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 March 31,
__ TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE 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 April 26, 1996: 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
March 31, 1996
<CAPTION>
UNAUDITED
Assets (amounts in thousands)
<S> <C>
Current assets:
Cash, and cash equivalents $ 560
Certificates of deposit 190
Receivables 145
Prepaid expenses and other 57
-----
Total current assets 952
Property, plant and equipment, at cost 16,583
Less accum. depr. and amort. (4,894)
------
Net property and equipment 11,689
------
$12,641
======
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable and current
installments of long-term debt $ 10
Accounts payable 3
Accrued expenses 64
------
Total current liabilities 77
Long-Term Liabilities:
Deferred revenues 9,382
Long-term debt, excluding current
installments 578
Other liabilities 441
Accrued decommissioning liability 221
------
10,622
Stockholders' equity:
Common stock $.01 par value 63
Additional paid-in capital 6,392
Retained deficit (2,749)
Cumulative translation adjustments (1,763)
Treasury stock (1)
------
Total stockholders' equity 1,942
------
$12,641
======
</TABLE>
See accompanying notes.
<TABLE>
Earth Sciences, Inc. and Subsidiaries
Consolidated Statements of Operations
Three Months Ended March 31, 1996 and 1995
UNAUDITED
<CAPTION> 1996 1995
(amounts in thousands)
<S> <C> <C>
REVENUES:
Royalty income $ 207 228
Other 8 10
---- ----
215 238
---- ----
EXPENSES:
Operating 83 81
General and administrative 94 80
Interest expense 17 21
Depreciation and amortization 57 57
---- ----
251 239
---- ----
Net loss $ (36) (1)
==== ====
Net loss per common share $ (.01) (.00)
==== ====
Weighted average common
shares outstanding 6,355,456 6,355,456
========= =========
</TABLE>
See accompanying notes.
<TABLE>
Earth Sciences, Inc. and Subsidiaries
Consolidated Statements of Accumulated Deficit
Three Months Ended March 31, 1996 and 1995
UNAUDITED
<CAPTION> 1996 1995
(amounts in thousands)
<S> <C> <C>
Retained deficit as of January 1 $ (2,713) (2,851)
Net loss for the period (36) (1)
------- -------
Retained deficit as of March 31 $ (2,849) (2,852)
====== ======
</TABLE>
See accompanying notes.
<TABLE>
Earth Sciences, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 1996 and 1995
UNAUDITED
<CAPTION> 1996 1995
(amounts in thousands)
<S> <C> <C>
Cash flows from operating activities:
Cash received from customers $ 286 236
Cash paid to suppliers and employees (188) (172)
Dividends and interest received 4 4
Interest paid (6) (11)
---- ----
Net cash provided (used)
by operating activities 96 57
---- ----
Cash flows from financing activities:
Collection on notes receivable - 60
Notes receivable (70) (60)
Capital expenditures (11) (5)
Collection on certificates of deposit 285 -
Payments on notes and long-term debt (2) (58)
---- ----
Net cash provided (used) 202 (63)
Net increase (decrease) in cash and
cash equivalents 298 (6)
Cash and cash equivalents at beginning
of period 262 323
---- ----
Cash and equivalents at end of period $ 560 317
==== ====
Reconciliation of net loss to net cash
provided by operating activities:
Net loss $ (36) (1)
Adjustments to reconcile net loss
to net cash used in operations
Depreciation and amortization 57 57
(Increase) decrease in receivables 74 (2)
Increase in other assets (2) (10)
Increase in payables 3 13
---- ----
Net cash provided (used) by
operating activities $ 96 57
==== ====
</TABLE>
See accompanying notes.
Earth Sciences, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
March 31, 1996
(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 1995 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 through the second quarter
of 1997. Public and private placements of stock and private
borrowings may be evaluated to fund increased activities in
Venezuela and 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 the fall of 1996. The search for
financing is proceeding and final engineering and permitting are
underway.
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 public and private placements of stock and joint
venture arrangements, if appropriate.
Cash flow from operations totaled $96,000 for the first
quarter of 1996 as compared to $57,000 for the same period in 1995.
Cash flow from investing activities included funding of a note
receivable of $70,000, capital expenditures of $11,000 and
repayments on notes and long-term debt of $2,000.
Results of Operations
Total revenues for the 1st quarter of 1996 were somewhat lower
than the same period in 1995. Whereas gold prices were
approximately equal, total ounces produced were lower
(15,400 oz. in 1996 vs. 17,100 in 1995) 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 quarter of 1996 were somewhat higher than
for the same period in 1995 due primarily to increased activity in
Calgary as efforts toward the re-start of the extraction facility
gain pace.
PART II. OTHER INFORMATION
Item 1.Legal Proceedings
Reported in Item 3 of Registrant's 1995 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 1995 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: April 26, 1996 /s/ Mark H. McKinnies
Mark H. McKinnies
President and Chief
Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 560
<SECURITIES> 0
<RECEIVABLES> 145
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 952
<PP&E> 16583
<DEPRECIATION> 4894
<TOTAL-ASSETS> 12641
<CURRENT-LIABILITIES> 77
<BONDS> 578
0
0
<COMMON> 63
<OTHER-SE> 1942
<TOTAL-LIABILITY-AND-EQUITY> 12641
<SALES> 0
<TOTAL-REVENUES> 215
<CGS> 0
<TOTAL-COSTS> 234
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17
<INCOME-PRETAX> (36)
<INCOME-TAX> 0
<INCOME-CONTINUING> (36)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (36)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
