<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 March 31, 2003

                         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 May 13, 2003, was 11,972,706.

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


                                       1

<PAGE>

                              ANTARES PHARMA, INC.

                                      INDEX

                                                                          PAGE
                                                                          ----

PART I.     FINANCIAL INFORMATION


   ITEM 1.  Financial Statements (Unaudited)

            Consolidated Balance Sheets, as of December 31, 2002 and
            March 31, 2003 ................................................. 3

            Consolidated Statements of Operations for the three
            months ended March 31, 2002 and 2003 ........................... 4

            Consolidated Statements of Cash Flows for the three
            months ended March 31, 2002 and 2003 ........................... 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 .....20

   ITEM 4.  Controls and Procedures ........................................20

PART II.    OTHER INFORMATION ..............................................22

            SIGNATURES .....................................................24


                                       2

<PAGE>

                              ANTARES PHARMA, INC.
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                      December 31,      March 31,
                                                                                          2002            2003
                                                                                      ------------    ------------
<S>                                                                                   <C>             <C>
                                     Assets
Current Assets:
       Cash .......................................................................   $    267,945    $    193,998
       Accounts receivable, net of allowances of $12,000 and  $70,000, respectively        174,566         194,659
       VAT and other receivables ..................................................         38,289         596,996
       Inventories ................................................................        558,911         614,525
       Deferred financing costs ...................................................        454,910          72,082
       Prepaid expenses and other assets ..........................................         39,849          95,418
                                                                                      ------------    ------------
              Total current assets ................................................      1,534,470       1,767,678

Equipment, furniture and fixtures, net ............................................      1,531,063       1,369,468
Patent rights, net ................................................................      2,157,174       2,181,148
Goodwill, net .....................................................................      1,095,355       1,095,355
Other assets ......................................................................         90,909          92,678
                                                                                      ------------    ------------

              Total Assets ........................................................   $  6,408,971    $  6,506,327
                                                                                      ============    ============

                 Liabilities and Shareholders' Equity (Deficit)

Current Liabilities:
       Accounts payable ...........................................................   $    608,695    $    937,025
       Accrued expenses and other liabilities .....................................      1,521,177       2,057,536
       Due to related parties .....................................................        893,892         978,066
       Convertible debentures, net of issuance discount of $891,187 and $236,578,
          respectively ............................................................        733,159       1,397,539
       Common stock warrants ......................................................           --         1,026,731
       Capital lease obligations - current maturities .............................        106,493          87,808
       Deferred revenue ...........................................................      1,859,288       3,110,598
                                                                                      ------------    ------------
              Total current liabilities ...........................................      5,722,704       9,595,303
Capital lease obligations, less current maturities ................................         30,979          14,521
                                                                                      ------------    ------------
              Total liabilities ...................................................      5,753,683       9,609,824
                                                                                      ------------    ------------

Shareholders' Equity (Deficit):
       Series A Convertible Preferred Stock:  $0.01 par; authorized 10,000
          shares; 1,350 issued and outstanding at December 31, 2002 and
          March 31, 2003 ..........................................................             14              14
       Common Stock:  $0.01 par; authorized 30,000,000 shares;
          10,776,885 and 11,887,506 issued and outstanding at
          December 31, 2002 and March 31, 2003, respectively ......................        107,769         118,875
       Additional paid-in capital .................................................     42,353,492      41,605,479
       Accumulated deficit ........................................................    (41,165,798)    (44,183,249)
       Deferred compensation ......................................................       (137,352)       (108,936)
       Accumulated other comprehensive loss .......................................       (502,837)       (535,680)
                                                                                      ------------    ------------
                                                                                           655,288      (3,103,497)
                                                                                      ------------    ------------
              Total Liabilities and Shareholders' Equity (Deficit) ................   $  6,408,971    $  6,506,327
                                                                                      ============    ============
</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
                                                                         March 31,
                                                               ----------------------------
                                                                   2002            2003
                                                               ------------    ------------
<S>                                                            <C>             <C>
Revenues:
     Product sales .........................................   $    538,013    $    703,696
     Licensing and product development .....................        130,958         161,448
     Royalties .............................................           --            44,982
                                                               ------------    ------------
                                                                    668,971         910,126

Cost of product sales ......................................        661,424         502,476
                                                               ------------    ------------
Gross margin ...............................................          7,547         407,650
                                                               ------------    ------------

Operating Expenses:
     Research and development ..............................        731,128         714,775
     Sales and marketing ...................................        158,421         110,865
     General and administrative ............................      1,277,329       1,498,332
                                                               ------------    ------------
                                                                  2,166,878       2,323,972
                                                               ------------    ------------

Net operating loss .........................................     (2,159,331)     (1,916,322)
                                                               ------------    ------------

Other income (expense):
     Loss on debt extinguishments ..........................           --          (885,770)
     Gains on common stock warrants ........................           --           115,711
     Interest income .......................................          3,232           3,882
     Interest expense ......................................         (8,362)       (310,480)
     Foreign exchange gains (losses) .......................         18,538         (28,559)
     Other, net ............................................           (717)          4,087
                                                               ------------    ------------
                                                                     12,691      (1,101,129)
                                                               ------------    ------------

Net loss applicable to common shares .......................   $ (2,146,640)   $ (3,017,451)
                                                               ============    ============

Basic and diluted net loss per common share ................   $       (.23)   $       (.26)
                                                               ============    ============

Basic and diluted weighted average common shares outstanding      9,170,077      11,736,291
                                                               ============    ============
</TABLE>

          See accompanying notes to consolidated financial statements.


                                       4

<PAGE>

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

<TABLE>
<CAPTION>
                                                                         For the Three Months Ended
                                                                                  March 31,
                                                                         --------------------------
                                                                            2002            2003
                                                                         -----------    -----------
<S>                                                                      <C>            <C>
Cash flows from operating activities:
         Net loss ....................................................   $(2,146,640)   $(3,017,451)
         Adjustments to reconcile net loss to net
            cash used in operating activities:
         Depreciation and amortization ...............................       233,363        220,785
         Amortization of deferred financing costs ....................          --          249,705
         Stock-based compensation expense ............................        46,862        239,600
         Provision for doubtful accounts .............................          --           57,675
         Loss on debt extinguishments ................................          --          741,570
         Gains on common stock warrants ..............................          --         (115,711)
         Net debt discount accretion and premium amortization ........          --            2,628
         Changes in operating assets and liabilities, net of effect of
            business acquisition:
            Accounts receivable ......................................       (75,239)       (78,093)
            VAT and other receivables ................................        12,996       (558,707)
            Inventories ..............................................       133,931        (55,614)
            Prepaid expenses and other assets ........................      (148,999)      (101,866)
            Accounts payable .........................................       (43,670)       328,330
            Accrued expenses and other ...............................        18,846        625,356
            Deferred revenue .........................................       149,183      1,251,310
            Liabilities to related parties ...........................      (112,481)         2,108
            Other ....................................................         1,206         (1,772)
                                                                         -----------    -----------
Net cash used in operating activities ................................    (1,930,642)      (210,147)
                                                                         -----------    -----------

Cash flows from investing activities:
         Purchases of equipment, furniture and fixtures ..............       (68,431)        (1,160)
         Additions to patent rights ..................................       (81,133)       (60,707)
                                                                         -----------    -----------
Net cash used in investing activities ................................      (149,564)       (61,867)
                                                                         -----------    -----------

Cash flows from financing activities:
         Proceeds from loans from shareholders .......................     1,000,000        130,000
         Proceeds from loan from debenture holder ....................          --          621,025
         Principal payments on convertible debentures ................          --         (464,000)
         Principal payments on capital lease obligations .............       (20,777)       (37,281)
                                                                         -----------    -----------
Net cash provided by financing activities ............................       979,223        249,744
                                                                         -----------    -----------

Effect of exchange rate changes on cash and cash equivalents .........         9,211        (51,677)
                                                                         -----------    -----------

Net increase (decrease) in cash and cash equivalents .................    (1,091,772)       (73,947)
Cash and cash equivalents:
         Beginning of period .........................................     1,965,089        267,945
                                                                         -----------    -----------
         End of period ...............................................   $   873,317    $   193,998
                                                                         ===========    ===========

Cash paid during the period for interest .............................   $     3,942    $    16,811
</TABLE>

           See accompanying notes to consolidated financial statements


                                       5

<PAGE>

                              ANTARES PHARMA, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                            March 31, 2002 and 2003

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 generally accepted accounting
         principles 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 for the year ended
         December 31, 2002. Operating results for the three-month period ended
         March 31, 2003, are not necessarily indicative of the results that may
         be expected for the year ending December 31, 2003.

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 had negative working capital of
         $4,188,234 and $7,827,625 at December 31, 2002 and March 31, 2003,
         respectively, 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, 2003, 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's cash position is currently only sufficient to fund
         working capital requirements for two or three weeks from May 12, 2003.
         Moreover, the Company has no immediate access to additional capital.
         Management's intentions are to raise additional capital through
         alliances with strategic corporate partners, equity offerings, and/or
         debt financing. There can be no assurance that the Company will ever
         become profitable or that additional 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.

         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 received a notice from Nasdaq on November 29, 2002, because
         for the 30 consecutive trading days prior to November 29, 2002, the
         Company's common stock closed below the minimum $1.00 per share
         requirement for continued listing under certain of Nasdaq's


                                       6

<PAGE>

                              ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)
                            March 31, 2002 and 2003

2.       Going Concern (Continued)

         marketplace rules. Nasdaq provided the Company 180 calendar days, or
         until May 28, 2003, to regain compliance with respect to this per share
         bid price requirement. This notice was described more fully in the
         Company's Current Report on Form 8-K, filed on December 3, 2002.

         In addition, by letter dated March 24, 2003, the Listing Qualifications
         arm of The Nasdaq Stock Market, Inc. notified the Company that it does
         not comply with Marketplace Rule 4310(c)(2)(B), which requires listed
         companies to have a minimum of (i) $2,500,000 in shareholders' equity,
         (ii) $35,000,000 market value of listed securities or (iii) $500,000 of
         net income from continuing operations for the most recently completed
         fiscal year or two of the three most recently completed fiscal years.
         Based on the Company's Annual Report on Form 10-K for the year ended
         December 31, 2002, the Company's shareholders' equity was $655,288.
         Additionally, as of March 24, 2003, the market value of the Company's
         listed securities was $5,943,753 (based on 11,887,506 shares
         outstanding multiplied by the closing bid price of $0.50). Finally, the
         Company reported a net loss from continuing operations for each of the
         last three fiscal years.

         The Company has corresponded with Nasdaq regarding potential
         transactions that the Company may consummate to increase its
         shareholders' equity. However, following review of these proposals, on
         April 28, 2003, Nasdaq notified the Company of its intent to delist the
         Company's common stock from the Nasdaq SmallCap Market effective May 7,
         2003. The Company appealed Nasdaq's determination by requesting an oral
         hearing before the Nasdaq Listing Qualifications Panel. This hearing
         request will stay the delisting of the Company's common stock pending
         the Listing Qualifications Panel's decision.

         To maintain listing on the Nasdaq SmallCap Market, the Company must
         address the issues raised by both the November 28, 2002 and March 24,
         2003 notice letters received from Nasdaq. As of March 31, 2003, the
         Company does not meet any of the financial requirements for continued
         or initial listing on the Nasdaq SmallCap Market. If the Company's
         stock were to be delisted, it would constitute an event of default
         under the newly restructured 8% debentures, and at the option of the
         holder, exercisable through delivery of written notice to the Company,
         they would become due and payable at 130% of the outstanding principal
         and accrued interest.

3.       Product Warranty

         The Company provides a warranty on its needle-free injector devices.
         Warranty terms for devices sold to end-users by dealers and
         distributors are included in the device instruction manual included
         with each device sold. Warranty terms for devices sold to corporate
         customers who provide their own warranty terms to end-users are
         included in the contracts with the corporate customers. The Company is
         obligated to repair or replace, at the Company's option, a device found
         to be defective due to use of defective materials or faulty
         workmanship. The warranty does not apply to any product that has been
         used in violation of instructions as to the use of the product or to
         any product that has been neglected, altered, abused or used for a
         purpose other than the one for which it was manufactured. The warranty
         also does not apply to


                                       7

<PAGE>

                              ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)
                            March 31, 2002 and 2003

3.       Product Warranty (Continued)

         any damage or defect caused by unauthorized repair or the use of
         unauthorized parts. Warranty periods on devices range from 12 to 30
         months from either the date of retail sale of the device by a dealer or
         distributor or the date of shipment to a customer if specified by
         contract. The Company recognizes the estimated cost of warranty
         obligations at the time the products are shipped based on historical
         claims incurred by the Company. Actual warranty claim costs could
         differ from these estimates. Warranty liability activity is as follows:

                            Balance at
                            Beginning      Warranty    Warranty    Balance at
                             of Year      Provisions    Claims      March 31
                            ----------    ----------   --------    ----------
         2002 ...........    $ 87,000      $12,172      $12,172     $ 87,000
         2003 ...........    $179,000      $16,541      $36,541     $159,000

4.       Comprehensive Loss

                                                    Three Months Ended
                                                         March 31,
                                                ---------------------------
                                                    2002            2003
                                                ------------    -----------
         Net loss ............................. $ (2,146,640)   $(3,017,451)
         Change in cumulative translation
            adjustment ........................       (1,626)       (32,843)
                                                ------------    -----------
         Comprehensive loss ................... $ (2,148,266)   $(3,050,294)
                                                ============    ===========

5.       Inventories

         Inventories consist of the following:

                                             December 31,      March 31,
                                                 2002             2003
                                             ------------      ---------
         Raw material .......................  $287,177        $323,639
         Work in-process ....................    32,370         175,507
         Finished goods .....................   289,364         165,379
                                               --------        --------
                                                608,911         664,525
         Inventory reserve ..................   (50,000)        (50,000)
                                               --------        --------
                                               $558,911        $614,525
                                               ========        ========

6.       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:


                                       8

<PAGE>

                              ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)
                            March 31, 2002 and 2003

6.       Industry Segment and Operations by Geographic Areas (Continued)

         The Company has operating assets located in two countries as follows:

                                                 December 31,       March 31,
                                                     2002             2003
                                                 ------------      ----------
         Switzerland ...........................  $1,447,468       $1,757,595
         United States of America ..............   4,961,503        4,748,732
                                                  ----------       ----------
                                                  $6,408,971       $6,506,327
                                                  ==========       ==========

         Revenues by customer location are summarized as follows:

                                                  For the Three Months
                                                    Ended March 31,
                                                 -----------------------
                                                   2002           2003
                                                 --------       --------
         United States of America .............. $159,011       $177,117
         Europe ................................  486,018        693,868
         Other .................................   23,942         39,141
                                                 --------       --------
                                                 $668,971       $910,126
                                                 ========       ========

         The Company's primary customer, Ferring, accounted for revenues of
         approximately $530,000 and $605,000 for the quarters ended March 31,
         2002 and 2003, respectively. No other single customer accounted for 10%
         or more of total revenue in either period.

7.       Convertible Debentures

         To reduce the risk of substantial dilution to common shareholders in
         the near-term, on February 7, 2003, the Company completed a
         restructuring of its 10% debentures previously sold to four primary
         investors. Specifically, as part of this restructuring, on January 24,
         2003 and January 31, 2003, the Company borrowed an aggregate of
         $621,025 from Xmark Funds. The Company used the proceeds of these
         borrowings to repurchase $464,000 principal amount of the 10%
         debentures previously sold to the two original 10% debenture holders
         who had converted $536,000 of principal into common stock, and to pay a
         repurchase premium of $144,200 and accrued interest of $12,825. As
         additional repurchase compensation, the Company issued warrants to one
         of the two original 10% debenture holders and paid $5,000, in lieu of
         warrants, to the other. The Company recognized a debt extinguishment
         loss of $885,770 related to these transactions. Thereafter, in exchange
         for the surrender and cancellation of the promissory notes, the Company
         issued to Xmark Funds 8% Senior Secured Convertible Debentures in the
         same principal amount of the promissory notes. The Company also
         exchanged Amended and Restated 8% Senior Secured Convertible Debentures
         for the remaining outstanding principal and accrued interest of
         $955,000 and $37,230, respectively, of the original 10% debentures. The
         aggregate principal amount of the 8% debentures is $1,613,255. The 8%
         debentures contain terms similar to the 10% debentures, except that the
         8% debentures include a fixed conversion price of $.50 per share and an
         interest rate of 8% per annum. The 8%


                                       9

<PAGE>

                              ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)
                            March 31, 2002 and 2003

7.       Convertible Debentures (Continued)

         debentures are due March 31, 2004. Similar to the 10% debentures, the
         Company granted a senior security interest in substantially all of its
         assets to the holders of the 8% debentures. At March 31, 2003 accrued
         interest of $20,862 was converted to principal, resulting in a
         principal balance of $1,634,117 at March 31, 2003. If the full
         principal amount of debentures were converted at the $0.50 conversion
         price, a total of 3,268,234 shares would be issued, which would result
         in substantial dilution to current shareholders. In connection with
         this restructuring, the Company also issued to the holders of the 8%
         debentures five-year warrants to purchase an aggregate of 2,932,500
         shares of the Company's common stock at an exercise price of $0.55 per
         share. The warrants are redeemable at the option of the Company upon
         the achievement of certain milestones set forth in the warrants.

         Upon conversion of the 8% debentures and exercise of the warrants, the
         Company will be obligated to issue an aggregate of 6,200,734 shares of
         its common stock, resulting in the holders of the 8% debentures and
         warrants owning in excess of 34% of the Company's common stock.
         Pursuant to NASD Marketplace Rules, the Company must obtain shareholder
         approval for the issuance of 20% or more of its currently outstanding
         shares. Therefore, under the terms of the 8% debentures and warrants,
         the holders thereof could not convert the 8% debentures or exercise the
         warrants for more than 19.99% of the number of shares of the Company's
         common stock outstanding on January 31, 2003, or 2,366,337 shares,
         until the Company obtained shareholder approval for the transaction and
         related stock issuances. In connection with the restructuring
         transaction, the Company's majority shareholder, Dr. Jacques Gonella,
         delivered a letter of undertaking to the holders of the 8% debentures
         stating that he would vote in favor of allowing the issuance of the
         Company's common stock upon conversion or exercise of the 8% debentures
         or warrants. The Company obtained shareholder approval for the
         transaction and related stock issuances at a special shareholders'
         meeting on May 8, 2003.

         The aggregate principal amount of the 8% debentures of $1,613,255 is
         held by two debenture holders in the amounts of $469,513 and
         $1,143,742, respectively. The Company analyzed each of the
         restructuring transactions for the two 8% debenture holders to
         determine the proper accounting treatment. The effective borrowing rate
         on $469,513 of restructured debentures was determined to be less than
         the effective borrowing rate on the original debentures immediately
         prior to the restructuring. As a result, the Company determined that
         the debentures totaling $469,513 should be accounted for as a troubled
         debt restructuring. The Company reduced the net carrying value of these
         debentures at the time of the restructuring from $140,659 to $97,710.
         The debt discount of $371,803 will be accreted to interest expense
         through March 31, 2004 using the effective interest method. The
         transaction related to the remaining $1,143,742 has been accounted for
         as a debt extinguishment under EITF 96-19. The restructured debentures
         were determined to be substantially different from the original
         debentures because the present value of the cash flows under the terms
         of the restructured debentures was more than 10 percent different from
         the present value of the remaining cash flows under the terms of the
         original debentures. The debentures have been recorded at a fair value
         of $1,276,339, and the premium of $132,597 will be amortized monthly
         through March 31, 2004 using the effective interest method. In
         connection with both transactions, the Company issued warrants to
         acquire 2,932,500 shares of common stock. The Company determined that
         the fair value of these warrants was $1,142,442 using the Black Scholes
         option pricing model. As further described in Note 8, these common
         stock warrants are classified as debt for accounting purposes. As a
         result of these debenture restructurings and the initial exchange of
         the $464,000 of 10% convertible debentures for the 8% bridge notes, the
         Company recognized losses on debt extinguishments of $885,770,
         consisting of write offs of debenture discounts and issuance costs of
         $693,098, repurchase premiums paid of $144,200, and $48,472
         representing the excess of the fair value of the warrants issued plus
         the debenture premium over the value of the reacquired conversion
         feature.


                                       10

<PAGE>

                              ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)
                            March 31, 2002 and 2003

8.       Common Stock Warrants

         In connection with the debenture restructuring transactions, the
         Company issued to the holders of the 8% debentures five-year warrants
         to purchase an aggregate of 2,932,500 shares of the Company's common
         stock at an exercise price of $0.55 per share. The warrants are subject
         to defined indemnifications if the underlying common shares are not
         fully tradable and the warrant holders incur losses due to their
         inability to sell these shares. The Company analyzed the terms and
         conditions of the warrants and determined that the warrants should be
         classified as debt under EITF 00-19, Accounting for Derivative
         Financial Instruments Indexed to, and Potentially Settled in, a
         Company's Own Stock. As such, the Company is required to mark-to-market
         these warrants at each reporting period with changes in the warrant
         values being recorded in the consolidated statement of operations. The
         warrants were recorded with an initial fair value on January 31, 2003
         of $1,142,442, determined using the Black Scholes option pricing model,
         and were adjusted to their fair value at March 31, 2003 of $1,026,731,
         with the difference of $115,711 being recorded as a gain on common
         stock warrants in the three months ended March 31, 2003. Upon exercise
         of the warrants the Company will record a reduction in the liability
         and an increase in additional-paid-in-capital. The warrants are not
         designated as a hedging instrument.

9.       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 quarters ended March 31, 2002 and March 31, 2003, the
         Company recognized $39,228 and $31,684, respectively, of license
         revenues that were previously recognized by the Company prior to the
         adoption of the cumulative deferral method.

         Ferring License Agreement

         The Company entered into a License Agreement, dated January 22, 2003,
         with Ferring BV ("Ferring"), under which the Company licensed certain
         of its intellectual property and extended the territories available to
         Ferring for use of certain of the Company's needle-free injector
         devices. Specifically, the Company granted to Ferring an exclusive,
         perpetual, irrevocable, royalty-bearing license, within a prescribed
         manufacturing territory, to manufacture certain of the Company's
         needle-free injector devices. The Company granted to Ferring similar
         non-exclusive rights outside of the prescribed manufacturing territory.
         In addition, the Company granted to Ferring a non-exclusive right to
         make and have made the equipment required to manufacture the licensed
         products, and an exclusive, perpetual, royalty-free license in a
         prescribed territory to use and sell the licensed products.

         The Company also granted to Ferring a right of first offer to obtain an
         exclusive worldwide license to manufacture and sell the Company's AJ-1
         device for the treatment of limited medical conditions.

         As consideration for the license grants, Ferring paid the Company
         EUR500,000 ($532,400) upon execution of the License Agreement, and paid
         an additional EUR1,000,000 ($1,082,098) on February 24, 2003. Ferring
         will also pay the Company royalties for each device manufactured by or
         on behalf of Ferring, including devices manufactured by the Company.
         Beginning on January 1, 2004, EUR500,000 ($541,049) of the license fee
         received on February 24, 2003, will be credited against the royalties
         owed by Ferring, until such amount is exhausted. These royalty
         obligations expire, on a country-by-country basis, when the respective
         patents for the products expire, despite the fact that the License
         Agreement does not itself expire until the last of such patents
         expires. The license fees are being recognized in income over the
         period from January 22, 2003 through expiration of the patents in
         December 2016.

         The Company also agreed that it would enter into a third-party supply
         agreement to supply sufficient licensed products to meet the Company's
         obligations to Ferring under the License Agreement and under the
         parties' existing supply agreement.

10.      Third Party Supply Agreement

         On February 22, 2003 the Company entered into a manufacturing agreement
         under which all assembly work currently performed by the Company at its
         Minneapolis facility will be outsourced to a third-party supplier
         ("Supplier"). Under the terms of the agreement, the Supplier will be
         responsible for procurement of raw materials and components, inspection
         of procured materials, production, assembly, testing, sterilization,
         labeling, packaging


                                       11

<PAGE>

                              ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)
                            March 31, 2002 and 2003

10.       Third Party Supply Agreement (Continued)

         and shipping to the Company's customers. The manufacturing operations
         were transferred to the Supplier in April 2003. The Company will
         continue to have responsibility for the manufacturing of the product
         including the quality of all products and the release of all products
         produced by the Supplier. The agreement has an initial term of two
         years. The Company reviewed the long-lived assets related to the
         manufacturing operations and determined there was no impairment as a
         result of the transfer.

11.      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 the issuance of up to
         216,000 restricted shares of common stock upon 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 $28,416 was recognized in connection with these
         shares during each of the quarters ended March 31, 2002 and 2003.

         During the first quarter of 2003 the Company issued 1,110,621 shares of
         common stock, of which 881,112 were issued due to conversions of
         convertible debentures and 229,509 were issued to consultants for
         services performed. The Company recognized $76,318 of expense in the
         quarter ended March 31, 2003 in connection with the shares issued to
         consultants.

         During the first quarter of 2003 the Company issued warrants to
         purchase 300,000 shares of the Company's common stock at an exercise
         price of $.55 per share as compensation to non-employees for
         professional services. The Company recognized expense of $134,866 in
         connection with these warrants.

         On March 28, 2003 the Company issued a warrant to its majority
         shareholder for the purchase of 195,000 shares of common stock at an
         exercise price of $.55 per share in connection with a $130,000 Term
         Note described in Note 15.

12.      New Accounting Pronouncements

         In December 2002, the Emerging Issues Task Force ("EITF") issued EITF
         00-21, Revenue Arrangements with Multiple Deliverables. EITF 00-21
         addresses certain aspects of the accounting by a vendor for
         arrangements under which it will perform multiple revenue-generating
         activities. In some arrangements, the different revenue-generating
         activities (deliverables) are sufficiently separable, and there exists
         sufficient evidence of their fair values to separately account for some
         or all of the deliverables (that is, there are separate units of


                                       12

<PAGE>

                              ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)
                            March 31, 2002 and 2003

12.      New Accounting Pronouncements (Continued)

         accounting). In other arrangements, some or all of the deliverables are
         not independently functional, or there is not sufficient evidence of
         their fair values to account for them separately. EITF 00-21 addresses
         when and, if so, how an arrangement involving multiple deliverables
         should be divided into separate units of accounting. EITF 00-21 does
         not change otherwise applicable revenue recognition criteria. EITF
         00-21 is applicable for the Company effective July 1, 2003, and could
         have an impact on revenue recognition of future licensing transactions.

         In April 2003, the Financial Accounting Standards Board ("FASB") issued
         SFAS 149, Amendment of Statement 133 on Derivative Instruments and
         Hedging Activities. This statement amends and clarifies financial
         accounting and reporting for derivative instruments, including certain
         derivative instruments embedded in other contracts (collectively
         referred to as derivatives) and for hedging activities under FASB
         Statement 133, Accounting for Derivative Instruments and Hedging
         Activities. Statement 149 has multiple effective date provisions
         depending on the nature of the amendment to Statement 133. The Company
         does not expect this statement to have a material impact on its
         consolidated results of operations or financial position, because the
         Company does not currently have derivative instruments or engage in
         hedging activities.

13.      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 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. The conversion of the Company's 8%
         convertible debentures into common stock would result in the issuance
         of 3,268,234 shares of common stock.

                                                        Three Months Ended
                                                             March 31,
                                                    --------------------------
                                                        2002          2003
                                                    ------------  ------------
         Net loss ..................................$(2,146,640)  $ (3,017,451)
         Basic and diluted weighted average
           common shares outstanding ...............  9,170,077     11,736,291
                                                    ------------  ------------
         Basic and diluted net loss per common
           share ...................................$     (0.23)  $      (0.26)
                                                    ============  ============


                                       13

<PAGE>

                              ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)
                            March 31, 2002 and 2003

13.      Reconciliation of Loss and Share Amount Used in EPS Calculation
         (Continued)

         Potentially dilutive securities excluded from dilutive loss per share
         at March 31, 2002 and 2003, as their effect is anti-dilutive, is as
         follows:

                                                         Three Months Ended
                                                             March 31,
                                                       ----------------------
                                                          2002        2003
                                                       ----------  ----------
         Stock options and warrants ..................  1,743,482   5,184,299
                                                       ==========  ==========
         Principal of convertible debentures ......... $        -  $1,634,117
                                                       ==========  ==========

14.      Stock Based Compensation

         The Company applies Accounting Principles Board, Opinion 25, Accounting
         for Stock Issued to Employees, and related interpretations in
         accounting for stock plans. Accordingly, no compensation expense has
         been recognized for stock-based compensation plans. Had compensation
         cost been determined based on the fair value at the grant date for
         stock options under SFAS No. 123, Accounting and Disclosure of
         Stock-Based Compensation, the net loss and loss per share would have
         increased to the pro-forma amounts shown below:

                                                         Three Months Ended
                                                             March 31,
                                                    ---------------------------
                                                        2002           2003
                                                    -----------    ------------
         Net loss:
            As reported ........................... $(2,146,640)   $(3,017,451)
            Compensation expense ..................    (366,798)      (243,108)
                                                    -----------    ------------
            Pro forma ............................. $(2,513,438)   $(3,260,559)
                                                    ===========    ============
         Basic and diluted net loss per
           common share:
            As reported ........................... $     (0.23)   $     (0.26)
            Compensation expense ..................       (0.04)         (0.02)
                                                    -----------    ------------
            Pro forma ............................. $     (0.27)   $     (0.28)
                                                    ===========    ============

15.      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 $46,500 in each of the
         quarters ended March 31, 2002 and 2003. Amounts owed to JG Consulting
         AG at December 31, 2002 and March 31, 2003 were $46,500 and $93,000,
         respectively.

         During 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,
         2002 and March 31, 2003 the Company had a payable to this company of
         $92,500.


                                       14

<PAGE>

                              ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)
                            March 31, 2002 and 2003

15.      Related Party Transactions (Continued)

         During the three months ended March 31, 2003 the Company recognized
         expense of $10,500 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, 2002 and March 31, 2003 of $22,211 and $10,500,
         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, $200,000 and $200,000 in June,
         September and December of 2002, respectively, to be repaid in July,
         September and December of 2003, respectively, with interest at the
         three-month Euribor Rate as of the date of the advance, plus 5%. The
         Company borrowed an additional $130,000 from its majority shareholder
         on March 28, 2003, to be repaid in December 2003, at the same interest
         rate as the 2002 borrowings. These amounts are included in due to
         related parties on the consolidated balance sheets as of December 31,
         2002 and March 31, 2003.

         The Company borrowed from its majority shareholder an additional
         $480,000, $140,000 and $250,000 on April 15, April 28 and May 8, 2003,
         respectively. The loans are due in December 2003 with interest at the
         three-month Euribor Rate as of the dates of the loans, plus 5%. The
         majority shareholder was also issued warrants for the purchase of
         195,000, 720,000, 210,000 and 375,000 shares of the Company's common
         stock at an exercise price of $0.55 per share in connection with the
         loans on March 28, April 15, April 28, and May 8, 2003, respectively.

         At March 31, 2002 and 2003 and May 14, 2003, aggregate loans from the
         majority shareholder excluding applicable debt discounts were
         $1,000,000, $830,000 and $1,700,000, respectively.


                                       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, inventory
reserves and valuation of long-lived and intangible assets and goodwill, 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, 2002. The Company has made no changes to these
policies during 2003.

Three Months Ended March 31, 2002 and 2003

Revenues

Total revenues for the three months ended March 31, 2002 and 2003 were $668,971
and $910,126, respectively. The increase in revenues of $241,155, or 36% is
primarily the result of an increase in product sales of $165,683, or 31%. The
product sales increase was mainly due to increased sales of injector device
disposable components to the Company's major customer.

Licensing and product development fee income increased by $30,490 or 23% for the
three months ended March 31, 2003 as compared to the prior-year period. The
increase results primarily from the receipt of approximately $500,000 of license
and product development fees in April 2002 that was deferred and is being
recognized over 47 months.

Cost of Sales

The cost of product sales of $661,424 and $502,476 for the first quarter of 2002
and 2003, respectively, are primarily related to injection devices and
disposable products. Cost of sales as a percentage of product sales decreased
from 123% for the first quarter of 2002 to 71% for the first quarter of 2003.
The significant improvement in gross margin during the 2003 period was primarily
due to approximately $282,000 of inventory write-offs and inventory reserve
adjustments in the first quarter of 2002 related to the launch of the Medi-Ject
Vision device into new markets.

Research and Development

Research and development expenses decreased $16,353 or 2% to $714,775 in the
three months ended March 31, 2003 from $731,128 in the prior year period. Higher
payroll costs due to research employee additions during 2002 at
Antares/Switzerland for increased research activities were offset by reductions
in prototyping and tooling expenses.


                                       16

<PAGE>

Sales and Marketing

Sales and marketing expenses totaled $158,421 and $110,865 in the three months
ended March 31, 2002 and 2003, respectively. This decrease of $47,556 or 30% is
primarily due to lower payroll costs caused by staff reductions at
Antares/Minnesota and reductions in travel expenses and professional fees.

General and Administrative

General and administrative expenses totaled $1,277,329 and $1,498,332 in the
three months ended March 31, 2002 and 2003, respectively. The increase of
$221,003 or 17% is primarily due to increases in professional and legal fees
partially offset by reductions in travel expenses.

Other Income (Expense)

Net other income (expense) decreased $1,113,820 from net other income of $12,691
in the first quarter of 2002 to net other expense of $1,101,129 in the first
quarter of 2003. The first quarter 2002 other income (expense) is primarily
composed of exchange gains of $18,538 and interest income of $3,232, offset by
interest expense of $8,362. The first quarter 2003 other income (expense) is
primarily composed of loss on extinguishment of debt of $885,770, exchange
losses of $28,559 and interest expense of $310,480, partially offset by gains on
common stock warrants of $115,711. The interest expense primarily relates to the
convertible debentures, consisting of $249,705 from the amortization of deferred
financing costs and debt issuance discount in connection with the 10%
convertible debentures and debenture interest totaling $31,733. Gains on common
stock warrants represents the change in fair value, using the Black Scholes
option pricing model, of the debenture holders' warrants from the issuance date
of January 31, 2003 to March 31, 2003, described further in Note 8 to the
Consolidated Financial Statements.

Cash Flows

Operating Activities

Net cash used in operating activities decreased by $1,720,495, from $1,930,642
for the first quarter of 2002 to $210,147 for the first quarter of 2003. This
was the result of net losses of $2,146,640 and $3,017,451 in the first quarter
of 2002 and 2003, respectively, adjusted by noncash expenses and changes in
operating assets and liabilities.

Net noncash expenses in the first quarter of 2002 totaled $280,225, consisting
primarily of depreciation and amortization of $233,363 and stock-based
compensation expense of $46,862. Noncash expenses of $1,396,252 in the first
quarter of 2003 were mainly due to depreciation and amortization of $220,785,
amortization of deferred financing costs of $249,705, stock-based compensation
expense of $239,600, provision for doubtful accounts of $57,675 and loss on
extinguishment of debt of $741,570, less gains on common stock warrants of
$115,711.

The change in operating assets and liabilities in the first quarter of 2002
resulted in a net decrease in cash of $64,227, primarily due to the increase in
accounts receivable and prepaid expenses of $75,239 and $148,999, respectively,
along with a decrease in liabilities to related parties of $112,481, offset by a
decrease in inventories of $133,931 and an increase in deferred revenue of
$149,183. Prepaid expenses increased $148,999 during the current quarter due
primarily to payment of the annual directors' insurance premium of $155,000. In
the first quarter of 2003, the change in operating assets and liabilities caused
a net increase in cash of $1,411,052, primarily due to increases in deferred
revenue and accrued expenses of $1,251,310 and $625,356, respectively, and a
decrease in accounts payable of $328,330, offset by increases in accounts
receivable, VAT and other receivables, inventories and prepaid and other assets
of $78,093, $558,707, $55,614 and $101,866, respectively. The increase in
deferred revenue in 2003 is


                                       17

<PAGE>

mainly due to the receipt of over $1,000,000 in the first quarter from Ferring
in connection with a License Agreement described in Note 9 to the Consolidated
Financial Statements.

Investing Activities

Net cash used in investing activities decreased $87,697, from $149,564 in the
first quarter of 2002 to $61,867 in the same period of 2003. Purchases of
equipment, furniture and fixtures in the first quarter of 2002 and 2003 totaled
$68,431 and $1,160, respectively, and expenditures for patent acquisition and
development totaled $81,133 and $60,707, respectively.

Financing Activities

Net cash provided by financing activities decreased $729,479 from $979,223 in
the first quarter of 2002 to $249,744 in the same period of 2003, due primarily
to net proceeds of $1,000,000 received from the majority shareholder during the
first quarter of 2002 compared to $130,000 during the first quarter of 2003. In
the first quarter of 2003 the Company borrowed $621,025 from one of the
debenture holders and used these proceeds to repurchase $464,000 principal
amount of the 10% debentures from two of the original debenture holders, and to
pay a repurchase premium of $144,200 and accrued interest of $12,825.

Liquidity

The Company had negative working capital of $4,188,234 and $7,827,625 at
December 31, 2002 and March 31, 2003, respectively, and incurred a net loss of
$3,017,451 for the quarter ended March 31, 2003. In addition, the Company has
had net losses and has had negative cash flows from operating activities since
inception. The Company expects to report a net loss for the year ending December
31, 2003, 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's cash position is currently only sufficient to fund working capital
requirements for two or three weeks from May 12, 2003. Moreover, the Company has
no immediate access to additional capital. Management's intentions are to
attempt to raise additional capital through alliances with strategic corporate
partners, equity offerings, and/or debt financing. However, there can be no
assurance that the Company will ever become profitable or that additional
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.

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 received a notice from Nasdaq on November 29, 2002, because for the
30 consecutive trading days prior to November 29, 2002, the Company's common
stock closed below the minimum $1.00 per share requirement for continued listing
under certain of Nasdaq's marketplace rules. Nasdaq provided the Company 180
calendar days, or until May 28, 2003, to regain compliance with respect to


                                       18

<PAGE>

this per share bid price requirement. This notice was described more fully in
the Company's Current Report on Form 8-K, filed on December 3, 2002.

In addition, by letter dated March 24, 2003, Nasdaq notified the Company that it
currently does not comply with Marketplace Rule 4310(c)(2)(B), which requires
listed companies to have a minimum of (i) $2,500,000 in shareholders' equity,
(ii) $35,000,000 market value of listed securities or (iii) $500,000 of net
income from continuing operations for the most recently completed fiscal year or
two of the three most recently completed fiscal years. Based on the Company's
Annual Report on Form 10-K for the year ended December 31, 2002, the Company's
shareholders' equity was $655,288. Additionally, as of March 24, 2003, the
market value of the Company's listed securities was $5,943,753 (based on
11,887,506 shares outstanding multiplied by the closing bid price of $0.50).
Finally, the Company reported a net loss from continuing operations for each of
the last three fiscal years.

The Company has corresponded with Nasdaq regarding potential transactions that
the Company may consummate to increase its shareholders' equity. However,
following review of these proposals, on April 28, 2003, Nasdaq notified the
Company of its intent to delist the Company's common stock from the Nasdaq
SmallCap Market effective May 7, 2003. The Company appealed Nasdaq's
determination by requesting an oral hearing before the Nasdaq Listing
Qualifications Panel. This hearing request will stay the delisting of the
Company's common stock pending the Listing Qualifications Panel's decision.

To maintain listing on the Nasdaq SmallCap Market, the Company must address the
issues raised by both the November 28, 2002 and March 24, 2003 notice letters
received from Nasdaq. As of March 31, 2003, the Company does not meet any of the
financial requirements for continued or initial listing on the Nasdaq SmallCap
Market. If the Company's stock were to be delisted, it would constitute an event
of default under the newly restructured 8% debentures, and at the option of the
holder, exercisable through delivery of written notice to the Company, they
would become due and payable at 130% of the outstanding principal and accrued
interest.

New Accounting Pronouncements

In December 2002, the Emerging Issues Task Force ("EITF") issued EITF 00-21,
Revenue Arrangements with Multiple Deliverables. EITF 00-21 addresses certain
aspects of the accounting by a vendor for arrangements under which it will
perform multiple revenue-generating activities. In some arrangements, the
different revenue-generating activities (deliverables) are sufficiently
separable, and there exists sufficient evidence of their fair values to
separately account for some or all of the deliverables (that is, there are
separate units of accounting). In other arrangements, some or all of the
deliverables are not independently functional, or there is not sufficient
evidence of their fair values to account for them separately. EITF 00-21
addresses when and, if so, how an arrangement involving multiple deliverables
should be divided into separate units of accounting. EITF 00-21 does not change
otherwise applicable revenue recognition criteria. EITF 00-21 is applicable for
the Company effective July 1, 2003, and could have an impact on revenue
recognition of future licensing transactions.

In April 2003, the Financial Accounting Standards Board ("FASB") issued SFAS
149, Amendment of Statement 133 on Derivative Instruments and Hedging
Activities. This statement amends and clarifies financial accounting and
reporting for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives) and for
hedging activities under FASB Statement 133, Accounting for Derivative
Instruments and Hedging Activities. Statement 149 has multiple effective date
provisions depending on the nature of the amendment to Statement 133. The
Company does not expect this statement to have a material impact on its
consolidated results of


                                       19

<PAGE>

operations or financial position, because the Company does not currently have
derivative instruments or engage in hedging activities.

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. 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 quarters ended March 31,
2002 and 2003 was not material. Beginning in 2003 the Company also has exposure
to exchange rate fluctuations between the Euro and the U.S. dollar. The
licensing agreement entered into in January 2003 with Ferring establishes
pricing in Euros for products sold under the existing supply agreement and for
all royalties. 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.

The Company's exposure to interest rate risk is limited to $830,000 borrowed in
2002 and 2003 under four Term Note agreements with its majority shareholder. The
notes bear interest at the three month Euribor Rate as of the date of each
advance, plus 5%. Due to the short-term nature of the notes, the Company's
exposure to interest rate risk is not believed to be material. The Company's 8%
convertible debentures, like all fixed rate instruments, are subject to interest
rate risk and will decline in value if market interest rates decrease. The
Company does not use derivative financial instruments to manage interest rate
risk.

The market value of the Company's 8% convertible debentures and the common stock
warrants are impacted by fluctuations in the price of the Company's common
stock.

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 its
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.


                                       20

<PAGE>

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. 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.


                                       21

<PAGE>

PART II - OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds

         On February 7, 2003, Company completed a restructuring of its
         outstanding debt securities previously sold to four primary investors.
         In connection with this restructuring, the Company repurchased certain
         of its outstanding 10% convertible debentures using funds borrowed from
         one of the 10% debenture holders. The Company then issued new 8% Senior
         Secured Convertible Debentures to this holder in the same amount
         borrowed from the debenture holder, and issued replacement 8%
         debentures in exchange for the remaining outstanding 10% debentures. In
         all, the Company issued $1,613,255 aggregate principal amount of its 8%
         debentures. The 8% debentures include a fixed conversion price of $.50
         per share and earn interest at a rate of 8% per annum. The Company
         granted a senior security interest in substantially all of its assets
         to the holders of the 8% debentures. The Company also issued to the
         debenture holders five-year warrants to purchase an aggregate of
         2,932,500 shares of the Company's common stock at an exercise price of
         $.55 per share. Upon conversion of the 8% debentures and exercise of
         the warrants, the Company will be obligated to issue an aggregate of
         6,159,011 shares of its common stock. As this amount exceeds 20% of the
         Company's current outstanding shares of common stock, the Company was
         required to obtain shareholder approval for this transaction. The
         Company's shareholders approved the issuance of the 8% debentures and
         the warrants at a special meeting held on May 8, 2003. Because this
         transaction was a restructuring of existing debt, the Company did not
         receive any additional proceeds as a result of it. The sale of the
         debentures and warrants was exempt from registration pursuant to
         Section 4(2) of the Securities Act of 1933.

         On each of January 15, 2003, February 15, 2003 and March 15, 2003, the
         Company issued 10,000 shares of its common stock to Mark Wachs and
         Associates. The shares were issued as compensation pursuant to a public
         relations letter agreement. The issuance of the shares was exempt from
         registration pursuant to Section 4(2) of the Securities Act of 1933.

         On the following dates, the Company issued the indicated number of
         shares of its common stock to Duncan Capital LLC:

                       January 10, 2003                 100,000 shares
                       January 17, 2003                 19,608 shares
                       February 17, 2003                19,231 shares
                       March 1, 2003                    10,670 shares

         The shares were issued as compensation to Duncan Capital LLC pursuant
         to an Advisory Agreement dated December 17, 2002. The issuance of the
         shares was exempt from registration pursuant to Section 4(2) of the
         Securities Act of 1933.

         On January 15, 2003, the Company issued 50,000 shares to Brown Simpson
         Asset Management, LLC as compensation pursuant to an Advisory Agreement
         dated January 15, 2003. The Company also issued to Brown Simpson a
         three-year warrant to purchase 300,000 shares of common stock at $.55
         per share. The issuance of the shares and the warrant was exempt from
         registration pursuant to Section 4(2) of the Securities Act of 1933.


                                       22

<PAGE>

         On March 28, 2003, the Company issued to Jacques Gonella, the Company's
         principal shareholder, a five-year warrant to purchase 195,000 shares
         of common stock at $.55 per share. The warrant was issued in connection
         with a Term Note in the principal amount of $130,000.00 issued to Dr.
         Gonella. The issuance of the warrant was exempt from registration
         pursuant to Section 4(2) of the Securities Act of 1933.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

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

              3.8      Articles of Amendment to Third Amended and Restated
                       Articles of Incorporation

             99.1      Section 906 CEO and CFO Certification

(b)      Reports on Form 8-K

         On February 12, 2003 the Company filed a Current Report on Form 8-K
         reporting under Item 5, Other Events, that it completed a restructuring
         of its outstanding debt securities. The Company exchanged $992,230 of
         its 10% Convertible Debentures and $621,025 of promissory notes for
         $1,613,255 of 8% Convertible Debentures plus warrants to purchase
         2,932,500 shares of common stock. The 8% Convertible Debentures contain
         substantially the same terms as the 10% Convertible Debentures, except
         that the 8% Convertible Debentures include a fixed conversion price of
         $.50 per share and an interest rate of 8%.

         On February 20, 2003 the Company filed a Current Report on Form 8-K
         reporting under Item 5, Other Events, that it entered into a License
         Agreement dated January 22, 2003, with Ferring BV ("Ferring"), under
         which the Company licensed certain of its intellectual property and
         extended the territories available to Ferring for use of certain of the
         Company's needle-free injector devices.

         On March 25, 2003 the Company filed a Current Report on Form 8-K
         reporting under Item 5, Other Events and Required FD Disclosure, that
         the Listing Qualifications arm of the Nasdaq Stock Market, Inc.
         notified the Company by letter dated March 24, 2003 that the Company is
         at risk of having its common stock delisted from the Nasdaq SmallCap
         Stock Market.


                                       23

<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.

May 20, 2003                            /s/ Roger G. Harrison, Ph.D.
                                        ---------------------------------------
                                        Roger G. Harrison, Ph.D.
                                        Chief Executive Officer and President

May 20, 2003                            /s/ Lawrence M. Christian
                                        ---------------------------------------
                                        Lawrence M. Christian
                                        Chief Financial Officer, Vice
                                        President - Finance and Secretary


                                       24

<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:   May 20, 2003

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




                                       25

<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:   May 20, 2003

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

                                       26
[{"type": "10-Q", "sequence": "1", "filename": "d10q.txt", "description": "FORM 10-Q", "secsgml_size_bytes": 92761}]
{"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": "03711851"}, "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": "ANTARES PHARMA INC /MN/", "date-changed": "20010604"}, {"former-conformed-name": "MEDI JECT CORP /MN/", "date-changed": "19960605"}]}
===============================================================================

                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 March 31, 2003

                         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 May 13, 2003, was 11,972,706.

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

                                       1
ANTARES PHARMA, INC.

                                      INDEX

                                                                          PAGE
                                                                          ----

PART I.     FINANCIAL INFORMATION

   ITEM 1.  Financial Statements (Unaudited)

            Consolidated Balance Sheets, as of December 31, 2002 and
            March 31, 2003 ................................................. 3

            Consolidated Statements of Operations for the three
            months ended March 31, 2002 and 2003 ........................... 4

            Consolidated Statements of Cash Flows for the three
            months ended March 31, 2002 and 2003 ........................... 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 .....20

   ITEM 4.  Controls and Procedures ........................................20

PART II.    OTHER INFORMATION ..............................................22

            SIGNATURES .....................................................24

                                       2
ANTARES PHARMA, INC.
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
December 31,      March 31,
                                                                                          2002            2003
                                                                                      ------------    ------------
Assets
Current Assets:
       Cash .......................................................................   $    267,945    $    193,998
       Accounts receivable, net of allowances of $12,000 and  $70,000, respectively        174,566         194,659
       VAT and other receivables ..................................................         38,289         596,996
       Inventories ................................................................        558,911         614,525
       Deferred financing costs ...................................................        454,910          72,082
       Prepaid expenses and other assets ..........................................         39,849          95,418
                                                                                      ------------    ------------
              Total current assets ................................................      1,534,470       1,767,678

Equipment, furniture and fixtures, net ............................................      1,531,063       1,369,468
Patent rights, net ................................................................      2,157,174       2,181,148
Goodwill, net .....................................................................      1,095,355       1,095,355
Other assets ......................................................................         90,909          92,678
                                                                                      ------------    ------------

              Total Assets ........................................................   $  6,408,971    $  6,506,327
                                                                                      ============    ============

                 Liabilities and Shareholders' Equity (Deficit)

Current Liabilities:
       Accounts payable ...........................................................   $    608,695    $    937,025
       Accrued expenses and other liabilities .....................................      1,521,177       2,057,536
       Due to related parties .....................................................        893,892         978,066
       Convertible debentures, net of issuance discount of $891,187 and $236,578,
          respectively ............................................................        733,159       1,397,539
       Common stock warrants ......................................................           --         1,026,731
       Capital lease obligations - current maturities .............................        106,493          87,808
       Deferred revenue ...........................................................      1,859,288       3,110,598
                                                                                      ------------    ------------
              Total current liabilities ...........................................      5,722,704       9,595,303
Capital lease obligations, less current maturities ................................         30,979          14,521
                                                                                      ------------    ------------
              Total liabilities ...................................................      5,753,683       9,609,824
                                                                                      ------------    ------------

Shareholders' Equity (Deficit):
       Series A Convertible Preferred Stock:  $0.01 par; authorized 10,000
          shares; 1,350 issued and outstanding at December 31, 2002 and
          March 31, 2003 ..........................................................             14              14
       Common Stock:  $0.01 par; authorized 30,000,000 shares;
          10,776,885 and 11,887,506 issued and outstanding at
          December 31, 2002 and March 31, 2003, respectively ......................        107,769         118,875
       Additional paid-in capital .................................................     42,353,492      41,605,479
       Accumulated deficit ........................................................    (41,165,798)    (44,183,249)
       Deferred compensation ......................................................       (137,352)       (108,936)
       Accumulated other comprehensive loss .......................................       (502,837)       (535,680)
                                                                                      ------------    ------------
                                                                                           655,288      (3,103,497)
                                                                                      ------------    ------------
              Total Liabilities and Shareholders' Equity (Deficit) ................   $  6,408,971    $  6,506,327
                                                                                      ============    ============
See accompanying notes to consolidated financial statements.

                                       3
ANTARES PHARMA, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
For the Three Months Ended
                                                                         March 31,
                                                               ----------------------------
                                                                   2002            2003
                                                               ------------    ------------
Revenues:
     Product sales .........................................   $    538,013    $    703,696
     Licensing and product development .....................        130,958         161,448
     Royalties .............................................           --            44,982
                                                               ------------    ------------
                                                                    668,971         910,126

Cost of product sales ......................................        661,424         502,476
                                                               ------------    ------------
Gross margin ...............................................          7,547         407,650
                                                               ------------    ------------

Operating Expenses:
     Research and development ..............................        731,128         714,775
     Sales and marketing ...................................        158,421         110,865
     General and administrative ............................      1,277,329       1,498,332
                                                               ------------    ------------
                                                                  2,166,878       2,323,972
                                                               ------------    ------------

Net operating loss .........................................     (2,159,331)     (1,916,322)
                                                               ------------    ------------

Other income (expense):
     Loss on debt extinguishments ..........................           --          (885,770)
     Gains on common stock warrants ........................           --           115,711
     Interest income .......................................          3,232           3,882
     Interest expense ......................................         (8,362)       (310,480)
     Foreign exchange gains (losses) .......................         18,538         (28,559)
     Other, net ............................................           (717)          4,087
                                                               ------------    ------------
                                                                     12,691      (1,101,129)
                                                               ------------    ------------

Net loss applicable to common shares .......................   $ (2,146,640)   $ (3,017,451)
                                                               ============    ============

Basic and diluted net loss per common share ................   $       (.23)   $       (.26)
                                                               ============    ============

Basic and diluted weighted average common shares outstanding      9,170,077      11,736,291
                                                               ============    ============
See accompanying notes to consolidated financial statements.

                                       4
ANTARES PHARMA, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
For the Three Months Ended
                                                                                  March 31,
                                                                         --------------------------
                                                                            2002            2003
                                                                         -----------    -----------
Cash flows from operating activities:
         Net loss ....................................................   $(2,146,640)   $(3,017,451)
         Adjustments to reconcile net loss to net
            cash used in operating activities:
         Depreciation and amortization ...............................       233,363        220,785
         Amortization of deferred financing costs ....................          --          249,705
         Stock-based compensation expense ............................        46,862        239,600
         Provision for doubtful accounts .............................          --           57,675
         Loss on debt extinguishments ................................          --          741,570
         Gains on common stock warrants ..............................          --         (115,711)
         Net debt discount accretion and premium amortization ........          --            2,628
         Changes in operating assets and liabilities, net of effect of
            business acquisition:
            Accounts receivable ......................................       (75,239)       (78,093)
            VAT and other receivables ................................        12,996       (558,707)
            Inventories ..............................................       133,931        (55,614)
            Prepaid expenses and other assets ........................      (148,999)      (101,866)
            Accounts payable .........................................       (43,670)       328,330
            Accrued expenses and other ...............................        18,846        625,356
            Deferred revenue .........................................       149,183      1,251,310
            Liabilities to related parties ...........................      (112,481)         2,108
            Other ....................................................         1,206         (1,772)
                                                                         -----------    -----------
Net cash used in operating activities ................................    (1,930,642)      (210,147)
                                                                         -----------    -----------

Cash flows from investing activities:
         Purchases of equipment, furniture and fixtures ..............       (68,431)        (1,160)
         Additions to patent rights ..................................       (81,133)       (60,707)
                                                                         -----------    -----------
Net cash used in investing activities ................................      (149,564)       (61,867)
                                                                         -----------    -----------

Cash flows from financing activities:
         Proceeds from loans from shareholders .......................     1,000,000        130,000
         Proceeds from loan from debenture holder ....................          --          621,025
         Principal payments on convertible debentures ................          --         (464,000)
         Principal payments on capital lease obligations .............       (20,777)       (37,281)
                                                                         -----------    -----------
Net cash provided by financing activities ............................       979,223        249,744
                                                                         -----------    -----------

Effect of exchange rate changes on cash and cash equivalents .........         9,211        (51,677)
                                                                         -----------    -----------

Net increase (decrease) in cash and cash equivalents .................    (1,091,772)       (73,947)
Cash and cash equivalents:
         Beginning of period .........................................     1,965,089        267,945
                                                                         -----------    -----------
         End of period ...............................................   $   873,317    $   193,998
                                                                         ===========    ===========

Cash paid during the period for interest .............................   $     3,942    $    16,811
See accompanying notes to consolidated financial statements

                                       5
ANTARES PHARMA, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                            March 31, 2002 and 2003

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 generally accepted accounting
         principles 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 for the year ended
         December 31, 2002. Operating results for the three-month period ended
         March 31, 2003, are not necessarily indicative of the results that may
         be expected for the year ending December 31, 2003.

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 had negative working capital of
         $4,188,234 and $7,827,625 at December 31, 2002 and March 31, 2003,
         respectively, 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, 2003, 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's cash position is currently only sufficient to fund
         working capital requirements for two or three weeks from May 12, 2003.
         Moreover, the Company has no immediate access to additional capital.
         Management's intentions are to raise additional capital through
         alliances with strategic corporate partners, equity offerings, and/or
         debt financing. There can be no assurance that the Company will ever
         become profitable or that additional 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.

         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 received a notice from Nasdaq on November 29, 2002, because
         for the 30 consecutive trading days prior to November 29, 2002, the
         Company's common stock closed below the minimum $1.00 per share
         requirement for continued listing under certain of Nasdaq's

                                       6
ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)
                            March 31, 2002 and 2003

2.       Going Concern (Continued)

         marketplace rules. Nasdaq provided the Company 180 calendar days, or
         until May 28, 2003, to regain compliance with respect to this per share
         bid price requirement. This notice was described more fully in the
         Company's Current Report on Form 8-K, filed on December 3, 2002.

         In addition, by letter dated March 24, 2003, the Listing Qualifications
         arm of The Nasdaq Stock Market, Inc. notified the Company that it does
         not comply with Marketplace Rule 4310(c)(2)(B), which requires listed
         companies to have a minimum of (i) $2,500,000 in shareholders' equity,
         (ii) $35,000,000 market value of listed securities or (iii) $500,000 of
         net income from continuing operations for the most recently completed
         fiscal year or two of the three most recently completed fiscal years.
         Based on the Company's Annual Report on Form 10-K for the year ended
         December 31, 2002, the Company's shareholders' equity was $655,288.
         Additionally, as of March 24, 2003, the market value of the Company's
         listed securities was $5,943,753 (based on 11,887,506 shares
         outstanding multiplied by the closing bid price of $0.50). Finally, the
         Company reported a net loss from continuing operations for each of the
         last three fiscal years.

         The Company has corresponded with Nasdaq regarding potential
         transactions that the Company may consummate to increase its
         shareholders' equity. However, following review of these proposals, on
         April 28, 2003, Nasdaq notified the Company of its intent to delist the
         Company's common stock from the Nasdaq SmallCap Market effective May 7,
         2003. The Company appealed Nasdaq's determination by requesting an oral
         hearing before the Nasdaq Listing Qualifications Panel. This hearing
         request will stay the delisting of the Company's common stock pending
         the Listing Qualifications Panel's decision.

         To maintain listing on the Nasdaq SmallCap Market, the Company must
         address the issues raised by both the November 28, 2002 and March 24,
         2003 notice letters received from Nasdaq. As of March 31, 2003, the
         Company does not meet any of the financial requirements for continued
         or initial listing on the Nasdaq SmallCap Market. If the Company's
         stock were to be delisted, it would constitute an event of default
         under the newly restructured 8% debentures, and at the option of the
         holder, exercisable through delivery of written notice to the Company,
         they would become due and payable at 130% of the outstanding principal
         and accrued interest.

3.       Product Warranty

         The Company provides a warranty on its needle-free injector devices.
         Warranty terms for devices sold to end-users by dealers and
         distributors are included in the device instruction manual included
         with each device sold. Warranty terms for devices sold to corporate
         customers who provide their own warranty terms to end-users are
         included in the contracts with the corporate customers. The Company is
         obligated to repair or replace, at the Company's option, a device found
         to be defective due to use of defective materials or faulty
         workmanship. The warranty does not apply to any product that has been
         used in violation of instructions as to the use of the product or to
         any product that has been neglected, altered, abused or used for a
         purpose other than the one for which it was manufactured. The warranty
         also does not apply to

                                       7
ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)
                            March 31, 2002 and 2003

3.       Product Warranty (Continued)

         any damage or defect caused by unauthorized repair or the use of
         unauthorized parts. Warranty periods on devices range from 12 to 30
         months from either the date of retail sale of the device by a dealer or
         distributor or the date of shipment to a customer if specified by
         contract. The Company recognizes the estimated cost of warranty
         obligations at the time the products are shipped based on historical
         claims incurred by the Company. Actual warranty claim costs could
         differ from these estimates. Warranty liability activity is as follows:

                            Balance at
                            Beginning      Warranty    Warranty    Balance at
                             of Year      Provisions    Claims      March 31
                            ----------    ----------   --------    ----------
         2002 ...........    $ 87,000      $12,172      $12,172     $ 87,000
         2003 ...........    $179,000      $16,541      $36,541     $159,000

4.       Comprehensive Loss

                                                    Three Months Ended
                                                         March 31,
                                                ---------------------------
                                                    2002            2003
                                                ------------    -----------
         Net loss ............................. $ (2,146,640)   $(3,017,451)
         Change in cumulative translation
            adjustment ........................       (1,626)       (32,843)
                                                ------------    -----------
         Comprehensive loss ................... $ (2,148,266)   $(3,050,294)
                                                ============    ===========

5.       Inventories

         Inventories consist of the following:

                                             December 31,      March 31,
                                                 2002             2003
                                             ------------      ---------
         Raw material .......................  $287,177        $323,639
         Work in-process ....................    32,370         175,507
         Finished goods .....................   289,364         165,379
                                               --------        --------
                                                608,911         664,525
         Inventory reserve ..................   (50,000)        (50,000)
                                               --------        --------
                                               $558,911        $614,525
                                               ========        ========

6.       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:

                                       8
ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)
                            March 31, 2002 and 2003

6.       Industry Segment and Operations by Geographic Areas (Continued)

         The Company has operating assets located in two countries as follows:

                                                 December 31,       March 31,
                                                     2002             2003
                                                 ------------      ----------
         Switzerland ...........................  $1,447,468       $1,757,595
         United States of America ..............   4,961,503        4,748,732
                                                  ----------       ----------
                                                  $6,408,971       $6,506,327
                                                  ==========       ==========

         Revenues by customer location are summarized as follows:

                                                  For the Three Months
                                                    Ended March 31,
                                                 -----------------------
                                                   2002           2003
                                                 --------       --------
         United States of America .............. $159,011       $177,117
         Europe ................................  486,018        693,868
         Other .................................   23,942         39,141
                                                 --------       --------
                                                 $668,971       $910,126
                                                 ========       ========

         The Company's primary customer, Ferring, accounted for revenues of
         approximately $530,000 and $605,000 for the quarters ended March 31,
         2002 and 2003, respectively. No other single customer accounted for 10%
         or more of total revenue in either period.

7.       Convertible Debentures

         To reduce the risk of substantial dilution to common shareholders in
         the near-term, on February 7, 2003, the Company completed a
         restructuring of its 10% debentures previously sold to four primary
         investors. Specifically, as part of this restructuring, on January 24,
         2003 and January 31, 2003, the Company borrowed an aggregate of
         $621,025 from Xmark Funds. The Company used the proceeds of these
         borrowings to repurchase $464,000 principal amount of the 10%
         debentures previously sold to the two original 10% debenture holders
         who had converted $536,000 of principal into common stock, and to pay a
         repurchase premium of $144,200 and accrued interest of $12,825. As
         additional repurchase compensation, the Company issued warrants to one
         of the two original 10% debenture holders and paid $5,000, in lieu of
         warrants, to the other. The Company recognized a debt extinguishment
         loss of $885,770 related to these transactions. Thereafter, in exchange
         for the surrender and cancellation of the promissory notes, the Company
         issued to Xmark Funds 8% Senior Secured Convertible Debentures in the
         same principal amount of the promissory notes. The Company also
         exchanged Amended and Restated 8% Senior Secured Convertible Debentures
         for the remaining outstanding principal and accrued interest of
         $955,000 and $37,230, respectively, of the original 10% debentures. The
         aggregate principal amount of the 8% debentures is $1,613,255. The 8%
         debentures contain terms similar to the 10% debentures, except that the
         8% debentures include a fixed conversion price of $.50 per share and an
         interest rate of 8% per annum. The 8%

                                       9
ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)
                            March 31, 2002 and 2003

7.       Convertible Debentures (Continued)

         debentures are due March 31, 2004. Similar to the 10% debentures, the
         Company granted a senior security interest in substantially all of its
         assets to the holders of the 8% debentures. At March 31, 2003 accrued
         interest of $20,862 was converted to principal, resulting in a
         principal balance of $1,634,117 at March 31, 2003. If the full
         principal amount of debentures were converted at the $0.50 conversion
         price, a total of 3,268,234 shares would be issued, which would result
         in substantial dilution to current shareholders. In connection with
         this restructuring, the Company also issued to the holders of the 8%
         debentures five-year warrants to purchase an aggregate of 2,932,500
         shares of the Company's common stock at an exercise price of $0.55 per
         share. The warrants are redeemable at the option of the Company upon
         the achievement of certain milestones set forth in the warrants.

         Upon conversion of the 8% debentures and exercise of the warrants, the
         Company will be obligated to issue an aggregate of 6,200,734 shares of
         its common stock, resulting in the holders of the 8% debentures and
         warrants owning in excess of 34% of the Company's common stock.
         Pursuant to NASD Marketplace Rules, the Company must obtain shareholder
         approval for the issuance of 20% or more of its currently outstanding
         shares. Therefore, under the terms of the 8% debentures and warrants,
         the holders thereof could not convert the 8% debentures or exercise the
         warrants for more than 19.99% of the number of shares of the Company's
         common stock outstanding on January 31, 2003, or 2,366,337 shares,
         until the Company obtained shareholder approval for the transaction and
         related stock issuances. In connection with the restructuring
         transaction, the Company's majority shareholder, Dr. Jacques Gonella,
         delivered a letter of undertaking to the holders of the 8% debentures
         stating that he would vote in favor of allowing the issuance of the
         Company's common stock upon conversion or exercise of the 8% debentures
         or warrants. The Company obtained shareholder approval for the
         transaction and related stock issuances at a special shareholders'
         meeting on May 8, 2003.

         The aggregate principal amount of the 8% debentures of $1,613,255 is
         held by two debenture holders in the amounts of $469,513 and
         $1,143,742, respectively. The Company analyzed each of the
         restructuring transactions for the two 8% debenture holders to
         determine the proper accounting treatment. The effective borrowing rate
         on $469,513 of restructured debentures was determined to be less than
         the effective borrowing rate on the original debentures immediately
         prior to the restructuring. As a result, the Company determined that
         the debentures totaling $469,513 should be accounted for as a troubled
         debt restructuring. The Company reduced the net carrying value of these
         debentures at the time of the restructuring from $140,659 to $97,710.
         The debt discount of $371,803 will be accreted to interest expense
         through March 31, 2004 using the effective interest method. The
         transaction related to the remaining $1,143,742 has been accounted for
         as a debt extinguishment under EITF 96-19. The restructured debentures
         were determined to be substantially different from the original
         debentures because the present value of the cash flows under the terms
         of the restructured debentures was more than 10 percent different from
         the present value of the remaining cash flows under the terms of the
         original debentures. The debentures have been recorded at a fair value
         of $1,276,339, and the premium of $132,597 will be amortized monthly
         through March 31, 2004 using the effective interest method. In
         connection with both transactions, the Company issued warrants to
         acquire 2,932,500 shares of common stock. The Company determined that
         the fair value of these warrants was $1,142,442 using the Black Scholes
         option pricing model. As further described in Note 8, these common
         stock warrants are classified as debt for accounting purposes. As a
         result of these debenture restructurings and the initial exchange of
         the $464,000 of 10% convertible debentures for the 8% bridge notes, the
         Company recognized losses on debt extinguishments of $885,770,
         consisting of write offs of debenture discounts and issuance costs of
         $693,098, repurchase premiums paid of $144,200, and $48,472
         representing the excess of the fair value of the warrants issued plus
         the debenture premium over the value of the reacquired conversion
         feature.

                                       10
ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)
                            March 31, 2002 and 2003

8.       Common Stock Warrants

         In connection with the debenture restructuring transactions, the
         Company issued to the holders of the 8% debentures five-year warrants
         to purchase an aggregate of 2,932,500 shares of the Company's common
         stock at an exercise price of $0.55 per share. The warrants are subject
         to defined indemnifications if the underlying common shares are not
         fully tradable and the warrant holders incur losses due to their
         inability to sell these shares. The Company analyzed the terms and
         conditions of the warrants and determined that the warrants should be
         classified as debt under EITF 00-19, Accounting for Derivative
         Financial Instruments Indexed to, and Potentially Settled in, a
         Company's Own Stock. As such, the Company is required to mark-to-market
         these warrants at each reporting period with changes in the warrant
         values being recorded in the consolidated statement of operations. The
         warrants were recorded with an initial fair value on January 31, 2003
         of $1,142,442, determined using the Black Scholes option pricing model,
         and were adjusted to their fair value at March 31, 2003 of $1,026,731,
         with the difference of $115,711 being recorded as a gain on common
         stock warrants in the three months ended March 31, 2003. Upon exercise
         of the warrants the Company will record a reduction in the liability
         and an increase in additional-paid-in-capital. The warrants are not
         designated as a hedging instrument.

9.       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 quarters ended March 31, 2002 and March 31, 2003, the
         Company recognized $39,228 and $31,684, respectively, of license
         revenues that were previously recognized by the Company prior to the
         adoption of the cumulative deferral method.

         Ferring License Agreement

         The Company entered into a License Agreement, dated January 22, 2003,
         with Ferring BV ("Ferring"), under which the Company licensed certain
         of its intellectual property and extended the territories available to
         Ferring for use of certain of the Company's needle-free injector
         devices. Specifically, the Company granted to Ferring an exclusive,
         perpetual, irrevocable, royalty-bearing license, within a prescribed
         manufacturing territory, to manufacture certain of the Company's
         needle-free injector devices. The Company granted to Ferring similar
         non-exclusive rights outside of the prescribed manufacturing territory.
         In addition, the Company granted to Ferring a non-exclusive right to
         make and have made the equipment required to manufacture the licensed
         products, and an exclusive, perpetual, royalty-free license in a
         prescribed territory to use and sell the licensed products.

         The Company also granted to Ferring a right of first offer to obtain an
         exclusive worldwide license to manufacture and sell the Company's AJ-1
         device for the treatment of limited medical conditions.

         As consideration for the license grants, Ferring paid the Company
         EUR500,000 ($532,400) upon execution of the License Agreement, and paid
         an additional EUR1,000,000 ($1,082,098) on February 24, 2003. Ferring
         will also pay the Company royalties for each device manufactured by or
         on behalf of Ferring, including devices manufactured by the Company.
         Beginning on January 1, 2004, EUR500,000 ($541,049) of the license fee
         received on February 24, 2003, will be credited against the royalties
         owed by Ferring, until such amount is exhausted. These royalty
         obligations expire, on a country-by-country basis, when the respective
         patents for the products expire, despite the fact that the License
         Agreement does not itself expire until the last of such patents
         expires. The license fees are being recognized in income over the
         period from January 22, 2003 through expiration of the patents in
         December 2016.

         The Company also agreed that it would enter into a third-party supply
         agreement to supply sufficient licensed products to meet the Company's
         obligations to Ferring under the License Agreement and under the
         parties' existing supply agreement.

10.      Third Party Supply Agreement

         On February 22, 2003 the Company entered into a manufacturing agreement
         under which all assembly work currently performed by the Company at its
         Minneapolis facility will be outsourced to a third-party supplier
         ("Supplier"). Under the terms of the agreement, the Supplier will be
         responsible for procurement of raw materials and components, inspection
         of procured materials, production, assembly, testing, sterilization,
         labeling, packaging

                                       11
ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)
                            March 31, 2002 and 2003

10.       Third Party Supply Agreement (Continued)

         and shipping to the Company's customers. The manufacturing operations
         were transferred to the Supplier in April 2003. The Company will
         continue to have responsibility for the manufacturing of the product
         including the quality of all products and the release of all products
         produced by the Supplier. The agreement has an initial term of two
         years. The Company reviewed the long-lived assets related to the
         manufacturing operations and determined there was no impairment as a
         result of the transfer.

11.      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 the issuance of up to
         216,000 restricted shares of common stock upon 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 $28,416 was recognized in connection with these
         shares during each of the quarters ended March 31, 2002 and 2003.

         During the first quarter of 2003 the Company issued 1,110,621 shares of
         common stock, of which 881,112 were issued due to conversions of
         convertible debentures and 229,509 were issued to consultants for
         services performed. The Company recognized $76,318 of expense in the
         quarter ended March 31, 2003 in connection with the shares issued to
         consultants.

         During the first quarter of 2003 the Company issued warrants to
         purchase 300,000 shares of the Company's common stock at an exercise
         price of $.55 per share as compensation to non-employees for
         professional services. The Company recognized expense of $134,866 in
         connection with these warrants.

         On March 28, 2003 the Company issued a warrant to its majority
         shareholder for the purchase of 195,000 shares of common stock at an
         exercise price of $.55 per share in connection with a $130,000 Term
         Note described in Note 15.

12.      New Accounting Pronouncements

         In December 2002, the Emerging Issues Task Force ("EITF") issued EITF
         00-21, Revenue Arrangements with Multiple Deliverables. EITF 00-21
         addresses certain aspects of the accounting by a vendor for
         arrangements under which it will perform multiple revenue-generating
         activities. In some arrangements, the different revenue-generating
         activities (deliverables) are sufficiently separable, and there exists
         sufficient evidence of their fair values to separately account for some
         or all of the deliverables (that is, there are separate units of

                                       12
ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)
                            March 31, 2002 and 2003

12.      New Accounting Pronouncements (Continued)

         accounting). In other arrangements, some or all of the deliverables are
         not independently functional, or there is not sufficient evidence of
         their fair values to account for them separately. EITF 00-21 addresses
         when and, if so, how an arrangement involving multiple deliverables
         should be divided into separate units of accounting. EITF 00-21 does
         not change otherwise applicable revenue recognition criteria. EITF
         00-21 is applicable for the Company effective July 1, 2003, and could
         have an impact on revenue recognition of future licensing transactions.

         In April 2003, the Financial Accounting Standards Board ("FASB") issued
         SFAS 149, Amendment of Statement 133 on Derivative Instruments and
         Hedging Activities. This statement amends and clarifies financial
         accounting and reporting for derivative instruments, including certain
         derivative instruments embedded in other contracts (collectively
         referred to as derivatives) and for hedging activities under FASB
         Statement 133, Accounting for Derivative Instruments and Hedging
         Activities. Statement 149 has multiple effective date provisions
         depending on the nature of the amendment to Statement 133. The Company
         does not expect this statement to have a material impact on its
         consolidated results of operations or financial position, because the
         Company does not currently have derivative instruments or engage in
         hedging activities.

13.      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 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. The conversion of the Company's 8%
         convertible debentures into common stock would result in the issuance
         of 3,268,234 shares of common stock.

                                                        Three Months Ended
                                                             March 31,
                                                    --------------------------
                                                        2002          2003
                                                    ------------  ------------
         Net loss ..................................$(2,146,640)  $ (3,017,451)
         Basic and diluted weighted average
           common shares outstanding ...............  9,170,077     11,736,291
                                                    ------------  ------------
         Basic and diluted net loss per common
           share ...................................$     (0.23)  $      (0.26)
                                                    ============  ============

                                       13
ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)
                            March 31, 2002 and 2003

13.      Reconciliation of Loss and Share Amount Used in EPS Calculation
         (Continued)

         Potentially dilutive securities excluded from dilutive loss per share
         at March 31, 2002 and 2003, as their effect is anti-dilutive, is as
         follows:

                                                         Three Months Ended
                                                             March 31,
                                                       ----------------------
                                                          2002        2003
                                                       ----------  ----------
         Stock options and warrants ..................  1,743,482   5,184,299
                                                       ==========  ==========
         Principal of convertible debentures ......... $        -  $1,634,117
                                                       ==========  ==========

14.      Stock Based Compensation

         The Company applies Accounting Principles Board, Opinion 25, Accounting
         for Stock Issued to Employees, and related interpretations in
         accounting for stock plans. Accordingly, no compensation expense has
         been recognized for stock-based compensation plans. Had compensation
         cost been determined based on the fair value at the grant date for
         stock options under SFAS No. 123, Accounting and Disclosure of
         Stock-Based Compensation, the net loss and loss per share would have
         increased to the pro-forma amounts shown below:

                                                         Three Months Ended
                                                             March 31,
                                                    ---------------------------
                                                        2002           2003
                                                    -----------    ------------
         Net loss:
            As reported ........................... $(2,146,640)   $(3,017,451)
            Compensation expense ..................    (366,798)      (243,108)
                                                    -----------    ------------
            Pro forma ............................. $(2,513,438)   $(3,260,559)
                                                    ===========    ============
         Basic and diluted net loss per
           common share:
            As reported ........................... $     (0.23)   $     (0.26)
            Compensation expense ..................       (0.04)         (0.02)
                                                    -----------    ------------
            Pro forma ............................. $     (0.27)   $     (0.28)
                                                    ===========    ============

15.      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 $46,500 in each of the
         quarters ended March 31, 2002 and 2003. Amounts owed to JG Consulting
         AG at December 31, 2002 and March 31, 2003 were $46,500 and $93,000,
         respectively.

         During 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,
         2002 and March 31, 2003 the Company had a payable to this company of
         $92,500.

                                       14
ANTARES PHARMA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)
                            March 31, 2002 and 2003

15.      Related Party Transactions (Continued)

         During the three months ended March 31, 2003 the Company recognized
         expense of $10,500 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, 2002 and March 31, 2003 of $22,211 and $10,500,
         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, $200,000 and $200,000 in June,
         September and December of 2002, respectively, to be repaid in July,
         September and December of 2003, respectively, with interest at the
         three-month Euribor Rate as of the date of the advance, plus 5%. The
         Company borrowed an additional $130,000 from its majority shareholder
         on March 28, 2003, to be repaid in December 2003, at the same interest
         rate as the 2002 borrowings. These amounts are included in due to
         related parties on the consolidated balance sheets as of December 31,
         2002 and March 31, 2003.

         The Company borrowed from its majority shareholder an additional
         $480,000, $140,000 and $250,000 on April 15, April 28 and May 8, 2003,
         respectively. The loans are due in December 2003 with interest at the
         three-month Euribor Rate as of the dates of the loans, plus 5%. The
         majority shareholder was also issued warrants for the purchase of
         195,000, 720,000, 210,000 and 375,000 shares of the Company's common
         stock at an exercise price of $0.55 per share in connection with the
         loans on March 28, April 15, April 28, and May 8, 2003, respectively.

         At March 31, 2002 and 2003 and May 14, 2003, aggregate loans from the
         majority shareholder excluding applicable debt discounts were
         $1,000,000, $830,000 and $1,700,000, respectively.

                                       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, inventory
reserves and valuation of long-lived and intangible assets and goodwill, 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, 2002. The Company has made no changes to these
policies during 2003.

Three Months Ended March 31, 2002 and 2003

Revenues

Total revenues for the three months ended March 31, 2002 and 2003 were $668,971
and $910,126, respectively. The increase in revenues of $241,155, or 36% is
primarily the result of an increase in product sales of $165,683, or 31%. The
product sales increase was mainly due to increased sales of injector device
disposable components to the Company's major customer.

Licensing and product development fee income increased by $30,490 or 23% for the
three months ended March 31, 2003 as compared to the prior-year period. The
increase results primarily from the receipt of approximately $500,000 of license
and product development fees in April 2002 that was deferred and is being
recognized over 47 months.

Cost of Sales

The cost of product sales of $661,424 and $502,476 for the first quarter of 2002
and 2003, respectively, are primarily related to injection devices and
disposable products. Cost of sales as a percentage of product sales decreased
from 123% for the first quarter of 2002 to 71% for the first quarter of 2003.
The significant improvement in gross margin during the 2003 period was primarily
due to approximately $282,000 of inventory write-offs and inventory reserve
adjustments in the first quarter of 2002 related to the launch of the Medi-Ject
Vision device into new markets.

Research and Development

Research and development expenses decreased $16,353 or 2% to $714,775 in the
three months ended March 31, 2003 from $731,128 in the prior year period. Higher
payroll costs due to research employee additions during 2002 at
Antares/Switzerland for increased research activities were offset by reductions
in prototyping and tooling expenses.

                                       16
Sales and Marketing

Sales and marketing expenses totaled $158,421 and $110,865 in the three months
ended March 31, 2002 and 2003, respectively. This decrease of $47,556 or 30% is
primarily due to lower payroll costs caused by staff reductions at
Antares/Minnesota and reductions in travel expenses and professional fees.

General and Administrative

General and administrative expenses totaled $1,277,329 and $1,498,332 in the
three months ended March 31, 2002 and 2003, respectively. The increase of
$221,003 or 17% is primarily due to increases in professional and legal fees
partially offset by reductions in travel expenses.

Other Income (Expense)

Net other income (expense) decreased $1,113,820 from net other income of $12,691
in the first quarter of 2002 to net other expense of $1,101,129 in the first
quarter of 2003. The first quarter 2002 other income (expense) is primarily
composed of exchange gains of $18,538 and interest income of $3,232, offset by
interest expense of $8,362. The first quarter 2003 other income (expense) is
primarily composed of loss on extinguishment of debt of $885,770, exchange
losses of $28,559 and interest expense of $310,480, partially offset by gains on
common stock warrants of $115,711. The interest expense primarily relates to the
convertible debentures, consisting of $249,705 from the amortization of deferred
financing costs and debt issuance discount in connection with the 10%
convertible debentures and debenture interest totaling $31,733. Gains on common
stock warrants represents the change in fair value, using the Black Scholes
option pricing model, of the debenture holders' warrants from the issuance date
of January 31, 2003 to March 31, 2003, described further in Note 8 to the
Consolidated Financial Statements.

Cash Flows

Operating Activities

Net cash used in operating activities decreased by $1,720,495, from $1,930,642
for the first quarter of 2002 to $210,147 for the first quarter of 2003. This
was the result of net losses of $2,146,640 and $3,017,451 in the first quarter
of 2002 and 2003, respectively, adjusted by noncash expenses and changes in
operating assets and liabilities.

Net noncash expenses in the first quarter of 2002 totaled $280,225, consisting
primarily of depreciation and amortization of $233,363 and stock-based
compensation expense of $46,862. Noncash expenses of $1,396,252 in the first
quarter of 2003 were mainly due to depreciation and amortization of $220,785,
amortization of deferred financing costs of $249,705, stock-based compensation
expense of $239,600, provision for doubtful accounts of $57,675 and loss on
extinguishment of debt of $741,570, less gains on common stock warrants of
$115,711.

The change in operating assets and liabilities in the first quarter of 2002
resulted in a net decrease in cash of $64,227, primarily due to the increase in
accounts receivable and prepaid expenses of $75,239 and $148,999, respectively,
along with a decrease in liabilities to related parties of $112,481, offset by a
decrease in inventories of $133,931 and an increase in deferred revenue of
$149,183. Prepaid expenses increased $148,999 during the current quarter due
primarily to payment of the annual directors' insurance premium of $155,000. In
the first quarter of 2003, the change in operating assets and liabilities caused
a net increase in cash of $1,411,052, primarily due to increases in deferred
revenue and accrued expenses of $1,251,310 and $625,356, respectively, and a
decrease in accounts payable of $328,330, offset by increases in accounts
receivable, VAT and other receivables, inventories and prepaid and other assets
of $78,093, $558,707, $55,614 and $101,866, respectively. The increase in
deferred revenue in 2003 is

                                       17
mainly due to the receipt of over $1,000,000 in the first quarter from Ferring
in connection with a License Agreement described in Note 9 to the Consolidated
Financial Statements.

Investing Activities

Net cash used in investing activities decreased $87,697, from $149,564 in the
first quarter of 2002 to $61,867 in the same period of 2003. Purchases of
equipment, furniture and fixtures in the first quarter of 2002 and 2003 totaled
$68,431 and $1,160, respectively, and expenditures for patent acquisition and
development totaled $81,133 and $60,707, respectively.

Financing Activities

Net cash provided by financing activities decreased $729,479 from $979,223 in
the first quarter of 2002 to $249,744 in the same period of 2003, due primarily
to net proceeds of $1,000,000 received from the majority shareholder during the
first quarter of 2002 compared to $130,000 during the first quarter of 2003. In
the first quarter of 2003 the Company borrowed $621,025 from one of the
debenture holders and used these proceeds to repurchase $464,000 principal
amount of the 10% debentures from two of the original debenture holders, and to
pay a repurchase premium of $144,200 and accrued interest of $12,825.

Liquidity

The Company had negative working capital of $4,188,234 and $7,827,625 at
December 31, 2002 and March 31, 2003, respectively, and incurred a net loss of
$3,017,451 for the quarter ended March 31, 2003. In addition, the Company has
had net losses and has had negative cash flows from operating activities since
inception. The Company expects to report a net loss for the year ending December
31, 2003, 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's cash position is currently only sufficient to fund working capital
requirements for two or three weeks from May 12, 2003. Moreover, the Company has
no immediate access to additional capital. Management's intentions are to
attempt to raise additional capital through alliances with strategic corporate
partners, equity offerings, and/or debt financing. However, there can be no
assurance that the Company will ever become profitable or that additional
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.

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 received a notice from Nasdaq on November 29, 2002, because for the
30 consecutive trading days prior to November 29, 2002, the Company's common
stock closed below the minimum $1.00 per share requirement for continued listing
under certain of Nasdaq's marketplace rules. Nasdaq provided the Company 180
calendar days, or until May 28, 2003, to regain compliance with respect to

                                       18
this per share bid price requirement. This notice was described more fully in
the Company's Current Report on Form 8-K, filed on December 3, 2002.

In addition, by letter dated March 24, 2003, Nasdaq notified the Company that it
currently does not comply with Marketplace Rule 4310(c)(2)(B), which requires
listed companies to have a minimum of (i) $2,500,000 in shareholders' equity,
(ii) $35,000,000 market value of listed securities or (iii) $500,000 of net
income from continuing operations for the most recently completed fiscal year or
two of the three most recently completed fiscal years. Based on the Company's
Annual Report on Form 10-K for the year ended December 31, 2002, the Company's
shareholders' equity was $655,288. Additionally, as of March 24, 2003, the
market value of the Company's listed securities was $5,943,753 (based on
11,887,506 shares outstanding multiplied by the closing bid price of $0.50).
Finally, the Company reported a net loss from continuing operations for each of
the last three fiscal years.

The Company has corresponded with Nasdaq regarding potential transactions that
the Company may consummate to increase its shareholders' equity. However,
following review of these proposals, on April 28, 2003, Nasdaq notified the
Company of its intent to delist the Company's common stock from the Nasdaq
SmallCap Market effective May 7, 2003. The Company appealed Nasdaq's
determination by requesting an oral hearing before the Nasdaq Listing
Qualifications Panel. This hearing request will stay the delisting of the
Company's common stock pending the Listing Qualifications Panel's decision.

To maintain listing on the Nasdaq SmallCap Market, the Company must address the
issues raised by both the November 28, 2002 and March 24, 2003 notice letters
received from Nasdaq. As of March 31, 2003, the Company does not meet any of the
financial requirements for continued or initial listing on the Nasdaq SmallCap
Market. If the Company's stock were to be delisted, it would constitute an event
of default under the newly restructured 8% debentures, and at the option of the
holder, exercisable through delivery of written notice to the Company, they
would become due and payable at 130% of the outstanding principal and accrued
interest.

New Accounting Pronouncements

In December 2002, the Emerging Issues Task Force ("EITF") issued EITF 00-21,
Revenue Arrangements with Multiple Deliverables. EITF 00-21 addresses certain
aspects of the accounting by a vendor for arrangements under which it will
perform multiple revenue-generating activities. In some arrangements, the
different revenue-generating activities (deliverables) are sufficiently
separable, and there exists sufficient evidence of their fair values to
separately account for some or all of the deliverables (that is, there are
separate units of accounting). In other arrangements, some or all of the
deliverables are not independently functional, or there is not sufficient
evidence of their fair values to account for them separately. EITF 00-21
addresses when and, if so, how an arrangement involving multiple deliverables
should be divided into separate units of accounting. EITF 00-21 does not change
otherwise applicable revenue recognition criteria. EITF 00-21 is applicable for
the Company effective July 1, 2003, and could have an impact on revenue
recognition of future licensing transactions.

In April 2003, the Financial Accounting Standards Board ("FASB") issued SFAS
149, Amendment of Statement 133 on Derivative Instruments and Hedging
Activities. This statement amends and clarifies financial accounting and
reporting for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives) and for
hedging activities under FASB Statement 133, Accounting for Derivative
Instruments and Hedging Activities. Statement 149 has multiple effective date
provisions depending on the nature of the amendment to Statement 133. The
Company does not expect this statement to have a material impact on its
consolidated results of

                                       19
operations or financial position, because the Company does not currently have
derivative instruments or engage in hedging activities.

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. 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 quarters ended March 31,
2002 and 2003 was not material. Beginning in 2003 the Company also has exposure
to exchange rate fluctuations between the Euro and the U.S. dollar. The
licensing agreement entered into in January 2003 with Ferring establishes
pricing in Euros for products sold under the existing supply agreement and for
all royalties. 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.

The Company's exposure to interest rate risk is limited to $830,000 borrowed in
2002 and 2003 under four Term Note agreements with its majority shareholder. The
notes bear interest at the three month Euribor Rate as of the date of each
advance, plus 5%. Due to the short-term nature of the notes, the Company's
exposure to interest rate risk is not believed to be material. The Company's 8%
convertible debentures, like all fixed rate instruments, are subject to interest
rate risk and will decline in value if market interest rates decrease. The
Company does not use derivative financial instruments to manage interest rate
risk.

The market value of the Company's 8% convertible debentures and the common stock
warrants are impacted by fluctuations in the price of the Company's common
stock.

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 its
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.

                                       20
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. 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.

                                       21
PART II - OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds

         On February 7, 2003, Company completed a restructuring of its
         outstanding debt securities previously sold to four primary investors.
         In connection with this restructuring, the Company repurchased certain
         of its outstanding 10% convertible debentures using funds borrowed from
         one of the 10% debenture holders. The Company then issued new 8% Senior
         Secured Convertible Debentures to this holder in the same amount
         borrowed from the debenture holder, and issued replacement 8%
         debentures in exchange for the remaining outstanding 10% debentures. In
         all, the Company issued $1,613,255 aggregate principal amount of its 8%
         debentures. The 8% debentures include a fixed conversion price of $.50
         per share and earn interest at a rate of 8% per annum. The Company
         granted a senior security interest in substantially all of its assets
         to the holders of the 8% debentures. The Company also issued to the
         debenture holders five-year warrants to purchase an aggregate of
         2,932,500 shares of the Company's common stock at an exercise price of
         $.55 per share. Upon conversion of the 8% debentures and exercise of
         the warrants, the Company will be obligated to issue an aggregate of
         6,159,011 shares of its common stock. As this amount exceeds 20% of the
         Company's current outstanding shares of common stock, the Company was
         required to obtain shareholder approval for this transaction. The
         Company's shareholders approved the issuance of the 8% debentures and
         the warrants at a special meeting held on May 8, 2003. Because this
         transaction was a restructuring of existing debt, the Company did not
         receive any additional proceeds as a result of it. The sale of the
         debentures and warrants was exempt from registration pursuant to
         Section 4(2) of the Securities Act of 1933.

         On each of January 15, 2003, February 15, 2003 and March 15, 2003, the
         Company issued 10,000 shares of its common stock to Mark Wachs and
         Associates. The shares were issued as compensation pursuant to a public
         relations letter agreement. The issuance of the shares was exempt from
         registration pursuant to Section 4(2) of the Securities Act of 1933.

         On the following dates, the Company issued the indicated number of
         shares of its common stock to Duncan Capital LLC:

                       January 10, 2003                 100,000 shares
                       January 17, 2003                 19,608 shares
                       February 17, 2003                19,231 shares
                       March 1, 2003                    10,670 shares

         The shares were issued as compensation to Duncan Capital LLC pursuant
         to an Advisory Agreement dated December 17, 2002. The issuance of the
         shares was exempt from registration pursuant to Section 4(2) of the
         Securities Act of 1933.

         On January 15, 2003, the Company issued 50,000 shares to Brown Simpson
         Asset Management, LLC as compensation pursuant to an Advisory Agreement
         dated January 15, 2003. The Company also issued to Brown Simpson a
         three-year warrant to purchase 300,000 shares of common stock at $.55
         per share. The issuance of the shares and the warrant was exempt from
         registration pursuant to Section 4(2) of the Securities Act of 1933.

                                       22
On March 28, 2003, the Company issued to Jacques Gonella, the Company's
         principal shareholder, a five-year warrant to purchase 195,000 shares
         of common stock at $.55 per share. The warrant was issued in connection
         with a Term Note in the principal amount of $130,000.00 issued to Dr.
         Gonella. The issuance of the warrant was exempt from registration
         pursuant to Section 4(2) of the Securities Act of 1933.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

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

              3.8      Articles of Amendment to Third Amended and Restated
                       Articles of Incorporation

             99.1      Section 906 CEO and CFO Certification

(b)      Reports on Form 8-K

         On February 12, 2003 the Company filed a Current Report on Form 8-K
         reporting under Item 5, Other Events, that it completed a restructuring
         of its outstanding debt securities. The Company exchanged $992,230 of
         its 10% Convertible Debentures and $621,025 of promissory notes for
         $1,613,255 of 8% Convertible Debentures plus warrants to purchase
         2,932,500 shares of common stock. The 8% Convertible Debentures contain
         substantially the same terms as the 10% Convertible Debentures, except
         that the 8% Convertible Debentures include a fixed conversion price of
         $.50 per share and an interest rate of 8%.

         On February 20, 2003 the Company filed a Current Report on Form 8-K
         reporting under Item 5, Other Events, that it entered into a License
         Agreement dated January 22, 2003, with Ferring BV ("Ferring"), under
         which the Company licensed certain of its intellectual property and
         extended the territories available to Ferring for use of certain of the
         Company's needle-free injector devices.

         On March 25, 2003 the Company filed a Current Report on Form 8-K
         reporting under Item 5, Other Events and Required FD Disclosure, that
         the Listing Qualifications arm of the Nasdaq Stock Market, Inc.
         notified the Company by letter dated March 24, 2003 that the Company is
         at risk of having its common stock delisted from the Nasdaq SmallCap
         Stock Market.

                                       23
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.

May 20, 2003                            /s/ Roger G. Harrison, Ph.D.
                                        ---------------------------------------
                                        Roger G. Harrison, Ph.D.
                                        Chief Executive Officer and President

May 20, 2003                            /s/ Lawrence M. Christian
                                        ---------------------------------------
                                        Lawrence M. Christian
                                        Chief Financial Officer, Vice
                                        President - Finance and Secretary

                                       24
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:   May 20, 2003

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

                                       25
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:   May 20, 2003

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

                                       26