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 March 31, 2000
[ ] 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
NetHoldings.Com, Inc.
(Formerly 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 July 31, 2000, NetHoldings.Com had 1,200,045 shares of Common Stock
Outstanding.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
NetHoldings.Com, Inc.
(Formerly Xplorer, S.A.)
INDEX
Page
PART I
Item 1. Financial Statements
Consolidated Condensed Balance Sheet
as of June 30, 2000 (unaudited)..................................1
Consolidated Condensed Statements of Operations for the Three
and Six Months Ended June 30, 2000 and 1999 (unaudited)..........2
Consolidated Condensed Statements of Cash Flows for the Six
Months Ended March 31, 2000 and 1999 (unaudited).................3
Notes to Consolidated Condensed Financial Statements................4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................6
PART II
Item 1. Legal Proceedings...................................................7
Item 2. Changes In Securities...............................................7
Item 3. Defaults Upon Senior Securities.....................................7
Item 4. Submission Of Matters To A Vote Of Security Holders.................7
Item 5. Other Information...................................................7
Item 6. Exhibits And Reports On Form 8-K....................................8
Signatures..........................................................9
I
<PAGE>
NetHoldings.Com, Inc.
(Formerly Xplorer, S.A.)
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEET
June 30, 2000
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current Assets
Cash and cash equivalents $ -
Receivables 3,495
Total Current Assets 3,495
TOTAL ASSETS $ 3,495
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities
Accrued expensed $ 516,632
Total Current Liabilities 516,632
Shareholders' Deficit
Preferred stock, par value $.001; authorized 25,000,000
shares; -0- shares outstanding
Common stock, par value $.001; authorized 75,000,000
shares; 1,180,045 issued and outstanding 1,180
Additional paid in capital 1,273,095
Accumulated deficit during development stage (1,786,412)
Total Shareholders' Deficit (512,137)
TOTAL LIABILITIES AND
SHAREHOLDERS' DEFICIT $ 3,495
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE>
NetHoldings.Com, Inc.
(Formerly Xplorer, S.A.)
Statements of Operations
For the Three and Six Months Ended
June 30, 2000 and 1999(Unaudited)
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended, Ended,
June 30, June 30,
2000 1999 2000 1999
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues
Other income $ - $ - $ - $ -
Total revenues - - - -
Costs and expenses:
General and administrative 375,167 17,250 396,667 36,192
Total expenses 375,167 17,250 396,667 36,192
Net income (loss) (375,167) (17,250) (396.667) (36,192)
Net income (loss) per common share $ (.34) $ (.03) $ (.41) $ (.07)
Weighted average common
shares outstanding 1,098,430 502,160 963,915 502,160
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
NetHoldings.Com, Inc.
(Formerly Xplorer, S.A.)
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 31, 2000 AND 1999
<TABLE>
<CAPTION>
Six Months Ended
June 30, June 30,
2000 1999
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (396,667) $ (36,192)
Adjustments to Reconcile Net Income (loss) to
to net cash used by operating activities:
Shares issued to employees and consultants for
services rendered 353,667 -
Increase in accrued expenses 43,000 32,300
Net Cash Used by Operating Activities - (3,892)
NET DECREASE IN CASH - (3,892)
Cash, at Beginning of Period - 3,892
Cash, at End of Period $ - $ -
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the year for:
Interest $ - $ -
Income taxes $ - $ -
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Fair value of common stock issued to employees and
consultants $ 353,667 $ -
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
NetHoldings.Com, Inc.
(Formerly Xplorer, S. A.)
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Three Month Period Ended March 31, 2000
NOTE 1 - ORGANIZATION AND PRESENTATION
Organization
NetHoldings.Com, Inc. (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. In 1999, the Company amended its articles of
incorporation changing its name from Xplorer, S.A. to NetHoldings.Com, Inc.
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 June 30, 2000.
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), secured financing
for its exploration and development activities. The operations of APT have been
included in the consolidated operations of the Company through September 30,
1999.
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 $5,143,480 before
minority interest from inception to June 30, 2000, and currently has no
operations. 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,
or be successful in its search for profitable operations or investments. These
consolidated financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
4
<PAGE>
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of the Company
and through September 30, 1999 the accounts of 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.
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. The historical loss per share has been
retroactively adjusted to give effect to the 40 for 1 reverse stock split in
December 1999. 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.
Stock Based Compensation
In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," (SFAS 123), which is effective for periods beginning after
December 15, 1995. SFAS 123 requires that companies either recognize
compensation expense for grants of stock, stock options, and other equity
instruments based on fair value or provide proforma disclosure of the effect on
net income and earnings per share in the Notes to the Financial Statements. The
Company intends to continue to account for its stock-based compensation under
Accounting Principles Board No. 25; however, the Company has adopted the
disclosure provisions of SFAS 123 for the fiscal year ended December 31, 1999.
On April 21, 2000, the Company issued 353,667 shares of common stock to
employees and consultants for services rendered. Such shares were registered by
management of the Company with the Securities and Exchange Commission on Form
S-8 registration statement.
5
<PAGE>
Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents include
highly liquid debt instruments purchased with a maturity of three months or
less.
Earnings Per Share
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 128 (SFAS 128), "Earnings Per
Share", which adopted by the Company. SFAS 128 replaces the presentation of
primary earnings per share with a presentation of basic earnings per share based
upon the weighted average number of common shares for the period.
ITEM 2. MANAGEMENT' S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company is a development stage enterprise and, as such, is incurring
expenses related to its search for new business opportunities. The Company
continues its efforts toward achieving a profitable operation and, although
management is confident of achieving that goal, the Company cannot assure its
shareholders that it will be successful in operating a profitable business.
Going Concern
The Company's working capital resources during the period ended June 30,
2000 were provided through increases in accrued expenses. 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.
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 2000. Accordingly, the accompanying
financial statements have been presented under the assumption the Company will
continue as a going concern.
Results of Operations
For the three months ended June 30, 2000
There were no revenue generating operations during the three months ended
June 30, 2000 and 1999.
Total expenses were $375,167 in the current quarter and $17,250 in the
comparable period last year. The change is due to issuance of 353,667 shares of
the company stock to employees and consultants of the Company. Because the stock
of the company is not actively traded, management valued the shares issued at
one dollar.
6
<PAGE>
For the six months ended June 30, 2000
There were no revenue generating operations during the six months ended
June 30, 2000 and 1999.
Total expenses were $396,167 in the current six months and $36,192 in the
comparable period last year. The change is due to issuance of 353,667 shares of
the company stock to employees and consultants of the Company. Because the stock
of the company is not actively traded, management valued the shares issued at
one dollar.
Liquidity and Capital Resources
As of June 30, 2000, the Company had a working capital deficit of $512,000,
for which the increase from year end was due entirely to an increase in accrued
expenses.
The Company had no cash on hand at June 30, 2000. 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, 1999 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.
Additionally, as of June 30, 2000, the Company had no operations or
employees other than its President.
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
7
<PAGE>
Item 6. Exhibits And Reports On Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Form 8-K
None
8
<PAGE>
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.
NetHoldings.Com, Inc.
(Formerly Xplorer, S.A.)
(Registrant)
Dated: August 11, 2000 By: /s/ Leonard J.Roman
Leonard J. Roman
Treasurer, Chief Financial Officer and
Director; NetHoldings.Com, Inc.
8
