U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB/A
AMENDMENT #1 TO PART I, ITEM 1
(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, 1998
__________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 reports 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 the latest practicable date: 21,893,739 Shares of
Common Stock, one cent par value outstanding as of November 6, 1998.
Transitional Small Business Disclosure Format: Yes______ ; No X
1
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FINANCIAL STATEMENTS
Earth Sciences, Inc. and Subsidiaries
Consolidated Balance Sheet
September 30, 1998
UNAUDITED
Assets (amounts in thousands)
Current assets:
Cash, and cash equivalents $ 451
Trade receivables, net of allowance for
doubtful accounts of $6 735
Inventories 655
Prepaid expenses and other 88
-----
Total current assets 1,929
Property, plant and equipment, at cost 21,116
Less accum. depreciation and amortization (5,355)
------
Net property and equipment 15,761
Other assets:
Goodwill, net of accum. amortization of $150 3,099
Other, net of accum. amortization of $1 68
------
Total other assets 3,167
------
Total Assets $20,857
======
Liabilities and Stockholders' Equity
Current liabilities:
Account payable and notes payable $ 1,026
Accrued salaries, wages and benefits 279
Other accrued liabilities 447
Billings in excess of costs on uncompleted contracts 123
Current portion of long-term debt 86
-----
Total current liabilities 1,961
Long-term debt, due after one year 225
Long-term liabilities:
Extraction plant liability 4,850
Convertible debentures - related party 1,000
Other liabilities 364
-----
6,214
Stockholders' equity:
Common stock $.01 par value 219
Additional paid-in capital 24,011
Accumulated deficit (11,773)
------
Total stockholders' equity 12,457
------
Total Liabilities and Stockholders' Equity $20,857
======
See accompanying notes.
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Earth Sciences, Inc. and Subsidiaries
Consolidated Statements of Operations
Three and Nine Months Ended September 30, 1998 and 1997
UNAUDITED
1998 1997
(amounts in thousands, except shares and per share amounts)
3 Mos. 9 Mos. 3 Mos. 9 Mos.
NET REVENUES:
Sales $ 813 3,901 591 826
Other 136 253 11 102
----- ----- ---- ----
Total 949 4,154 602 928
COSTS AND EXPENSES:
Operating 1,045 4,263 1,004 1,446
General and administrative 665 2,531 726 1,330
Depreciation and amort. 172 546 121 247
----- ----- ----- -----
Total expenses 1,882 7,340 1,851 3,023
----- ----- ----- -----
OPERATING LOSS ( 933) (3,186) (1,249) (2,095)
OTHER INCOME (EXPENSE):
Interest expense (53) (1,138) (690) (1,974)
Minority interest in loss
of subsidiary - 3 95 143
----- ----- ----- -----
(53) (1,135) (595) (1,831)
----- ----- ----- -----
NET LOSS $ ( 986) (4,321) (1,844) (3,926)
===== ===== ===== =====
NET LOSS PER COMMON SHARE
(Basic and Diluted) $ (.05) (.22) (.21) (.45)
===== ===== ===== =====
WEIGHT AVERAGE COMMON SHARES
OUTSTANDING 21,844,000 19,456,000 8,896,000 8,732,000
========== ========== ========= =========
- --------------------------------------------------------------------------------
Earth Sciences, Inc. and Subsidiaries
Consolidated Statements of Accumulated Deficit
Nine Months Ended September 30, 1998 and 1997
UNAUDITED
1998 1997
(amounts in thousands)
Accumulated deficit as of January 1 $ (7,452) (2,721)
Net loss for the period (4,321) (3,926)
------- ------
Accumulated deficit as of September 30 $ (11,773) (6,647)
====== =====
See accompanying notes.
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Earth Sciences, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 1998 and 1997
UNAUDITED
1998 1997
(amounts in thousands)
Cash flows from operating activities:
Net loss $ (4,321) $ (3,926)
Adjustments to reconcile net loss to net cash
used in operations:
Depreciation and amortization 546 247
Interest expense related to debt discount 1,063 1,801
Expenses paid with stock 218 23
Gain on sale of building (188) -
Sale of marketable securities - 1,135
Change in operating assets and liabilities 611 (1,181)
----- -----
Net cash used by operating activities (2,071) (1,901)
Cash flows from investing activities:
Collection on notes receivable - 50
Notes receivable funded - (50)
Proceeds from sale of building 345 -
Capital expenditures (922) (2,857)
Purchase of investment in ADA - (1,503)
Net decrease (increase) in other assets
and liabilities 183 (736)
----- -----
Net cash used by investing activities (394) (5,096)
Cash flows from financing activities:
Payments on notes and long-term debt (500) -
Proceeds from issuance of common stock - 42
Proceeds from convertible debentures and
notes payable 3,084 6,685
----- -----
Net cash provided by financing activities 2,584 6,727
----- -----
Net decrease in cash and cash equivalents 119 (270)
Cash and cash equivalents at beginning of period 332 586
----- -----
Cash and equivalents at end of period $ 451 $ 316
===== =====
Supplemental Schedule of Cash Flow Information:
Cash payments for interest $ 27 $ 46
==== ====
Conversion of notes payable and debentures $ 9,188 $ 76
===== ====
See accompanying notes.
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Earth Sciences, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
September 30, 1998
(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 1997 Form 10-KSB.
(2) Acquisition of ADA Environmental Solutions
On April 30, 1997, Registrant acquired a 51% interest in ADA Environmental
Solutions LLC ("ADA") through the purchase of an additional 46.2% interest from
ADA. Registrant had previously purchased a 4.8% interest in ADA in February
1997 by payment to ADA of $400,000. The 46.2% interest was purchased by payment
to ADA of $500,000 and a non-interest bearing promissory note in the amount of
$1,600,000. Registrant exercised its option to acquire the remaining 49%
interest in ADA on May 11, 1998 by issuance of 1,715,596 shares of Registrant's
common stock in exchange for all the outstanding stock of ADA-ES, Inc., a
Colorado corporation, whose only asset was the remaining 49% interest in ADA.
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: November 16, 1998 /s/ Mark H. McKinnies
Mark H. McKinnies
President and Chief Financial Officer
