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, 1999
[ ] 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
(State or other jurisdiction of incorporation or organization)
88-0199674
(I.R.S. Employer Identification Number)
2929 S. Maryland Parkway
Las Vegas, Nevada 89109
(Address of principal executive offices)
(702) 699-5400
(Issuer's telephone number)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
As of September 30, 1999, Xplorer, S.A. had 33,041,770 shares of Common
Stock Outstanding.
Transitional Small Business
Disclosure Format (check one): Yes [ ]No [ X ]
[XPLORER\10-QSB:093099.QS1]
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XPLORER, S.A.
INDEX
Page
PART I
Item 1. Financial Statements
Consolidated Condensed Balance Sheet
as of September 30, 1999 (unaudited)................................1
Consolidated Condensed Statements of Operations
for the Three Months and Nine Months Ended
September 30, 1999 and 1998 (unaudited).............................2
Consolidated Condensed Statements of Shareholders' Equity for
Nine Months Ended September 30, 1999 (unaudited)....................3
Consolidated Condensed Statements of Cash Flows for the Nine
Months Ended September 30, 1999 and 1998 (unaudited)................4
Notes to Consolidated Condensed Financial Statements .................5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.............................8
PART II
Item 1. Legal Proceedings...........................................10
Item 2. Changes In Securities.......................................10
Item 3. Defaults Upon Senior Securities.............................10
Item 4. Submission Of Matters To A Vote Of Security Holders.........10
Item 5. Other Information...........................................10
Item 6. Exhibits And Reports On Form 8-K............................10
Signatures......................................................11
I
[XPLORER\10-QSB:093099.QS1]
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XPLORER, S.A.
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEET
September 30, 1999
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Current Assets
Cash and cash equivalents $ -
Receivables 3,495
Total Current Assets 3,495
Property and equipment 1,803
TOTAL ASSETS $ 5,298
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accrued expensed $ 486,455_
Total Current Liabilities 486,455
Shareholders' Equity (Deficit)
Common stock, par value $.001; authorized 60,000,000
shares; 33,041,770 issued and outstanding 33,042
Additional paid in capital 887,566
Accumulated deficit during development stage (1,401,765)
Total Shareholders' Equity (Deficit) (481,157)
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY (DEFICIT) $ 5,298
</TABLE>
The accompanying notes are an integral part of these financial statements.
[XPLORER\10-QSB:093099.QS1]
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XPLORER, S.A.
Statements of Operations
For the Three and Nine Months Ended
September 30, 1999 and 1998(Unaudited)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended, Ended,
September 30, September 30,
1999 1998 1999 1998
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues
Other income $ 0 $ 0 $ 0 $ 0
Total revenues 0 0 0 0
Costs and expenses:
General and administrative 319,025 1,000 355,217 86,269
Net loss on investments and
Settlement of gold contracrs 0 0 0 121,705
Interest expense 0 0 0 3,750
Total expenses 319,025 1,000 355,217 211,724
Net income (loss) (319,025) (1,000) $ (355,217)$ (211,724)
Net income (loss) per common share $ (.02)$ (.00) $ (.02)$ (.01)
Weighted average common
shares outstanding 20,086,266 19,779,705 20,086,266 19,779,705
</TABLE>
The accompanying notes are an integral part of these financial statements
[XPLORER\10-QSB:093099.QS1]
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XPLORER, S.A.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE Nine MONTHS ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
Common Stock Preferred Stock Additional Accumulated
Paid-In During
Shares Amount Shares Amount Capital Development Stage Total
<S> <C> <C> <C> <C> <C> <C> <C>
Balance January 1, 1999 20,086,266 $ 20,087 1,280,550 $ 1,281 $ 2,570,530 $ (5,664,828) $ (3,072,930)
Net loss for period - - - - - (18,942) (18,942)
Balance, March 31, 1999 20,086,266 20,087 1,280,550 1,281 2,570,530 (5.683,770) (3,091,872)
Net loss for period (17,250) (17,250)
Balance, June 30, 1999 20,086,266 20,087 1,280,550 1,281 2,570,530 (5.701,020) (3,109,122)
Note payable converted to
common stock 150,000 150 - - 449,850 - 450,000
Preferred stock converted to
common stock 12,805,504 12,805 (1,280,550) (1,281) 11,524) - -
Spinnoff of Atlantic Pacific
Trust - - - - (2,121,290) 4,618,280 2,496,990
Net loss for period (319,025) (319,025)
Balance, September 30, 1999 33,041,770 $33,042 - $ - $ 887,566 $ (1,401,765) $ (481,157)
</TABLE>
The accompanying notes are an integral part of these financial statements.
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XPLORER, S.A.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
<TABLE>
<CAPTION>
Nine Months Ended
September 30, September 30,
1999 1998
<S> <C> <C>
Cash Flows from Operating Activities
Net Income (Loss) $ (355,217) $ (211,724)
Adjustments to Reconcile Net Income (loss) to
to net cash used by operating activities:
Decrease in other investments - 121,705
Increase in accrued expenses 353,823 34,309
Net Cash Used by Operating Activities (1,394) (55,710)
Cash Flows from Financing Activities
Decrease in cash at Atlantic Pacific Trust (2,498) -
Net Cash Used by Financing Activities (2,498) -
NET DECREASE IN CASH (3,892) (55,710)
CASH, at Beginning of Period 3,892 71,124
CASH, at End of Period $ - $ 15,414
NON CASH ITEMS:
Note payable converted to common stock $ 450,000 $ -
Preferred stock converted to common stock $ 12,805 $ -
Elimination of negative stockholders equity
due to spinoff of Atlantic Pacific Trust $2,496,990 $ -
</TABLE>
The accompanying notes are an integral part of these financial statements.
[XPLORER\10-QSB:093099.QS1]
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XPLORER, S. A. (A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Nine Month Period Ended September 30, 1999
Note 1 Organization and Presentation
Organization
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 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 is a development stage enterprise and has not achieved its
intended operations or related revenue as of December 15, 1999.
Through September 30, 1999 the Company owned 59% of Atlanta Pacific Trust,
LLC (APT). APT is the owner of the Evening Star Mine and through its related
company, Atlantic-Pacific Finanzprodukte, GMBH (APT Germany), secures financing
for its exploration and development activities.
Effective September 30, 1999, the Company assigned all its rights and
interest in APT to an unrelated entity in exchange for a fully reserved for note
owned by that entity. The note received although fully reserved for was
collateralized by marketable securities with a market value of approximately
$450,000. The Company anticipates beginning default proceedings on the note to
foreclose on the collateral. The note is currently being carried at zero value
in the financial statements.
The Company's consolidated financial statements have been presented on the
basis that it is a going concern, which contemplates the realization of the
mineral properties and other assets and the satisfaction of liabilities in the
normal course of business. The Company has incurred losses of $1,401,765 before
giving effect to APT from inception to September 30, 1999. The $4.3 million of
losses relating to the operations of APT have been eliminated as a result of the
exchange agreement. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management continues to actively seek
additional sources of capital to fund current and future operations. There is no
assurance that the Company will be successful in continuing to raise additional
capital, establishing probable or proven ore reserves, or determining if the
mineral properties can be mined economically. These consolidated financial
statements do not include any adjustments that might result from the outcome of
these uncertainties.
[XPLORER\10-QSB:093099.QS1]
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Note 2 Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements previously included the accounts of
the Company and its 59% owned subsidiary, Atlantic Pacific Trust, LLC (APT), and
APT's related company, Atlantic-Pacific Finanzprodukte, GmbH. In consolidations,
all significant intercompany balances and transactions are eliminated. As a
result of the exchange agreement for its investment in APT, the financial
statements presented at September 30, 1999 no longer include the accounts of
APT.
Use of Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities, and
disclosure of contingent liabilities at the date of the financial statements,
and the reported amount of revenues and expenses during the reporting period.
Actual results could differ from those results.
Office Furniture and Equipment
Office furniture and equipment are recorded at cost. Depreciation is
computed by the straight-line method based upon the estimated useful lives of
the respective assets, generally three to five years.
Income (Loss) per Common Stock
Income (loss) per share of common stock is computed based on the weighted
average number of shares outstanding. Warrants, options and convertible
debentures have not been included in the calculation as their effect would be
anti-dilutive.
Income Taxes
The Company accounts for income taxes using the liability method which
requires recognition of deferred tax liabilities and assets for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Deferred tax assets and liabilities are determined
based on the difference between the financial statements and tax basis of assets
and liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse.
Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents include
highly liquid debt instrument purchased with a maturity of three months or less.
Note 3 Property, Plant and Equipment
The values reflected in its Annual Report on Form 10 KSB for the Company,
excluding APT for the fiscal year ended December 31, 1999 are carried forward
here. These values are at the defined cost of $2,705, with accumulated
depreciation of $902, with the net reflected on the balance sheet. Depreciation
for the current year will be added at year end.
[XPLORER\10-QSB:093099.QS1]
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Note 4 Note Payable
As of June 30, 1999, the Company had a Note payable in the amount of
$450,000, with interest at 10% per annum payable monthly, with all outstanding
principal and interest due on demand. On August, 1999 the note was converted
into 150,000 shares of the common stock of the Company.
Note 5 - Preferred Stock
In September, 1999, the Company converted all 1,280,550 shares of its
Preferred Stock owned by a single shreholder into 12, 805,500 shares of Xplorer,
S.A. common stock.
Note 6 - Subsequent Event
In December 1999, the Company effected a 40 to 1 reverse stock split and
changed the name of the Company Xplorer, S.A. to NetHoldings.Com, Inc.
[XPLORER\10-QSB:093099.QS1]
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ITEM 2. MANAGEMENT' S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
For the three months ended September 30, 1999
Going Concern
The Company's working capital resources during the period ended September
30, 1999 were provided by utilizing the cash on hand at December 31, 1998. The
formal business activity of mining did not begin this quarter since the activity
is just in the process of being funded. As a result, the Company is
substantially a shell. Sufficient funds have previously been made available by
related parties for the working capital requirements not filled by other
sources. Management anticipates this will continue until the commencement of
mining operations or other operations.
The Company has experienced recurring net losses, has limited liquid
resources, and negative working capital. Management's intent is to continue
searching for additional sources of capital and the Company intends to continue
operating with minimal overhead and key administrative functions provided by
consultants who are compensated in the form of the Company's common stock. It is
estimated, based upon its historical operating expenses and current obligations,
that the Company may need to utilize its common stock for future financial
support to finance its needs during 1999. Accordingly, the accompanying
consolidated financial statements have been presented under the assumption the
Company will continue as a going concern.
Results of Operations
Quarter and Nine Months Ended September 30, 1999 Compared to
Quarter and Nine Months Ended September 30, 1998
There has not been sufficient time since the emergence from Chapter 11
Proceedings to begin operations. There is currently no schedule as to when these
operation activities will begin, accordingly, there were no revenues or cost of
revenues recorded during the current quarter or comparable quarter.
Total expenses were $319,025 in the current quarter and $1,000 in the
comparable period last year and $355,217 as compared to $211,724 for the nine
months ended September 30, 1999 and 1998, respectively. The change is
attributable to continued utilization of services provided by professional
consultants and other advisors and a minimal level of activities since 1997. In
the third quarter of 1999, the Company accrued a $300,000 fee payable to third
party advisors for past and future consulting services. Additionally, in the
second quarter of 1998, the Company recognized a loss on investment of $121,705.
Estimations of Management
Each year, Atlantic Management has estimated ore reserves and prepared a
comprehensive mining plan for the then-anticipated remaining life of the mining
property. As a result, of the exchange agreement for the Company's investment in
APT, it no longer will be necessary for management to estimate the ore reserves
or prepare a comprehensive mining plan.
The Company's management provides no assurance as to the outcome of any of
these matters and resulting adjustments could be material to the Company's
financial condition and operations.
[XPLORER\10-QSB:093099.QS1]
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Liquidity and Capital Resources
As of September 30, 1999, the Company had a working capital deficit of
$482,960. During 1999, without the effect of APT the Company's working capital
was primarily affected by the conversion of $450,000 of notes payable into
150,000 shares of common stock and the increase of $353,823 of accrued expenses.
The Company had no cash on hand at September 30 , 1999. The limited cash
balance is a direct result of the Company having no operations during the
periods.
The Company's plan is to keep searching for additional sources of capital
and new operating opportunities. Furthermore, the Company may have to utilize
its common stock for future financial support to finance its needs. Such
conditions raise substantial doubt about the Company's ability to continue as a
going concern. As such, the Company's independent accountants have modified
their report for the Company's latest fiscal year ended December 31, 1998 to
include an explanatory paragraph with respect to the uncertainty.
The Company has no commitments for capital expenditures or additional
equity or debt financing and no assurances can be made that its working capital
needs can be met.
Business Risks:
As discussed previously, the Company is substantially a shell but intends
to seek out and acquire profitable operating businesses. However, no definitive
agreements have been reached. If any acquisition agreements are reached in the
near term, the Company can make no assurances that it will be able to obtain the
financing necessary to complete the any transaction.
Competition:
Since the Company has no current operations, it does not have any direct
across the board competitors, but may have competition in the future within the
industries for which it may acquire operations.
Management of Growth:
If the Company is successful in implementing its growth strategy, the
Company believes it could undergo a period of rapid growth that could place a
significant strain on its management, financial and other resources. The
Company's ability to manage its growth will require it to continue to improve
its operational and financial systems and to motivate and effectively manage its
employees. If the Company grows it will have to implement new financial,
budgeting, management information and internal control systems. The Company's
success will depend upon its ability to attract and retain highly skilled
personnel. There can be no assurance that the Company will be successful in
attracting and retaining key management, technical, marketing and sales
personnel. Its failure to do so would materially and adversely affect the
Company's business and results of operations.
Additionally, as of September 30, 1999, the Company had no operations or
employees other than its President.
[XPLORER\10-QSB:093099.QS1]
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PART II: OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes In Securities
None
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission Of Matters To A Vote Of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits And Reports On Form 8-K
None.
[XPLORER\10-QSB:093099.QS1]
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
XPLORER, S.A.
(Registrant)
Dated: December 23, 1999 By: /s/ Leonard J.Roman
Leonard J. Roman
Treasurer, Chief Financial Officer and
Director; Xplorer, S.A.
[XPLORER\10-QSB:093099.QS1]
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 3,495
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,495
<PP&E> 2,705
<DEPRECIATION> (902)
<TOTAL-ASSETS> 9,298
<CURRENT-LIABILITIES> 486,455
<BONDS> 0
0
0
<COMMON> 33,042
<OTHER-SE> (514,199)
<TOTAL-LIABILITY-AND-EQUITY> 5,298
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 355,217
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (355,217)
<INCOME-TAX> 0
<INCOME-CONTINUING> (355,217)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (355,217)
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
