UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB / A
(x) Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 1997
OR
( ) Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Transition period from___ to___
Commission file number 0-17874
XPLORER, S.A.
(Exact name of registrant as specified in its charter)
Nevada 88-0199674
------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification)
Number)
4750 Kelso Creek Road, Weldon, California 93238
- ----------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Phone: (619) 378-3936 Fax: (619) 378-1066
(Registrant's telephone number, including area code)
Gerant Industries, Inc.- March 31, 1997
(Former name, former address and former fiscal year,
if changed since last report)
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[ ]
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 subsequent to the distribution of securities under a plan confirmed
by a court. Yes [X] No[ ]
As of March 31, 1997, there were 18,782,447 shares of common stock ($0.001 par
value) issued and outstanding.
Total sequentially numbered pages in this document: 16
1
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Xplorer, S.A.
(A Development Stage Enterprise)
Consolidated Balance Sheet
As of March 31, 1997
Assets 1997 1996
--------------------------------
(Unaudited) (Unaudited)
Current Assets:
Cash $95,544 Not Available
Note receivable (Note 5) 16,000 For Prior Period
Marketable securities (Note 4) 223,693 See Note 15
Prepaid commissions 286,320
Total Current Assets 621,557
Property, plant & equipment
- net (Notes 6, 8, 7, 11) 3,489,384
Other investments (Notes 7 and 10) 1,019,000
--------------------------------
Total Assets $5,129,941
================================
Liabilities and Shareholder Equity
Liabilities:
Current Liabilities:
Gold contracts ( Note 11) 250,399
Zero-coupon bonds - Current 890,000
Related party payable (Note 12) 208,017
Note payable (Notes 5 and 11) 450,000
Payroll obligations 11,752
Other accrued expenses 21,738
--------------------------------
1,831,906
Accrued legal fees (Note 9) 97,000
Long-term zero coupon bonds 620,418
Minority interest in
consolidated subsidiary (Note 8) 852,000
--------------------------------
3,401,324
--------------------------------
THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT
2
<PAGE>
Xplorer, S.A.
(A Development Stage Enterprise)
Consolidated Balance Sheet (Continued)
As of March 31, 1997
1997 1996
--------------------------------
(Unaudited) (Unaudited)
Commitments and contingencies
(Notes 2, 9, 10, & 11)
Shareholders' Equity (Note 7):
Preferred Stock, par value $0.001, 1,300
authorized 1,250,600 shares;
convertible beginning in 2006;
1,250,600 shares issued and outstanding.
Common Stock, $0.001 par value,
authorized sixty million (60,000,000) 18,600
shares; 18,782,447 shares
issued and outstanding.
Additional paid in capital 2,694,055
Deficit accumulated during
the development stage (985,338)
--------------------------------
Total Shareholders' Equity 1,728,617
--------------------------------
Total Liabilities and Shareholders' Equity $5,129,941
================================
THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT
3
<PAGE>
Xplorer, S.A (A Development Stage Enterprise)
Unaudited Statement of Operations
For The Three Month Period Ended March 31, 1997
1997 1996
-------------------------------------------------
Quarter Year To Date Quarter Year To Date
-------------------------------------------------
Income: Not Available For
Prior Period
See Note 15 For Details
Revenues (Note 1) $0 $0
Other income (expense) $55,020 55,020
-------------------------------------------------
Total Income 55,020 55,020
-------------------------------------------------
Cost of Sales:
0 0
0 0
-------------------------------------------------
Total Cost of sales 0 0
-------------------------------------------------
Gross margin (Loss) 55,020 55,020
-------------------------------------------------
Operating Expenses:
Compensation 43,766 43,766
Professional fees 73,368 73,368
Commissions 0 0
Interest 7,500 7,500
Administrative 11,724 11,724
Depreciation 0 0
-------------------------------------------------
Total Operating expenses 136,358 136,358
-------------------------------------------------
Net Profit (Loss) ($81,338) ($81,338)
=================================================
Earnings (Loss) per
Share of Common
Stock & Equivalents ($0.004) ($0.004)
=================================================
Common Stock
outstanding 18,782,447 18,782,447
=================================================
THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT
4
<PAGE>
Xplorer, S.A. (A Development Stage Enterprise)
UNAUDITED STATEMENT OF CASH FLOWS
For the Three Month Period Ended March 31, 1997
CASH FLOWS FROM OPERATING ACTIVITIES 1997 1996
--------------------------------
Net (Loss) ($81,338) Not Available
Adjustments to Reconcile Net Income to For Prior Period
Net Cash Used in Operating Activities: See Note 15
Eliminate Non-Cash Items
(Depreciation and Amortization)
(Increase) Decrease in:
Receivables
Marketable securities 2,707
Prepaid commissions (76,320)
Increase (Decrease) in:
Gold contracts (22,601)
Zero coupon bonds (25,000)
Related party payable 59,017
Accrued expenses and payroll obligations (7,710)
Accrued legal fees (50,000)
Long term zero coupon bonds 67,718
--------------------------------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (133,527)
--------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Increase (Decrease) in:
Costs added to property, plant
& equipment (84,984)
Notes payable
Stock issued for equity conversion:
Common stock
Paid in capital 148,055
--------------------------------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 63,071
--------------------------------
NET INCREASE (DECREASE) IN CASH (70,456)
CASH, at Beginning of Period 166,000
--------------------------------
CASH, at End of Period $95,544
================================
THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT
5
<PAGE>
<TABLE>
<CAPTION>
Xplorer, S.A. (A Development Stage Enterprise)
UNAUDITED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Note 8)
For the Three Month Period Ended March 31, 1997
Additional
Common Stock Preferred Stock Paid In Retained
Shares Amount Shares Amount Capital Earnings Total
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance per audit,
December 31, 1996 18,782,447 $18,782 1,280,550 $1,300 $2,546,000 ($904,000) $1,662,082
Entries For Quarter
Ending March 31, 1997
Required adjustment
for quarter 148,055 $148,055
Profit or (Loss) for period (81,338) ($81,338)
-----------------------------------------------------------------------------------------------
BALANCE, March 31, 1997 18,782,447 $18,782 1,280,550 $1,300 $2,694,055 ($985,338) $1,728,799
===============================================================================================
</TABLE>
THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT
6
<PAGE>
XPLORER, S. A. (A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Three Month Period Ended March 31, 1997
Note 1 Organization and Presentation:
Xplorer, S. A., the "Company" (successor to Gerant Industries, Inc.) was
organized by adoption of amended and restated Articles of Incorporation
dated July 5, 1996 which were filed with the office of the Secretary of
State of Nevada on August 15, 1996.
Gerant Industries, Inc. ("Gerant") filed a petition for reorganization
under Chapter 11 of the United States Bankruptcy Court ("the Court") for
the Central District of California on March 1, 1994. On July 24, 1996 the
Court confirmed Gerant's Third Amended Plan of Reorganization (the
"Plan"). The Plan approved the amendment of the of the Articles of
Incorporation and By-Laws, change of corporate name, authorization of
common and preferred shares of stock, payment of claims and issuance of
stock by the successors to this debtor-in-possession, Xplorer, S. A. The
Company was to issue 16,500,000 shares of common stock and 1,043,000
shares of preferred stock which were valued in aggregate at $53 Million by
the Court. The historical determinable value in accordance with generally
accepted accounting principles was $2,011,200 and the Company accounted
for the transaction as a quasi-reorganization.
The Company is a development stage enterprise and has not achieved its
intended operations or related revenue as of this date.
The Company, a development stage enterprise, anticipates obtaining
sufficient cash resources in 1997 from the sale of investment contracts,
warrant exercise, operations, or private placement of equity securities.
Such proceeds are necessary to assure the funding of anticipated operating
costs and satisfaction of any negative working capital as of the current
period.
Presentation
The Company intends to engage in the development of natural resource
properties. As of March 31, 1997 the Company does not have any operating
properties and is a development stage enterprise owning 59% of Atlantic
Pacific Trust, LLC., and its wholly-owned subsidiary Atlantic-Pacific
Finanzprodukte, GmbH as of March 31, 1997. The accounts of this entity,
which has made loans to its parent are included in these financial
statements and all significant inter-company transactions have been
eliminated. The loans have been converted to common stock or units of the
Company (Note 8).
Gerant, the predecessor Company, had net assets of approximately $52,000
(Note 3) and insignificant operations from January 1, 1994 to August 15,
1996. The quasi-reorganization of this entity resulted in retained
earnings of $0 as of January 1, 1996.
7
<PAGE>
Notes to Xplorer, S.A. Financial Statements (Continued)
Note 2 Summary of Significant Accounting Policies:
Mining Properties:
Mining properties are reflected in property, plant, and equipment at cost
of acquisition and development. Costs include efforts to remove ore and
waste, exploration, development of new ore bodies and defining further
mineralization in existing ore bodies. These costs are deferred and will
be charged to operation costs utilizing the unit-of -production method in
the period in which commercial production occurs.
When a property is identified as having development potential, the costs
of engineering, contract labor, financing, and professional fees related
to development are capitalized as they are incurred. If a project is
determined not to be economically feasible, unrecoverable costs are
expensed in the year in which the determination is made. Mining properties
are reflected at net realizable value based on the Company's ability to
generate future value.
Revenue Recognition:
Revenue is recognized when title to delivered gold or other precious
metals passes to the buyer.
Reporting Currency:
While the Company has significant financing transactions denominated in
German currency, its operations are located in the U.S. Accordingly, all
financial information regarding these transactions is translated into U.S.
dollars and no material transaction effect exists at March 31, 1997.
Loss Per Share:
The loss per share is calculated using the weighted average number of
shares outstanding. Warrants outstanding are anti-dilutive and are not
included.
Property, Plant & Equipment and Depreciation:
All property, plant & equipment is stated at cost and depreciated on a
straight-line basis over individual useful lives - three years
(computers), five years (mining equipment), and units-of- production once
mining property is at the operational level.
Financial Uncertainties:
The Company is in the development stage and has experienced a net loss of
$81,338. The loss is principally due to commissions and interest
associated with the 1996 German financing. There is no assurance that
commercial quantities of mineral resources can be developed and sold in a
profitable market. Also, mining production could be delayed and
uninsurable risks could be incurred (see Note 9).
8
<PAGE>
Notes to Xplorer, S.A. Financial Statements (Continued)
The Company's profitability is subject to change in gold prices and
exchange rates. To reduce the impact of such changes, the Company locks in
the future value of certain of these items through hedging transactions.
These transactions are accomplished through the use of financial
instruments, the value of which is derived from movements in the
underlying gold prices, the Company's actual production, or exchange
rates.
The Company intends to engage in financial instruments to reduce the
financial impact caused by fluctuations in the exchange rate of U.S.
dollars to German Deutsche Mark liabilities.
The carrying values of investment contracts involving gold settlement are
re-measured using the market value of gold at the balance sheet date ($369
per troy ounce). The price of gold fluctuates daily, thus the values used
herein may fluctuate subsequent to the date hereof.
Income Taxes:
Xplorer, S.A. and its predecessor company have a substantial net operating
loss of an uncertain amount as of the date of this report. Prior years tax
returns are now in the process of being prepared.
Common Stock Issuance:
Shares issued to Gerant special creditors, employees, consultants, and
preferred shareholder of the Company are valued at the nominal value of
$0.10 per share. Common stock Units include one share of stock and a
warrant to acquire an additional share at 70% of market value.
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.
Note 3 Quasi-Reorganization:
Gerant changed its corporate name to Xplorer, S.A. pursuant to an exchange
of stock and the provisions outlined in the Plan.
The Gerant's balance sheet prior to the execution of the Plan and
reorganization with newly- formed Xplorer S.A. was as stated in the
Company's 10-KSB as of December 31, 1996.
Under the Plan, the Company would realize the assets of Gerant and assume
the liabilities at Gerant basis, and issue common and preferred stock in
exchange for 1,005,000 units of Atlantic equity held by the Company. Such
units had a nominal book value of $1.50. These transactions created a
valuation for the Company's new common and preferred stock issuance of
$2,011,200.
9
<PAGE>
Notes to Xplorer, S.A. Financial Statements (Continued)
Note 4 Marketable Securities:
The Company maintains an interest in marketable equity securities as part
of its hedge program. These securities are reflected appropriately in the
marketable securities section of the balance sheet. The realized gains or
losses are reflected in the Statement of Operations under other income and
expense.
The Company does not use derivatives financial instruments for speculative
purposes. The Company enters into gold equity investments to manage
exposure to changes in a rising gold price and the Company's undelivered
commitments.
Note 5 Note Receivable:
Sym-Tek filed Chapter 11 bankruptcy proceedings with Gerant as a creditor.
The amount of $16,000 was received in January 23, 1997 and used to pay
legal obligations of Gerant's bankruptcy proceeding.
Note 6 Property, Plant and Equipment:
The values reflected in the 10 KSB of December 31, 1996 are carried
forward here and are adjusted by any additions or deletions as of the
current period. These values are at the defined cost of $3,586,300, with
accumulated depreciation of $181,900, with the net reflected on the
balance sheet.
The Company's majority-owned subsidiary (Note 8) owns eight claims known
as the Evening Star Mine located in Piute Mountain, Kern County,
California. Most of the development costs for Evening Star Mines are from
related parties (Note 13).
Note 7 Other Investments:
The Company holds a $500,000 full recourse promissory note at 8% interest
per annum, payable monthly and principal due August 18, 1997. This note is
secured by 500,000 Class C Units of United Reality Group Limited
Partnership redeemable by issuer at $1.00 per unit in August 1997 and 75%
tenant in common interest in the net proceeds from the Southwood Plaza
Shopping Center in Charlotte, North Carolina. The property presently
generates positive cash flow. However, the Company has elected not to
reflect a $400,000 non- recourse promissory note secured only by 400,000
units of United Reality Group Partnership. Interest on the $500,000 note
of $3,333 has been received on a monthly basis continuously.
10
<PAGE>
Notes to Xplorer, S.A. Financial Statements (Continued)
Atlantic owns 100% of the common stock of a company that has two
investments in commercial property located in Bakersfield, California. The
net realizable value of this investment is $500,000 as of the current
date.
Atlantic owns 406,000 shares of Xplorer S.A. This investment is 59%
eliminated in consolidated financial statements and reflected at a nominal
value of $0.10 per share of $19,000.
Note 8 Atlantic Pacific Trust, L.L.C.:
Atlantic Pacific Trust, L.L.C. ("Atlantic"), a Nevada limited liability
company, is a natural resource company owned by Xplorer and three of the
Company's shareholders (the "Minority Interest"). Such corporation is the
successor to Atlantic Pacific Trust ("APT") and is the legal owner of
certain mining properties located in Kern County, California.
These mining properties (approximately 117 mining claims) were held by a
trust controlled by William M. Moreland ("Moreland"), and transferred to a
new entity, North Star Industries ("North"). North was 30% owned by
Moreland, 30% owned by Gardner, and 40% owned by Compania Comerciale
Atlantis, S.A., a Costa Rican entity ("CCA"). The claims were eventually
divided into four separate trusts. One of these trusts, Nevada Trust,
which owned eight claims known as the "Evening Star Mine", was acquired at
cost by APT.
APT was funded by sale of investment contracts, precious metal forward
contracts, and equity units ("LLC"). The Company owns 1,254,960 LLC units
as of the current date (59%).
APT made a loan to the Company for $355,000 that was converted to Company
special units (one share of common stock and one B warrant and C warrant
each exercisable within five years at $2.00 and $3.00 per share,
respectively and paid a Gerant creditor $110,000 in exchange for 111, 667
shares of the Company's common stock. These funds were used by the Company
to pay Gerant creditors according to the Plan. At the current date the
value of 275,334 shares (59% of 466,667) has been eliminated upon
consolidation.
The Plan provided that Compania Comerciale Atlantis, S.A. would exchange
500,000 of its LLC units for 1,250,000 preferred shares of the Company.
However, only 417,200 units were exchanged for 1,043,000 preferred shares
under this Plan. In December 1996, CCA did exchange 189,960 units for an
additional 237,550 shares of preferred stock. The preferred stock is
partially convertible to ten shares of common stock at the end of six
years and has a dividend of 1.00% per month payable in common stock at
time of conversion. In December 1996, the preferred stockholder agreed to
waive all present and future preferred dividend rights for the immediate
issuance of 1,000,000 common shares of the Company.
11
<PAGE>
Notes to Xplorer, S.A. Financial Statements (Continued)
The Plan also provided that 585,560 LLC units held by Atlantic
beneficiaries Be exchanged for Debtor Notes and converted to 14,639,000
shares of common stock. In addition, the former Gerant shareholders had a
reverse split of 5 to 1 to 400,000 total shares which were to be exchanged
pursuant to the Plan for 400,000 common stock Units of the Company. Each
common stock Unit consisting of one common share and one Warrant for one
share of common at 70% of market asking price on August 5, 1997. (288,935
Units were issued as of 3/31/97)
Note 9 Accrued Legal Fees:
Per the Plan, Atlantic agreed to purchase an estimated $257,000 legal fee
administrative claim of the law firm, Robinson, Diamant, Brill, & Klausner
(the "Firm"). Upon purchase, Atlantic intends to exchange the claim for
257,000 Xplorer common stock special units. This transaction is still in
progress and is anticipated to be completed during the calendar year 1997.
Note 10 Note Payable:
In September, 1996 the Company borrowed $450,000 from Gardner Investments.
The terms of the note are 10.00% per annum payable monthly. The principal
is due and payable on September 25, 1997 and is secured by 500,000 Class C
Units of United Realty Group, L.P. The note is convertible, at the option
of the holder, at any time for 150,000 shares of common stock of the
Company.
Note 11 Investment Contracts Payable:
Atlantic has issued investment contracts under German securities laws.
Such contracts are four types:
a) Contract of $9,645 per kilo received in U.S. dollars for purchase of
undelivered kilos (32.15 troy ounces) of gold bullion. All contracts
have a one year maturity. As of December 31, 1996, the balance is
$273,000. The Company has covered it's gold risk on outstanding
contracts up to $369 per ounce.
b) Zero-coupon contract of $12,500 payable in U.S. dollars and bearing
interest at 9.00% per annum. Such contracts are repayable with
related interest in one to five years. As of March 31, 1997 the
balance is and interest expense of $28,100 has been accreted.
12
<PAGE>
Notes to Xplorer, S.A. Financial Statements (Continued)
c) Zero-coupon contract payable in 5,000 German Duetsch Marks ("DM")
units and bearing interest at 9.00% per annum. Such contracts are
repayable with related interest in DM in one to five years. The
balance as of March 31, 1997 is $1,129,500 and interest expense of
has been accreted.
d) Zero-coupon contract payable in DM or gold at the rate of 600 DM
principal per 1 troy ounce of gold did not result in funding to the
Company until January 1997. This is the only type of contract that
will be offered in the future.
All bonds are secured by the Company's interest in the Evening Star mining
claims per assignment to a bond trustee.
The Company paid commissions of approximately 33% and raised $1,375,000 in
net funds during 1996.
Investment contracts are due as follows:
1997 $1,140,399
1998 267,000
1999 150,000
2000 45,000
2001 86,700
2002 71,718
----------
Total $1,760,817
==========
Note 12 Related Party Payable:
In 1995, Atlantic entered into agreements with Sequoia Trust, a related
party, to lease surface and mineral rights related to 57 acres of land
adjacent to Evening Star Mine and certain improved real property known as
the Weldon Research Center for total cost of $6,000 per month. These lease
are renewable after a five year term and require a future minimum annual
payment of $72,000 to Sequoia Trust. Total charges capitalized to
development during 1996 were $104,000.
These properties provide the Company with the opportunity to develop three
patented mining claims with probable commercial grade ore (12% royalty due
to Sequoia Trust), construct a primary ore processing refinery, and
utilize 13,000 square feet at the Weldon Research Center for its
mineralization analyzes and other testing procedures.
Atlantic also has a cancellable contract with EMTEC, Inc., a related
party, for development of the eleven mining claims and the future
operation of the mine and refinery. The contract requires the Company to
pat EMTEC bi-monthly at invoiced cost plus 18% which includes overhead.
Total charges capitalized to development to date are $548,318.
13
<PAGE>
Notes to Xplorer, S.A. Financial Statements (Continued)
As of March 31, 1997 the Company owes these entities $147,000 for past
services and such amount is accrued into development costs for evening
Star Mine (See Note 6).
Note 13 New Accounting Pronouncements:
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets to be Disposed Of" (SFAS 121) requires
that long-lived assets be reviewed for impairment whenever changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. The adoption of this statement as of March 31, 1997 had no
material effect on the consolidated financial statements.
Statement of Financial Accounting Standards Nos. 123. "Accounting for
Stock-Based Compensation" (SFAS 123) establishes financial accounting and
reporting standards for stock-based employee compensation plans as well as
transactions in which an entity issues it's equity instruments to acquire
goods or services from non-employees. However, it also allows an entity to
continue to measure compensation cost based on APB Opinion No. 25,
"Accounting for Stock Issued to Employees". The Company has determined
that the fair value of stock transactions is similar to the issue price at
the time of granting and accordingly, has elected to continue to apply the
intrinsic value based method.
In June, 1996, Statement of Financial Accounting Standards No. 125,
"Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities" (SFAS No. 125), which provides accounting
and reporting standards for transfers and servicing of financial assets
and extinguishment of liabilities occurring after December 31, 1996 was
issued. The adopting of SFAS No. 125 is not expected to have any impact on
the financial statements of the Company.
Note 14 Comparative Financial Statements
Comparative financial data for similar periods in 1996 are not available.
The predecessor Company, Gerant, was in a Chapter 11 Proceedings, which
was confirmed as indicated above, and during this process had little or no
operations. Any presentation of the numbers during that period would cause
the reader to have a distorted view from a comparative standpoint. This
will continue until the fourth quarter of this year, when Comparative
Balance Sheets will commence.
14
<PAGE>
Notes to Xplorer, S.A. Financial Statements (Continued)
ITEM 2 MANAGEMENT' S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
For the three months ended March 31, 1997:
Financial Condition:
The Company's working capital resources during the period ended March 31,
1997 were provided by convertible loans (See Notes to Financial Statements), and
stock placements and Revenue bonds and investments. The formal business activity
of mining did not begin this quarter since the activity is just in the process
of being funded. Sufficient funds have been made available by related parties
for the working capital requirements not filled by other sources. This will
continue until the commencement of operations.
Management believes that the Company's working capital resources and
anticipated cash flow from mining activities will not be sufficient to support
operations during the year ending December 31, 1997, therefore Management has
arranged sufficient financing to fund these activities and to fulfill its budget
requirements. Although Management can offer no assurance that the commitments
for the financing for these activities will be fulfilled.
Results of Operations:
There has not been sufficient time since the emergence from Chapter 11
Proceedings to begin operations. These operation activities are not scheduled to
begin until the third quarter of 1997.
Estimations of Management:
The Plan of Reorganization and Disclosure Document approved by the
Bankruptcy Court on July 24, 1996 included valuations of the gold ore reserves
that were acquired by the Company as part of the Plan. The Company's portion of
these gold ore reserves is 59%. The valuation is based upon a comprehensive
geological reserve study conducted by geologist Christopher L. Pratt, which said
report was updated December 31, 1996.
The Company's management in compliance with applicable reporting guidelines
has listed the gold ore reserves as Probable Reserves (indicated reserves) until
completion of the pilot ore refinery, further mineralization studies, additional
drilling and sampling, and geological feasibility analysis.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
N/A
15
<PAGE>
Notes to Xplorer, S.A. Financial Statements (Continued)
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
XPLORER, S.A.
(Registrant)
Date: May 31, 1997 /s/ Steven Mortensen
----------------------------------------
Steven Mortensen,
Chairman and Secretary
/s/ Jon W. Bice
----------------------------------------
Jon W. Bice (CFO)
16
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 95,544
<SECURITIES> 223,693
<RECEIVABLES> 16,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 621,557
<PP&E> 3,778,200
<DEPRECIATION> (181,900)
<TOTAL-ASSETS> 5,129,941
<CURRENT-LIABILITIES> 1,831,906
<BONDS> 0
0
1,300
<COMMON> 18,782
<OTHER-SE> 1,708,535
<TOTAL-LIABILITY-AND-EQUITY> 5,129,941
<SALES> 0
<TOTAL-REVENUES> 55,020
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 128,858
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7500
<INCOME-PRETAX> (81,338)
<INCOME-TAX> 0
<INCOME-CONTINUING> (81,338)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (81,338)
<EPS-PRIMARY> (0.004)
<EPS-DILUTED> (0.004)
</TABLE>
