SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 10 OR 15(d) OF THE EXCHANGE ACT
Commission File Number 0-3926
ANTARES RESOURCES CORPORATION
(Exact name of small business issuer as specified in its charter)
New York 13-1950459
(State or other jurisdiction (I.R.S. Identification number)
of incorporation or organization)
2345 Friendly Road, Fernandina Beach, Florida 32034
(address of principal executive offices)
(904)261-8607
(Issuer's Telephone Number, Including Area Code)
(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
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
Outstanding Equity Securities at August 9, 1996
Class of Securities Outstanding Shares
Common Stock, .001 par value, 24,253,972 shares
Preferred Stock, .01 par value
Series B ($ 2.50 Liquidation Preference) 126,000 shares
Transitional Small Business Disclosure Format
Yes X No
ANTARES RESOURCES CORPORATION
Index to Quarterly Report on Form 10-QSB
For the Quarter Ended June 30, 1996
Part 1. FINANCIAL INFORMATION
Page Number
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 1996
and September 30, 1995. 3-4
Consolidated Statements of Operations for the three and nine month
periods ended June 30, 1996 and 1995. 5-6
Consolidated Statements of Cash Flows
for the nine month periods ended June 30, 1996 and 1995. 7
Notes to Consolidated Financial Statements. 8-11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. 12-15
Signature Page 15
Part II. Other information
Item 1. Legal Proceedings
Reference is made to Note 5 on Page 9 of the Consolidated Financial Statements.
Item 2. Changes in Securities
(Non Applicable)
Item 3. Defaults upon Senior Securities
(Non Applicable)
Item 4. Submission of Matters to a Vote of Security Holders
(Non Applicable)
Item 5. Other Information
(Non Applicable)
Item 6. Exhibits and Reports on Form 8-K
(None)
Item 6a. EX-27 Financial Data Schedule
ANTARES RESOURCES CORPORATION AND SUBSIDIARIES
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION> June 30, September 30,
<S> <C> <C>
ASSETS 1996 1995
(Unaudited)
Current assets:
Cash and equivalents $ 844,176 $6,120,164
Accounts receivable, net of allowance for doubtful
accounts of $10,000 in June and $0 in September 214,616 69,872
Current portion of stockholder loans receivable 65,504 24,019
Inventories 1,107,002 0
Prepaid expenses 6,874 17,657
Total current assets 2,238,172 6,231,712
Property and equipment:
Real estate held for development 1,767,062 1,754,245
Leasehold improvements 35,604 0
Machinery and equipment 331,836 51,506
Displays and racks 0 0
Vehicles 128,840 29,085
Office equipment 45,441 23,196
-------------------- --------------------
2,308,783 1,858,032
Less accumulated depreciation (69,669) (15,947)
-------------------- --------------------
2,239,114 1,842,085
-------------------- --------------------
Net assets of discontinued segment 1,774,479 750,253
-------------------- --------------------
Other assets:
Investments 1,002,500 2,500
Stockholder loans receivable, net of current portion 83,373 34,477
Contract rights 2,900,000 2,900,000
Intangibles, net of amortization 156,797 0
Deferred financing costs 30,000 30,000
Deferred acquisition costs 0 44,167
-------------------- -------------------- 4,172,670 3,011,144
-------------------- --------------------
$10,424,435 $11,835,194
======== ========
</TABLE>
<PAGE>
ANTARES RESOURCES CORPORATION AND SUBSIDIARIES
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
<S> <C> <C>
June 30, September 30,
LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1995
Unaudited)
Current liabilities:
Current maturities of long-term debt $ 27,852 $4,878
Current portion of capital lease obligation 36,678 35,068
Current portion of subordinated debt 200,000 350,000
Accounts payable and accrued expenses 555,627 178,552
Due to stockholders 0 8,505
Payroll taxes payable 48,999 23,088
---------------- --------------- Total current liabilities 869,156 600,091
Long-term debt, net of current maturities 37,298 17,910
Capital lease obligation, net of current portion 368,643 396,357
Subordinated debt, net of current portion 100,000 250,000
- ---------------- ---------------- 1,375,097 1,264,358
-------------------- --------------------
Stockholders' equity:
Preferred stock, $.01 par value
5,000,000 shares authorized
Series A - 100,000 shares issued 1,000
Series B - 126,000 shares issued and
outstanding in June 1,260
Series B - 135,000 shares issued and
outstanding in September 1,350
Common stock, $.001 par value
200,000,000 shares authorized
24,253,972 shares issued and outstanding in June 24,254
12,209,988 shares issued and outstanding in September 12,210
Additional paid-in capital 14,021,092 13,455,772
Accumulated deficit (4,680,168) (2,899,496)
-------------------- -------------------- 9,366,438 10,570,836
Less stock subscriptions receivable (317,100) -
-------------------- -------------------- 9,049,338 10,570,836
-------------------- -------------------- $10,424,435 $11,835,194
======== ============
</TABLE>
<PAGE>
ANTARES RESOURCES CORPORATION AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
<S> <C> <C>
Nine months ended June 30, 1996 1995*
(Unaudited) (Unaudited)
Revenues:
Alternative fuel $791,608 $706,813
Trailer sales 1,180,333 0
Waste disposal 0 279,914
1,971,941 986,727
Cost of revenues:
Alternative fuel 505,885 441,431
Trailer sales 1,207,336 0
Waste disposal 0 196,846
1,713,221 638,277
Gross profit 258,720 348,450
Selling expenses 29,439 0
General and administrative expenses 1,182,810 487,552
Project development expenses 101,774 68,890
1,314,023 556,442
Loss from operations (1,055,303) (207,992)
Other expenses (income):
Interest expense 67,732 54,910
Interest income (134,128) 0
(Gain) loss on sale of assets (14,851) 58,644
(81,247) 113,554
Loss from continuing operations (974,056) (321,546)
Discontinued operations:
Loss from operations (796,616) (298,348)
Estimated loss on disposal (10,000) 0
(806,616) (298,348)
Loss before cumulative effect of change in marketable
securities accounting principle (1,780,672) (619,894)
Cumulative effect on prior years of change in marketable
securities accounting principle - 2,500
Net loss $(1,780,672) $(617,394)
Net loss per common share ($0.05) ($0.16)
Weighted average number of common shares outstanding 19,401,600 3,873,353
</TABLE>
* Activities of operating subsidiaries are for the six-month period from January
1, 1995 (date of acquisition) through June 30, 1995.<PAGE>
ANTARES RESOURCES CORPORATION AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
<S> <C> <C>
Three months ended June 30, 1996 1,995
(Unaudited) (Unaudited)
Revenues:
Alternative fuel $238,768 $323,787
Trailer sales 807,381 0
Waste disposal 0 111,280
1,046,149 435,067
Cost of revenues:
Alternative fuel 162,976 191,373
Trailer sales 776,438 0
Waste disposal 0 78,764
939,414 270,137
Gross profit 106,735 164,930
Selling expenses 14,106 0
General and administrative expenses 332,186 247,871
Project development expenses 24,471 68,890
370,763 316,761
Loss from operations (264,028) (151,831)
Other expenses (income):
Interest expense 28,227 30,188
Interest income (29,127) 0
(Gain) loss on sale of assets (2,416) 58,644
(3,316) $88,832
Loss from continuing operations (260,712) (240,663)
Discontinued operations:
Loss from operations (501,164) (117,809)
Estimated loss on disposal (10,000) 0
(511,164) (117,809)
Net loss $(771,876) $(358,472)
Net loss per common share ($0.03) ($0.05)
Weighted average number of common shares outstanding 23,446,181 6,887,738
</TABLE>
<PAGE>
<TABLE>
Consolidated Statement of Cash Flows <CAPTION>
<S> <C> <C> Nine months ended June 30,
1996 1995
(Unaudited) (Unaudited)
Cash flows from operating activities:
Net loss $(1,780,672) $(617,394)
Adjustments to reconcile net loss to net cash used in operating activities:
Cumulative effect on prior years of change in marketable
securities accounting principle 0 (2,500)
Depreciation and amortization 125,540 42,156
Bad debts 174,917 23,897
(Gain) loss on sale of assets (14,851) 58,644
Estimated loss on disposal of discontinued segment 10,000
Operating expenses and liabilities paid by and accrued to stockholders 0 261,508
Change in assets and liabilities (Increase) decrease in accounts receivable
(154,744)(127,116)
(Increase) decrease in inventories (995,121) 175,515
(Increase) decrease in prepaid expenses 10,783 (7,756)
(Increase) decrease in net operating assets of discontinued segment (1,132,477)
(Increase) decrease in deferred acquisition costs 0 (43,717)
Increase (decrease) in accounts payable & accrued expenses 371,245 28,611
Increase (decrease) in payroll taxes payable 25,911 12,397
Increase (decrease) in accrued financing charges payable 0 227,500
Total adjustments (1,578,797) 649,139
Net cash used in operating activities (3,359,469) 31,745
Cash flows from investing activities: Acquisition costs (195,443)(55,670)
Capital expenditures (316,375) (61,245)
Proceeds from sale of property and equipment 12,435 30,643
Loans to stockholders (112,123) 0
Principal payments from note receivable 4,225 181
Investment (1,000,000) 0
Net cash used in investing activities (1,607,281) (86,091)
Cash flows from financing activities:
Principal payments under loan agreements (314,633) (32,200)
Proceeds from financing agreements 0 139,000
Principal payments under capital lease obligations (26,104) (11,063)
Proceeds from stockholder loans 0 15,500
Proceeds from issuance of capital stock and options 31,499 103,555
Net cash provided by (used in) financing activities (309,238) 214,792
Net (decrease) increase in cash (5,275,988) 160,446
Cash at beginning of period 6,120,164 0
Cash at end of period $ 844,176 $ 160,446
</TABLE>
ANTARES RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996
(unaudited)
Note 1. Unaudited Interim Financial Statements
The accompanying unaudited financial statements have been prepared in
accordance with the instructions for Form 10-QSB and do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments, consisting only of normal recurring adjustments considered
necessary for a fair presentation, have been included. Operating results for
any quarter are not necessarily indicative of the results for any quarter or
for the full year. These statements should be read in connection with the
financial statements of Antares Resources Corporation and notes thereto
included in the Antares Resources Corporation Company's (the Company) Annual
Report on Form 10KSB for the year ended September 30, 1995 and the Company's
Proxy Statement dated January 26, 1996.
Note 2. History and business activity
The Company was incorporated in the State of New York on November 19, 1958,
and had several name changes reflecting its prior business operations until
December 20, 1983, at which time the Company changed its name to Antares
Resources Corporation. Prior to the business combination which took place
January 1,1995, the Company had not conducted any material business operation
since 1984. Antares Resources Corporation is a publicly held company whose
stock is listed on the NASDAQ Small Cap Market.
The Company has three operating subsidiaries. Empire Energy, Inc. is engaged
in the buying and selling of pine wood by-products used as fuel in the firing
boilers of paper mills. Caribbean Breeze International, Inc. is engaged in
the design, production and sale of sun and skin care products. Southern
Trailers Manufacturing, Inc. manufactures and sells utility, cargo and horse
trailers. A fourth subsidiary, Cherokee Sun Corp. (a development stage
company) has made arrangements to enter the kitty litter production business
as a supplier of the raw material, montmorillionite clay ( fuller's earth) in
bulk form or as finished product which has been processed and packaged with
private labels. A fifth subsidiary, Multi-Source Labs, Inc. acquired the
rights to produce and distribute a drink-holding adapter, "The Beverage Brat",
and assigned those rights to Caribbean Breeze International, Inc. Sales began
in the second quarter.
<PAGE>
Note 3. Business Combinations
On January 1, 1995, the company acquired the assets of Empire Energy, Inc.
("Old Empire"), and its affiliated Caribbean Breeze International, Inc. ("Old
Caribbean") and Cherokee Sun Corp. ("Old Cherokee"), in exchange for 1,000,000
shares of its .001 par value common stock, 100,000 shares of $10 convertible
preferred stock and $600,000 of 12% subordinate notes. In addition, Antares
Resources Corporation assumed certain liabilities of Old Empire, Old Caribbean
and Old Cherokee. The acquisition was accounted for as a purchase.
The acquisition included on the ongoing business, all tangible assets and
intangible assets including contract rights, customer lists, product formulas
and the agreement of certain shareholders not to compete with the business.
Note 4. Discontinued Operations
Effective June 30, 1996, the Company adopted a formal plan to dispose of its
Caribbean Breeze International sun and skin-care products business. The
Company is currently negotiating the terms of a proposed sale of the business.
Under the proposed terms, the sale would be effective July 1, 1996. The sale
will also include the assets of Multi-Source Labs, Inc. Multi-Source Labs,
Inc. has had no operations.
The results of the Caribbean Breeze International business have been reported
separately as discontinued operations in the consolidated statements of
operations. Consolidated financial statements for prior comparative periods
have been restated to present the Caribbean Breeze business as a discontinued
operation.
Net sales of Caribbean Breeze International, Inc. were $1,021,814 for the
nine-month period ended June 30, 1996 and $720,476 for the period form January
1, 1995 (date of acquisition) through June 30, 1995. Such amounts are not
included in net sales in the accompanying consolidated statements of
operations.
<TABLE>
Assets and liabilities of Caribbean Breeze International and Multi-Source Labs
to be disposed of consisted of the following:
<CAPTION>
<S> <C> <C>
June 30, 1996 September 30, 1995
Accounts receivable $ 387,301 $ -
Inventories 950,430 397,191
Other current assets 51,953 6,095
Property & Equipment, net 156,162 112,535
Intangible assets, net 310,000 285,000
Liabilities (81,367) (50,568)
Net assets of discontinued segment $1,774,479 $750,253
</TABLE>
<PAGE>
The net assets of the discontinued segment have been classified as a
non-current asset in the accompanying consolidated balance sheet.
Under the terms of the proposed sale, the Company will sell the net assets of
the discontinued segment for a note which would bear interest at prime plus
3/4% and would mature in August 1998. The note will be collateralized by the
assets of the Caribbean Breeze International business and by common stock of
Antares Resources Corporation having a value equal to the amount of the note
receivable.
Note 5. Stock Split
The Board of Directors declared a two-for-one forward split of the Company's
common stock, effective for stockholders of record on January 5, 1996. The
share distribution date was January 31, 1996.
Note 6. Legal Proceedings
On March 26, 1996, the Corporation settled its prior dispute with Avon
Products, Inc. wherein it was alleged by Avon that the Company's packaging of
its "Ultra 3-N-One Outdoor Protection" is confusingly similar to the packaging
of Avon's own products. In anticipation of the settlement and in accordance
with its terms, the Company has changed its packaging of its "Ultra 3-N-One
Outdoor Protection". The settlement did not involve the payment of any money
by the Corporation to Avon.
On April 15, 1996 the judgement against David Capps by a third party was
satisfied thereby releasing any lien on certain shares of Caribbean Breeze,
Inc. a predecessor to the Company's subsidiary Caribbean Breeze International,
Inc.
Note 6. Commitments
During April 1996 the Company entered into a contract to purchase
approximately 1300 acres of property located near Charleston, South Carolina
from the Dunes West Joint Venture subsidiary of Georgia Pacific Corp.
The Company paid a $250,000 refundable deposit against the $5,000,000 purchase
price. A joint venture partner is currently being sought to either develop
the property or purchase it from the Company.
During the quarter ended June 30, 1996, the contract was terminated and the
deposit was refunded with interest.
<PAGE>
Salary and Capital Resources
The Company continues to finance its operations primarily from the capital
infusion received in July of 1995. Accounts Receivable increased to $214,616
at June 30, 1996 from $69,872 at June 30, 1995. This increase came from
increased sales in Southern Trailers Manufacturing. Inventory was $1,107,002
at June 30, 1996 versus $0.00 at June 30, 1995. Again, Southern Trailers
Manufacturing added additional inventory to support sales growth.
Trends
Sales for the Company continue to increase with sales for the nine months
ended June 30, 1996 at $1,046,149 as compared to the $435,067 of sales
produced at the September 30, 1995 fiscal year end (9 months of operations), a
140% increase.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion should be read in conjunction with the Company's
Financial Statements and related notes.
Overview
Antares Resources is a holding company that conducts its operations through
its three operating subsidiaries, Caribbean Breeze International, Inc. (CBI),
Empire Energy, Inc. (EEI) and Southern Trailers Manufacturing, Inc.(STM).
Cherokee Sun Corporation (CSC) is a development stage subsidiary that is in
the process of trying to enter the kitty litter processing business, and
Multi-Source Labs is a non-operating subsidiary which holds the rights to all
non-suncare products. Effective July 1, 1996, the Company sold Caribbean
Breeze International, Inc. and Multi-Source Labs, Inc. to reduce losses and
expenses associated with the operation. A full discussion of the sale and
effects on Antares Resources Corporation will be presented later in this
analysis.
The principal business of Caribbean Breeze International is the
production, marketing and distribution of sun, skin care and sun block
products which it sells through a national network of independent distributors
and brokers. Empire Energy, Inc. engages in the buying and selling of wood
waste products used as fuel primarily by paper mills in Southeastern Georgia
and Northeast Florida.. Southern Trailers manufactures and sells horse
trailers, utility trailers and cargo trailers from its manufacturing
facility in Unadilla, Georgia.
Cherokee Sun Corporation continues to negotiate with major kitty
litter producers for a contract to produce product on a private label basis.
The following financial information and discussion will cover the
consolidated results of the Company's third quarter operations ending June 30,
1996, and the nine months ending June 30, 1996. The results will be compared
with the operating results for the second quarter and nine months ended June
30, 1995. The nine months ended June 30, 1995 contains operating results for
only six months of operations, because the parent company was inactive until
January 1, 1995. There are no comparative third quarter figures for
Southern Trailers, because it began operations as a manufacturer of trailers
in November of 1995.
Results of Operation
The following tables sets forth, for periods indicated, the percentage
of total revenues represented by certain items included in the Company's
Consolidated Statement of Operations. The information will be presented to
show Caribbean Breeze International, Inc. as a discontinued operation as if
the transaction had occurred September 30, 1995.
<TABLE>
EMPIRE ENERGY, INC.
<CAPTION>
3 Months Ended 6/30/96 3 Months Ended 6/30/95 9 Months Ended 6/30/96 9
Months Ended 6/30/95*
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1996 _%_ 1995 ___%_ 1996 ___%___ 1995 ___%___ Sales:
Alternative Fuel 238,768 100.00% 323,787 74.42% 791,608 100.00% 706,813 71.63%
Waste Disposal - 0 - 111,280 25.58% - 0 -__ 279,914 28.37%
Total Sales 238,768 100.00% 435,067 100.00% 791,608 100.00% 986,727 100.00%
Cost of Sales 162,976 68.26% 270,137 62.09% 505,885 63.91% 638,277 64.69%
Gross Profit 75,792 31.74% 164,930 37.91% 285,723 36.09% 348,450 35.31%
Selling Expenses - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 -
General & Admn. 53,710 22.49% 139,324 32.02% 212,707 26.87% 231,588 23.47%
</table?
* Represents six months of operations
<PAGE>
Revenues
Revenues for Empire Energy, Inc. were $238,767 for the quarter ended June 30,
1996, versus $435,067 for the quarter ended June 30, 1995. Included in the
$435,067 of sales was $111,280 from the sale of corregated waste product,
which was discontinued in October of 1995. Empire Energy, Inc. operates under
verbal agreements with paper mills in the South Georgia, North Florida market,
and these agreements set the selling price of bark. Due to a shortage of bark
available for sale by Empire Energy, Inc., sales for comparative product were
down by $85,020 for the quarter ended June 30, 1996, however, Empire Energy,
Inc. has generated new agreements that will increase revenues starting in July
of 1996.
Cost of Sales
Cost of Sales for Empire Energy, Inc. were up for the quarter ended
June 30, 1996, 68.20% versus 62.09% for the quarter ended June 30, 1995. The
shrinking margin reflects the results of an under-supply of bark on the market
available for sale by Empire Energy, Inc.
Selling General and Administrative
Selling General and Administrative expenses for the 3 months ended
June 30, 1996 were $53,710 versus $139,324 for the quarter ended June 30,
1995. This reduction came from a reduction in salaries and a reduction in the
number of workers, and a reallocation of corporate overhead from Empire
Energy, Inc. to other operating subsidiaries.
</TABLE>
<TABLE>
SOUTHERN TRAILERS MANUFACTURING , INC.
<CAPTION>
3 Months Ended 6/30/96 9 Months Ended 6/30/96**
<S> <C> <C> <C> <C>
1996 ___%___ 1996 ___%___
Sales 807,381 100.00% 1,180,333 100.00%
Cost of Sales 776,438 96.17% 1,207,336 102.29%
Gross Profit 30,943 3.83% (27,003) (2.29%)
Selling Expenses 14,106 1.75% 19,439 1.65%
Gen/Admn. Exp. 89,528 11.09% 332,879 28.20%
</TABLE>
**Represents seven and one-half months of operation
Revenues
Revenues for the quarter ended June 30, 1996 were $807,380. Southern
Trailers Manufacturing was not owned by Antares Resources Corporation in June
30, 1995: however, revenues were up by $470,931 over the quarter ended March
31, 1996. The plant is now fully operational and the ability to produce the
trailers in a timely manner was very positive in assisting the sales increase.
Cost of Sales
Cost of sales for Southern Trailer Manufacturing, Inc. were 96.17%,
which was down 21.85% form 118.02% in the quarter ended March 31, 1996. This
decrease was due to better purchasing of manufacturing materials and a higher
selling price on the trailers. The Company's goal is to bring this percentage
down to 75%, and to help reach this goal, selling prices were increased 5% and
the labor force was reduced by 10%.
<PAGE>
Selling, General and Administrative Expenses
Selling, General and Administrative Expenses for the quarter ended
June 30, 1996 were $103,634 versus $172,153 for the quarter ended March 31,
1996. This decrease came from reduction of the labor force and a reallocation
of some expenses to manufacturing overhead.
Profit/Loss
The quarter ended June 30, 1996, showed a net loss of $766,876, which
included a loss from the discontinued operation of Caribbean Breeze
International, Inc. of $521,164. The loss from continuing operations was
$245,712 versus a loss of 240,663 for the same quarter of 1995. The Parent
Company's expenses were up due to the addition of several employees since the
June 30, 1995 date.
Interest
Interest income was from investing excess funds and income on the
Preferred Stock investment. Interest expense was on subordinate debt.
Liquidity and Capital Resources
The Company continues to finance its operations primarily from the
capital infusion received in July of 1995. Accounts Receivable increased to
$214,616 at June 30, 1996 from $69,872 at June 30, 1995. This increase came
from increased sales in Southern Trailers Manufacturing. Inventory was
$1,107,002 at June 30, 1996 versus $0.00 at June 30, 1995. Again, Southern
Trailers Manufacturing added additional inventory to support sales growth.
Trends
Sales for the Company continue to increase with sales for the nine
months ended June 30, 1996 at $1,046,149 as compared to the $435,067 of sales
produced at the September 30, 1995 fiscal year end (9 months of operations), a
140% increase.
Disposition of Caribbean Breeze International, Inc.
DISCONTINUED OPERATIONS - Effective June 30, 1996, the Company adopted
a formal plan to dispose of its Caribbean Breeze International sun and
skin-care products business. The Company is currently negotiating the terms
of a proposed sale of the business. Under the proposed terms, the sale would
be effective July 1, 1996. The sale will also include the assets of
Multi-Source Labs, Inc. Multi-Source Labs, Inc. has had no operations.
The results of the Caribbean Breeze International business have been
reported separately as discontinued operations in the consolidated statements
of operations. Consolidated financial statements for prior comparative
periods have been restated to present the Caribbean Breeze business as a
discontinued operation.
Net sales of Caribbean Breeze International, Inc. were $1,021,814 for
the nine-month period ended June 30, 1996 and $720,476 for the period from
January 1, 1995 (date of acquisition) through June 30, 1995. Such amounts are
not included in net sales in the accompanying consolidated statements of
operations.
<TABLE>
Assets and liabilities of Caribbean Breeze International and
Multi-Source Labs to be disposed of consisted of the following:
<CAPTION>
<S> <C> <C>
June 30, 1996 September 30, 1995
Accounts Receivable $ 387,301 $ - 0 -
Inventories 950,430 397,191
Other Current Assets 51,953 6,095
Property & Equipment, Net 156,162 112,535
Intangible Assets, Net 310,000 285,000
Liabilities (81,367) __(50,568)__
Net Assets of
Discontinued Segment $1,774,479 $ 750,253
</TABLE>
The net assets of the discontinued segment have been classified as a
non-current asset in the accompanying consolidated balance sheet.
Under the terms of the proposed sale, the Company will sell the net
assets of the discontinued segment for a note which would bear interest at
prime plus 3/4% and would mature in August 1998. The note will be
collateralized by the assets of the Caribbean Breeze International business
and by common stock of Antares Resources Corporation having a value equal to
the amount of the note receivable. The stock will be re-valued and adjusted
each quarter. The sale will be to David Capps (President of
Caribbean Breeze International) and his employment contract with Antares
Resources Corporation will be terminated and he will resign as a Director of
the Parent Company.
Inflation
The Company does not believe that inflation had a material effect on the
results of operations for the three months or nine months ended June 30, 1996.
Forward-looking Statements
This quarterly report contains forward-looking statements
within the meaning of Section 27A of the Securities act and Section 21E of the
Securities Exchange Act of 1934. Such forward-looking statements may be
deemed to include the Company's plans to identify emerging trends and
industries, expand the range of services it offers; increase the number of its
company clients. Actual results could differ from those projected in any
forward-looking statements.
<PAGE>
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 of the
undersigned thereunto duly authorized.
ANTARES RESOURCES CORPORATION
(Registrant)
By:/s/William W. Perry, III
William W. Perry, III
President and Chief Executive Officer
(Duly Authorized Officer)
Dated: August 20, 1996
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
ANTARES RESOURCES CORPORATION
Financial Data Schedules
As of June 30, 1996 and for the nine-month period then ended
Article 5 of Regulation S-X
This schedule contains summary financial information extracted from the
condensed consolidated financial statements filed with Form 10QSB for the
quarterly period ended June 30, 1996 and is qualified in its entirety by
reference to such financial statements.
Item Description
<CAPTION>
<S> <C>
<PERIOD TYPE> 9-mos
<FISCAL YEAR END> SEP-30-96
<PERIOD END> JUN-30-96
Cash 844,176
Securities 0
Receivables 224,616
Allowances 10,000
Inventory 1,107,002
Current Assets 2,238,172
PP&E 2,308,783
Depreciation 69,669
Total Assets 10,424,435
Current Liabilities 869,156
Bonds 505,941
Preferred Mandatory 0
Preferred 1,260
Common stock 24,254
Other SE 9,023,824
Total-Liabilities-Equity 10,424,435
Sales 1,971,941
Total Revenues 1,971,941
CSG 1,713,221
Total Costs 1,713,221
Other-Expenses 1,314,023
Loss Provisions 0
Interest-Expense 67,732
Income-Pretax (974,056)
Income-Tax 0
Income-Continuing (974,056)
Discontinued (806,616)
Extraordinary 0
Cumulative 0
Net income or loss (1,780,672)
Earnings-Primary (0.05)
Earnings-Diluted 0
</TABLE>
