- ---------------------------------------------------------------- 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 [ ] Transition Report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended: March 31, 1995. Commission File No. 0-10039 SEAHAWK CAPITAL CORPORATION - ----------------------------------------------------------------- (Exact name of small business issuer as specified in its charter New Jersey 22-2267656 - ---------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1010 Kings Highway South, Suite 1-D Cherry Hill, New Jersey 08034-5074 - ---------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant telephone number, including area code: (609) 428-3845 (Not applicable) - ---------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 [ ] NO [X] State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: Common Stock, no par value, outstanding as of December 31, 1995: 27,281,302 shares. Transitional Small Business Disclosure Format (check one): YES [ ] NO [X] - ---------------------------------------------------------------- SEAHAWK CAPITAL CORPORATION FORM 10-QSB INDEX
Page ----- PART I FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets at March 31, 1995 And December 31, 1994 .......................... 3 Consolidated Statements of Operations for the three month periods ended March 31, 1995 and 1994 ........................ 4 Consolidated Statement of Shareholders Equity for the three month period ended March 31, 1995 .... 5 Consolidated Statements of Cash Flows for the three month periods ended March 31, 1995 and 1994 ....................................... 6 Notes to Consolidated Financial Statements .......... 7 Item 2. Management s Discussion and Analysis of Financial Condition and Results of Operations ..................................... 9 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K ............... 10 SIGNATURES ............................................... 10 /TABLE PART I - FINANCIAL INFORMATION Item 1. Financial Statements SEAHAWK CAPITAL CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited)
March 31, December 31, 1995 1994 --------- ---------- ASSETS Current assets: Cash and cash equivalents ....... $ 8,864 $ 17,250 Receivables ..................... 4,997 3,451 Investment in Extruco, Limited .. 56,897 --------- --------- Total current assets ............ 70,758 20,701 Other assets ...................... 54,990 --------- --------- $ 70,758 $ 75,691 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities - Accounts payable and accrued liabilities ......... $ 36,345 $ 20,636 --------- --------- Commitments and contingencies Stockholders equity: Common stock, no par value, 100,000,000 shares authorized; Issued - 13,137,082 shares (including 855,780 shares in treasury .................. 12,701,325 12,701,325 Translation adjustment .......... 457 (1,076) Deficit ......................... (12,667,369) (12,645,194) ---------- ---------- Total stockholders' equity.... 34,413 55,055 ---------- ---------- $ 70,758 $ 75,691 ========== ==========
SEAHAWK CAPITAL CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Month Periods Ended March 31, 1995 and 1994 (Unaudited)
1995 1994 ------- -------- Revenues: Sales to customers ............. $ 351,644 Commission and fees ............ 39,263 Interest and other ............. $ 194 776 ------ ------- 194 391,683 ------ ------- Costs and expenses: Cost of sales .................. 260,242 General and administrative ..... 22,369 211,597 Depreciation ................... 2,728 Interest ....................... 2,462 ------ ------- 22,369 477,029 ------ -------- Loss from Continuing Operations .. (22,175) (85,346) Discontinued operations .......... 3,069 ------ ------- Net Loss ......................... $(22,175) $ (82,277) ====== ======= Net loss per common and common equivalent share: Loss from continuing operations. $(0.00) $(0.01) ===== ===== Net loss ....................... $(0.00) $(0.01) ===== =====
SEAHAWK CAPITAL CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY For the Three Months Ended March 31, 1995 (Unaudited)
Common Stock Cumulative ----------------------- Translation Shares Amount (Deficit) Adjustment Total ---------- ----------- ------------ -------- --------- Balance, December 31, 1994 ..... 12,281,302 $12,701,325 $(12,645,194) $(1,076) $ 55,055 Cumulative translation adjustment.... 1,533 1,533 Net loss for three months ended March 31, 1995 (22,175) (22,175) ---------- ----------- ------------ ------- --------- Balance, March 31, 1995 ......... 12,281,302 $12,701,325 $(12,667,369) $ 457 $ 34,413 ========== =========== ============ ======= =========
SEAHAWK CAPITAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS For the Three Month Periods Ended March 31, 1995 and 1994 (Unaudited)
1995 1994 ---- ---- OPERATING ACTIVITIES Net loss .......................... $ (22,175) $ (82,277) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation ................. 2,728 Changes in assets and liabilities ............... 13,778 (110,740) ------- -------- Net cash used by operating activities ............ (8,397) (190,289) ------- -------- INVESTING ACTIVITIES - Capital expenditures ............ 51,140 -------- EFFECT OF EXCHANGE RATE CHANGES ON CASH ................. 11 ------- NET DECREASE IN CASH AND CASH EQUIVALENTS ................ ( 8,386) (139,149) CASH AND CASH EQUIVALENTS: At beginning of period ............ 17,250 466,607 ------- -------- At end of period .................. $ 8,864 $ 327,458 ======= ========
See accompanying notes to financial statements SEAHAWK CAPITAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 1995 (Unaudited) 1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES The consolidated financial statements include the accounts of Seahawk Capital Corporation (the "Company") and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. The accompanying consolidated financial statements of Seahawk Capital Corporation at March 31, 1995 and 1994 and for the three month periods then ended are unaudited but include all adjustments, consisting only of normal recurring accruals, which management considers necessary for a fair presentation of the Company s financial condition and results of operations in accordance with generally accepted accounting principles. These financial statements do no include all the disclosures associated with the Company s annual financial statements and accordingly should be read in conjunction with such statements. The information for the three month period ended March 31, 1995 is not necessarily indicative of the operating results for the entire year. The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements contained in the Company s Annual Report on Form 10-K for the year ended December 31, 1994. Loss per share calculations are based upon 12,281,302 shares in 1995 and 13,137,082 shares in 1994, based upon the weighted average number of common and common equivalent shares outstanding during the periods. 2. INVESTMENTS IN SUBSIDIARY COMPANIES Effective December 31, 1994, the Company transferred its approximately 73% interest in Seahawk Overseas Exploration Corporation ("Overseas") to John C. Fitton (a Director of the Company) in exchange for 855,780 shares of the Company's common stock. Summarized results of Overseas included in the accompanying statement of operations as discontinued operations for the three months ended March 31, 1994 are as follows: Revenues, principally commissions and fees ... $ 27,110 Expenses, principally general and administrative ......................... 24,041 ------ Income ........................................ $ 3,069 ======
Due to continued losses from Scotcoast, Limited ("Scotcoast") operations, the Company and SRC Foods Group, Limited, ("SRCF") elected not to provide further support to Scotcoast. Scotcoast is in the process of being liquidated. The investment in Scotcoast was written off in the second quarter of 1994. SRCF also has an equity investment in Extruco, Limited and PEICO Limited, which companies were to utilize certain rights and processes of SRCF. Due to a disagreement with Extruco, Limited s shareholders, SRCF's 33.3% interest was disposed of in August 1995 at a loss of approximately $5,000. Because PEICO, Limited has not to date been able to obtain the financing needed to begin operations, this investment was written off in the second quarter of 1994. Foreign operations in 1994, principally Scotcoast, Limited, included in the accompanying consolidated financial statements are as follows:
1995 1994 ------ ------ Revenues $ 194 $ 391,644 Expenses 11,002 430,654 Loss from continuing operations (10,809) (39,010) Total assets 62,078 971,471
3. SUBSEQUENT EVENTS On May 8, 1995, the Company sold 15,000,000 previously unissued shares of its common stock to Jonathan B. Lassers for $150,000 in cash. As part of the transaction, Mr. Lassers also acquired transferable warrants to purchase up to an additional 70,000,000 shares of the Company s common stock exercisable until December 31, 1997 at $0.01 a share. As a result of the purchase, Mr. Lassers owns approximately 55% of the total outstanding common stock. If all the warrants are exercised, his beneficial ownership would increase to approximately 87.4%. Because of this purchase, a change in control of the Company was effected. Substantially all members of the Company's prior management have resigned as directors and officers. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS As indicated in Note 3 to the consolidated financial statements in Item 1 of this Report, the Company has new management. The following management's discussion is based on the new managements understanding of the financial condition and the results of operations for the periods presented. LIQUIDITY AND CAPITAL RESOURCES At March 31, 1995, the Company has a stockholders' equity of $34,413. The Company has incurred net losses in most of the past 10 years. After the transfer of Overseas and write-off of its investment in Scotcoast in the second quarter of 1994, the Company s only operations are related to SRCF, which is not significant in amount, and its 50% interest in PEICO, Limited which was written off and 33.3% interest in Extruco, Limited which was disposed of in August 1995. (See Note 1 to the consolidated financial statements under Item 1 of this Report for a fuller discussion.) As discussed in Note 3 to the consolidated financial statements under Item 1 of this Report, in May 1995, the Company sold 15,000,000 previously unissued shares of its common stock for $150,000 in cash. Because of the above mentioned net losses, the Company's cash flows from operating activities have been negative. Until such time additional operating businesses are acquired and operate profitably, the Company s operations are being financed with the remaining cash and the proceeds from the sale of common stock in May 1995. The Company is exploring various financing options in connection with the acquisition of companies in the food processing industry. It is not expected that the Company will achieve profitability in the near future. Further, there is no assurance that the Company will achieve profitability thereafter. Although it is expected that the Company will have adequate resources available to continue through December 31, 1995, unless the Company can obtain the financing necessary to acquire a profitable operating business, the Company will be unable to continue as a going concern. RESULTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 1995 VS. 1994 The Company generated consolidated revenues of $194 in the 1995 period compared to revenues of $391,683 during the same period of 1994. This decrease of $391,489 is due primarily to the revenues generated by Scotcoast included in the first quarter of 1994. Scotcoast had no operations in the first quarter of 1995. Also there were no commission and fees generated by SRCF in the first quarter of 1995. Total expenses for the 1995 period of $22,369 were $454,660 less than the same period in 1994. This decrease is primarily due to the cessation of the Scotcoast operations. (See Note 2 to the financial statements in Item 1 of this Report.) PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits Exhibit Description ------- ------------ 27 Article 5 Financial Data Schedule (b) Reports on Form 8-K. No reports on Form 8-K were filed during the quarter ended March 31, 1995. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: February 20, 1996 SEAHAWK CAPITAL CORPORATION (Registrant) By: /s/ JONATHAN B. LASSERS ------------------------ Jonathan B. Lassers, President, Principal Executive Officer and Principal Financial Officer By: /s/ ANNAMARIE L. ARIAS ---------------------------- Annamarie L. Arias, Secretary-Treasurer and Principal Accounting Officer