaries
Consolidated Statements of Accumulated Deficit
Six Months Ended June 30, 1995 and 1994
UNAUDITED
<CAPTION> 1995 1994
(amounts in thousands)
<S> <C> <C>
Retained deficit as of January 1 $ (2,851) (2,684)
Net earnings (loss) for the period 35 (11)
----- -----
Retained deficit as of June 30 $ (2,816) (2,695)
===== =====
</TABLE>
See accompanying notes.
<TABLE>
Earth Sciences, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 1995 and 1994
UNAUDITED
<CAPTION> 1995 1994
(amounts in thousands)
<S> <C> <C>
Cash flows from operating activities:
Cash received from customers $ 464 544
Cash paid to suppliers and employees (317) (344)
Dividends and interest received 13 5
Interest paid (21) (36)
----- -----
Net cash provided (used)
by operating activities 139 169
----- -----
Cash flows from financing activities:
Collection on notes receivable 130 60
Notes receivable funded (130) (60)
Capital expenditures (9) (62)
Payments on notes and long-term debt (111) (125)
----- -----
Net cash used (120) (187)
----- -----
Cash flow from investing activities:
Sale of common stock - 483
----- -----
Net increase (decrease) in cash and
cash equivalents 19 465
Cash and cash equivalents at beginning
of period 323 66
----- -----
Cash and equivalents at end of period $ 342 531
===== =====
Reconciliation of net loss to net cash
provided by operating activities:
Net earnings (loss) $ 35 (11)
Adjustments to reconcile net loss
to net cash used in operations:
Depreciation and amortization 115 111
(Increase) decrease in receivables (21) 52
Increase in other assets (4) 9
Increase in payables 14 8
----- -----
Net cash provided (used) by
operating activities $ 139 169
===== =====
</TABLE>
See accompanying notes.
Earth Sciences, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
June 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. In the first half of 1994,
a total of $483,000 was raised from Regulation S offerings to
foreign investors and the private placement of stock. Additional
private placements and private borrowing may be evaluated to fund
increased activities in Venezuela 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 late in 1995. 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 $139,000 for the first half
of 1995 as compared to $169,000 for the same period in 1994. Cash
flow from investing activities included funding and collection on
notes receivable of $130,000, capital expenditures of $9,000 and
repayments on notes and long-term debt of $111,000.
Results of Operations
Total revenues for the 1st half of 1995 were approximately
equal to the same period in 1994. Gold prices and total ounces
produced were somewhat lower (35,200 oz. in 1995 vs. 35,300 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 half of 1995 were somewhat less then for
the same period in 1994 due primarily to costs incurred in the sale
of stock in 1994 not reoccurring in 1995.
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: July 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 342
<SECURITIES> 0
<RECEIVABLES> 155
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 829
<PP&E> 16417
<DEPRECIATION> 4677
<TOTAL-ASSETS> 12569
<CURRENT-LIABILITIES> 66
<BONDS> 716
0
0
<COMMON> 64
<OTHER-SE> 1715
<TOTAL-LIABILITY-AND-EQUITY> 12569
<SALES> 0
<TOTAL-REVENUES> 499
<CGS> 0
<TOTAL-COSTS> 422
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 42
<INCOME-PRETAX> 35
<INCOME-TAX> 0
<INCOME-CONTINUING> 35
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
