SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Act of 1934
For the quarterly period ended September 30, 1997
Commission File Number 0-18565
SEMPER RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 93-0947570
(State of incorporation) (IRS Employer
Identification Number)
340 East Warm Springs Rd., Suite 1A
Las Vegas, Nevada 89119
(Address of Principal Executive Offices)
Registrant's Telephone Number: (702) 260-4900
RESOURCES OF THE PACIFIC CORPORATION
-----------------------------------------
(Former Name of the Registrant)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of 15(d) of the Securities Act of 1934
during the preceding 12 months (or shorter period that the registrant was
required to file such report(s), and (2) has been subject to the filing
requirement for the past 90 days.
Yes No X
------ ------
As of September 30, 1997 there were 25,358,600 shares of the Issuer's Common
Stock, $.001 par value outstanding.
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
SEMPER RESOURCES CORPORATION
BALANCE SHEETS
Assets Sept 30, December 31,
- ------ 1997 1996
---- ----
(Unaudited) (Audited)
Current Assets:
Cash $ 18,195 $ 16,046
------------ ------------
Total Current Assets: 18,195 16,046
Property & Equipment, net 0 0
Other Assets:
Joint Venture Timber Concessions 7,098,948 7,098,948
Advances & Deposits 167,311 167,311
Goodwill, net 95,664 101,219
Other 1,350 1,350
------------ ------------
Total Other Assets: $ 7,363,273 $ 7,368,828
Total Assets $ 7,381,467 $ 7,384,874
============ ============
Liabilities and Stockholders Equity
- -----------------------------------
Current Liabilities:
Accounts payable $ 88,044 $ 105,613
Accrued expenses 87,958 674
Advances from related parties 4,265 4,100
Notes payable 50,000 0
Notes payable due related parties 50,000 50,000
------------ ------------
Total Current Liabilities $ 280,267 $ 160,387
Stockholders' Equity
Series A 12% convertible preferred
stock, $.001 par value, 15,000 shares
authorized, 130 shares issued and
outstanding, stated at liquidation value $ 130,000 $ 130,000
Common stock, $.001 par value,
100,000,000 shares authorized,
25,358,600 and 25,257,965 issued
and outstanding at September 30,1997
and December 31, 1996 25,358 25,258
Additional paid in capital 10,497,425 10,497,425
Accumulated deficit ( 2,471,991) ( 2,471,991)
Deficit accumulated during the
development stage ( 1,079,592) ( 956,205)
------------ ------------
Total Stockholder's equity $ 7,101,200 $ 7,224,487
------------ ------------
$ 7,381,467 $ 7,384,874
============ ============
<PAGE>
SEMPER RESOURCES CORPORATION
STATEMENT OF OPERATIONS (Unaudited)
Three Months Ended Nine Months Ended
Sept 30 Sept 30
1997 1996 1997 1996
---- ---- ---- ----
Revenues:
Sales $ - $ - $ - $ -
Expenses:
Selling, General &
Administrative $ 44,746 $ 89,756 $ 112,531 $ 227,813
Amortization and
Depreciation 1,852 1,852 5,556 5,555
---------- ---------- ---------- ----------
Total Expenses $ 46,598 $ 91,608 $ 118,087 $ 233,368
---------- ---------- ---------- ----------
Other income (expenses)
Interest expense ( 1,964) ( 3,027) ( 5,300) ( 8,214)
---------- ---------- ---------- ----------
Net Loss $( 48,562) $( 94,635) $( 123,387) $( 241,582)
========== ========== ========== ==========
Loss Per Share $ 0.002 $ 0.004 $ 0.005 $ 0.01
========== ========== ========== ==========
Weighted average shares
outstanding 25,358,600 25,207,964 25,257,965 25,087,964
========== ========== ========== ==========
<PAGE>
SEMPER RESOURCES CORPORATION
STATEMENT OF CASH FLOWS (Unaudited)
For the Nine Months Ended Sept 30,
1997 1996
---- ----
Cash Flows from operating activities:
Net loss $(123,387) $(241,582)
Adjustments to reconcile net loss to net
cash used by operating activities:
Amortization 5,556 5,555
Changes in assets and liabilities:
Accounts payable and accrued liabilities 69,715 27,082
Prepaid expenses 0 ( 38,110)
Other assets (increase) 0 (178,789)
--------- ---------
Net cash (used in) operating activities $( 48,116) $(425,844)
Cash Flows from financing activities:
Proceeds from sales of Common Stock 100 280,000
Proceeds from sales of Preferred Stock 0 230,000
Loan proceeds 50,265 30.077
--------- ---------
Net cash provided (used) in financing 50,265 540,844
--------- ---------
Net increase (decrease) in cash $ 2,149 $ 114,232
Cash and cash equivalents, at beginning of period 16,046 151
--------- ---------
Cash and cash equivalents, at end of period $ 18,195 $ 114,383
========= =========
<PAGE>
Semper Resources Corporation
(Formerly Resources of the Pacific Corporation)
(A Development Stage Company)
Notes to Consolidated Financial Statements
December 31, 1996 and 1995
Summary of Significant Accounting Policies
Organization and consolidation
The financial statements presented are those of Semper Resources Corporation
(the Company) and Resources of the Pacific, Inc. (Resources), its wholly owned
subsidiary.
The Company acquired Resources on September 7, 1995 in an exchange of common
stock. Prior to and in conjunction with the acquisition, the Company had a 1
for 20 reverse stock split. The financial statements reflect the effects of
this transaction.
The Company was organized under the laws of the State of Nevada as 10 Minute
Pit Stop USA, Inc. in April, 1987. On April 30, 1987, the Company merged with
Value Funding Corporation, a public corporation, and the Company was
designated as the surviving corporation. Value Funding Corporation also owned
a subsidiary, 6 Minute Pit Stop USA, Inc. The name of the Company was changed
in April 1990 to Pit Stop Auto Centers, Inc., in September 1995 to Resources
of the Pacific Corporation, then in May 1996 to Semper Resources Corporation.
The Company's subsidiary, 6 Minute Pit Stop USA, Inc., filed for Chapter 7
bankruptcy in 1988. The Company acquired a controlling interest in Grease N'
Go International, Inc., during 1987. During 1991, the Company disposed of its
entire interest in Grease N' Go International, Inc. The Company is currently
considered a development stage company as defined in SFAS No. 7. The Company
reentered the development stage during 1992 after disposing of all its
operations during 1991 (see Note 10). The Company currently has no operations,
but plans to commence operations in 1998 (see Note 14).
Property and equipment
Property and equipment are recorded at cost which is depreciated over the
estimated useful lives of the related assets. Depreciation is computed using
the straight-line method for financial reporting purposes, with accelerated
methods used for income tax purposes. The estimated useful lives of property
and equipment for purposes of financial reporting is 3 to 5 years.
Intangible assets
Goodwill consists of the excess paid by the Company over the fair market value
of the net assets aquired from Resources and is being amortized using the
straight-line method over a 15 year period.
<PAGE>
Loss per share
The computation of loss per share of common stock is based on the weighted
average number of shares outstanding during the period presented giving
retroactive effect to the 1 for 20 reverse stock split. Common stock
equivalents were not included in the earnings per share computation as their
effect was antidilutive.
Statement of cash flows
For purposes of the statement of cash flows, the Company considers all highly
liquid debt investments purchased with a maturity of three months or less to
be cash equivalents.
Income taxes
The Company accounts for its income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes" which
requires the liability approach for the effect of income taxes.
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 amounts reported in the consolidated financial statements and
related notes to financial statements. Changes in such estimates may affect
amounts reported in future periods.
Acquisition
On September 7, 1995, the Company acquired all of the outstanding common stock
of Resources of the Pacific, Inc. in exchange for 22,219,000 shares of the
Company's common stock. The acquisition has been accounted for using the
purchase method and accordingly, the accompanying consolidated financial
statements reflect this transaction at the date of acquisition.
Property and Equipment
At December 31, 1996 and 1995 property and equipment consisted entirely of
office equipment at a cost of $2,000. Accumulated depreciation was $2,000 at
December 31, 1996 and 1995. Depreciation expense for the years ended December
31, 1996 and 1995 was recorded in the amount of $-0- and $281 respectively.
Income Taxes
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes" which requires the
liability approach for the effect of income taxes.
The Company has available at December 31, 1996 unused net operating loss
carryforwards of approximately $3,200,000 which may be applied<PAGE>
against future
taxable income and which expire in various years beginning in 2005 through
2011. If certain substantial changes in the Company's ownership should occur,
there could be an annual limitation on the amount of net operating loss
carryforward which can be utilized. The amount of and ultimate realization of
the benefits from the net operating loss carryforwards for income tax purposes
is dependent, in part, upon the tax laws in effect, the future earnings of the
Company, and other future events, the effects of which cannot be determined.
Because of the uncertainty surrounding the realization of the loss
carryforwards the Company has established a valuation allowance equal to the
tax benefit of the loss carryforwards. The change in the valuation allowance
is equal to the tax benefit of the current period's net loss.
Related Party Transactions
At September 30, 1997 the Company owed $4,265 for advances from related
parties.
The Company made various issuances of common stock to related parties during
1996 and 1995. See Capital Stock footnote.
The Company entered into a financing agreement with International Bell, Inc.,
a shareholder, on September 7, 1995. At September 30, 1997 the unpaid balance
was $50,000.
Short Term Debt
The Company issued, during the Third Quarter, 1997, 12% per annum promissory
notes totaling $50,000 to two private parties. The promissory notes are
payable on demand, or if no demand is made on March 19, 1998, or at the time
of first funding of a private placement of common stock, whichever is earlier.
Capital Stock
In conjunction with the obtaining of short term debt, the Company issued
50,000 restricted common shares to intermediaries.
On May 17, 1996, the Company filed amended and restated Articles of
Incorporation increasing the authorized common shares from 25,000,000 to
100,000,000, changing the common stock par value from $.005 to $.001 per share
and authorizing 100,000 shares of preferred stock with a par value of $.001
per share. The financial statements reflect the change in the common stock
par value.
On May 17, 1996, the Company also designated 15,000 shares of Preferred Stock,
par value $.001 per share, as Series A 12% Convertible Preferred Stock.
Holders of Series A stock are entitled to a dividend of $120 per share per
year, payable semi-annually in cash or in stock (at $1.50 per share), at the
Company's option, on November 15 and May 15 of each year. Series A stock has
a liquidation preference equal to $1,000 per share, are non-voting shares, and
are subject to redemption, at the option of the Company, at any time after
December 31,1997 at $1,000 per share plus any accrued dividends. Holders of
Series A stock have the<PAGE>
option to convert with certain restrictions each share
held into 667 shares of common stock on or before December 31, 1997. At
December 31, 1996 dividends in arrears were $12,188.
Related party stock transactions
In January, 1997, the Board of Directors awarded Mr. Robert A. Dietrich,
President & CEO, warrants to purchase 50,000 shares of Common Stock at an
exercise price of $2.00 per share. The warrant may be exercised at any time
over five years.
On March 30, 1995, the Company issued 65,000 shares of its common stock valued
at $.075 per share to the Company's then President for payment of advances in
the amount of $4,850. On June 30, 1995, the Company issued 440,000 shares of
its common stock valued at $.05 per share, to the Company's then President for
payment of advances in the amount of $22,000. These transactions occurred
prior to the 1 for 20 reverse stock split.
Commitments and Contingencies
In November 1996, the Company entered into a Purchase Agreement with Casecroft
Management Ltd., Ralph Financial Corporation and Roy Skluth collectively, to
acquire real property timber tracts located in Brazil and all related timber
and harvesting rights. The purchase price is 3,000,000 shares of the
Company's common stock and $275,000 in cash. In consideration of an
additional non-refundable $6,500 payment the Company has the option to
purchase approximately 6.5 million acres for $119,000,000 in cash and
2,500,000 shares of the Company's common stock. In consideration of an
additional non-refundable $2,500 payment, the Company has the option to
purchase a certain building and improvements, and certain equipment for
$4,000,000 in cash and 8,500,000 shares of the Company's Series A Preferred
stock. In consideration of an additional non-refundable $1,000 payment, the
Company has the option to purchase approximately 92,000 acres for 500,000
shares of the Company's common stock. The Company paid a sum of $50,000 upon
execution of this agreement, $40,000 of which is refundable upon termination
of the agreement. The financial statements reflect the monies paid as a
deposit at December 31, 1996.
The Company is not currently aware of any material pending or threatened
litigation which is likely to have a material adverse effect upon the Company.
However, the possibility exists that creditors and others seeking relief from
the Company's former subsidiary and former operations may also include the
Company in claims and suits pursuant to the parent/subsidiary relationship
which previously existed. Management believes it would be successful in
defending against such claims and that no material negative impact on the
financial condition of the Company would occur. Management is also not aware
of any pending or threatened claims against the Company for environmental
clean-up or environmental related contingencies and believes there are no
material liabilities that are required to be accrued or disclosed in <PAGE>
connection with the clean-up of environmental hazards related to the Company's
prior operations.
Stock Option Plan
The Company has a stock option plan. Under the plan, non-qualified stock
options may be granted to key employees, directors and executive officers
designated by the Board of Directors (or a committee appointed by the Board),
at exercise prices equal to at least 100% of the fair market value of the
common stock on the date of grant. In addition to selecting the optionees,
the Board (or such committee) determines the number of shares subject to each
option and otherwise administers the Plan. There is a total of 105,000 shares
reserved for this stock option plan. At December 31, 1996, 55,000 shares
remained available to be granted.
Joint Venture Timber Concessions
On October 7, 1995, the Company acquired from Resources of the Pacific LTD.
all of its rights, title and interest in certain joint venture timber
concessions for the development of timber located in Fiji. The Company issued
1,350,000 shares of its common stock valued at $5.258 per share. The Company
shall be entitled to sixty (60) percent of any profits from the operations of
these joint ventures, if any.
The Company anticipates that these joint ventures will commence operations
during 1998, ultimately providing a source of earnings and cash flow to the
Company.
Advances to Joint Venture Partners
During 1996, the Company made advances to its Joint Venture partners to cover
certain expenses in the amount of $109,995 as of December 31, 1996. These
advances will be repaid to the Company from the Joint Venture partners share
of future operating profits.
Subsequent Events
In November, 1997, the Company entered into Letter of Intent Agreements for
two separate timber acquisition projects. Both Agreements are subject to due
diligence and the construction of definite purchase and exchange agreements.
One Agreement is to acquire the Philippine timber interests of Bentley House
International, Inc.; the other is to establish in Romania a kiln drying, value
added manufacturing and marketing operation with a Romanian company, S.C. ARM
S.A. Both transactions are scheduled for completion of due diligence,
difinitive agreement construction and closing during the first quarter of 1998.
During the first quarter, 1998, the Company will begin marketing a private
placement of common shares for the purpose of financing its acquisitions and
to begin operations as selected locations during 1998.<PAGE>
Item 2. Management's Discussion of Financial Condition and Results of
Operations.
Material Changes in Results of Operations
There were no operating revenues for their the three months ended September 30,
1997 or September 30, 1996, as the sole business activity of the Company was
its search for businesses to acquire.
As a development stage enterprise the Company incurred operating expenses of
$46,598 for the three month period ended September 30, 1997 and $1,079,592,
including interest expense, since inception as a development stage enterprise.
In addition the Company had interest expense for the three months ended March
31, 1997 of $1,964.
Operating Expenses for the nine month period ended September 30, 1997 were
$118,087. The Company incurred interest expenses for the nine month period
ended September 30, 1997 in the amount of $5,300.
Changes in Financial Condition, Liquidity and Capital Resources
For the past eighteen months, the Company has funded its operating losses and
capital requirements through the sale of stock and loans from its shareholders
and third parties. As of September 30, 1997, the Company had a cash balance
of $18,195 and a deficit in working capital of $262,072.
Net cash used in operating activities for the nine month period ended
September 30, 1997 was $48,116. Net cash provided from financing activities
for the nine month period ended September 30, 1997, was $50,265 in advances
from a shareholders and third party loans.
At September 30, 1997, the Company had a demand loan payable to a shareholder
of $50,000.
The Company has experienced operating losses throughout its history since
classification as a development stage company; and the acquisition of
Resources of the Pacific, Inc. and purchase agreement to acquire several
tracts of forest land in Brazil, and Letters of Intent to acquire and operate
timber production in the Philippines and Joint Venture Agreement in Romania
will require substantial funds for the development of its business. Therefore,
the Company's ability to survive is dependent on its ability to raise capital
through the issuance of stock or to borrow additional funds. The Company
intends to raise additional cash for operations and acquisitions in a private
placement during the first quarter of 1998. Without the success of one of
these options, the Company will not have sufficient cash to satisfy its working
capital and investment requirements for the next twelve months.
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 Securities Holders. None.
Item 5 Other Information. None
Item 6 Exhibits and Reports on Form 8-K.
(a) Exhibits: None
(b) Reports on Form 8-K: None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: December 30, 1997 SEMPER RESOURCES CORPORATION
By: /s/ Robert A. Dietrich
-----------------------------------
Robert A. Dietrich, President and Chief
Executive Officer
By: /s/ John H. Brebbia
-----------------------------------
John H. Brebbia, Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000863139
<NAME> Semper Resources Corporation
<MULTIPLIER> 1
<S> <C>
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<PERIOD-TYPE> 9-MOS
<CASH> 18,195
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
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<CURRENT-ASSETS> 18,195
<PP&E> 2,000
<DEPRECIATION> 2,000
<TOTAL-ASSETS> 7,381,467
<CURRENT-LIABILITIES> 280,267
<BONDS> 0
0
130,000
<COMMON> 25,358
<OTHER-SE> 10,497,425
<TOTAL-LIABILITY-AND-EQUITY> 7,381,467
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 118,087
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,300
<INCOME-PRETAX> (123,387)
<INCOME-TAX> 0
<INCOME-CONTINUING> (123,387)
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<EXTRAORDINARY> 0
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<NET-INCOME> (123,387)
<EPS-PRIMARY> ( .005)
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</TABLE>
