SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996 Commission file number 0-10039 DYNAMICWEB ENTERPRISES, INC. (Name of small business issuer in its charter) New Jersey 22-2267658 (State of other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1033 Route 46 East, Suite A-102 Clifton, New Jersey 07013 (address of principal executive offices) Issuer's telephone number: 201-777-7666 SEAHAWK CAPITAL CORPORATION 1010 Kings Highway South, Suite 1-D Cherry Hill, New Jersey 08034 (Former Name and Address) Check whether the issuer (1) 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 The number of shares outstanding of each of the Registrant's common stock, par value $.0001, as of June 30, 1996: 6,498,511 Shares Transitional Small Business Disclosure Format (check one): Yes No X PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS DYNAMICWEB ENTERPRISES, INC. (FORMERLY SEAHAWK CAPITAL CORPORATION) CONSOLIDATED BALANCE SHEET JUNE 30,1996 (UNAUDITED) ASSETS ------ CURRENT ASSETS: Cash $274,275 Accounts receivable, less allowance for 32,840 doubtful accounts of $400 Due from affiliate 14,283 Prepaid expenses 2,500 -------- TOTAL CURRENT ASSETS 323,898 PROPERTY AND EQUIPMENT, less accumulated depreciation of $3,747 26,607 PATENTS AND TRADEMARKS, less accumulated amortization of $679 17,558 -------- TOTAL ASSETS $368,063 LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES: Accounts payable and accrued liabilities $ 47,130 STOCKHOLDERS EQUITY: Common stock, $. 0001 par value; authorized 50,000,000 shares; issued and outstanding 6,498,511 shares $ 650 Additional paid-in capital 613,120 Accumulated deficit (292,837) -------- TOTAL STOCKHOLDERS' EQUITY 320,933 -------- $368,063 ========
See notes to financial statements DYNAMICWEB ENTERPRISES, INC. (FORMERLY SEAHAWK CAPITAL CORPORATION) CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
February 1, 1995 Three Months Six Months Nine Months (Inception) Ended June Ended June Ended June to June 30, 30, 1996 30, 1995 30, 1996 1995 --------- --------- ---------- --------- SALES $26,409 $ 3,980 $ 86,937 $ 3,980 --------- --------- --------- --------- COST AND EXPENSES: Cost of sales 22,280 2,227 49,444 2,227 Selling, general and administrative 169,025 8,121 281,748 13,535 Research & Development 8,479 4,204 14,854 6,204 Depreciation and amortization 1,603 94 3,768 94 --------- --------- ---------- --------- TOTAL COSTS & EXPENSES 201,387 14,646 349,814 22,060 --------- --------- ---------- --------- LOSS BEFORE INCOME TAX BENEFIT (174,978) (10,666) (262,877) (18,080) INCOME TAX BENEFIT 2,400 4,100 --------- --------- ---------- --------- NET LOSS $(174,978) $ (8,266) $(262,877) $ (13,980) ========= ========= ========== ========= NET LOSS PER SHARE $ (0.03) $ 0.00 $ (0.04) $ 0.00 ========= ========== ========== ========= WEIGHTED AVERAGE SHARE OUTSTANDING 6,498,511 6,115,000 6,269,504 6,155,000 ========= ========= ========= =========
See notes to financial statements DYNAMICWEB ENTERPRISES, INC. (FORMERLY SEAHAWK CAPITAL CORPORATION) CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
February 1, 1995 Nine Months (Inception) to Ended June June 30, 30, 1996 1995 ----------- ------------- OPERATING ACTIVITIES: Net loss $(262,877) $(13,980) Adjustments to reconcile net Loss to net cash used in operating activities - depreciation and amortization 3,768 94 Changes in assets and liabilities Accounts receivable ( 31,470) Accounts payable 47,130 Prepaid Expenses (2,500) --------- --------- Net cash used in operating activities (245,949) (13,886) --------- --------- INVESTING ACTIVITIES: Purchases of equipment ( 19,088) (10,911) Acquisition of patents and trademarks ( 17,991) --------- --------- Net cash used in investing activities ( 37,079) (10,911) --------- --------- FINANCING ACTIVITIES: Loans from affiliate ( 43,186) 24,797 Issuance of common stock 600,405 --------- --------- Net cash provided by financing activities 557,219 24,797 --------- --------- NET INCREASE IN CASH 274,191 0 Balance, beginning of period 84 0 --------- --------- Balance, end of period $ 274,275 $ 0 ========= ========= SUPPLEMENTAL DISCLOSURES: Cash paid during the year for: Interest $ 0 $ 0 ========= ========= Income taxes $ 0 $ 0 ========= =========
See notes to financial statements. DYNAMICWEB ENTERPRISES, INC. (FORMERLY SEAHAWK CAPITAL CORPORATION) NOTES CONSOLIDATED TO FINANCIAL STATEMENTS JUNE 30, 1996 (UNAUDITED) 1. Basis of Presentation The financial statements include the accounts of DynamicWeb Enterprises, Inc. ("The Company") and its wholly owned subsidiary DynamicWeb Transaction Systems, Inc. ("DynamicWeb"). All intercompany transactions and balances have been eliminated in consolidation. The accompanying financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the financial position and the results of operations for the interim periods presented. All such adjustments are of a normal and recurring nature. The results of operations for the interim periods presented are not necessarily indicative of the results of future operations. Certain financial information which is normally included in financial statements prepared in accordance with generally accepted accounting principles, is not required for interim reporting purposes and, has accordingly been condensed or omitted. The accompanying financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's report filed on Form 8-K for earliest event reported March 26, 1996. 2. History On February 1, 1995 Megascore, Inc. a computer software company, initiated research activities for the purpose of developing software to facilitate the exchange of information and the conducting of electronic commerce over the Internet. On February 7, 1996 that business and the related net assets were acquired by DynamicWeb in exchange for 2,387,770 common shares which were concurrently distributed pro-rata to Megascore shareholders. Accordingly, DynamicWeb and Megascore became separate entities under common control. The financial statements give retroactive effect to this transaction. DynamicWeb was in the development stage through December 31, 1995. 3. Acquisition On March 26, 1996 DynamicWeb was acquired by Seahawk Capital Corporation, a publicly held corporation, DynamicWeb received 93 percent of Seahawk's outstanding common shares (5,723,631 shares) in exchange for all of DynamicWeb's outstanding common shares, For accounting purposes the transaction was treated as a recapitalization of DynamicWeb, with DynamicWeb deemed to be the acquirer. Accordingly, the historical financial statements prior to March 26, 1996 will be those of DynamicWeb after financial statements are issued for a period which includes the date of the acquisition. On May 14, 1996, Seahawk changed it's name to DynamicWeb Enterprises, Inc. ITEM 2. PLAN OF OPERATION On February 1, 1995, Megascore, Inc., a computer software company, initiated research activities to develop software to facilitate the exchange of information and the conducting of electronic commerce over the Internet. On February 7, 1996, that business and the related net assets were acquired by DynamicWeb Transaction Systems, Inc. ("DWEB"). On March 26, 1996, 100% of the stock of DWEB was acquired by Seahawk Capital Corporation, a publicly traded company. The Company's name was changed to DynamicWeb Enterprises, Inc. (the "Company") on May 14, 1996. For accounting purposes, the transaction was treated as a recapitalization of the DWEB with DWEB as the acquirer (reverse acquisition). The ongoing business of the Company will be that of DWEB. As a result, the historical financial statements of DWEB will become the financial statements of the Company. Seahawk had no assets or operations at March 26, 1996. The Company is engaged in the development and marketing of integrated application software for information exchange and electronic commerce over the Internet. The Company has developed a family of products designed to ease the transition from traditional methods of transacting business to electronic commerce over the Worldwide Web. The Company s proprietary (patent pending) software, trademarked DynamicWeb Search Engine (TM), is designed to efficiently sift through large amounts of information stored in traditional off-line non-Internet files and to make such information suitable for delivery to the mass market consumer via the Internet. The Company s software allows individuals and organizations to execute a wide array of transactions across the Internet, such as buying and selling merchandise and services. In April 1996, the Company completed financing which provided the Company with $447,750 in exchange for 343,511 shares of the Company's common stock. The Company's operations to date have consisted primarily of developing its products. Revenues to date have been primarily from fees for providing Internet connections to their customers. Management s plan of operation for the next twelve months is to expand the marketing of the products which have currently been developed. During the next twelve months the Company will continue to improve its existing products and continue with the development and marketing of firewall products for providing security over the Internet. Also it intends to continue to develop products that produce seamless integration with EDI. These development activities will be financed through current working capital and future proceeds of private placements. The Company's current office facilities will not provide adequate space for future operations. The Company will need to purchase or lease larger office space. While the Company is currently exploring possibilities, no plans have been finalized. As the Company grows, it will need to purchase more computer equipment and Internet connectivity. The Company currently has nine full time employees and one part time employee. The nine full time employees are in the following areas of the Company: Executive - 2; marketing and sales - 2 1/2; research and technical - 3; and, administration - 1 1/2. Along with their executive duties, the 2 executives split their time among the various areas. Additional employees, primarily in research and technical and marketing and sales, will be added as the Company grows. 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 (a) Exhibits Exhibit 27 - Financial Data Schedule (b) Reports on Form 8-K The Company filed a Report on Form 8-K on June 13, 1996 dated March 26, 1996. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. DYNAMICWEB ENTERPRISES, INC. (formerly known as Seahawk Capital Corporation) BY: /S/STEVEN VANECHANOS, JR. ------------------------------ STEVEN VANECHANOS, JR. President, Principal Executive Officer and Principal Financial Officer