<PAGE>

================================================================================

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934.

                For the quarterly period ended September 30, 2002


Commission File Number 0-20945


                              ANTARES PHARMA, INC.

        A Minnesota Corporation                  IRS Employer ID No. 41-1350192


                       707 Eagleview Boulevard, Suite 414
                               Exton, Pennsylvania
                                      19341

                                 (610) 458-6200


                                   ----------


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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
                                       ---     ---

The number of shares outstanding of the Registrant's Common Stock, $.01 par
value, as of November 7, 2002, was 10,031,163.

================================================================================

<PAGE>

                              ANTARES PHARMA, INC.

                                      INDEX

                                                                            PAGE
                                                                            ----

PART I.      FINANCIAL INFORMATION

    ITEM 1.  Financial Statements (Unaudited)

             Consolidated Balance Sheets, as of December 31, 2001
             and September 30, 2002 ........................................  3

             Consolidated Statements of Operations for the three
             months and nine months ended September 30, 2001 and 2002 ......  4

             Consolidated Statements of Cash Flows for the nine
             months ended September 30, 2001 and 2002 ......................  5

             Notes to Consolidated Financial Statements ....................  6

    ITEM 2.  Management's Discussion and Analysis of Financial
             Condition and Results of Operations ........................... 16

    ITEM 3.  Quantitative and Qualitative Disclosures About
             Market Risk ................................................... 22

    ITEM 4.  Controls and Procedures ....................................... 23

PART II.     OTHER INFORMATION

    ITEM 6.  Exhibits and Reports on Form 8-K .............................. 24

             Signatures .................................................... 26



                                       2

<PAGE>

                              ANTARES PHARMA, INC.
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                    December 31,    September 30,
                                                                                        2001            2002
                                                                                    ------------    -------------
<S>                                                                                 <C>             <C>
                                     Assets

Current Assets:
       Cash .....................................................................   $  1,965,089    $    566,484
       Accounts receivable, less allowance for doubtful accounts of $18,000 .....        535,461         227,910
       VAT and other receivables ................................................        331,660          90,337
       Inventories ..............................................................        655,691         471,071
       Prepaid expenses and other assets ........................................         55,041         137,814
       Deferred financing costs .................................................           --           591,309
                                                                                    ------------    ------------
              Total current assets ..............................................      3,542,942       2,084,925

Equipment, furniture and fixtures, net ..........................................      1,924,675       1,665,090
Patent rights, net ..............................................................      2,464,336       2,647,498
Goodwill, net ...................................................................      3,095,355       3,095,355
Other assets ....................................................................        101,142         132,862
                                                                                    ------------    ------------

              Total Assets ......................................................   $ 11,128,450    $  9,625,730
                                                                                    ============    ============

                      Liabilities and Shareholders' Equity

Current Liabilities:
       Accounts payable .........................................................   $    637,794    $    487,575
       Accrued expenses and other liabilities ...................................      1,070,916         844,891
       Due to related parties ...................................................        243,692         641,877
       Convertible debentures ...................................................           --         1,407,096
       Capital lease obligations - current maturities ...........................         91,054         121,119
       Deferred revenue .........................................................      1,511,198       2,083,513
                                                                                    ------------    ------------
              Total current liabilities .........................................      3,554,654       5,586,071

Capital lease obligations, less current maturities ..............................        105,629          44,454
                                                                                    ------------    ------------
              Total liabilities .................................................      3,660,283       5,630,525
                                                                                    ------------    ------------

Shareholders' Equity:
       Series A Convertible Preferred Stock:  $0.01 par; authorized 10,000
          shares; 1,250 and 1,300 issued and outstanding at December 31, 2001 and
          September 30, 2002, respectively ......................................             13              13
       Common Stock:  $0.01 par; authorized 30,000,000 shares;
          9,161,188 and 9,798,231 issued and outstanding at
          December 31, 2001 and September 30, 2002, respectively ................         91,612          97,982
       Additional paid-in capital ...............................................     37,464,531      41,985,368
       Accumulated deficit ......................................................    (29,457,033)    (37,422,910)
       Deferred compensation ....................................................       (251,016)       (209,768)
       Accumulated other comprehensive loss .....................................       (379,940)       (455,480)
                                                                                    ------------    ------------
                                                                                       7,468,167       3,995,205
                                                                                    ------------    ------------
              Total Liabilities and Shareholders' Equity ........................   $ 11,128,450    $  9,625,730
                                                                                    ============    ============
</TABLE>

          See accompanying notes to consolidated financial statements.


                                       3

<PAGE>

                              ANTARES PHARMA, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                     For the Three Months Ended      For the Nine Months Ended
                                                            September 30,                  September 30,
                                                    ----------------------------    ----------------------------
                                                        2001            2002            2001            2002
                                                    ------------    ------------    ------------    ------------
<S>                                                 <C>             <C>             <C>             <C>
Revenues:
     Product sales ..............................   $    457,555    $  1,071,232    $  1,742,286    $  2,599,800
     Licensing and product development ..........        139,202         161,629         547,793         430,645
                                                    ------------    ------------    ------------    ------------
                                                         596,757       1,232,861       2,290,079       3,030,445

Cost of product sales ...........................        373,190         874,374       1,093,116       2,095,083
                                                    ------------    ------------    ------------    ------------
Gross margin ....................................        223,567         358,487       1,196,963         935,362
                                                    ------------    ------------    ------------    ------------

Operating Expenses:
     Research and development ...................        685,894         843,902       2,080,673       2,388,722
     In-process research and development ........           --              --           948,000            --
     Sales and marketing ........................        363,050         216,910       1,007,057         616,079
     General and administrative .................      1,334,437       1,248,611       3,719,477       3,864,388
                                                    ------------    ------------    ------------    ------------
                                                       2,383,381       2,309,423       7,755,207       6,869,189
                                                    ------------    ------------    ------------    ------------

Net operating loss ..............................     (2,159,814)     (1,950,936)     (6,558,244)     (5,933,827)
                                                    ------------    ------------    ------------    ------------

Other income (expense):
     Interest income ............................         44,667             628         202,851          10,595
     Non-cash interest expense for the intrinsic
       value of the beneficial conversion feature
       of convertible debentures ................           --        (1,720,000)           --        (1,720,000)
     Other interest expense .....................         (4,399)       (173,694)        (95,350)       (226,957)
     Foreign exchange losses ....................        (13,132)         (8,269)        (20,741)        (44,911)
     Other, net .................................        (24,212)            (82)        (18,076)           (777)
                                                    ------------    ------------    ------------    ------------
                                                           2,924      (1,901,417)         68,684      (1,982,050)
                                                    ------------    ------------    ------------    ------------

Net loss ........................................     (2,156,890)     (3,852,353)     (6,489,560)     (7,915,877)

In-the-money conversion feature-preferred
   stock dividend ...............................           --              --        (5,314,125)           --

Preferred stock dividends .......................           --              --           (50,000)        (50,000)
                                                    ------------    ------------    ------------    ------------

Net loss applicable to common shares ............   $ (2,156,890)   $ (3,852,353)   $(11,853,685)   $ (7,965,877)
                                                    ============    ============    ============    ============

Basic and diluted net loss per common share .....   $      (0.24)   $      (0.39)   $      (1.43)   $      (0.85)
                                                    ============    ============    ============    ============

Basic and diluted weighted average common
   shares outstanding ...........................      8,955,347       9,790,411       8,276,424       9,417,888
                                                    ============    ============    ============    ============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       4

<PAGE>
                              ANTARES PHARMA, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                             For the Nine Months Ended
                                                                                                   September 30,
                                                                                           ----------------------------
                                                                                               2001            2002
                                                                                           ------------    ------------
<S>                                                                                        <C>             <C>
Cash flows from operating activities:
     Net loss ..........................................................................   $ (6,489,560)   $ (7,915,877)
     Adjustments to reconcile net loss to net cash used in operating activities:
     Depreciation and amortization .....................................................        892,269         616,123
     Amortization of deferred financing costs ..........................................           --            94,331
     Loss on disposal and abandonment of assets ........................................         30,049            --
     In-process research and development ...............................................        948,000            --
     Interest expense for the intrinsic value of the beneficial conversion
       feature of convertible debentures ...............................................           --         1,720,000
     Stock-based compensation expense ..................................................         69,272         276,694
     Changes in operating assets and liabilities, net of effect of business acquisition:
       Accounts receivable .............................................................         (1,433)        307,551
       VAT and other receivables .......................................................        328,007         241,323
       Inventories .....................................................................       (376,022)        184,620
       Prepaid expenses and other assets ...............................................         (3,926)       (290,296)
       Accounts payable ................................................................       (860,150)       (150,219)
       Accrued expenses and other ......................................................       (395,854)       (168,137)
       Due to related parties ..........................................................          9,302        (108,960)
       Deferred revenue ................................................................          6,404         572,315
       Other ...........................................................................        (54,646)        (31,720)
                                                                                           ------------    ------------
Net cash used in operating activities ..................................................     (5,898,288)     (4,652,252)
                                                                                           ------------    ------------

Cash flows from investing activities:
     Purchases of equipment, furniture and fixtures ....................................       (390,270)       (149,346)
     Proceeds from sale of equipment, furniture and fixtures ...........................         91,699            --
     Additions to patent rights ........................................................        (98,255)       (228,132)
     Increase in notes receivable and due from Medi-Ject ...............................       (602,756)           --
     Acquisition of Medi-Ject, including cash acquired .................................        355,578            --
                                                                                           ------------    ------------
Net cash used in investing activities ..................................................       (644,004)       (377,478)
                                                                                           ------------    ------------

Cash flows from financing activities:
     Proceeds from loans from shareholders .............................................      1,188,199       2,500,000
     Proceeds from issuance of convertible debentures ..................................           --         1,400,000
     Principal payments on capital lease obligations ...................................       (148,273)        (93,157)
     Proceeds from issuance of common stock, net .......................................     10,048,249            --
                                                                                           ------------    ------------
Net cash provided by financing activities ..............................................     11,088,175       3,806,843
                                                                                           ------------    ------------

Effect of exchange rate changes on cash and cash equivalents ...........................       (413,180)       (175,718)
                                                                                           ------------    ------------

Net increase (decrease) in cash and cash equivalents ...................................      4,132,703      (1,398,605)
Cash and cash equivalents:
     Beginning of period ...............................................................        243,222       1,965,089
                                                                                           ------------    ------------
     End of period .....................................................................   $  4,375,925    $    566,484
                                                                                           ============    ============

Supplemental cash flow information:
     Cash paid during the period for interest ..........................................   $     95,350    $     21,312
</TABLE>
----------
Schedule of non-cash investing and financing activities: See information
regarding non-cash investing and financing activities in Notes 1, 2, 7 and 8.

           See accompanying notes to consolidated financial statements


                                       5

<PAGE>

                              ANTARES PHARMA, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)
                          September 30, 2001 and 2002

1.   Basis of Presentation

     The accompanying unaudited financial statements have been prepared in
     accordance with generally accepted accounting principles for interim
     financial information and with the instructions to Form 10-Q and Article 10
     of Regulation S-X. Accordingly, they do not include all of the information
     and footnotes required by accounting principles generally accepted in the
     United States of America for complete financial statements. In the opinion
     of management, all adjustments (consisting of normal recurring accruals)
     considered necessary for a fair presentation have been included. The
     accompanying financial statements and notes should be read in conjunction
     with our Annual Report on Form 10-K (as amended on Form 10-K/A on September
     19, 2002 and October 9, 2002) for the year ended December 31, 2001.
     Operating results for the nine-month period ended September 30, 2002, are
     not necessarily indicative of the results that may be expected for the year
     ending December 31, 2002.

     The Company has identified certain of its significant accounting policies
     that it considers particularly important to the portrayal of the Company's
     results of operations and financial position and which may require the
     application of a higher level of judgment by the Company's management, and
     as a result are subject to an inherent level of uncertainty. These are
     characterized as "critical accounting policies" and address revenue
     recognition and inventory reserves, each more fully described under
     "Management's Discussion and Analysis of Financial Condition and Results of
     Operations" in the Company's Annual Report on Form 10-K for the year ended
     December 31, 2001. The Company has made no changes to these policies during
     2002. In addition to these policies, management has identified the
     following accounting policy as one that is critical to the presentation of
     the consolidated financial statements.

     Valuation of Long-Lived and Intangible Assets and Goodwill

     The Company assesses the impairment of identifiable intangibles, long-lived
     assets and goodwill at least annually, and whenever events or changes in
     circumstances indicate that the carrying value may not be recoverable. If
     it is determined that the carrying value of intangibles, long-lived assets
     or goodwill may not be recoverable, impairment is measured based on a
     projected discounted cash flow method using a discount rate determined by
     management to be commensurate with the risk inherent in the Company's
     business model or another valuation technique. Net intangible assets,
     long-lived assets and goodwill totaled $7,407,943 as of September 30, 2002.
     The Company is required to at least annually assess the recoverability of
     its intangible assets, or more frequently if certain conditions occur. The
     Company will assess recoverability during the quarter ended December 31,
     2002.

     On January 31, 2001, Medi-Ject Corporation, now known as Antares Pharma,
     Inc. ("Antares" or "the Company") purchased from Permatec Holding AG
     ("Permatec") all of the outstanding shares of Permatec Pharma AG, Permatec
     Technology AG, and Permatec NV (the "Share Transaction"). In exchange,
     Antares issued 2,900,000 shares of Antares common stock to Permatec. Upon
     the issuance, Permatec and its affiliates owned approximately 67% of the
     outstanding shares of Antares common stock. For accounting purposes,
     Permatec is deemed to have acquired Antares. The acquisition has been
     accounted for by the purchase method of accounting.


                                       6

<PAGE>
                              ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
                          September 30, 2001 and 2002

1.   Basis of Presentation (Continued)

     Upon closing of the Share Transaction on January 31, 2001, the full
     principal amount of Permatec's shareholders' loans to the three Permatec
     subsidiaries which were included in the Share Transaction, of $13,069,870,
     was converted to equity.

     Also on January 31, 2001, promissory notes issued by Medi-Ject to Permatec
     between January 25, 2000 and January 15, 2001, in the aggregate principal
     amount of $5,500,000, were converted into Series C Convertible Preferred
     Stock ("Series C"). Permatec, the holder of the Series C stock, immediately
     exercised its right to convert the Series C stock, and Antares issued
     2,750,000 shares of common stock to Permatec, as nominee for Dr. Jacques
     Gonella, upon such conversion. Also on that date, the name of the
     corporation was changed to Antares Pharma, Inc.

     The total consideration paid, or purchase price, for Medi-Ject was
     $6,889,974, which represents the fair market value of Medi-Ject and related
     transaction costs of $480,095. For accounting purposes, the fair value of
     Medi-Ject is based on the 1,424,729 shares of Medi-Ject common stock
     outstanding on January 25, 2000, at an average closing price three days
     before and after such date of $2.509 per share plus the estimated fair
     value of the Series A convertible preferred stock and the Series B
     mandatorily redeemable convertible preferred stock plus the fair value of
     outstanding stock options and warrants representing shares of Medi-Ject
     common stock either vested on January 25, 2000, or that became vested at
     the close of the Share Transaction plus the capitalized acquisition cost of
     Permatec.

     The purchase price allocation was as follows:

            Cash acquired ................................. $   394,535
            Current assets ................................     900,143
            Equipment, furniture and fixtures .............   1,784,813
            Patents .......................................   1,470,000
            Other intangible assets .......................   2,194,000
            Goodwill ......................................   1,276,806
            Other assets ..................................       3,775
            Current liabilities ...........................  (2,026,723)
            Debt ..........................................     (55,375)
            In-process research and development ...........     948,000
                                                            -----------
            Purchase price ................................ $ 6,889,974
                                                            ===========

     In connection with the Share Transaction on January 31, 2001, the Company
     acquired in-process research and development projects having an estimated
     fair value of $948,000, that had not yet reached technological feasibility
     and had no alternative future use. Accordingly, this amount was immediately
     expensed in the Consolidated Statements of Operations.

     Unaudited pro forma results of operations for the years ended December 31,
     2000 and 2001, and for the nine months ended September 30, 2001, assuming
     Permatec's acquisition of Medi-Ject, the conversion of the $5,000,000 in
     promissory notes, and the Company's implementation of SFAS 141, all
     collectively occurred on January 1, 2000, are as follows:


                                       7

<PAGE>
                              ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
                          September 30, 2001 and 2002

1.   Basis of Presentation (Continued)

<TABLE>
<CAPTION>
                                                                                              Pro forma
                                                  Pro forma Year      Pro forma Year     Nine Months Ended
                                                       Ended              Ended            September 30,
                                                 December 31, 2000   December 31, 2001         2001
                                                 -----------------   -----------------   -----------------
     <S>                                           <C>                 <C>                <C>
     Net revenues .............................    $  2,553,284        $  3,811,362       $  2,602,917
     Loss before cumulative effect of a
        change in accounting principle ........    $(10,030,643)       $(15,086,836)      $(12,130,477)
     Net loss .................................    $(11,145,026)       $(15,086,836)      $(12,130,477)
     Net loss per share .......................    $      (1.63)       $      (1.78)      $      (1.47)
</TABLE>

2.   Going Concern

     The accompanying financial statements have been prepared on a going-concern
     basis, which contemplates the realization of assets and the satisfaction of
     liabilities and other commitments in the normal course of business. The
     Company's external auditors issued their report on the December 31, 2001
     financial statements, which expressed substantial doubt about the Company's
     ability to continue as a going concern. The Company had negative working
     capital of $3,501,146 at September 30, 2002, and has had net losses and
     negative cash flows from operating activities since inception.

     The Company expects to report a net loss for the year ending December 31,
     2002, as marketing and development costs related to bringing future
     generations of products to market continue. Long-term capital requirements
     will depend on numerous factors, including the status of collaborative
     arrangements, the progress of research and development programs and the
     receipt of revenues from sales of products.

     There can be no assurance that the Company will ever become profitable or
     that adequate funds will be available when needed or on acceptable terms.

     The financial statements do not include any adjustments relating to the
     recoverability and classification of recorded asset amounts or the amounts
     and classification of liabilities that might be necessary if the Company is
     unable to continue as a going concern.

     The Company believes it has sufficient cash to continue operations through
     November 2002 and will be required to raise additional working capital to
     continue to exist. Management's intentions are to raise this additional
     capital through alliances with strategic corporate partners, equity
     offerings, and/or debt financing. The Company received $1,000,000 on March
     12, 2002 and $1,000,000 on April 24, 2002 from the Company's majority
     shareholder, Dr. Jacques Gonella, under a Term Note agreement dated
     February 20, 2002. The Term Note agreement allowed for total advances to
     the Company of $2,000,000 and was interest bearing at the three-month
     Euribor Rate as of the date of each advance, plus 5%. The principal of
     $2,000,000 and accrued interest of $36,550 was converted into 509,137
     shares of common stock on June 10, 2002 at $4.00 per share, the market
     price of the Company's stock on that date. In addition, the


                                       8

<PAGE>

                              ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
                          September 30, 2001 and 2002

2.   Going Concern (Continued)

     Company borrowed from its majority shareholder $300,000 and $200,000 in
     June and September of 2002, respectively, to be repaid in July and
     September of 2003, respectively, with interest at the three-month Euribor
     Rate as of the date of the advance, plus 5%.

     On July 12, 2002 the Company entered into a Securities Purchase Agreement
     (the "Agreement") for the sale and purchase of up to $2,000,000 aggregate
     principal amount of the Company's 10% Convertible Debentures. The
     debentures are convertible into shares of the Company's common stock at a
     conversion price which is the lower of $2.50 or 75% of the average of the
     three lowest intraday prices of the Company's common stock, as reported on
     the Nasdaq SmallCap Market, during the 20 trading days preceding the
     conversion date. Within 15 days of the closing, the Company was obligated
     to file a registration statement with the Securities and Exchange
     Commission to register the shares issuable upon conversion of the
     debentures. Under the terms of the Agreement, the Company received $700,000
     upon closing of the transaction on July 12, 2002, an additional $700,000
     after the Company filed the registration statement on July 19, 2002 to
     register the shares issuable upon conversion of the debentures, and
     $600,000 after such registration statement was declared effective on
     October 10, 2002. The debentures are collateralized by all assets of the
     Company, which include all inventory, receivables, furniture, equipment and
     patents. The Company held a special meeting of its shareholders on August
     23, 2002, at which the shareholders approved the issuance of the shares
     issuable upon conversion of the debentures. As the per share conversion
     price of the debentures was substantially lower than the market price of
     the common stock on the date the debentures were sold, the Company recorded
     a non-cash accounting charge of $1,720,000 at September 30, 2002 for the
     intrinsic value of the beneficial in-the-money conversion feature of the
     debentures. Upon conversion of the debentures, existing common shareholders
     could experience substantial dilution of their investment. As of November
     7, 2002, $175,000 of the debentures had been converted into 227,932 shares
     of common stock. If all remaining debentures were converted at the $0.42
     conversion price in place at November 7, 2002, a total of 4,345,238 shares
     would be issued, which would result in substantial dilution to current
     shareholders.

3.   Comprehensive Loss

<TABLE>
<CAPTION>
                                                     Three Months Ended             Nine Months Ended
                                                       September 30,                  September 30,
                                                --------------------------     --------------------------
                                                   2001           2002             2001           2002
                                                -----------    -----------     -----------    -----------
        <S>                                    <C>             <C>             <C>            <C>
        Net loss .............................  $(2,156,890)   $(3,852,353)    $(6,489,560)   $(7,915,877)
        Change in cumulative translation
          adjustment .........................      (34,759)       (22,099)       (375,514)       (75,540)
                                                -----------    -----------     -----------    -----------
        Comprehensive loss ...................  $(2,191,649)   $(3,874,452)    $(6,865,074)   $(7,991,417)
                                                ===========    ===========     ===========    ===========
</TABLE>


                                       9

<PAGE>
                              ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
                          September 30, 2001 and 2002

4.   Inventories

     Inventories consist of the following:

                                                   December 31,    September 30,
                                                      2001             2002
                                                   ------------    -------------
        Raw material ............................   $ 294,643        $271,755
        Work in-process .........................      29,611          27,937
        Finished goods ..........................     436,437         221,379
                                                    ---------        --------
                                                      760,691         521,071
        Inventory reserve .......................    (105,000)        (50,000)
                                                    ---------        --------
                                                    $ 655,691        $471,071
                                                    =========        ========

5.   Industry Segment and Operations by Geographic Areas

     The Company is primarily engaged in development of drug delivery
     transdermal and transmucosal pharmaceutical products and drug delivery
     injection devices and supplies. These operations are considered to be one
     segment. The geographic distributions of the Company's identifiable assets
     and revenues are summarized in the following table:

     The Company has operating assets located on two continents as follows:

                                                 December 31,      September 30,
                                                    2001                2002
                                                 ------------      -------------
        Switzerland ...........................  $ 2,388,337        $1,606,442
        United States of America ..............    8,740,113         8,019,288
                                                 -----------        ----------
                                                 $11,128,450        $9,625,730
                                                 ===========        ==========

     Revenues by region of origin are summarized as follows:

                                                     For the Three Months Ended
                                                           September 30,
                                                     --------------------------
                                                       2001            2002
                                                     --------      ------------
        United States of America ..................  $313,260       $  416,724
        Europe ....................................   288,594          793,074
        Other .....................................    (5,097)          23,063
                                                     --------       ----------
                                                     $596,757       $1,232,861
                                                     ========       ==========

                                                      For the Nine Months Ended
                                                             September 30,
                                                     ---------------------------
                                                        2001              2002
                                                     ----------       ----------
        United States of America ..................  $  564,486       $1,100,725
        Europe ....................................   1,658,250        1,858,393
        Other .....................................      67,343           71,327
                                                     ----------       ----------
                                                     $2,290,079       $3,030,445
                                                     ==========       ==========


                                       10

<PAGE>

                              ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
                          September 30, 2001 and 2002

6.   Accounting for License Revenues

     During the quarter ended December 31, 2000 and effective January 1, 2000,
     the Company adopted the cumulative deferral method for accounting for
     license revenues. The adoption of this accounting principle resulted in a
     $1,059,622 cumulative effect adjustment in the first quarter 2000.

     During the quarter and nine-month periods ended September 30, 2001 and for
     the same periods ending September 30, 2002, the Company recognized $69,301,
     $207,902, $31,684 and $107,626, respectively, of license revenues that were
     previously recognized by the Company prior to the adoption of the
     cumulative deferral method.

7.   In-The-Money Conversion Feature Preferred Stock Dividend

     During 2000 and 2001, prior to the closing of the Share Transaction on
     January 31, 2001, Medi-Ject borrowed a total of $5,500,000 in convertible
     promissory notes from Permatec. At the closing of the Share Transaction,
     the principal amount of convertible promissory notes converted to 27,500
     shares of Series C preferred stock. At the option of the holder, these
     shares were immediately converted into 2,750,000 shares of Antares common
     stock. As the conversion feature to common stock was contingent upon the
     closing of the Share Transaction, the measurement of the stated conversion
     feature as compared to the Company's common stock price of $4.56 at January
     31, 2001, resulted in an in-the-money conversion feature of $5,314,125,
     which was a deemed dividend to the Series C preferred shareholder. This
     dividend increased the net loss applicable to common shareholders in the
     Antares' net loss per share calculation.

8.   Shareholders' Equity

     Roger G. Harrison, Ph.D., was appointed Chief Executive Officer of Antares
     Pharma, Inc., effective March 12, 2001. The terms of the employment
     agreement with Dr. Harrison include up to 216,000 restricted shares of
     common stock that will be granted after the achievement of certain
     time-based and performance-based milestones. The time-based milestones have
     been achieved and the Company issued Dr. Harrison 48,000 and 40,000
     restricted shares in April 2001 and March 2002, respectively. All
     restricted shares issued under the terms of the employment agreement vest
     on March 12, 2004. The Company has recorded deferred compensation expense
     of $341,000, the aggregate market value of the 88,000 shares at the
     measurement date. Compensation expense is being recognized ratably over the
     three-year vesting period. Compensation expense of $61,568 and $85,248 was
     recognized in connection with these shares through September 30, 2001 and
     2002, respectively.

     During the second quarter of 2002 the Company issued 80,000 shares of fully
     vested common stock valued at $283,000 to two consultants for services to
     be performed. Of the 80,000 shares issued, 20,000 were issued as
     compensation directly related to the closing on July 12, 2002 of $2,000,000
     of the Company's 10% Convertible Debentures. Expense related to 20,000
     shares will be recognized as interest expense over the term of the
     debentures. The remaining 60,000 shares were for consulting services to be
     provided to the Company. Expense related to the


                                       11

<PAGE>

                              ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
                          September 30, 2001 and 2002

8.   Shareholders' Equity (Continued)

     60,000 shares is being recognized as the consulting services are provided
     to the Company. Through September 30, 2002 approximately $173,000 has been
     recognized as expense.

     On June 10, 2002 the principal balance of $2,000,000 and accrued interest
     of $36,550 under a term note agreement with the Company's majority
     shareholder, Dr. Jacques Gonella, was converted into 509,137 shares of
     common stock at $4.00 per share.

     Under the terms of an equity advisor agreement in connection with the
     Company's 10% Convertible Debentures, the Company issued in July and
     October 2002, 112,000 and 48,000 warrants, respectively, valued at $412,118
     and $54,899, respectively. The value of the warrants is being amortized to
     interest expense over the one-year life of the debentures. Through
     September 30, 2002, $85,411 has been amortized to interest expense. The
     warrants are exercisable for ten years at an exercise price of $2.50.

9.   New Accounting Pronouncements

     In July 2001, the Financial Accounting Standards Board issued SFAS 141,
     "Business Combinations," and SFAS 142, "Goodwill and Other Intangible
     Assets." SFAS 141 requires that the purchase method of accounting be used
     for all business combinations initiated after June 30, 2001. SFAS 142
     changes the accounting for goodwill from an amortization method to an
     impairment-only approach. Thus, amortization of goodwill, including
     goodwill recorded in past business combinations, ceased upon adoption of
     that Statement. The Company adopted SFAS 142 in the first quarter of fiscal
     2002 and, accordingly, evaluated its existing intangible assets and
     goodwill that were acquired in the Share Transaction. The Company concluded
     that $1,935,588 representing the unamortized portion of the amount
     allocated to other intangible assets on the date of adoption should be
     classified as goodwill as these intangible assets did not meet the
     definition for separate accounting under SFAS 142. These amounts were
     previously classified as workforce, ISO certification and clinical studies
     with unamortized balances of $510,413, $271,588 and $1,153,587,
     respectively, at December 31, 2001. Upon adoption of SFAS 142, the Company
     reassessed the useful lives and residual values of all intangible assets
     acquired in purchase business combinations, and determined that there were
     no amortization period adjustments necessary.

     The Company adopted SFAS 141 during 2001 and adopted SFAS 142 effective
     January 1, 2002. As of the date of adoption of SFAS 142, after
     reclassification of other intangible assets as goodwill, the Company had
     approximately $3,095,355 of unamortized goodwill subject to the transition
     provisions of SFAS 141 and 142. The Company completed an evaluation of
     goodwill in accordance with the provisions of SFAS 142 and concluded that
     no impairment existed. Adoption of SFAS 142 is expected to decrease
     amortization expenses in 2002 by approximately $410,000 as a result of
     ceasing amortization of goodwill and other intangible assets reclassified
     as goodwill.

     For the three and nine-month periods ended September 30, 2001 and 2002, the
     goodwill amortization, adjusted net loss and basic and diluted loss per
     share are as follows:

                                       12

<PAGE>

                              ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
                          September 30, 2001 and 2002


9.   New Accounting Pronouncements (Continued)

<TABLE>
<CAPTION>
                                              Three Months Ended              Nine Months Ended
                                                September 30,                   September 30,
                                         ----------------------------    ----------------------------
                                             2001            2002            2001            2002
                                         ------------    ------------    ------------    ------------
     <S>                                 <C>             <C>             <C>             <C>
     Net loss as reported .............  $ (2,156,890)   $ (3,852,353)   $(11,853,685)   $ (7,965,877)
     Addback goodwill amortization ....       102,396            --           361,253            --
                                         ------------    ------------    ------------    ------------
     Adjusted net loss ................  $ (2,054,494)   $ (3,852,353)   $(11,492,432)   $ (7,965,877)
                                         ============    ============    ============    ============
     Basic and diluted loss per
       share:
             Net loss as reported .....  $      (0.24)   $      (0.39)   $      (1.43)   $      (0.85)
             Goodwill amortization ....          0.01            -               0.04            -
                                         ------------    ------------    ------------    ------------
      Adjusted net loss per share .....  $      (0.23)   $      (0.39)   $      (1.39)   $      (0.85)
                                         ============    ============    ============   =============
</TABLE>

     For the three years ended December 31, 1999, 2000 and 2001, the goodwill
     amortization, adjusted net loss and basic and diluted loss per share are as
     follows:
<TABLE>
<CAPTION>
                                                          December 31,
                                              -----------------------------------------
                                                  1999          2000            2001
                                              ------------  ------------   ------------
     <S>                                      <C>           <C>            <C>
     Net loss as reported ..................  $(3,967,366)  $(5,260,387)   $(14,913,226)
     Addback goodwill amortization .........      177,963       177,963         464,434
                                              -----------   -----------    ------------
     Adjusted net loss .....................  $(3,789,403)  $(5,082,424)   $(14,448,792)
                                              ===========   ===========    ============
     Basic and diluted loss per share:
         Net loss as reported ..............  $     (0.92)  $     (1.22)   $      (1.76)
         Goodwill amortization .............         0.04          0.04            0.06
                                              -----------   -----------    -----------
      Adjusted net loss per share ..........  $     (0.88)  $     (1.18)   $      (1.70)
                                              ===========   ===========    ============
</TABLE>

     The gross carrying amount and accumulated amortization of patents,
     which are the only intangible assets of the Company subject to
     amortization, was $2,975,299 and $327,801, respectively, at September
     30, 2002. Amortization expense was $75,040 for the nine-months ended
     September 30, 2002. The estimated aggregate amortization expense for
     the next five years is $33,000 in the fourth quarter of 2002, $133,000
     in 2003 through 2006, and $96,000 in the first nine months of 2007.

     In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
     No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
     Corrections." SFAS No. 145 allows only those gains and losses on the
     extinguishment of debt that meet the criteria of extraordinary items to be
     treated as such in the financial statements. SFAS No. 145 also requires
     sales-leaseback accounting for certain lease modifications that have
     economic effects that are similar to sales-leaseback transactions. Certain
     provisions of SFAS No. 145 are effective for transactions occurring after
     May 15, 2002, while the remaining provisions will be effective for the
     Company in the first quarter of fiscal 2004. The Company does not expect
     the adoption of SFAS No. 145 to have a material impact on its consolidated
     financial statements.


                                       13

<PAGE>

                              ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
                          September 30, 2001 and 2002

9.   New Accounting Pronouncements (Continued)

     In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
     Associated with Exit or Disposal Activities," which nullifies EITF 94-3 and
     requires that a liability for a cost associated with an exit or disposal
     activity be recognized when the liability is incurred. The Company plans to
     adopt SFAS No. 146 in January 2003. Management believes that the adoption
     of this statement will not have a material effect on the Company's results
     of operations in the foreseeable future.

10.  Reconciliation of Loss and Share Amount Used in EPS Calculation

     Basic loss per common share is computed by dividing net loss available to
     Common Shareholders by the weighted-average number of common shares
     outstanding for the period. Diluted loss per common share reflects the
     potential dilution from the exercise or conversion of securities into
     common stock. The 509,137 shares of common stock issued on June 10, 2002 to
     the Company's majority shareholder, Dr. Jacques Gonella, in connection with
     conversion of $2,036,550 in notes payable and accrued interest, had only a
     minor effect on the loss per share for the nine-month period ended
     September 30, 2002, and the full impact from issuance of these shares will
     not be reflected in the year-to-date loss per share calculations until
     future periods. In addition, as discussed in Note 2, the conversion of the
     Company's 10% convertible debentures may result in substantial dilution to
     common shareholders. The following table discloses the basic and diluted
     loss per share. In addition, as the Company is in a loss position, the
     table discloses the stock options and warrants outstanding at the end of
     each period which were excluded from the weighted average shares
     outstanding as their impact is anti-dilutive.

<TABLE>
<CAPTION>
                                               Three Months Ended               Nine Months Ended
                                                  September 30,                   September 30,
                                          ----------------------------    ----------------------------
                                              2001            2002            2001            2002
                                          ------------    ------------    ------------    ------------
     <S>                                  <C>             <C>             <C>             <C>
     Net loss .........................   $ (2,156,890)   $ (3,852,353)   $(11,853,685)   $ (7,965,877)
     Basic and diluted weighted average
       common shares outstanding ......      8,955,347       9,790,411       8,276,424       9,417,888
                                          ------------    ------------    ------------    ------------
     Basic and diluted net loss per
       common share ...................   $      (0.24)   $      (0.39)   $      (1.43)   $      (0.85)
                                          ============    ============    ============    ============
     Antidilutive stock options
       and warrants ...................      1,695,860       1,858,638       1,695,860       1,858,638
                                          ============    ============    ============    ============
     Principal amount of anti-dilutive
        convertible debentures ........           --      $  1,400,000            --      $  1,400,000
                                          ============    ============    ============    ============
</TABLE>

11.  Related Party Transactions

     Effective February 1, 2001, the Company entered into a consulting agreement
     with JG Consulting AG, a company owned by the Company's majority
     shareholder, Dr. Jacques Gonella. In connection with this agreement, the
     Company recognized expense of $124,000 and $139,500 for the nine-month
     periods ended September 30, 2001 and 2002, respectively. Amounts owed to


                                       14

<PAGE>

                              ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
                          September 30, 2001 and 2002

11.      Related Party Transactions (Continued)

         JG Consulting AG at December 31, 2001 and September 30, 2002 were
         $90,532 and $31,000, respectively. In addition, in 2001 the Company
         sold equipment, furniture and fixtures to JG Consulting AG for $91,699,
         which approximated the book value of the assets sold.

         During the nine months ended September 30, 2001 the Company recognized
         expense of $92,500 for feasibility study and market research services
         performed by a company in which Dr. Gonella has an ownership interest
         of approximately 25%. At December 31, 2001 and September 30, 2002 the
         Company had a payable to this company of $92,500.

         During the nine months ended September 30, 2002 the Company recognized
         expense of approximately $78,400 for consulting services provided by
         John Gogol, one of the Company's board members. The Company had a
         payable to Mr. Gogol at December 31, 2001 and September 30, 2002 of
         $6,363 and $11,232, respectively.

         The Company received $1,000,000 on March 12, 2002 and $1,000,000 on
         April 24, 2002 from the Company's majority shareholder, Dr. Jacques
         Gonella, under a Term Note agreement dated February 20, 2002. The Term
         Note agreement allowed for total advances to the Company of $2,000,000
         and was interest bearing at the three-month Euribor Rate as of the date
         of each advance, plus 5%. The principal of $2,000,000 and accrued
         interest of $36,550 was converted into 509,137 shares of common stock
         on June 10, 2002 at $4.00 per share. In addition, the Company borrowed
         from its majority shareholder $300,000 and $200,000 in June and
         September of 2002, respectively, to be repaid in July and September of
         2003, respectively, with interest at the three-month Euribor Rate as of
         the date of the advance, plus 5%.


                                       15

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

Results of Operations

Critical Accounting Policies

The Company has identified certain of its significant accounting policies that
it considers particularly important to the portrayal of the Company's results of
operations and financial position and which may require the application of a
higher level of judgment by the Company's management, and as a result are
subject to an inherent level of uncertainty. These are characterized as
"critical accounting policies" and address revenue recognition and inventory
reserves, each more fully described under "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in the Company's Annual Report
on Form 10-K for the year ended December 31, 2001. The Company has made no
changes to these policies during 2002. In addition to these policies, management
has identified the following accounting policy as one that is critical to the
presentation of the consolidated financial statements.

Valuation of Long-Lived and Intangible Assets and Goodwill

The Company assesses the impairment of identifiable intangibles, long-lived
assets and goodwill at least annually, and whenever events or changes in
circumstances indicate that the carrying value may not be recoverable. If it is
determined that the carrying value of intangibles, long-lived assets or goodwill
may not be recoverable, impairment is measured based on a projected discounted
cash flow method using a discount rate determined by management to be
commensurate with the risk inherent in the Company's business model or another
valuation technique. Net intangible assets, long-lived assets and goodwill
totaled $7,407,943 as of September 30, 2002. The Company is required to at least
annually assess the recoverability of its intangible assets, or more frequently
if certain conditions occur. The Company will assess recoverability during the
quarter ended December 31, 2002.

Three and Nine Months Ended September 30, 2001 and 2002

Revenues

Total revenues for the three and nine months ended September 30, 2002 were
$1,232,861 and $3,030,445, respectively, reflecting increases over the same
periods of the prior year of $636,104 and $740,366, or 107% and 32%,
respectively. The increase in revenues is due mainly to increases in product
sales in the three and nine-month periods of $613,677 and $857,514,
respectively, offset in the nine-month period by a decrease in licensing and
product development revenue of $117,148. The increased product sales resulted
primarily from increased sales of injector devices and increased sales to
licensees in connection with clinical studies and other development activities
under license agreements.

Licensing and product development fee income increased by $22,427 or 16%, in the
three-month period and decreased by $117,148 or 21% in the nine-month period
ended September 30, 2002, as compared to the prior-year periods. The decrease in
the nine-month period is primarily due to a $150,000 Antares/Minnesota one-time
development fee earned in the second quarter of 2001 under a discrete contract.
The balance of the licensing and product development revenue is attributable to
the recognition of previously deferred revenue related to licensing and product
development contracts.


                                       16

<PAGE>

During the quarter ended December 31, 2000 and effective January 1, 2000, the
Company adopted the cumulative deferral method for accounting for license
revenues. The adoption of this accounting principle resulted in a $1,059,622
cumulative effect adjustment in the first quarter of 2000.

During the quarter and nine-month periods ended September 30, 2001 and for the
same periods ending September 30, 2002, the Company recognized $69,301,
$207,902, $31,684 and $107,626, respectively, of license revenues that were
previously recognized by the Company prior to the adoption of the cumulative
deferral method.

Cost of Sales

The costs of product sales are primarily related to injection devices and
disposable products. Cost of sales as a percentage of product sales was 82% in
the third quarter of both 2001 and 2002, and increased from 63% for the first
nine months of 2001 to 81% for the same period of 2002. The third quarter of
2002 includes a charge of $140,000, or 13% and 5% of product sales in the
quarter and nine-month periods, respectively, representing the estimated costs
associated with retrieving and proactively reworking or replacing certain
injection devices to prevent a potential premature wearing discovered during
routine ongoing product testing. Also included in the increase during the first
nine months of 2002 was approximately $282,000 of inventory write-offs and
inventory reserve adjustments in the first quarter related to the launch of the
Medi-Ject Vision ("MJ7") device into new markets. Approximately $171,000 of this
amount related to a disposable component found to have a design defect, which
was immediately corrected. The remaining $111,000 of inventory written off was
due to a production problem encountered in connection with another disposable
component. The Company has incurred only minor additional expenses associated
with testing and making the required production modifications.

Research and Development

Research and development expenses totaled $843,902 and $2,388,722 in the three
and nine-month periods ended September 30, 2002, respectively, compared to
$685,894 and $2,080,673 in the same prior-year periods. The increase in the
three-month period of $158,008 is primarily due to research employee additions
at Antares/Switzerland for increased research activities. The increase in the
nine-month period of $308,049 is primarily due to the research employee
additions at Antares/Switzerland and the inclusion of nine months of
Antares/Minnesota expenses in 2002 compared with only eight months in 2001
following the business combination on January 31, 2001.

Sales and Marketing

Sales and marketing expenses totaled $216,910 and $616,079 in the three and
nine-month periods ended September 30, 2002, respectively, compared to $363,050
and $1,007,057 in the same periods of the prior year. The decreases in the three
and nine-month periods of $146,140 or 40%, and $390,978 or 39%, respectively, as
compared to the prior-year periods, are primarily due to a management decision
to reduce sales and marketing costs, offset in the nine-month period by nine
months of Antares/Minnesota expenses in 2002 compared with only eight months in
2001 following the business combination on January 31, 2001.

General and Administrative

General and administrative expenses totaled $1,248,611 and $3,864,388 in the
three and nine-month periods ended September 30, 2002, respectively, compared to
$1,334,437 and $3,719,477 in the same periods of the prior year. The decrease in
the three-month period of $85,826 or 6% as compared to the prior-year period is
primarily due to reduction of amortization expense of $56,550 due to the
adoption of


                                       17

<PAGE>

SFAS 142 and decreased travel expenses. The increase in the current year
nine-month period as compared to the same prior-year period of $144,911 or 4% is
primarily due to the opening of the corporate office in Exton, PA in December of
2001 and expenses related to our equity advisor agreements. The increase in the
nine-month period is also due to the inclusion of nine months of
Antares/Minnesota expenses in 2002 compared with only eight months in 2001
following the business combination on January 31, 2001, offset by decreases in
expenses related to the business combination and amortization expense of
$150,800 due to the adoption of SFAS 142.

Other Income (Expense)

Net other income (expense) changed to expense of $1,901,417 and $1,982,050 in
the three and nine-month periods of 2002, respectively, from income of $2,924
and $68,684, in the same periods ended September 30, 2001. The changes resulted
primarily from interest expense of $1,720,000 related to the intrinsic value of
the beneficial in-the-money conversion feature of the Company's 10% convertible
debentures sold in July of 2002 recorded in the third quarter of 2002, as the
per share conversion price of the debentures into common stock was substantially
lower than the market price of the common stock on the date of the debenture
purchase agreement. In addition, other interest expense in the three-month and
nine-month periods of 2002 increased by $169,295 and $131,607, respectively,
over the same periods in 2001 due to the sale of $1,400,000 of the convertible
debentures and due to borrowings of $2,500,000 in the second and third quarters
of 2002 from the Company's majority shareholder. The increased interest expense
results primarily from $133,567 of amortization of deferred financing costs
related to the convertible debentures. In June, the Company's majority
shareholder converted $2,000,000 of debt plus accrued interest into common
stock, resulting in a reduction in interest expense in the third quarter of
approximately $30,000 as compared to the second quarter. Interest expense for
the nine-months of 2001 of $95,350 resulted primarily from interest expense on
outstanding notes incurred by Antares/Switzerland in January 2001 prior to the
business combination, while interest expense for the nine-months of 2002 of
$226,957 was primarily due to amortization of deferred financing costs and
interest charges related to the convertible debentures and interest on the
borrowings from the Company's majority shareholder. Also, interest income
decreased in the three-month and nine-month periods of 2002 as compared to 2001
by $44,039 and $192,256, respectively, due to lower average cash balances in
2002 compared to 2001.

The 509,137 shares of common stock issued on June 10, 2002 to the Company's
majority shareholder, Dr. Jacques Gonella, in connection with conversion of
$2,036,550 in notes payable and accrued interest, had only a minor effect on the
loss per share for the nine-month period ended September 30, 2002, and the full
impact from issuance of these shares will not be reflected in the year-to-date
loss per share calculations until future periods. In addition, as discussed in
Note 2 to the Consolidated Financial Statements, the conversion of the Company's
10% convertible debentures may result in substantial dilution to common
shareholders.

Cash Flows

Operating Activities

Net cash used in operating activities decreased by $1,246,036, from $5,898,288
for the first nine months of 2001 to $4,652,252 for the first nine months of
2002. This was the result of net losses of $6,489,560 and $7,915,877 in the
first nine months of 2001 and 2002, respectively, adjusted by noncash expenses
and changes in operating assets and liabilities.


                                       18

<PAGE>

Net noncash expenses of $1,939,590 in the first nine months of 2001 were mainly
due to depreciation and amortization of $892,269 and in-process research and
development of $948,000. Noncash expenses in the first nine months of 2002
totaled $2,707,148, consisting primarily of interest expense for the intrinsic
value of the beneficial conversion feature of the Company's 10% convertible
debentures of $1,720,000, depreciation and amortization of $616,123 and
stock-based compensation expense of $276,694.

The change in operating assets and liabilities in the first nine months of 2001
resulted in a net decrease to cash of $1,348,318, comprised mainly of reductions
in accounts payable and accrued expenses of $860,150 and $395,854, respectively,
as a result of improved liquidity from the sale of common stock in the first
nine months of 2001. In addition, an increase in inventory used $376,022 in the
2001 period. In the first nine months of 2002, the change in operating assets
and liabilities caused an increase in cash of $556,477, primarily due to the
increase in deferred revenue of $572,315 and decreases in accounts receivable of
$307,551, VAT and other receivables of $241,323, and inventory of $184,620,
offset by an increase in prepaid expenses of $290,296, and decreases in accounts
payable, accrued expenses and liabilities to related parties of $150,219,
$168,137 and $108,960, respectively. The increase in deferred revenue of
$572,315 resulted mainly from milestone payments of approximately $500,000
related to existing license agreements, along with approximately $300,000
related to agreements originating in 2002.

Investing Activities

Net cash used in investing activities decreased $266,526, from $644,004 in the
first nine months of 2001 to $377,478 in the same period of 2002. In 2001,
$602,756 was loaned to Medi-Ject before the business combination and was offset
by the cash balance of $355,578 in Medi-Ject at the time of the business
combination. In addition, in 2001 the Company received proceeds of $91,699 from
the sale of equipment, furniture and fixtures. Purchases of equipment, furniture
and fixtures in the first nine months of 2001 and 2002 totaled $390,270 and
$149,346, respectively, and expenditures for patent acquisition and development
totaled $98,255 and $228,132, respectively.

Financing Activities

Net cash provided by financing activities decreased $7,281,332 from $11,088,175
in the first nine months of 2001 to $3,806,843 in the same period of 2002, due
primarily to net proceeds of $10,048,249 received during the first nine months
of 2001 from issuance of common stock, of which $9,994,549 was received in a
private placement of common stock.

The Company received $1,000,000 on March 12, 2002 and $1,000,000 on April 24,
2002 from the Company's majority shareholder, Dr. Jacques Gonella, under a Term
Note agreement dated February 20, 2002. The Term Note agreement allowed for
total advances to the Company of $2,000,000. The note was interest bearing at
the three-month Euribor Rate as of the date of each advance, plus 5%. The
principal and accrued interest of $36,550 was converted into 509,137 shares of
common stock on June 10, 2002 at $4.00 per share, the market price of the
Company's common stock on that date. Additionally, the Company borrowed from its
majority shareholder $300,000 and $200,000 in June and September of 2002,
respectively, to be repaid in July and September of 2003, with interest at the
three-month Euribor Rate as of the date of the advance, plus 5%.

On July 12, 2002 the Company entered into a Securities Purchase Agreement (the
"Agreement") for the sale and purchase of up to $2,000,000 aggregate principal
amount of the Company's 10% convertible debentures. The debentures are
convertible into shares of the Company's common stock at a conversion


                                       19

<PAGE>

price which is the lower of $2.50 or 75% of the average of the three lowest
intraday prices of the Company's common stock, as reported on the Nasdaq
SmallCap Market, during the 20 trading days preceding the conversion date.
Within 15 days of the closing, the Company was obligated to file a registration
statement with the Securities and Exchange Commission to register the shares
issuable upon conversion of the debentures. Under the terms of the Agreement,
the Company received $700,000 upon closing of the transaction on July 12, 2002,
an additional $700,000 after the Company filed the registration statement on
July 19, 2002 to register the shares issuable upon conversion of the debentures,
and $600,000 after such registration statement was declared effective on October
10, 2002. The debentures are collateralized by all assets of the Company, which
include all inventory, receivables, furniture, equipment and patents. The
Company held a special meeting of its shareholders on August 23, 2002, at which
the shareholders approved the issuance of the shares issuable upon conversion of
the debentures. As the per share conversion price of the debentures into common
stock was substantially lower than the market price of the common stock on the
date the debentures were sold, the Company recorded a non-cash accounting charge
of $1,720,000 at September 30, 2002 for the intrinsic value of the beneficial
in-the-money conversion feature of the debentures. Upon conversion of the
debentures, existing common shareholders could experience substantial dilution
of their investment. As of November 7, 2002, $175,000 of the debentures had been
converted into 227,932 shares of common stock. If all remaining debentures were
converted at the $0.42 conversion price in place at November 7, 2002, a total of
4,345,238 shares would be issued.

Liquidity

The accompanying financial statements have been prepared on a going-concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities and other commitments in the normal course of business. The
Company's external auditor issued their report on the December 31, 2001
financial statements, which expressed substantial doubt about the Company's
ability to continue as a going concern. The Company had negative working capital
of $3,501,146 at September 30, 2002, and has had net losses and negative cash
flows from operating activities since inception.

The Company expects to report a net loss for the year ending December 31, 2002,
as marketing and development costs related to bringing future generations of
products to market continue. Long-term capital requirements will depend on
numerous factors, including the status of collaborative arrangements, the
progress of research and development programs and the receipt of revenues from
sales of products.

The Company believes it has sufficient cash to continue operations through
November 2002 and will be required to raise additional working capital to
continue to exist. Management's intentions are to raise this additional capital
through alliances with strategic corporate partners, equity offerings, and/or
debt financing. In 2002 the Company borrowed $2,500,000 from the Company's
majority shareholder, of which $2,000,000 plus accrued interest was converted to
common stock in June. In July and October the Company issued $1,400,000 and
$600,000, respectively, of its 10% convertible debentures. See "Cash Flows -
Financing Activities."

There can be no assurance that the Company will ever become profitable or that
adequate funds will be available when needed or on acceptable terms. If for any
reason the Company is unable to obtain additional financing it may not be able
to continue as a going concern, which may result in material asset impairments,
other material adverse changes in the business, results of operations or
financial condition, or the loss by shareholders of all or a part of their
investment in the Company.


                                       20

<PAGE>

The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary if the Company is unable
to continue as a going concern.

New Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board issued SFAS 141,
"Business Combinations," and SFAS 142, "Goodwill and Other Intangible Assets."
SFAS 141 requires that the purchase method of accounting be used for all
business combinations initiated after June 30, 2001. SFAS 142 changes the
accounting for goodwill from an amortization method to an impairment-only
approach. Thus, amortization of goodwill, including goodwill recorded in past
business combinations, ceased upon adoption of that Statement. The Company
adopted SFAS 142 in the first quarter of fiscal 2002 and, accordingly, evaluated
its existing intangible assets and goodwill that were acquired in the Medi-Ject
purchase business combination. The Company concluded that $1,935,588
representing the unamortized portion of the amount allocated to other intangible
assets on the date of adoption should be classified as goodwill as these
intangible assets did not meet the definition for separate accounting under SFAS
142. These amounts were previously classified as workforce, ISO certification
and clinical studies with unamortized balances of $510,413, $271,588 and
$1,153,587, respectively, at December 31, 2001. Upon adoption of SFAS 142, the
Company reassessed the useful lives and residual values of all intangible assets
acquired in purchase business combinations, and determined that there were no
amortization period adjustments necessary.

The Company adopted SFAS 141 during 2001 and adopted SFAS 142 effective January
1, 2002. As of the date of adoption of SFAS 142, after reclassification of other
intangible assets as goodwill, the Company had approximately $3,095,355 of
unamortized goodwill subject to the transition provisions of SFAS 141 and 142.
The Company completed an evaluation of goodwill in accordance with the
provisions of SFAS 142 and concluded that no impairment exists. Adoption of SFAS
142 is expected to decrease amortization expenses in 2002 by approximately
$410,000 as a result of ceasing amortization of goodwill and other intangible
assets reclassified as goodwill.

For the three and nine month periods ended September 30, 2001 and 2002, the
goodwill amortization, adjusted net loss and basic and diluted loss per share
are as follows:

<TABLE>
<CAPTION>
                                                 Three Months Ended                Nine Months Ended
                                                    September 30,                    September 30,
                                             ----------------------------    ----------------------------
                                                 2001           2002             2001            2002
                                             ------------    ------------    -------------   ------------
<S>                                          <C>             <C>             <C>             <C>
Net loss as reported ......................  $(2,156,890)    $(3,852,353)    $(11,853,685)   $(7,965,877)
Addback goodwill amortization .............      102,396               -          361,253              -
                                             -----------     -----------     ------------    -----------
Adjusted net loss .........................  $(2,054,494)    $(3,852,353)    $(11,492,432)   $(7,965,877)
                                             ===========     ===========     ============    ===========
Basic and diluted loss per share:
    Net loss as reported ..................  $     (0.24)    $     (0.39)    $      (1.43)   $     (0.85)
    Goodwill amortization .................         0.01               -             0.04              -
                                             -----------     -----------     ------------    -----------
 Adjusted net loss per share ..............  $     (0.23)    $     (0.39)    $      (1.39)   $     (0.85)
                                             ===========     ===========     ============    ===========
</TABLE>

For the three years ended December 31, 1999, 2000 and 2001, the goodwill
amortization, adjusted net loss and basic and diluted loss per share are as
follows:


                                       21

<PAGE>

<TABLE>
<CAPTION>
                                                         December 31,
                                          ------------------------------------------
                                              1999          2000            2001
                                          ------------  ------------   -------------
<S>                                       <C>           <C>            <C>
Net loss as reported ...................  $(3,967,366)  $(5,260,387)   $(14,913,226)
Addback goodwill amortization ..........      177,963       177,963         464,434
                                          -----------   -----------    ------------
Adjusted net loss ......................  $(3,789,403)  $(5,082,424)   $(14,448,792)
                                          ===========   ===========    ============
Basic and diluted loss per share:
    Net loss as reported ...............  $     (0.92)  $     (1.22)   $      (1.76)
    Goodwill amortization ..............         0.04          0.04            0.06
                                          -----------   -----------    ------------
 Adjusted net loss per share ...........  $     (0.88)  $     (1.18)   $      (1.70)
                                          ===========   ===========    ============
</TABLE>

The gross carrying amount and accumulated amortization of patents, which are the
only intangible assets of the Company subject to amortization, was $2,975,299
and $327,801, respectively, at September 30, 2002. Amortization expense was
$75,040 for the nine-months ended September 30, 2002. The estimated aggregate
amortization expense for the next five years is $33,000 in the fourth quarter of
2002, $133,000 in 2003 through 2006, and $96,000 in the first nine months of
2007.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No.
4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections."
SFAS No. 145 allows only those gains and losses on the extinguishment of debt
that meet the criteria of extraordinary items to be treated as such in the
financial statements. SFAS No. 145 also requires sales-leaseback accounting for
certain lease modifications that have economic effects that are similar to
sales-leaseback transactions. Certain provisions of SFAS No. 145 are effective
for transactions occurring after May 15, 2002, while the remaining provisions
will be effective for the Company in the first quarter of fiscal 2004. The
Company does not expect the adoption of SFAS No. 145 to have a material impact
on its consolidated financial statements.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities," which nullifies EITF 94-3 and requires that a
liability for a cost associated with an exit or disposal activity be recognized
when the liability is incurred. The Company plans to adopt SFAS No. 146 in
January 2003. Management believes that the adoption of this statement will not
have a material effect on the Company's results of operations in the foreseeable
future.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's primary market risk exposure is foreign exchange rate fluctuations
of the Swiss Franc to the U.S. dollar as the financial position and operating
results of the Company's subsidiaries in Switzerland are translated into U.S.
dollars for consolidation. For the three and nine-months ended September 30,
2002, the Company recorded an increase to cumulative comprehensive loss of
$22,099 and $75,540, respectively, and $34,759 and $375,514, respectively, for
the same prior-year periods related to foreign currency translation adjustments.
The Company's exposure to foreign exchange rate fluctuations also arises from
transferring funds to its Swiss subsidiaries in Swiss Francs. Most of the
Company's sales and licensing fees are denominated in U.S. dollars, thereby
significantly mitigating the risk of exchange rate fluctuations on trade
receivables. The effect of foreign exchange rate fluctuations on the Company's
financial results for the three and nine-months ended September 30, 2001 and
2002 was not material. The Company does not currently use derivative financial
instruments to hedge against exchange rate risk. Because exposure increases as
intercompany balances grow, the Company will continue to evaluate the need to
initiate hedging programs to mitigate the impact of foreign exchange rate
fluctuations on intercompany balances.


                                       22

<PAGE>

The Company's exposure to interest rate risk is not believed to be material. The
Company does not use derivative financial instruments to manage interest rate
risk. All existing debt agreements of the Company bear interest at fixed rates,
and are therefore not subject to exposure from fluctuating interest rates.

ITEM 4.  CONTROLS AND PROCEDURES

Based on an evaluation of the disclosure controls and procedures conducted
within 90 days prior to the filing date of this Quarterly Report on Form 10-Q,
the Company's Chief Executive Officer and Chief Financial Officer have concluded
that the disclosure controls and procedures (as defined in Rules 13a-14(c) and
15d-14(c)) are effective. There were no significant changes in the internal
controls or in other factors that could significantly affect those controls
subsequent to the date of the evaluation thereof.

The company's management, including the CEO and CFO, does not expect that our
disclosure controls and procedures will prevent all error and all fraud. A
control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system
are met. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within the company have been detected. The
design of any system of controls also is based in part upon certain assumptions
about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future
conditions; over time, control may become inadequate because of changes in
conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.

Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995

Certain statements in this Quarterly Report on Form 10-Q are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. When used in this Quarterly Report on Form 10-Q, the words "may,"
"should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "intends," "potential" or "continue" and similar expressions are
generally intended to identify forward-looking statements. Because these
forward-looking statements involve risks and uncertainties, actual results could
differ materially from those expressed or implied by these forward-looking
statements. These statements are only predictions. Although the Company believes
that the expectations reflected in the forward-looking statements are
reasonable, it cannot guarantee future results, levels of activity, performance
and/or achievements.

Forward-looking statements represent the Company's expectations or beliefs
concerning future events, including statements regarding the Company's current
cash situation, need for additional capital, ability to continue operations,
whether the Company will be successful in entering into new strategic
relationships, the Company's ability to attract and retain customers, the
Company's ability to adapt to changing technologies, the impact of competition
and pricing pressures from actual and potential competitors with greater
financial resources, the Company's ability to hire and retain competent
employees, the Company's ability to protect and reuse its intellectual property,
changes in general economic conditions, and other factors identified in the
Company's filings with the Securities and Exchange Commission, including those
identified in Exhibit 99.2 to this Quarterly Report on Form 10-Q. The Company
disclaims any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.


                                       23

<PAGE>

PART II - OTHER INFORMATION

Item 2.   Changes in Securities and Use of Proceeds

          On July 12, 2002 the Company entered into a Securities Purchase
          Agreement (the "Agreement") for the sale and purchase of up to
          $2,000,000 aggregate principal amount of the Company's 10% convertible
          debentures. The debentures are convertible into shares of the
          Company's common stock at a conversion price which is the lower of
          $2.50 or 75% of the average of the three lowest intraday prices of the
          Company's common stock, as reported on the Nasdaq SmallCap Market,
          during the 20 trading days preceding the conversion date. Within 15
          days of the closing, the Company was obligated to file a registration
          statement with the Securities and Exchange Commission to register the
          shares issuable upon conversion of the debentures. Under the terms of
          the Agreement, the Company received $700,000 upon closing of the
          transaction on July 12, 2002, an additional $700,000 after the Company
          filed the registration statement on July 19, 2002 to register the
          shares issuable upon conversion of the debentures, and $600,000 after
          such registration statement was declared effective on October 10,
          2002. The sale of the debentures was exempt from registration pursuant
          to Rule 506 of the Securities Act of 1933.

          On each of July 12, 2002 and July 25, 2002, the Company issued
          warrants to purchase 56,000 shares of the Company's common stock. The
          warrants were issued pursuant to an equity advisor agreement in
          connection with the sale of the Company's 10% convertible debentures
          and are exercisable for ten years at an exercise price of $2.50. The
          issuance of the warrants was exempt from registration pursuant to
          Section 4(2) of the Securities Act of 1933.

Item 4.   Submission of Matters to a Vote of Security Holders

          The Company held a special meeting of its shareholders on August 23,
          2002, at which the shareholders approved the issuance of the common
          stock issuable upon conversion of the Company's 10% convertible
          debentures. At the special meeting, there were 7,901,295 votes cast
          for the proposal, 13,175 votes cast against the proposal, 1,188
          abstentions and no broker non-votes.

Item 6.   Exhibits and Reports on Form 8-K

(a)       Exhibits

          Exhibit No.                     Description
          -----------      ----------------------------------------------------

               3.4         Third Amended and Restated Articles of Incorporation
              99.1         Section 906 CEO and CFO Certification
              99.2         Cautionary Statements

(b)       Reports on Form 8-K

          On July 17, 2002, the Company filed a Form 8-K reporting under Item 5,
          Other Events, that it had entered into a Securities Purchase Agreement
          with several investors for the sale and purchase of up to $2,000,000
          aggregate principal amount of the Company's 10% Convertible
          Debentures.


                                       24

<PAGE>

          On September 16, 2002, the Company filed a Form 8-K reporting under
          Item 5, Other Events, that the Board of Directors approved amendments
          to the Company's insider trading policy to permit its officers and
          directors to enter into written trading plans or arrangements for
          systematic trading in the Company's securities, and that Dr. Roger G.
          Harrison, the Company's Chief Executive Officer, entered into a
          trading plan complying with Rule 10b5-1 and the Company's insider
          trading policy on August 26, 2002.


                                       25

<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 by the
undersigned thereunto duly authorized


                                       ANTARES PHARMA, INC.


November 13, 2002                      /s/ Roger G. Harrison, Ph.D.
                                       -----------------------------------------
                                       Roger G. Harrison, Ph.D.
                                       Chief Executive Officer and President


November 13, 2002                      /s/ Lawrence M. Christian
                                       -----------------------------------------
                                       Lawrence M. Christian
                                       Chief Financial Officer, Vice President -
                                       Finance and Secretary


                                       26

<PAGE>

                                 Certifications

I, Roger G. Harrison, Ph.D., certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Antares Pharma, Inc.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   Designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this quarterly
          report is being prepared;

     b)   Evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   Presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a)   All significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:    November 13, 2002

/s/ Roger G. Harrison, Ph. D.
-------------------------------------
Roger G. Harrison, Ph. D.
Chief Executive Officer and President


                                       27

<PAGE>

I, Lawrence M. Christian, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Antares Pharma, Inc.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   Designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this quarterly
          report is being prepared;

     b)   Evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   Presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a)   All significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:   November 13, 2002

/s/ Lawrence M. Christian
-------------------------------------
Lawrence M. Christian
Chief Financial Officer, Vice President - Finance and Secretary

                                       28
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{"company-data": {"conformed-name": "ANTARES PHARMA  INC", "cik": "0001016169", "assigned-sic": "3841", "irs-number": "411350192", "state-of-incorporation": "MN", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-20945", "film-number": "02822444"}, "business-address": {"street1": "707 EAGLEVIEW BOULEVARD", "street2": "SUITE 414", "city": "EXTON", "state": "PA", "zip": "19341", "phone": "610-458-6200"}, "mail-address": {"street1": "707 EAGLEVIEW BOULEVARD", "street2": "SUITE 414", "city": "EXTON", "state": "PA", "zip": "19341"}, "former-company": [{"former-conformed-name": "MEDI JECT CORP /MN/", "date-changed": "19960605"}, {"former-conformed-name": "ANTARES PHARMA INC /MN/", "date-changed": "20010604"}]}
================================================================================

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934.

                For the quarterly period ended September 30, 2002

Commission File Number 0-20945

                              ANTARES PHARMA, INC.

        A Minnesota Corporation                  IRS Employer ID No. 41-1350192

                       707 Eagleview Boulevard, Suite 414
                               Exton, Pennsylvania
                                      19341

                                 (610) 458-6200

                                   ----------

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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
                                       ---     ---

The number of shares outstanding of the Registrant's Common Stock, $.01 par
value, as of November 7, 2002, was 10,031,163.

================================================================================
ANTARES PHARMA, INC.

                                      INDEX

                                                                            PAGE
                                                                            ----

PART I.      FINANCIAL INFORMATION

    ITEM 1.  Financial Statements (Unaudited)

             Consolidated Balance Sheets, as of December 31, 2001
             and September 30, 2002 ........................................  3

             Consolidated Statements of Operations for the three
             months and nine months ended September 30, 2001 and 2002 ......  4

             Consolidated Statements of Cash Flows for the nine
             months ended September 30, 2001 and 2002 ......................  5

             Notes to Consolidated Financial Statements ....................  6

    ITEM 2.  Management's Discussion and Analysis of Financial
             Condition and Results of Operations ........................... 16

    ITEM 3.  Quantitative and Qualitative Disclosures About
             Market Risk ................................................... 22

    ITEM 4.  Controls and Procedures ....................................... 23

PART II.     OTHER INFORMATION

    ITEM 6.  Exhibits and Reports on Form 8-K .............................. 24

             Signatures .................................................... 26

                                       2
ANTARES PHARMA, INC.
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
December 31,    September 30,
                                                                                        2001            2002
                                                                                    ------------    -------------
Assets

Current Assets:
       Cash .....................................................................   $  1,965,089    $    566,484
       Accounts receivable, less allowance for doubtful accounts of $18,000 .....        535,461         227,910
       VAT and other receivables ................................................        331,660          90,337
       Inventories ..............................................................        655,691         471,071
       Prepaid expenses and other assets ........................................         55,041         137,814
       Deferred financing costs .................................................           --           591,309
                                                                                    ------------    ------------
              Total current assets ..............................................      3,542,942       2,084,925

Equipment, furniture and fixtures, net ..........................................      1,924,675       1,665,090
Patent rights, net ..............................................................      2,464,336       2,647,498
Goodwill, net ...................................................................      3,095,355       3,095,355
Other assets ....................................................................        101,142         132,862
                                                                                    ------------    ------------

              Total Assets ......................................................   $ 11,128,450    $  9,625,730
                                                                                    ============    ============

                      Liabilities and Shareholders' Equity

Current Liabilities:
       Accounts payable .........................................................   $    637,794    $    487,575
       Accrued expenses and other liabilities ...................................      1,070,916         844,891
       Due to related parties ...................................................        243,692         641,877
       Convertible debentures ...................................................           --         1,407,096
       Capital lease obligations - current maturities ...........................         91,054         121,119
       Deferred revenue .........................................................      1,511,198       2,083,513
                                                                                    ------------    ------------
              Total current liabilities .........................................      3,554,654       5,586,071

Capital lease obligations, less current maturities ..............................        105,629          44,454
                                                                                    ------------    ------------
              Total liabilities .................................................      3,660,283       5,630,525
                                                                                    ------------    ------------

Shareholders' Equity:
       Series A Convertible Preferred Stock:  $0.01 par; authorized 10,000
          shares; 1,250 and 1,300 issued and outstanding at December 31, 2001 and
          September 30, 2002, respectively ......................................             13              13
       Common Stock:  $0.01 par; authorized 30,000,000 shares;
          9,161,188 and 9,798,231 issued and outstanding at
          December 31, 2001 and September 30, 2002, respectively ................         91,612          97,982
       Additional paid-in capital ...............................................     37,464,531      41,985,368
       Accumulated deficit ......................................................    (29,457,033)    (37,422,910)
       Deferred compensation ....................................................       (251,016)       (209,768)
       Accumulated other comprehensive loss .....................................       (379,940)       (455,480)
                                                                                    ------------    ------------
                                                                                       7,468,167       3,995,205
                                                                                    ------------    ------------
              Total Liabilities and Shareholders' Equity ........................   $ 11,128,450    $  9,625,730
                                                                                    ============    ============
See accompanying notes to consolidated financial statements.

                                       3
ANTARES PHARMA, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
For the Three Months Ended      For the Nine Months Ended
                                                            September 30,                  September 30,
                                                    ----------------------------    ----------------------------
                                                        2001            2002            2001            2002
                                                    ------------    ------------    ------------    ------------
Revenues:
     Product sales ..............................   $    457,555    $  1,071,232    $  1,742,286    $  2,599,800
     Licensing and product development ..........        139,202         161,629         547,793         430,645
                                                    ------------    ------------    ------------    ------------
                                                         596,757       1,232,861       2,290,079       3,030,445

Cost of product sales ...........................        373,190         874,374       1,093,116       2,095,083
                                                    ------------    ------------    ------------    ------------
Gross margin ....................................        223,567         358,487       1,196,963         935,362
                                                    ------------    ------------    ------------    ------------

Operating Expenses:
     Research and development ...................        685,894         843,902       2,080,673       2,388,722
     In-process research and development ........           --              --           948,000            --
     Sales and marketing ........................        363,050         216,910       1,007,057         616,079
     General and administrative .................      1,334,437       1,248,611       3,719,477       3,864,388
                                                    ------------    ------------    ------------    ------------
                                                       2,383,381       2,309,423       7,755,207       6,869,189
                                                    ------------    ------------    ------------    ------------

Net operating loss ..............................     (2,159,814)     (1,950,936)     (6,558,244)     (5,933,827)
                                                    ------------    ------------    ------------    ------------

Other income (expense):
     Interest income ............................         44,667             628         202,851          10,595
     Non-cash interest expense for the intrinsic
       value of the beneficial conversion feature
       of convertible debentures ................           --        (1,720,000)           --        (1,720,000)
     Other interest expense .....................         (4,399)       (173,694)        (95,350)       (226,957)
     Foreign exchange losses ....................        (13,132)         (8,269)        (20,741)        (44,911)
     Other, net .................................        (24,212)            (82)        (18,076)           (777)
                                                    ------------    ------------    ------------    ------------
                                                           2,924      (1,901,417)         68,684      (1,982,050)
                                                    ------------    ------------    ------------    ------------

Net loss ........................................     (2,156,890)     (3,852,353)     (6,489,560)     (7,915,877)

In-the-money conversion feature-preferred
   stock dividend ...............................           --              --        (5,314,125)           --

Preferred stock dividends .......................           --              --           (50,000)        (50,000)
                                                    ------------    ------------    ------------    ------------

Net loss applicable to common shares ............   $ (2,156,890)   $ (3,852,353)   $(11,853,685)   $ (7,965,877)
                                                    ============    ============    ============    ============

Basic and diluted net loss per common share .....   $      (0.24)   $      (0.39)   $      (1.43)   $      (0.85)
                                                    ============    ============    ============    ============

Basic and diluted weighted average common
   shares outstanding ...........................      8,955,347       9,790,411       8,276,424       9,417,888
                                                    ============    ============    ============    ============
See accompanying notes to consolidated financial statements.

                                       4
ANTARES PHARMA, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
For the Nine Months Ended
                                                                                                   September 30,
                                                                                           ----------------------------
                                                                                               2001            2002
                                                                                           ------------    ------------
Cash flows from operating activities:
     Net loss ..........................................................................   $ (6,489,560)   $ (7,915,877)
     Adjustments to reconcile net loss to net cash used in operating activities:
     Depreciation and amortization .....................................................        892,269         616,123
     Amortization of deferred financing costs ..........................................           --            94,331
     Loss on disposal and abandonment of assets ........................................         30,049            --
     In-process research and development ...............................................        948,000            --
     Interest expense for the intrinsic value of the beneficial conversion
       feature of convertible debentures ...............................................           --         1,720,000
     Stock-based compensation expense ..................................................         69,272         276,694
     Changes in operating assets and liabilities, net of effect of business acquisition:
       Accounts receivable .............................................................         (1,433)        307,551
       VAT and other receivables .......................................................        328,007         241,323
       Inventories .....................................................................       (376,022)        184,620
       Prepaid expenses and other assets ...............................................         (3,926)       (290,296)
       Accounts payable ................................................................       (860,150)       (150,219)
       Accrued expenses and other ......................................................       (395,854)       (168,137)
       Due to related parties ..........................................................          9,302        (108,960)
       Deferred revenue ................................................................          6,404         572,315
       Other ...........................................................................        (54,646)        (31,720)
                                                                                           ------------    ------------
Net cash used in operating activities ..................................................     (5,898,288)     (4,652,252)
                                                                                           ------------    ------------

Cash flows from investing activities:
     Purchases of equipment, furniture and fixtures ....................................       (390,270)       (149,346)
     Proceeds from sale of equipment, furniture and fixtures ...........................         91,699            --
     Additions to patent rights ........................................................        (98,255)       (228,132)
     Increase in notes receivable and due from Medi-Ject ...............................       (602,756)           --
     Acquisition of Medi-Ject, including cash acquired .................................        355,578            --
                                                                                           ------------    ------------
Net cash used in investing activities ..................................................       (644,004)       (377,478)
                                                                                           ------------    ------------

Cash flows from financing activities:
     Proceeds from loans from shareholders .............................................      1,188,199       2,500,000
     Proceeds from issuance of convertible debentures ..................................           --         1,400,000
     Principal payments on capital lease obligations ...................................       (148,273)        (93,157)
     Proceeds from issuance of common stock, net .......................................     10,048,249            --
                                                                                           ------------    ------------
Net cash provided by financing activities ..............................................     11,088,175       3,806,843
                                                                                           ------------    ------------

Effect of exchange rate changes on cash and cash equivalents ...........................       (413,180)       (175,718)
                                                                                           ------------    ------------

Net increase (decrease) in cash and cash equivalents ...................................      4,132,703      (1,398,605)
Cash and cash equivalents:
     Beginning of period ...............................................................        243,222       1,965,089
                                                                                           ------------    ------------
     End of period .....................................................................   $  4,375,925    $    566,484
                                                                                           ============    ============

Supplemental cash flow information:
     Cash paid during the period for interest ..........................................   $     95,350    $     21,312
----------
Schedule of non-cash investing and financing activities: See information
regarding non-cash investing and financing activities in Notes 1, 2, 7 and 8.

           See accompanying notes to consolidated financial statements

                                       5
ANTARES PHARMA, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)
                          September 30, 2001 and 2002

1.   Basis of Presentation

     The accompanying unaudited financial statements have been prepared in
     accordance with generally accepted accounting principles for interim
     financial information and with the instructions to Form 10-Q and Article 10
     of Regulation S-X. Accordingly, they do not include all of the information
     and footnotes required by accounting principles generally accepted in the
     United States of America for complete financial statements. In the opinion
     of management, all adjustments (consisting of normal recurring accruals)
     considered necessary for a fair presentation have been included. The
     accompanying financial statements and notes should be read in conjunction
     with our Annual Report on Form 10-K (as amended on Form 10-K/A on September
     19, 2002 and October 9, 2002) for the year ended December 31, 2001.
     Operating results for the nine-month period ended September 30, 2002, are
     not necessarily indicative of the results that may be expected for the year
     ending December 31, 2002.

     The Company has identified certain of its significant accounting policies
     that it considers particularly important to the portrayal of the Company's
     results of operations and financial position and which may require the
     application of a higher level of judgment by the Company's management, and
     as a result are subject to an inherent level of uncertainty. These are
     characterized as "critical accounting policies" and address revenue
     recognition and inventory reserves, each more fully described under
     "Management's Discussion and Analysis of Financial Condition and Results of
     Operations" in the Company's Annual Report on Form 10-K for the year ended
     December 31, 2001. The Company has made no changes to these policies during
     2002. In addition to these policies, management has identified the
     following accounting policy as one that is critical to the presentation of
     the consolidated financial statements.

     Valuation of Long-Lived and Intangible Assets and Goodwill

     The Company assesses the impairment of identifiable intangibles, long-lived
     assets and goodwill at least annually, and whenever events or changes in
     circumstances indicate that the carrying value may not be recoverable. If
     it is determined that the carrying value of intangibles, long-lived assets
     or goodwill may not be recoverable, impairment is measured based on a
     projected discounted cash flow method using a discount rate determined by
     management to be commensurate with the risk inherent in the Company's
     business model or another valuation technique. Net intangible assets,
     long-lived assets and goodwill totaled $7,407,943 as of September 30, 2002.
     The Company is required to at least annually assess the recoverability of
     its intangible assets, or more frequently if certain conditions occur. The
     Company will assess recoverability during the quarter ended December 31,
     2002.

     On January 31, 2001, Medi-Ject Corporation, now known as Antares Pharma,
     Inc. ("Antares" or "the Company") purchased from Permatec Holding AG
     ("Permatec") all of the outstanding shares of Permatec Pharma AG, Permatec
     Technology AG, and Permatec NV (the "Share Transaction"). In exchange,
     Antares issued 2,900,000 shares of Antares common stock to Permatec. Upon
     the issuance, Permatec and its affiliates owned approximately 67% of the
     outstanding shares of Antares common stock. For accounting purposes,
     Permatec is deemed to have acquired Antares. The acquisition has been
     accounted for by the purchase method of accounting.

                                       6
ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
                          September 30, 2001 and 2002

1.   Basis of Presentation (Continued)

     Upon closing of the Share Transaction on January 31, 2001, the full
     principal amount of Permatec's shareholders' loans to the three Permatec
     subsidiaries which were included in the Share Transaction, of $13,069,870,
     was converted to equity.

     Also on January 31, 2001, promissory notes issued by Medi-Ject to Permatec
     between January 25, 2000 and January 15, 2001, in the aggregate principal
     amount of $5,500,000, were converted into Series C Convertible Preferred
     Stock ("Series C"). Permatec, the holder of the Series C stock, immediately
     exercised its right to convert the Series C stock, and Antares issued
     2,750,000 shares of common stock to Permatec, as nominee for Dr. Jacques
     Gonella, upon such conversion. Also on that date, the name of the
     corporation was changed to Antares Pharma, Inc.

     The total consideration paid, or purchase price, for Medi-Ject was
     $6,889,974, which represents the fair market value of Medi-Ject and related
     transaction costs of $480,095. For accounting purposes, the fair value of
     Medi-Ject is based on the 1,424,729 shares of Medi-Ject common stock
     outstanding on January 25, 2000, at an average closing price three days
     before and after such date of $2.509 per share plus the estimated fair
     value of the Series A convertible preferred stock and the Series B
     mandatorily redeemable convertible preferred stock plus the fair value of
     outstanding stock options and warrants representing shares of Medi-Ject
     common stock either vested on January 25, 2000, or that became vested at
     the close of the Share Transaction plus the capitalized acquisition cost of
     Permatec.

     The purchase price allocation was as follows:

            Cash acquired ................................. $   394,535
            Current assets ................................     900,143
            Equipment, furniture and fixtures .............   1,784,813
            Patents .......................................   1,470,000
            Other intangible assets .......................   2,194,000
            Goodwill ......................................   1,276,806
            Other assets ..................................       3,775
            Current liabilities ...........................  (2,026,723)
            Debt ..........................................     (55,375)
            In-process research and development ...........     948,000
                                                            -----------
            Purchase price ................................ $ 6,889,974
                                                            ===========

     In connection with the Share Transaction on January 31, 2001, the Company
     acquired in-process research and development projects having an estimated
     fair value of $948,000, that had not yet reached technological feasibility
     and had no alternative future use. Accordingly, this amount was immediately
     expensed in the Consolidated Statements of Operations.

     Unaudited pro forma results of operations for the years ended December 31,
     2000 and 2001, and for the nine months ended September 30, 2001, assuming
     Permatec's acquisition of Medi-Ject, the conversion of the $5,000,000 in
     promissory notes, and the Company's implementation of SFAS 141, all
     collectively occurred on January 1, 2000, are as follows:

                                       7
ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
                          September 30, 2001 and 2002

1.   Basis of Presentation (Continued)
Pro forma
                                                  Pro forma Year      Pro forma Year     Nine Months Ended
                                                       Ended              Ended            September 30,
                                                 December 31, 2000   December 31, 2001         2001
                                                 -----------------   -----------------   -----------------
Net revenues .............................    $  2,553,284        $  3,811,362       $  2,602,917
     Loss before cumulative effect of a
        change in accounting principle ........    $(10,030,643)       $(15,086,836)      $(12,130,477)
     Net loss .................................    $(11,145,026)       $(15,086,836)      $(12,130,477)
     Net loss per share .......................    $      (1.63)       $      (1.78)      $      (1.47)
2.   Going Concern

     The accompanying financial statements have been prepared on a going-concern
     basis, which contemplates the realization of assets and the satisfaction of
     liabilities and other commitments in the normal course of business. The
     Company's external auditors issued their report on the December 31, 2001
     financial statements, which expressed substantial doubt about the Company's
     ability to continue as a going concern. The Company had negative working
     capital of $3,501,146 at September 30, 2002, and has had net losses and
     negative cash flows from operating activities since inception.

     The Company expects to report a net loss for the year ending December 31,
     2002, as marketing and development costs related to bringing future
     generations of products to market continue. Long-term capital requirements
     will depend on numerous factors, including the status of collaborative
     arrangements, the progress of research and development programs and the
     receipt of revenues from sales of products.

     There can be no assurance that the Company will ever become profitable or
     that adequate funds will be available when needed or on acceptable terms.

     The financial statements do not include any adjustments relating to the
     recoverability and classification of recorded asset amounts or the amounts
     and classification of liabilities that might be necessary if the Company is
     unable to continue as a going concern.

     The Company believes it has sufficient cash to continue operations through
     November 2002 and will be required to raise additional working capital to
     continue to exist. Management's intentions are to raise this additional
     capital through alliances with strategic corporate partners, equity
     offerings, and/or debt financing. The Company received $1,000,000 on March
     12, 2002 and $1,000,000 on April 24, 2002 from the Company's majority
     shareholder, Dr. Jacques Gonella, under a Term Note agreement dated
     February 20, 2002. The Term Note agreement allowed for total advances to
     the Company of $2,000,000 and was interest bearing at the three-month
     Euribor Rate as of the date of each advance, plus 5%. The principal of
     $2,000,000 and accrued interest of $36,550 was converted into 509,137
     shares of common stock on June 10, 2002 at $4.00 per share, the market
     price of the Company's stock on that date. In addition, the

                                       8
ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
                          September 30, 2001 and 2002

2.   Going Concern (Continued)

     Company borrowed from its majority shareholder $300,000 and $200,000 in
     June and September of 2002, respectively, to be repaid in July and
     September of 2003, respectively, with interest at the three-month Euribor
     Rate as of the date of the advance, plus 5%.

     On July 12, 2002 the Company entered into a Securities Purchase Agreement
     (the "Agreement") for the sale and purchase of up to $2,000,000 aggregate
     principal amount of the Company's 10% Convertible Debentures. The
     debentures are convertible into shares of the Company's common stock at a
     conversion price which is the lower of $2.50 or 75% of the average of the
     three lowest intraday prices of the Company's common stock, as reported on
     the Nasdaq SmallCap Market, during the 20 trading days preceding the
     conversion date. Within 15 days of the closing, the Company was obligated
     to file a registration statement with the Securities and Exchange
     Commission to register the shares issuable upon conversion of the
     debentures. Under the terms of the Agreement, the Company received $700,000
     upon closing of the transaction on July 12, 2002, an additional $700,000
     after the Company filed the registration statement on July 19, 2002 to
     register the shares issuable upon conversion of the debentures, and
     $600,000 after such registration statement was declared effective on
     October 10, 2002. The debentures are collateralized by all assets of the
     Company, which include all inventory, receivables, furniture, equipment and
     patents. The Company held a special meeting of its shareholders on August
     23, 2002, at which the shareholders approved the issuance of the shares
     issuable upon conversion of the debentures. As the per share conversion
     price of the debentures was substantially lower than the market price of
     the common stock on the date the debentures were sold, the Company recorded
     a non-cash accounting charge of $1,720,000 at September 30, 2002 for the
     intrinsic value of the beneficial in-the-money conversion feature of the
     debentures. Upon conversion of the debentures, existing common shareholders
     could experience substantial dilution of their investment. As of November
     7, 2002, $175,000 of the debentures had been converted into 227,932 shares
     of common stock. If all remaining debentures were converted at the $0.42
     conversion price in place at November 7, 2002, a total of 4,345,238 shares
     would be issued, which would result in substantial dilution to current
     shareholders.

3.   Comprehensive Loss
Three Months Ended             Nine Months Ended
                                                       September 30,                  September 30,
                                                --------------------------     --------------------------
                                                   2001           2002             2001           2002
                                                -----------    -----------     -----------    -----------
Net loss .............................  $(2,156,890)   $(3,852,353)    $(6,489,560)   $(7,915,877)
        Change in cumulative translation
          adjustment .........................      (34,759)       (22,099)       (375,514)       (75,540)
                                                -----------    -----------     -----------    -----------
        Comprehensive loss ...................  $(2,191,649)   $(3,874,452)    $(6,865,074)   $(7,991,417)
                                                ===========    ===========     ===========    ===========
9
ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
                          September 30, 2001 and 2002

4.   Inventories

     Inventories consist of the following:

                                                   December 31,    September 30,
                                                      2001             2002
                                                   ------------    -------------
        Raw material ............................   $ 294,643        $271,755
        Work in-process .........................      29,611          27,937
        Finished goods ..........................     436,437         221,379
                                                    ---------        --------
                                                      760,691         521,071
        Inventory reserve .......................    (105,000)        (50,000)
                                                    ---------        --------
                                                    $ 655,691        $471,071
                                                    =========        ========

5.   Industry Segment and Operations by Geographic Areas

     The Company is primarily engaged in development of drug delivery
     transdermal and transmucosal pharmaceutical products and drug delivery
     injection devices and supplies. These operations are considered to be one
     segment. The geographic distributions of the Company's identifiable assets
     and revenues are summarized in the following table:

     The Company has operating assets located on two continents as follows:

                                                 December 31,      September 30,
                                                    2001                2002
                                                 ------------      -------------
        Switzerland ...........................  $ 2,388,337        $1,606,442
        United States of America ..............    8,740,113         8,019,288
                                                 -----------        ----------
                                                 $11,128,450        $9,625,730
                                                 ===========        ==========

     Revenues by region of origin are summarized as follows:

                                                     For the Three Months Ended
                                                           September 30,
                                                     --------------------------
                                                       2001            2002
                                                     --------      ------------
        United States of America ..................  $313,260       $  416,724
        Europe ....................................   288,594          793,074
        Other .....................................    (5,097)          23,063
                                                     --------       ----------
                                                     $596,757       $1,232,861
                                                     ========       ==========

                                                      For the Nine Months Ended
                                                             September 30,
                                                     ---------------------------
                                                        2001              2002
                                                     ----------       ----------
        United States of America ..................  $  564,486       $1,100,725
        Europe ....................................   1,658,250        1,858,393
        Other .....................................      67,343           71,327
                                                     ----------       ----------
                                                     $2,290,079       $3,030,445
                                                     ==========       ==========

                                       10
ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
                          September 30, 2001 and 2002

6.   Accounting for License Revenues

     During the quarter ended December 31, 2000 and effective January 1, 2000,
     the Company adopted the cumulative deferral method for accounting for
     license revenues. The adoption of this accounting principle resulted in a
     $1,059,622 cumulative effect adjustment in the first quarter 2000.

     During the quarter and nine-month periods ended September 30, 2001 and for
     the same periods ending September 30, 2002, the Company recognized $69,301,
     $207,902, $31,684 and $107,626, respectively, of license revenues that were
     previously recognized by the Company prior to the adoption of the
     cumulative deferral method.

7.   In-The-Money Conversion Feature Preferred Stock Dividend

     During 2000 and 2001, prior to the closing of the Share Transaction on
     January 31, 2001, Medi-Ject borrowed a total of $5,500,000 in convertible
     promissory notes from Permatec. At the closing of the Share Transaction,
     the principal amount of convertible promissory notes converted to 27,500
     shares of Series C preferred stock. At the option of the holder, these
     shares were immediately converted into 2,750,000 shares of Antares common
     stock. As the conversion feature to common stock was contingent upon the
     closing of the Share Transaction, the measurement of the stated conversion
     feature as compared to the Company's common stock price of $4.56 at January
     31, 2001, resulted in an in-the-money conversion feature of $5,314,125,
     which was a deemed dividend to the Series C preferred shareholder. This
     dividend increased the net loss applicable to common shareholders in the
     Antares' net loss per share calculation.

8.   Shareholders' Equity

     Roger G. Harrison, Ph.D., was appointed Chief Executive Officer of Antares
     Pharma, Inc., effective March 12, 2001. The terms of the employment
     agreement with Dr. Harrison include up to 216,000 restricted shares of
     common stock that will be granted after the achievement of certain
     time-based and performance-based milestones. The time-based milestones have
     been achieved and the Company issued Dr. Harrison 48,000 and 40,000
     restricted shares in April 2001 and March 2002, respectively. All
     restricted shares issued under the terms of the employment agreement vest
     on March 12, 2004. The Company has recorded deferred compensation expense
     of $341,000, the aggregate market value of the 88,000 shares at the
     measurement date. Compensation expense is being recognized ratably over the
     three-year vesting period. Compensation expense of $61,568 and $85,248 was
     recognized in connection with these shares through September 30, 2001 and
     2002, respectively.

     During the second quarter of 2002 the Company issued 80,000 shares of fully
     vested common stock valued at $283,000 to two consultants for services to
     be performed. Of the 80,000 shares issued, 20,000 were issued as
     compensation directly related to the closing on July 12, 2002 of $2,000,000
     of the Company's 10% Convertible Debentures. Expense related to 20,000
     shares will be recognized as interest expense over the term of the
     debentures. The remaining 60,000 shares were for consulting services to be
     provided to the Company. Expense related to the

                                       11
ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
                          September 30, 2001 and 2002

8.   Shareholders' Equity (Continued)

     60,000 shares is being recognized as the consulting services are provided
     to the Company. Through September 30, 2002 approximately $173,000 has been
     recognized as expense.

     On June 10, 2002 the principal balance of $2,000,000 and accrued interest
     of $36,550 under a term note agreement with the Company's majority
     shareholder, Dr. Jacques Gonella, was converted into 509,137 shares of
     common stock at $4.00 per share.

     Under the terms of an equity advisor agreement in connection with the
     Company's 10% Convertible Debentures, the Company issued in July and
     October 2002, 112,000 and 48,000 warrants, respectively, valued at $412,118
     and $54,899, respectively. The value of the warrants is being amortized to
     interest expense over the one-year life of the debentures. Through
     September 30, 2002, $85,411 has been amortized to interest expense. The
     warrants are exercisable for ten years at an exercise price of $2.50.

9.   New Accounting Pronouncements

     In July 2001, the Financial Accounting Standards Board issued SFAS 141,
     "Business Combinations," and SFAS 142, "Goodwill and Other Intangible
     Assets." SFAS 141 requires that the purchase method of accounting be used
     for all business combinations initiated after June 30, 2001. SFAS 142
     changes the accounting for goodwill from an amortization method to an
     impairment-only approach. Thus, amortization of goodwill, including
     goodwill recorded in past business combinations, ceased upon adoption of
     that Statement. The Company adopted SFAS 142 in the first quarter of fiscal
     2002 and, accordingly, evaluated its existing intangible assets and
     goodwill that were acquired in the Share Transaction. The Company concluded
     that $1,935,588 representing the unamortized portion of the amount
     allocated to other intangible assets on the date of adoption should be
     classified as goodwill as these intangible assets did not meet the
     definition for separate accounting under SFAS 142. These amounts were
     previously classified as workforce, ISO certification and clinical studies
     with unamortized balances of $510,413, $271,588 and $1,153,587,
     respectively, at December 31, 2001. Upon adoption of SFAS 142, the Company
     reassessed the useful lives and residual values of all intangible assets
     acquired in purchase business combinations, and determined that there were
     no amortization period adjustments necessary.

     The Company adopted SFAS 141 during 2001 and adopted SFAS 142 effective
     January 1, 2002. As of the date of adoption of SFAS 142, after
     reclassification of other intangible assets as goodwill, the Company had
     approximately $3,095,355 of unamortized goodwill subject to the transition
     provisions of SFAS 141 and 142. The Company completed an evaluation of
     goodwill in accordance with the provisions of SFAS 142 and concluded that
     no impairment existed. Adoption of SFAS 142 is expected to decrease
     amortization expenses in 2002 by approximately $410,000 as a result of
     ceasing amortization of goodwill and other intangible assets reclassified
     as goodwill.

     For the three and nine-month periods ended September 30, 2001 and 2002, the
     goodwill amortization, adjusted net loss and basic and diluted loss per
     share are as follows:

                                       12
ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
                          September 30, 2001 and 2002

9.   New Accounting Pronouncements (Continued)
Three Months Ended              Nine Months Ended
                                                September 30,                   September 30,
                                         ----------------------------    ----------------------------
                                             2001            2002            2001            2002
                                         ------------    ------------    ------------    ------------
Net loss as reported .............  $ (2,156,890)   $ (3,852,353)   $(11,853,685)   $ (7,965,877)
     Addback goodwill amortization ....       102,396            --           361,253            --
                                         ------------    ------------    ------------    ------------
     Adjusted net loss ................  $ (2,054,494)   $ (3,852,353)   $(11,492,432)   $ (7,965,877)
                                         ============    ============    ============    ============
     Basic and diluted loss per
       share:
             Net loss as reported .....  $      (0.24)   $      (0.39)   $      (1.43)   $      (0.85)
             Goodwill amortization ....          0.01            -               0.04            -
                                         ------------    ------------    ------------    ------------
      Adjusted net loss per share .....  $      (0.23)   $      (0.39)   $      (1.39)   $      (0.85)
                                         ============    ============    ============   =============
For the three years ended December 31, 1999, 2000 and 2001, the goodwill
     amortization, adjusted net loss and basic and diluted loss per share are as
     follows:
December 31,
                                              -----------------------------------------
                                                  1999          2000            2001
                                              ------------  ------------   ------------
Net loss as reported ..................  $(3,967,366)  $(5,260,387)   $(14,913,226)
     Addback goodwill amortization .........      177,963       177,963         464,434
                                              -----------   -----------    ------------
     Adjusted net loss .....................  $(3,789,403)  $(5,082,424)   $(14,448,792)
                                              ===========   ===========    ============
     Basic and diluted loss per share:
         Net loss as reported ..............  $     (0.92)  $     (1.22)   $      (1.76)
         Goodwill amortization .............         0.04          0.04            0.06
                                              -----------   -----------    -----------
      Adjusted net loss per share ..........  $     (0.88)  $     (1.18)   $      (1.70)
                                              ===========   ===========    ============
The gross carrying amount and accumulated amortization of patents,
     which are the only intangible assets of the Company subject to
     amortization, was $2,975,299 and $327,801, respectively, at September
     30, 2002. Amortization expense was $75,040 for the nine-months ended
     September 30, 2002. The estimated aggregate amortization expense for
     the next five years is $33,000 in the fourth quarter of 2002, $133,000
     in 2003 through 2006, and $96,000 in the first nine months of 2007.

     In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
     No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
     Corrections." SFAS No. 145 allows only those gains and losses on the
     extinguishment of debt that meet the criteria of extraordinary items to be
     treated as such in the financial statements. SFAS No. 145 also requires
     sales-leaseback accounting for certain lease modifications that have
     economic effects that are similar to sales-leaseback transactions. Certain
     provisions of SFAS No. 145 are effective for transactions occurring after
     May 15, 2002, while the remaining provisions will be effective for the
     Company in the first quarter of fiscal 2004. The Company does not expect
     the adoption of SFAS No. 145 to have a material impact on its consolidated
     financial statements.

                                       13
ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
                          September 30, 2001 and 2002

9.   New Accounting Pronouncements (Continued)

     In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
     Associated with Exit or Disposal Activities," which nullifies EITF 94-3 and
     requires that a liability for a cost associated with an exit or disposal
     activity be recognized when the liability is incurred. The Company plans to
     adopt SFAS No. 146 in January 2003. Management believes that the adoption
     of this statement will not have a material effect on the Company's results
     of operations in the foreseeable future.

10.  Reconciliation of Loss and Share Amount Used in EPS Calculation

     Basic loss per common share is computed by dividing net loss available to
     Common Shareholders by the weighted-average number of common shares
     outstanding for the period. Diluted loss per common share reflects the
     potential dilution from the exercise or conversion of securities into
     common stock. The 509,137 shares of common stock issued on June 10, 2002 to
     the Company's majority shareholder, Dr. Jacques Gonella, in connection with
     conversion of $2,036,550 in notes payable and accrued interest, had only a
     minor effect on the loss per share for the nine-month period ended
     September 30, 2002, and the full impact from issuance of these shares will
     not be reflected in the year-to-date loss per share calculations until
     future periods. In addition, as discussed in Note 2, the conversion of the
     Company's 10% convertible debentures may result in substantial dilution to
     common shareholders. The following table discloses the basic and diluted
     loss per share. In addition, as the Company is in a loss position, the
     table discloses the stock options and warrants outstanding at the end of
     each period which were excluded from the weighted average shares
     outstanding as their impact is anti-dilutive.
Three Months Ended               Nine Months Ended
                                                  September 30,                   September 30,
                                          ----------------------------    ----------------------------
                                              2001            2002            2001            2002
                                          ------------    ------------    ------------    ------------
Net loss .........................   $ (2,156,890)   $ (3,852,353)   $(11,853,685)   $ (7,965,877)
     Basic and diluted weighted average
       common shares outstanding ......      8,955,347       9,790,411       8,276,424       9,417,888
                                          ------------    ------------    ------------    ------------
     Basic and diluted net loss per
       common share ...................   $      (0.24)   $      (0.39)   $      (1.43)   $      (0.85)
                                          ============    ============    ============    ============
     Antidilutive stock options
       and warrants ...................      1,695,860       1,858,638       1,695,860       1,858,638
                                          ============    ============    ============    ============
     Principal amount of anti-dilutive
        convertible debentures ........           --      $  1,400,000            --      $  1,400,000
                                          ============    ============    ============    ============
11.  Related Party Transactions

     Effective February 1, 2001, the Company entered into a consulting agreement
     with JG Consulting AG, a company owned by the Company's majority
     shareholder, Dr. Jacques Gonella. In connection with this agreement, the
     Company recognized expense of $124,000 and $139,500 for the nine-month
     periods ended September 30, 2001 and 2002, respectively. Amounts owed to

                                       14
ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
                          September 30, 2001 and 2002

11.      Related Party Transactions (Continued)

         JG Consulting AG at December 31, 2001 and September 30, 2002 were
         $90,532 and $31,000, respectively. In addition, in 2001 the Company
         sold equipment, furniture and fixtures to JG Consulting AG for $91,699,
         which approximated the book value of the assets sold.

         During the nine months ended September 30, 2001 the Company recognized
         expense of $92,500 for feasibility study and market research services
         performed by a company in which Dr. Gonella has an ownership interest
         of approximately 25%. At December 31, 2001 and September 30, 2002 the
         Company had a payable to this company of $92,500.

         During the nine months ended September 30, 2002 the Company recognized
         expense of approximately $78,400 for consulting services provided by
         John Gogol, one of the Company's board members. The Company had a
         payable to Mr. Gogol at December 31, 2001 and September 30, 2002 of
         $6,363 and $11,232, respectively.

         The Company received $1,000,000 on March 12, 2002 and $1,000,000 on
         April 24, 2002 from the Company's majority shareholder, Dr. Jacques
         Gonella, under a Term Note agreement dated February 20, 2002. The Term
         Note agreement allowed for total advances to the Company of $2,000,000
         and was interest bearing at the three-month Euribor Rate as of the date
         of each advance, plus 5%. The principal of $2,000,000 and accrued
         interest of $36,550 was converted into 509,137 shares of common stock
         on June 10, 2002 at $4.00 per share. In addition, the Company borrowed
         from its majority shareholder $300,000 and $200,000 in June and
         September of 2002, respectively, to be repaid in July and September of
         2003, respectively, with interest at the three-month Euribor Rate as of
         the date of the advance, plus 5%.

                                       15
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

Results of Operations

Critical Accounting Policies

The Company has identified certain of its significant accounting policies that
it considers particularly important to the portrayal of the Company's results of
operations and financial position and which may require the application of a
higher level of judgment by the Company's management, and as a result are
subject to an inherent level of uncertainty. These are characterized as
"critical accounting policies" and address revenue recognition and inventory
reserves, each more fully described under "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in the Company's Annual Report
on Form 10-K for the year ended December 31, 2001. The Company has made no
changes to these policies during 2002. In addition to these policies, management
has identified the following accounting policy as one that is critical to the
presentation of the consolidated financial statements.

Valuation of Long-Lived and Intangible Assets and Goodwill

The Company assesses the impairment of identifiable intangibles, long-lived
assets and goodwill at least annually, and whenever events or changes in
circumstances indicate that the carrying value may not be recoverable. If it is
determined that the carrying value of intangibles, long-lived assets or goodwill
may not be recoverable, impairment is measured based on a projected discounted
cash flow method using a discount rate determined by management to be
commensurate with the risk inherent in the Company's business model or another
valuation technique. Net intangible assets, long-lived assets and goodwill
totaled $7,407,943 as of September 30, 2002. The Company is required to at least
annually assess the recoverability of its intangible assets, or more frequently
if certain conditions occur. The Company will assess recoverability during the
quarter ended December 31, 2002.

Three and Nine Months Ended September 30, 2001 and 2002

Revenues

Total revenues for the three and nine months ended September 30, 2002 were
$1,232,861 and $3,030,445, respectively, reflecting increases over the same
periods of the prior year of $636,104 and $740,366, or 107% and 32%,
respectively. The increase in revenues is due mainly to increases in product
sales in the three and nine-month periods of $613,677 and $857,514,
respectively, offset in the nine-month period by a decrease in licensing and
product development revenue of $117,148. The increased product sales resulted
primarily from increased sales of injector devices and increased sales to
licensees in connection with clinical studies and other development activities
under license agreements.

Licensing and product development fee income increased by $22,427 or 16%, in the
three-month period and decreased by $117,148 or 21% in the nine-month period
ended September 30, 2002, as compared to the prior-year periods. The decrease in
the nine-month period is primarily due to a $150,000 Antares/Minnesota one-time
development fee earned in the second quarter of 2001 under a discrete contract.
The balance of the licensing and product development revenue is attributable to
the recognition of previously deferred revenue related to licensing and product
development contracts.

                                       16
During the quarter ended December 31, 2000 and effective January 1, 2000, the
Company adopted the cumulative deferral method for accounting for license
revenues. The adoption of this accounting principle resulted in a $1,059,622
cumulative effect adjustment in the first quarter of 2000.

During the quarter and nine-month periods ended September 30, 2001 and for the
same periods ending September 30, 2002, the Company recognized $69,301,
$207,902, $31,684 and $107,626, respectively, of license revenues that were
previously recognized by the Company prior to the adoption of the cumulative
deferral method.

Cost of Sales

The costs of product sales are primarily related to injection devices and
disposable products. Cost of sales as a percentage of product sales was 82% in
the third quarter of both 2001 and 2002, and increased from 63% for the first
nine months of 2001 to 81% for the same period of 2002. The third quarter of
2002 includes a charge of $140,000, or 13% and 5% of product sales in the
quarter and nine-month periods, respectively, representing the estimated costs
associated with retrieving and proactively reworking or replacing certain
injection devices to prevent a potential premature wearing discovered during
routine ongoing product testing. Also included in the increase during the first
nine months of 2002 was approximately $282,000 of inventory write-offs and
inventory reserve adjustments in the first quarter related to the launch of the
Medi-Ject Vision ("MJ7") device into new markets. Approximately $171,000 of this
amount related to a disposable component found to have a design defect, which
was immediately corrected. The remaining $111,000 of inventory written off was
due to a production problem encountered in connection with another disposable
component. The Company has incurred only minor additional expenses associated
with testing and making the required production modifications.

Research and Development

Research and development expenses totaled $843,902 and $2,388,722 in the three
and nine-month periods ended September 30, 2002, respectively, compared to
$685,894 and $2,080,673 in the same prior-year periods. The increase in the
three-month period of $158,008 is primarily due to research employee additions
at Antares/Switzerland for increased research activities. The increase in the
nine-month period of $308,049 is primarily due to the research employee
additions at Antares/Switzerland and the inclusion of nine months of
Antares/Minnesota expenses in 2002 compared with only eight months in 2001
following the business combination on January 31, 2001.

Sales and Marketing

Sales and marketing expenses totaled $216,910 and $616,079 in the three and
nine-month periods ended September 30, 2002, respectively, compared to $363,050
and $1,007,057 in the same periods of the prior year. The decreases in the three
and nine-month periods of $146,140 or 40%, and $390,978 or 39%, respectively, as
compared to the prior-year periods, are primarily due to a management decision
to reduce sales and marketing costs, offset in the nine-month period by nine
months of Antares/Minnesota expenses in 2002 compared with only eight months in
2001 following the business combination on January 31, 2001.

General and Administrative

General and administrative expenses totaled $1,248,611 and $3,864,388 in the
three and nine-month periods ended September 30, 2002, respectively, compared to
$1,334,437 and $3,719,477 in the same periods of the prior year. The decrease in
the three-month period of $85,826 or 6% as compared to the prior-year period is
primarily due to reduction of amortization expense of $56,550 due to the
adoption of

                                       17
SFAS 142 and decreased travel expenses. The increase in the current year
nine-month period as compared to the same prior-year period of $144,911 or 4% is
primarily due to the opening of the corporate office in Exton, PA in December of
2001 and expenses related to our equity advisor agreements. The increase in the
nine-month period is also due to the inclusion of nine months of
Antares/Minnesota expenses in 2002 compared with only eight months in 2001
following the business combination on January 31, 2001, offset by decreases in
expenses related to the business combination and amortization expense of
$150,800 due to the adoption of SFAS 142.

Other Income (Expense)

Net other income (expense) changed to expense of $1,901,417 and $1,982,050 in
the three and nine-month periods of 2002, respectively, from income of $2,924
and $68,684, in the same periods ended September 30, 2001. The changes resulted
primarily from interest expense of $1,720,000 related to the intrinsic value of
the beneficial in-the-money conversion feature of the Company's 10% convertible
debentures sold in July of 2002 recorded in the third quarter of 2002, as the
per share conversion price of the debentures into common stock was substantially
lower than the market price of the common stock on the date of the debenture
purchase agreement. In addition, other interest expense in the three-month and
nine-month periods of 2002 increased by $169,295 and $131,607, respectively,
over the same periods in 2001 due to the sale of $1,400,000 of the convertible
debentures and due to borrowings of $2,500,000 in the second and third quarters
of 2002 from the Company's majority shareholder. The increased interest expense
results primarily from $133,567 of amortization of deferred financing costs
related to the convertible debentures. In June, the Company's majority
shareholder converted $2,000,000 of debt plus accrued interest into common
stock, resulting in a reduction in interest expense in the third quarter of
approximately $30,000 as compared to the second quarter. Interest expense for
the nine-months of 2001 of $95,350 resulted primarily from interest expense on
outstanding notes incurred by Antares/Switzerland in January 2001 prior to the
business combination, while interest expense for the nine-months of 2002 of
$226,957 was primarily due to amortization of deferred financing costs and
interest charges related to the convertible debentures and interest on the
borrowings from the Company's majority shareholder. Also, interest income
decreased in the three-month and nine-month periods of 2002 as compared to 2001
by $44,039 and $192,256, respectively, due to lower average cash balances in
2002 compared to 2001.

The 509,137 shares of common stock issued on June 10, 2002 to the Company's
majority shareholder, Dr. Jacques Gonella, in connection with conversion of
$2,036,550 in notes payable and accrued interest, had only a minor effect on the
loss per share for the nine-month period ended September 30, 2002, and the full
impact from issuance of these shares will not be reflected in the year-to-date
loss per share calculations until future periods. In addition, as discussed in
Note 2 to the Consolidated Financial Statements, the conversion of the Company's
10% convertible debentures may result in substantial dilution to common
shareholders.

Cash Flows

Operating Activities

Net cash used in operating activities decreased by $1,246,036, from $5,898,288
for the first nine months of 2001 to $4,652,252 for the first nine months of
2002. This was the result of net losses of $6,489,560 and $7,915,877 in the
first nine months of 2001 and 2002, respectively, adjusted by noncash expenses
and changes in operating assets and liabilities.

                                       18
Net noncash expenses of $1,939,590 in the first nine months of 2001 were mainly
due to depreciation and amortization of $892,269 and in-process research and
development of $948,000. Noncash expenses in the first nine months of 2002
totaled $2,707,148, consisting primarily of interest expense for the intrinsic
value of the beneficial conversion feature of the Company's 10% convertible
debentures of $1,720,000, depreciation and amortization of $616,123 and
stock-based compensation expense of $276,694.

The change in operating assets and liabilities in the first nine months of 2001
resulted in a net decrease to cash of $1,348,318, comprised mainly of reductions
in accounts payable and accrued expenses of $860,150 and $395,854, respectively,
as a result of improved liquidity from the sale of common stock in the first
nine months of 2001. In addition, an increase in inventory used $376,022 in the
2001 period. In the first nine months of 2002, the change in operating assets
and liabilities caused an increase in cash of $556,477, primarily due to the
increase in deferred revenue of $572,315 and decreases in accounts receivable of
$307,551, VAT and other receivables of $241,323, and inventory of $184,620,
offset by an increase in prepaid expenses of $290,296, and decreases in accounts
payable, accrued expenses and liabilities to related parties of $150,219,
$168,137 and $108,960, respectively. The increase in deferred revenue of
$572,315 resulted mainly from milestone payments of approximately $500,000
related to existing license agreements, along with approximately $300,000
related to agreements originating in 2002.

Investing Activities

Net cash used in investing activities decreased $266,526, from $644,004 in the
first nine months of 2001 to $377,478 in the same period of 2002. In 2001,
$602,756 was loaned to Medi-Ject before the business combination and was offset
by the cash balance of $355,578 in Medi-Ject at the time of the business
combination. In addition, in 2001 the Company received proceeds of $91,699 from
the sale of equipment, furniture and fixtures. Purchases of equipment, furniture
and fixtures in the first nine months of 2001 and 2002 totaled $390,270 and
$149,346, respectively, and expenditures for patent acquisition and development
totaled $98,255 and $228,132, respectively.

Financing Activities

Net cash provided by financing activities decreased $7,281,332 from $11,088,175
in the first nine months of 2001 to $3,806,843 in the same period of 2002, due
primarily to net proceeds of $10,048,249 received during the first nine months
of 2001 from issuance of common stock, of which $9,994,549 was received in a
private placement of common stock.

The Company received $1,000,000 on March 12, 2002 and $1,000,000 on April 24,
2002 from the Company's majority shareholder, Dr. Jacques Gonella, under a Term
Note agreement dated February 20, 2002. The Term Note agreement allowed for
total advances to the Company of $2,000,000. The note was interest bearing at
the three-month Euribor Rate as of the date of each advance, plus 5%. The
principal and accrued interest of $36,550 was converted into 509,137 shares of
common stock on June 10, 2002 at $4.00 per share, the market price of the
Company's common stock on that date. Additionally, the Company borrowed from its
majority shareholder $300,000 and $200,000 in June and September of 2002,
respectively, to be repaid in July and September of 2003, with interest at the
three-month Euribor Rate as of the date of the advance, plus 5%.

On July 12, 2002 the Company entered into a Securities Purchase Agreement (the
"Agreement") for the sale and purchase of up to $2,000,000 aggregate principal
amount of the Company's 10% convertible debentures. The debentures are
convertible into shares of the Company's common stock at a conversion

                                       19
price which is the lower of $2.50 or 75% of the average of the three lowest
intraday prices of the Company's common stock, as reported on the Nasdaq
SmallCap Market, during the 20 trading days preceding the conversion date.
Within 15 days of the closing, the Company was obligated to file a registration
statement with the Securities and Exchange Commission to register the shares
issuable upon conversion of the debentures. Under the terms of the Agreement,
the Company received $700,000 upon closing of the transaction on July 12, 2002,
an additional $700,000 after the Company filed the registration statement on
July 19, 2002 to register the shares issuable upon conversion of the debentures,
and $600,000 after such registration statement was declared effective on October
10, 2002. The debentures are collateralized by all assets of the Company, which
include all inventory, receivables, furniture, equipment and patents. The
Company held a special meeting of its shareholders on August 23, 2002, at which
the shareholders approved the issuance of the shares issuable upon conversion of
the debentures. As the per share conversion price of the debentures into common
stock was substantially lower than the market price of the common stock on the
date the debentures were sold, the Company recorded a non-cash accounting charge
of $1,720,000 at September 30, 2002 for the intrinsic value of the beneficial
in-the-money conversion feature of the debentures. Upon conversion of the
debentures, existing common shareholders could experience substantial dilution
of their investment. As of November 7, 2002, $175,000 of the debentures had been
converted into 227,932 shares of common stock. If all remaining debentures were
converted at the $0.42 conversion price in place at November 7, 2002, a total of
4,345,238 shares would be issued.

Liquidity

The accompanying financial statements have been prepared on a going-concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities and other commitments in the normal course of business. The
Company's external auditor issued their report on the December 31, 2001
financial statements, which expressed substantial doubt about the Company's
ability to continue as a going concern. The Company had negative working capital
of $3,501,146 at September 30, 2002, and has had net losses and negative cash
flows from operating activities since inception.

The Company expects to report a net loss for the year ending December 31, 2002,
as marketing and development costs related to bringing future generations of
products to market continue. Long-term capital requirements will depend on
numerous factors, including the status of collaborative arrangements, the
progress of research and development programs and the receipt of revenues from
sales of products.

The Company believes it has sufficient cash to continue operations through
November 2002 and will be required to raise additional working capital to
continue to exist. Management's intentions are to raise this additional capital
through alliances with strategic corporate partners, equity offerings, and/or
debt financing. In 2002 the Company borrowed $2,500,000 from the Company's
majority shareholder, of which $2,000,000 plus accrued interest was converted to
common stock in June. In July and October the Company issued $1,400,000 and
$600,000, respectively, of its 10% convertible debentures. See "Cash Flows -
Financing Activities."

There can be no assurance that the Company will ever become profitable or that
adequate funds will be available when needed or on acceptable terms. If for any
reason the Company is unable to obtain additional financing it may not be able
to continue as a going concern, which may result in material asset impairments,
other material adverse changes in the business, results of operations or
financial condition, or the loss by shareholders of all or a part of their
investment in the Company.

                                       20
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary if the Company is unable
to continue as a going concern.

New Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board issued SFAS 141,
"Business Combinations," and SFAS 142, "Goodwill and Other Intangible Assets."
SFAS 141 requires that the purchase method of accounting be used for all
business combinations initiated after June 30, 2001. SFAS 142 changes the
accounting for goodwill from an amortization method to an impairment-only
approach. Thus, amortization of goodwill, including goodwill recorded in past
business combinations, ceased upon adoption of that Statement. The Company
adopted SFAS 142 in the first quarter of fiscal 2002 and, accordingly, evaluated
its existing intangible assets and goodwill that were acquired in the Medi-Ject
purchase business combination. The Company concluded that $1,935,588
representing the unamortized portion of the amount allocated to other intangible
assets on the date of adoption should be classified as goodwill as these
intangible assets did not meet the definition for separate accounting under SFAS
142. These amounts were previously classified as workforce, ISO certification
and clinical studies with unamortized balances of $510,413, $271,588 and
$1,153,587, respectively, at December 31, 2001. Upon adoption of SFAS 142, the
Company reassessed the useful lives and residual values of all intangible assets
acquired in purchase business combinations, and determined that there were no
amortization period adjustments necessary.

The Company adopted SFAS 141 during 2001 and adopted SFAS 142 effective January
1, 2002. As of the date of adoption of SFAS 142, after reclassification of other
intangible assets as goodwill, the Company had approximately $3,095,355 of
unamortized goodwill subject to the transition provisions of SFAS 141 and 142.
The Company completed an evaluation of goodwill in accordance with the
provisions of SFAS 142 and concluded that no impairment exists. Adoption of SFAS
142 is expected to decrease amortization expenses in 2002 by approximately
$410,000 as a result of ceasing amortization of goodwill and other intangible
assets reclassified as goodwill.

For the three and nine month periods ended September 30, 2001 and 2002, the
goodwill amortization, adjusted net loss and basic and diluted loss per share
are as follows:
Three Months Ended                Nine Months Ended
                                                    September 30,                    September 30,
                                             ----------------------------    ----------------------------
                                                 2001           2002             2001            2002
                                             ------------    ------------    -------------   ------------
Net loss as reported ......................  $(2,156,890)    $(3,852,353)    $(11,853,685)   $(7,965,877)
Addback goodwill amortization .............      102,396               -          361,253              -
                                             -----------     -----------     ------------    -----------
Adjusted net loss .........................  $(2,054,494)    $(3,852,353)    $(11,492,432)   $(7,965,877)
                                             ===========     ===========     ============    ===========
Basic and diluted loss per share:
    Net loss as reported ..................  $     (0.24)    $     (0.39)    $      (1.43)   $     (0.85)
    Goodwill amortization .................         0.01               -             0.04              -
                                             -----------     -----------     ------------    -----------
 Adjusted net loss per share ..............  $     (0.23)    $     (0.39)    $      (1.39)   $     (0.85)
                                             ===========     ===========     ============    ===========
For the three years ended December 31, 1999, 2000 and 2001, the goodwill
amortization, adjusted net loss and basic and diluted loss per share are as
follows:

                                       21
December 31,
                                          ------------------------------------------
                                              1999          2000            2001
                                          ------------  ------------   -------------
Net loss as reported ...................  $(3,967,366)  $(5,260,387)   $(14,913,226)
Addback goodwill amortization ..........      177,963       177,963         464,434
                                          -----------   -----------    ------------
Adjusted net loss ......................  $(3,789,403)  $(5,082,424)   $(14,448,792)
                                          ===========   ===========    ============
Basic and diluted loss per share:
    Net loss as reported ...............  $     (0.92)  $     (1.22)   $      (1.76)
    Goodwill amortization ..............         0.04          0.04            0.06
                                          -----------   -----------    ------------
 Adjusted net loss per share ...........  $     (0.88)  $     (1.18)   $      (1.70)
                                          ===========   ===========    ============
The gross carrying amount and accumulated amortization of patents, which are the
only intangible assets of the Company subject to amortization, was $2,975,299
and $327,801, respectively, at September 30, 2002. Amortization expense was
$75,040 for the nine-months ended September 30, 2002. The estimated aggregate
amortization expense for the next five years is $33,000 in the fourth quarter of
2002, $133,000 in 2003 through 2006, and $96,000 in the first nine months of
2007.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No.
4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections."
SFAS No. 145 allows only those gains and losses on the extinguishment of debt
that meet the criteria of extraordinary items to be treated as such in the
financial statements. SFAS No. 145 also requires sales-leaseback accounting for
certain lease modifications that have economic effects that are similar to
sales-leaseback transactions. Certain provisions of SFAS No. 145 are effective
for transactions occurring after May 15, 2002, while the remaining provisions
will be effective for the Company in the first quarter of fiscal 2004. The
Company does not expect the adoption of SFAS No. 145 to have a material impact
on its consolidated financial statements.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities," which nullifies EITF 94-3 and requires that a
liability for a cost associated with an exit or disposal activity be recognized
when the liability is incurred. The Company plans to adopt SFAS No. 146 in
January 2003. Management believes that the adoption of this statement will not
have a material effect on the Company's results of operations in the foreseeable
future.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's primary market risk exposure is foreign exchange rate fluctuations
of the Swiss Franc to the U.S. dollar as the financial position and operating
results of the Company's subsidiaries in Switzerland are translated into U.S.
dollars for consolidation. For the three and nine-months ended September 30,
2002, the Company recorded an increase to cumulative comprehensive loss of
$22,099 and $75,540, respectively, and $34,759 and $375,514, respectively, for
the same prior-year periods related to foreign currency translation adjustments.
The Company's exposure to foreign exchange rate fluctuations also arises from
transferring funds to its Swiss subsidiaries in Swiss Francs. Most of the
Company's sales and licensing fees are denominated in U.S. dollars, thereby
significantly mitigating the risk of exchange rate fluctuations on trade
receivables. The effect of foreign exchange rate fluctuations on the Company's
financial results for the three and nine-months ended September 30, 2001 and
2002 was not material. The Company does not currently use derivative financial
instruments to hedge against exchange rate risk. Because exposure increases as
intercompany balances grow, the Company will continue to evaluate the need to
initiate hedging programs to mitigate the impact of foreign exchange rate
fluctuations on intercompany balances.

                                       22
The Company's exposure to interest rate risk is not believed to be material. The
Company does not use derivative financial instruments to manage interest rate
risk. All existing debt agreements of the Company bear interest at fixed rates,
and are therefore not subject to exposure from fluctuating interest rates.

ITEM 4.  CONTROLS AND PROCEDURES

Based on an evaluation of the disclosure controls and procedures conducted
within 90 days prior to the filing date of this Quarterly Report on Form 10-Q,
the Company's Chief Executive Officer and Chief Financial Officer have concluded
that the disclosure controls and procedures (as defined in Rules 13a-14(c) and
15d-14(c)) are effective. There were no significant changes in the internal
controls or in other factors that could significantly affect those controls
subsequent to the date of the evaluation thereof.

The company's management, including the CEO and CFO, does not expect that our
disclosure controls and procedures will prevent all error and all fraud. A
control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system
are met. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within the company have been detected. The
design of any system of controls also is based in part upon certain assumptions
about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future
conditions; over time, control may become inadequate because of changes in
conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.

Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995

Certain statements in this Quarterly Report on Form 10-Q are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. When used in this Quarterly Report on Form 10-Q, the words "may,"
"should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "intends," "potential" or "continue" and similar expressions are
generally intended to identify forward-looking statements. Because these
forward-looking statements involve risks and uncertainties, actual results could
differ materially from those expressed or implied by these forward-looking
statements. These statements are only predictions. Although the Company believes
that the expectations reflected in the forward-looking statements are
reasonable, it cannot guarantee future results, levels of activity, performance
and/or achievements.

Forward-looking statements represent the Company's expectations or beliefs
concerning future events, including statements regarding the Company's current
cash situation, need for additional capital, ability to continue operations,
whether the Company will be successful in entering into new strategic
relationships, the Company's ability to attract and retain customers, the
Company's ability to adapt to changing technologies, the impact of competition
and pricing pressures from actual and potential competitors with greater
financial resources, the Company's ability to hire and retain competent
employees, the Company's ability to protect and reuse its intellectual property,
changes in general economic conditions, and other factors identified in the
Company's filings with the Securities and Exchange Commission, including those
identified in Exhibit 99.2 to this Quarterly Report on Form 10-Q. The Company
disclaims any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.

                                       23
PART II - OTHER INFORMATION

Item 2.   Changes in Securities and Use of Proceeds

          On July 12, 2002 the Company entered into a Securities Purchase
          Agreement (the "Agreement") for the sale and purchase of up to
          $2,000,000 aggregate principal amount of the Company's 10% convertible
          debentures. The debentures are convertible into shares of the
          Company's common stock at a conversion price which is the lower of
          $2.50 or 75% of the average of the three lowest intraday prices of the
          Company's common stock, as reported on the Nasdaq SmallCap Market,
          during the 20 trading days preceding the conversion date. Within 15
          days of the closing, the Company was obligated to file a registration
          statement with the Securities and Exchange Commission to register the
          shares issuable upon conversion of the debentures. Under the terms of
          the Agreement, the Company received $700,000 upon closing of the
          transaction on July 12, 2002, an additional $700,000 after the Company
          filed the registration statement on July 19, 2002 to register the
          shares issuable upon conversion of the debentures, and $600,000 after
          such registration statement was declared effective on October 10,
          2002. The sale of the debentures was exempt from registration pursuant
          to Rule 506 of the Securities Act of 1933.

          On each of July 12, 2002 and July 25, 2002, the Company issued
          warrants to purchase 56,000 shares of the Company's common stock. The
          warrants were issued pursuant to an equity advisor agreement in
          connection with the sale of the Company's 10% convertible debentures
          and are exercisable for ten years at an exercise price of $2.50. The
          issuance of the warrants was exempt from registration pursuant to
          Section 4(2) of the Securities Act of 1933.

Item 4.   Submission of Matters to a Vote of Security Holders

          The Company held a special meeting of its shareholders on August 23,
          2002, at which the shareholders approved the issuance of the common
          stock issuable upon conversion of the Company's 10% convertible
          debentures. At the special meeting, there were 7,901,295 votes cast
          for the proposal, 13,175 votes cast against the proposal, 1,188
          abstentions and no broker non-votes.

Item 6.   Exhibits and Reports on Form 8-K

(a)       Exhibits

          Exhibit No.                     Description
          -----------      ----------------------------------------------------

               3.4         Third Amended and Restated Articles of Incorporation
              99.1         Section 906 CEO and CFO Certification
              99.2         Cautionary Statements

(b)       Reports on Form 8-K

          On July 17, 2002, the Company filed a Form 8-K reporting under Item 5,
          Other Events, that it had entered into a Securities Purchase Agreement
          with several investors for the sale and purchase of up to $2,000,000
          aggregate principal amount of the Company's 10% Convertible
          Debentures.

                                       24
On September 16, 2002, the Company filed a Form 8-K reporting under
          Item 5, Other Events, that the Board of Directors approved amendments
          to the Company's insider trading policy to permit its officers and
          directors to enter into written trading plans or arrangements for
          systematic trading in the Company's securities, and that Dr. Roger G.
          Harrison, the Company's Chief Executive Officer, entered into a
          trading plan complying with Rule 10b5-1 and the Company's insider
          trading policy on August 26, 2002.

                                       25
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

                                       ANTARES PHARMA, INC.

November 13, 2002                      /s/ Roger G. Harrison, Ph.D.
                                       -----------------------------------------
                                       Roger G. Harrison, Ph.D.
                                       Chief Executive Officer and President

November 13, 2002                      /s/ Lawrence M. Christian
                                       -----------------------------------------
                                       Lawrence M. Christian
                                       Chief Financial Officer, Vice President -
                                       Finance and Secretary

                                       26
Certifications

I, Roger G. Harrison, Ph.D., certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Antares Pharma, Inc.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   Designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this quarterly
          report is being prepared;

     b)   Evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   Presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a)   All significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:    November 13, 2002

/s/ Roger G. Harrison, Ph. D.
-------------------------------------
Roger G. Harrison, Ph. D.
Chief Executive Officer and President

                                       27
I, Lawrence M. Christian, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Antares Pharma, Inc.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   Designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this quarterly
          report is being prepared;

     b)   Evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   Presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a)   All significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:   November 13, 2002

/s/ Lawrence M. Christian
-------------------------------------
Lawrence M. Christian
Chief Financial Officer, Vice President - Finance and Secretary

                                       28