UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
( x ) Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 1996
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, CA 93283
- -------------------------------------------------------------------------------
(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 September 30, 1996, there were 16,682,656 shares of common stock ($0.0001
par value) issued and outstanding.
Total sequentially numbered pages in this document: 8
1
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Xplorer, S.A.
Balance Sheet
As of September 30, 1996
BASIS
---------------------------
Assets Cost Market
------------- ------------
(Unaudited) (Unaudited)
(NOTE 9)
Cash (Note 3) $ 528,316 $ 528,316
Accrued interest receivable (Note 4) 36,667 36,667
Note receivable - Sym-Tek (Note 5) 16,000 16,000
Office equipment (Net of
depreciation of $0.00) (Note 6) 2,917 2,917
United Realty Investment (Note 7) 500,000 500,000
Units of beneficial interest in
Atlantic Pacific Trust (Note 8) 6,080,250 56,460,900
----------- -----------
Total Assets $ 7,164,150 $57,544,800
=========== ===========
Liabilities and Shareholder Equity
Liabilities:
Note payable (Note 12) $ 450,000 $ 450,000
Accrued legal fees (Note 10) 257,000 257,000
Pre-petition creditor debt (Note 11) 27,771 27,771
Other accrued expenses
----------- -----------
Total Liabilities 734,771 734,771
----------- -----------
Shareholders' Equity (Note 8):
Preferred Stock, par value $0.001, authorized
Fifteen Million (15,000,000), and One Million
Forty Three Thousand One Hundred (1,043,100)
shares issued and outstanding 1,043 20,862,000
Common Stock, $0.0001 par value, authorized
sixty million (60,000,000) shares, sixteen
million six hundred eighty three thousand
(16,683,000) shares issued and outstanding 16,683 16,683
Additional paid in capital 6,411,653 35,931,346
----------- -----------
Total Shareholder Equity 6,429,379 56,810,029
----------- -----------
Total Liabilities and Equity $ 7,164,150 $57,544,800
=========== ===========
THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT
2
<PAGE>
Xplorer, S.A.
UNAUDITED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Note 8)
For the Period Ended September 30, 1996
<TABLE>
<CAPTION>
Additional
Common Stock Preferred Stock Paid In Retained
Shares Amount Shares Amount Capital Earnings Total
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, August 15, 1996 16,500,000 $16,500 1,043,100 $20,862,000 $30,155,886 ($50,287) $50,984,099
Entries For Quarter Ending
September 30, 1996
Stock issued pursuant to Plan for 0
Creditors 182,656 183 0 0 89,046 0 89,229
Adjustment to cost from Market value 0 0 0 (20,860,957) (23,833,279) 50,287 (44,643,949)
Profit or (Loss) for period 0
------------------------------------------------------------------------------------
BALANCE, September 30, 1996 16,682,656 $16,683 1,043,100 $1,043 $6,411,653 $0 $6,429,379
------------------------------------------------------------------------------------
</TABLE>
THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT
3
<PAGE>
Xplorer, S.A.
Notes to Financial Statements (Unaudited)
For the 1.25 Month Period Ended September 30, 1996
Note 1 ORGANIZATION AND SUMMARY
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 and filed with the office of the Secretary of State
for the 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 for the Central
District of California on March 1, 1994 as BK No. LA 94-17852-AA.
On July 17, 1996 the court confirmed Gerant's third amended plan of
reorganization. The order confirming the plan was entered on July 24,
1996. The date of implementation of the plan was August 5, 1996.
The plan approved the amendment 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.
The Company does not have an Operating Statement, or Cash Flow
Statement, as is required under Form 10-Q, General Filing Requirements
of Form 10-Q, as it was in bankruptcy and had no activity for the prior
nine (9) month period.
Xplorer, S.A. is a natural resource capital management corporation,
specializing in the capitalization of natural resource business
organizations in which Xplorer, S.A. has ownership.
Note 2 TRANSFER OF ASSETS AND LIABILITIES
Xplorer, S.A. has acquired the assets and assumed the liabilities
pursuant to provisions outlined in the "Debtors Third Amended Plan of
Reorganization" submitted by Gerant Industries, Inc. and approved by
the United States Bankruptcy Court, as herein discussed.
Under the plan, the new company was to receive all of the assets of
Gerant and assume the liabilities at the predecessor basis.
Note 3 CASH
The cash balance in the sum of $73,316 is held in Trust by the law
offices of Robinson, Diamant, Brill and Klausner, Los Angeles,
California. This account was established pursuant to court proceedings
involving Gerant and funds become available as of December 31, 1996.
The balance of $455,000 is deposited in money market account at Paine
Weber.
Note 4 ACCRUED INTEREST RECEIVABLE
This accrued interest is a receivable from United Realty Group Limited
Partnership (see Note 6 below). The note bears pays interest only
monthly.
4
<PAGE>
Note 5 SYM-TEK NOTE RECEIVABLE
SYM-TEK has filed Chapter 11 Bankruptcy Proceedings. Gerant had a
$350,000 claim against Sym-Tek. $16,000 was received on January 23,
1996. An estimated additional $16,000 is expected to be received from
the final distribution by Sym-Tek.
Note 6 FIXED ASSETS
Fixed assets are consisted of computer equipment. The gross assets are
$7,500, Accumulated depreciation is $4,583 and the Net Asset is $2,917.
Note 7 UNITED REALTY INVESTMENT
This investment consist of a promissory note at 8% per annum, interest
only paid monthly and due August 18, 1997 and 500,000 class C Units of
United Realty Group Limited Partnership redeemable by issuer at $1.00
per unit in August, 1997. This obligation is secured by a 75% tenant in
common interest in the net proceeds from the Southwood Plaza Shopping
Center in Charlotte, North Carolina.
Note 8 UNITS OF BENEFICIAL INTEREST
Atlantic Pacific Trust (Atlantic) is a natural resource company. The
reorganization plan of Gerant provided that holders of approximately
500,000 units of Beneficial Interest in Atlantic would exchange those
units for approximately 1,250,000 preferred shares of Xplorer, S.A.
stock. To date, 417,240 units of Beneficial Interest have been
exchanged for 1,043,100 shares of stock.
The Plan also provided that an additional 500,000 Units of Beneficial
Interest would be sold to the debtor in return for Debtor Notes. There
were actually 585,560 units sold for Debtor Notes and those notes have
since been converted to approximately 14,639,000 shares of common
stock. Xplorer, S.A. has also acquired an additional 2,200 units for
$110,000. Therefore 417,240, plus 585,560, plus 2,200 equals 1,005,000
units of equity position in Atlantic as held by the Company at 9/30/96.
These units have been reflected on the books at historical cost basis
of $6.05 per unit, for a Balance Sheet value of $6,080,250. The Market
value of the units , as shown on 9/30/96 Balance Sheet Atlantic Pacific
Trust, was $56.18 per unit. Company Management believes the estimated
Market value of the 1,005,000 beneficial units owned is $56,460,900.
The audit of August 15, 1996 included the Preferred and Common stock at
Market value as a result of the values accepted by the Bankruptcy Court
in the Disclosure Statement for Gerant Industries. These values have
been revised downward to reflect actual cost rather than Market. the
result of these value changes were the result of the realization that
control of Xplorer shifted to Beneficial Holders of Atlantic, thus the
transaction had to be valued at cost rather than Market. These
adjustments are reflected in The Statement of Changes in Stockholders'
Equity.
5
<PAGE>
Note 9 PRESENTATION AT FAIR MARKET VALUE
The asset values for mineral resources reflected on the Balance Sheet
of Atlantic Pacific Trust are fair market values, based solely upon the
opinion of Christopher L. Pratt, Geologist, as confirmed by other
professionals (see below) as to the proven recoverable reserves and the
projected cost of exploration, development and production.
The value of the mineral resources are summarized as follows:
Proven reserves in ounces of gold 435,000
less 10% projected loss factor (43,500)
------------
Recovery ounces 391,500
Market price of gold (per ounce) $386
------------
Projected gross revenue $151,119,000
Less extraction cost of $140 per
ton times 290,000 tons ($40,600,000)
------------
Net Value $110,519,000
============
The above estimates reflect 1.5 ounces of gold per ton of ore and do
not include probable reserves, only the proven mineral reserves owned
by Atlantic Pacific Trust.
Note 10 ACCRUED LEGAL FEES
The legal fees were the result of the Reorganization of Gerant
Industries, Inc. Debtor In Possession Bankruptcy. Atlantic Pacific
Trust has agreed to purchase the $257,000 legal fees claimed by the law
firm of Robinson, Diamant, Brill and Klausner. Upon the purchase
Atlantic will exchange 257,000 units of Xplorer for discharge of this
obligation as approved in the Third Amended Plan of Reorganization of
Gerant. Each unit represents one share of common stock and two warrants
to purchase common stock which expire in 2001.
Note 11 PRE-PETITION CREDITOR DEBT
There is a balance of approximately $27,771 in claims to be settled per
the approved Third Amended Plan of Reorganization of Gerant.
Note 12 NOTE PAYABLE
Xplorer borrowed $450,000 from Gardner Investments. The terms of the
note are interest only paid monthly. The interest rates is eight (8)
percent per annum. The note is due and payable November 1, 1997.
The note is convertible, at the option of the holder, at any time for
150,000 shares of common stock of Xplorer.
6
<PAGE>
ITEM 2. MANAGEMENT' S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
For the three months ended September 30, 1996:
Financial Condition:
The Company's working capital resources during the period ended
September 30, 1996 were provided by converible loans (See Notes to Financial
Statements), and stock placements. 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
completion of all requirements of the Plan Of Reorganization reported in the 8K
of August 15, 1996.
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, 1996, therefore Management has
arranged sufficient financing to fund these activities and to fulfull its budget
requirements.
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 first quarter of 1997.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
8-K filed September 12, 1996
7
<PAGE>
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: January 13, 1997 /s/ Steven Mortensen
--------------------
Steven Mortensen,
Chairman and Secretary
/s/ Jon W. Bice
--------------------
Jon W. Bice (CFO)
8
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 528,316
<SECURITIES> 0
<RECEIVABLES> 52,667
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,917
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,164,150
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
1,043
<COMMON> 16,683
<OTHER-SE> 6,411,653
<TOTAL-LIABILITY-AND-EQUITY> 7,164,150
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
