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, 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 November 15, 2000, NetHoldings.Com had 605,420 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 September 30, 2000 (unaudited).............................. 1
Consolidated Condensed Statements of Operations
for the Three and Nine Months Ended September 30, 2000 and 1999
(unaudited)....................................................... 2
Consolidated Condensed Statements of Cash Flows for the Six Months
Ended September 30, 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
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NetHoldings.Com, Inc.
(Formerly Xplorer, S.A.)
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEET
September 30, 2000
<TABLE>
<S> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 96
Receivables 3,275
Total Current Assets 3,371
TOTAL ASSETS $ 3,371
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities
Accrued expensed $ 540,609
Total Current Liabilities 540,609
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; 590,025 issued and outstanding 590
Additional paid in capital 1,273,685
Accumulated deficit during development stage (1,818,255)
Total Shareholders' Deficit (543,980)
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 3,371
</TABLE>
The accompanying notes are an integral part of these financial statements.
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NetHoldings.Com, Inc.
(Formerly Xplorer, S.A.)
Statements of Operations
For the Three and Nine Months Ended
September 30, 2000 and 1999(Unaudited)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended, Ended,
September 30, September 30,
2000 1999 2000 1999
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues
Other income $ -- $ -- $ -- $ --
Total revenue -- -- -- --
Costs and expenses:
General and administrative 31,843 319,025 428,510 355,217
Total expenses 31,843 319,025 428,510 355,217
Net income (loss) (31,843) (319,025) (428,510) (355,217)
Net income (loss) per common share $ (.05) $ (1.27) $ (.83) $ (1.41)
Weighted average common
shares outstanding 590,023 251,080 517,979 251,080
</TABLE>
The accompanying notes are an integral part of these financial statements.
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NetHoldings.Com, Inc.
(Formerly Xplorer, S.A.)
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
Nine Months Ended
September 30, September 30,
2000 1999
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (428,510) $ (355,217)
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 74,939 351,325
Net Cash Provided (Used) by Operating Activities 96 (1,394)
NET INCREASE (DECREASE IN CASH) 96 (3,892)
Cash, at Beginning of Period -- 3,892
Cash, at End of Period $ 96 $ --
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
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.
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NetHoldings.Com, Inc.
(Formerly Xplorer, S. A.)
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Nine Month Period Ended September 30, 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 September 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
value underlying its assets and the satisfaction of liabilities in the normal
course of business. The Company has incurred losses of $1,818,000, excluding the
operations of its former subsidiary, Atlantic Pacific Trust, LLC ("APT"), from
inception to September 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.
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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 a one for 2 reverse stock split in
September 2000 and a 1 for 40 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.
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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 September
30, 2000 were provided primarily 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 September 30, 2000
There were no revenue generating operations during the three months ended
June 30, 2000 and 1999.
Total expenses were $31,843 in the current quarter and $319,025 in the
comparable period last year. The change is due to the Company accruing a
$300,000 fee payable to third party advisors for past and future consulting
services in the third quarter of 1999.
For the Nine months ended September 30, 2000
There were no revenue generating operations during the nine months ended
September 30, 2000 and 1999.
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<PAGE>
Total expenses were $428,510 in the current nine months and $355,217 in the
comparable period last year. The primary components were the issuance of 353,667
shares of the company stock to employees and consultants of the Company valued
at $1 per share in fiscal 2000 and the Company accruing a $300,000 fee payable
to third party advisors for past and future consulting services in fiscal 1999.
Because the stock of the company is not actively traded, management valued the
shares issued at one dollar.
Liquidity and Capital Resources
As of September 30, 2000, the Company had a working capital deficit of
$540,000, for which the increase from year end was due entirely to an increase
in accrued expenses.
The Company had minimal cash on hand at September 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.
Other Events
On August 31, 2000 the Company announced that it had signed a Letter of
Intent to acquire Capital Markets Group, Inc., a privately held, Internet-based
real time provider of original financial content. On November 10, 2000, the
Company announced the termination of the definitive agreement to acquire Capital
Markets Group, Inc.
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
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Item 5. Other Information
None
Item 6. Exhibits And Reports On Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Form 8-K
None
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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.
NetHoldings.Com, Inc.
(Formerly Xplorer, S.A.)
(Registrant)
Dated: November 20, 2000 By: /s/ Leonard J.Roman
Leonard J. Roman
Treasurer, Chief Financial Officer
and Director;
NetHoldings.Com, Inc.
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