<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 June 30, 1997
[ ] Transition Report Pursuant to Section 13 of 15(d) of the
Securities Exchange Act of 1934
Commission file number 0-5667
Seal Holdings Corporation
(Exact name of registrant as specified in its charter)
Delaware 64-0769296
(State of Incorporation) (IRS Employer ID No.)
125 Worth Avenue, Suite 314, Palm Beach, Florida 33480
(Address of principal executive offices) (Zip Code)
(561) 833-5111
(issuer's telephone number)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the
preceding 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 ( )
Class A common stock, par value $.20 per share, 1,219,756 shares
outstanding as of August 5, 1997
Class B common stock, par value $.20 per share, 25,000 shares
outstanding as of August 5, 1997
Transitional Small Business Disclosure Format (Check one):
Yes ( ) No (X)
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INDEX
Page
PART I. FINANCIAL INFORMATION
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of
Operations 5
Condensed Consolidated Statements of Cash
Flows 6
Notes to Condensed Consolidated Financial Statements 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 2. Changes in Securities 9
Item 4. Results of Votes of Security Holders 9
Item 6. Exhibits and Reports on Form 11
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
SEAL HOLDINGS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
<TABLE>
<CAPTION>
June 30 December 31
1997 1996
(UNAUDITED) (AUDITED)
<S> <C> <C>
ASSETS
Current Assets:
Cash and Cash Equivalents (Note B) $ 2,204 $ 2,437
Other receivables 12 14
Prepaid Expenses 7 8
Net assets of discontinued operations
(Note C) 132 64
-------- --------
Total current assets 2,155 2,523
PROPERTY AND EQUIPMENT
Furniture and equipment 99 58
Less accumulated depreciation (56) (53)
-------- --------
Property and equipment, net 43 5
OTHER ASSETS
Assets held for resale (Note D) 154
Other assets 40 4
-------- --------
TOTAL ASSETS $ 2,238 $ 2,686
======== ========
</TABLE>
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SEAL HOLDINGS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
<TABLE>
<CAPTION>
June 30 December 31
1997 1996
(Unaudited) (Audited)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Trade accts. payable & accrued exp $ 116 $ 54
-------- --------
Total current liabilities 116 54
-------- --------
Total liabilities 116 54
SHAREHOLDERS' EQUITY
Class A common stock, $.20 par
value; 14,975,000 shares author-
ized and 1,216,124 shares
issued in 1997. $.10 par value;
3,700,000 shares authorized and
2,432,248 shares issued in 1996 243 243
Class B common stock, $.20 par
value; 25,000 shares author-
ized, issued and outstanding in
1997. $.10 par value; 50,000
shares authorized, issued and
outstanding in 1996 5 5
Additional paid-in capital 4,475 4,475
Accumulated deficit (2,508) (2,042)
Class A common stock held in
treasury at cost; 169,843 and
447,621 shares in 1997 and 1996,
respectively ( 93) (49)
-------- --------
Shareholders' equity 2,122 2,632
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,238 $ 2,686
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
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<PAGE>
SEAL HOLDINGS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands of dollars except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six Months ended
June 30 June 30
1997 1996 1997 1996
-------- -------- ------- -------
<S> <C> <C> <C> <C>
Income from continuing
operations $ ( 179) $ $ (466) $
Income (loss) from
discontinued operations
(less applicable income
tax) 101 367
------- ------- ------- -------
Net income (loss) $ ( 179) $ 101 $ (466) $ 367
NET INCOME (LOSS) PER SHARE
From continuing operations $ (.15) $ .00 $ (0.39) $
From discontinued operations .00 $ .05 $ 0.37
WEIGHTED AVERAGE
SHARES OUTSTANDING 1,184,756 984,867 1,184,756 985,867
</TABLE>
See notes to condensed consolidated financial statements.
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<PAGE>
SEAL HOLDINGS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands of dollars)
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30
1997 1996
------ ------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ (466) $ 367
Adjustments to reconcile net income
(loss) to net cash provided by operating activities:
Depreciation and amortization 3
Changes in operating assets
Accounts and notes receivable 3
Other assets (36)
Accounts payable - trade 62
Changes in net assets of discontinued
operations 86 (580)
-------- --------
Net cash provided (required) by
operating activities (348) (213)
INVESTING ACTIVITIES
Purchase of property and equipment (41) (3)
-------- --------
Net cash provided (required)
by investing activities (41) (3)
FINANCING ACTIVITIES
Decrease in long-term debt of discontinued
operations (198)
Purchase of treasury stock (44)
-------- --------
Net cash required by financing activities (44) (198)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (433) (414)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 2,437 1,055
-------- --------
CASH AND CASH EQUIVALENTS AT
JUNE 30, 1997 AND 1996 $ 2,004 $ 641
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
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<PAGE>
SEAL HOLDINGS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-B. Accordingly, they do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of normal
recurring accruals and the presentation of prior year's results as
discontinued operations - See Note C) considered necessary for a fair
presentation have been included. All data in the financial statements
is in thousands of dollars except share quantities and per-share amounts.
These financial statements, footnotes and discussions should be read in
conjunction with audited financial statements and related footnotes in the
Seal Fleet, Inc. annual report on Form 10-K for the year ended December 31,
1996 filed with the Securities and Exchange Commission. Operating results
for the three month period and the six month period ended June 30, 1997
are not necessarily indicative of the results that may be expected for the
year ending December 31, 1997.
On June 30, 1997, Seal Fleet, Inc. merged into its wholly owned subsidiary,
Seal Holdings Corporation with Seal Holdings Corporation remaining as the
survivor corporation. On that same date, the companies effected a reverse and
forward split of the Company's stock, more fully described in the proxy
statement dated April 11, 1997, and discussed in Part II, Item 2, below.
NOTE B - CASH AND CASH EQUIVALENTS
The Company's Cash and Cash Equivalents at June 30, 1997 consisted
of money market and demand deposits of $82, Certificates of Deposit
of $389, US Government agency bonds of $784, and Commercial Paper
of $749. All maturities are of less than 90 days.
NOTE C - SALE OF DISCONTINUED OPERATIONS
On August 14, 1996, the Company sold all marine assets and ceased all
activities which were related to ownership, management, brokerage, and
operation of offshore supply ships. All related activities for the
three months ended June 30, 1996 and the six months ended June 30, 1996
have been presented in the accompanying financial statements as discontinued
operations.
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NOTE D - ASSETS HELD FOR RESALE
At December 31, 1996, the Company owned a tract of unimproved land in
Brazoria County, Texas which was recorded at its estimated fair market
value of $154,000. This land was sold to the United States Department
of the Interior's Fish and Wildlife Service for the stated fair market
value. Payment was received during April, 1997.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Company continues its transition from the offshore marine business
to a new line of business within the healthcare industry more fully
described in the Current Report on Form 8-K dated June 10, 1997.
RESULTS OF THE QUARTER ENDED JUNE 30, 1997
The ongoing activities of the Company during the quarter were related
to the evaluation of investment alternatives within the healthcare
industry, the positioning of the Company for future growth through
establishing Seal Holdings Corporation, and preparation for the
reverse and forward splits of the Company's common stock; all reflected in
the proxy statement dated April 11, 1997 and, with respect to the
Company's entry into the healthcare industry, on Form 8-K dated June 10,
1997.
The major elements of expense, offset by interest income from short-term
investments, reflected in the net loss, year-to-date of $466 include:
Salaries and Benefits $ 92
Contract Labor 4
Legal and Audit 172
Business Travel & Entertainment 47
Shareholder Relations 132
Office Rent and Supplies 9
Other 62
-----
Sub-Total $ 518
Interest and Dividend Income 55
Other Non-operating items ( 3)
-----
Net Income (Loss) $(466)
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During the three month period ended June 30, 1997, the Company continued to
wind down the discontinued operations. There was no impact on earnings from
discontinued operations in that an allowance was set up at December 31, 1996
to cover the estimated future impact of discontinued operations.
PART II. Other Information
Item 1. Legal Proceedings
The Company is not a party to any material pending legal proceeding,
other than ordinary routine litigation incidental to the discontinued
business.
Item 2. Changes in Securities
On June 30, 1997, the Company effected a one-for-fifty-shares reverse split
of the Company's common stock, immediately followed by a twenty-five-shares-
for-one share forward split of the Company's common stock. On that same
date, Seal Fleet, Inc. merged into its wholly owned subsidiary, Seal Holdings
Corporation with Seal Holdings Corporation remaining as the survivor
corporation.
The reverse stock split resulted in all shares being purchased from
shareholders holding fewer than 50 shares and, excess shares over even
multiples of fifty shares from shareholders holding more than fifty shares.
Of the 2,502,405 outstanding shares in Seal Fleet, Inc. prior to the
reverse split, an estimated 62,894 shares were purchased. This share
repurchase resulted in an insignificant change in the relative percentage
of total shares held by individual shareholders.
Following the forward split, new share certificates are being issued by
Seal Holdings Corporation.
Item 4. Results of Votes of Security Holders
On May 14, 1997, the Company held its annual meeting pursuant to the
notice of meeting announced in the proxy statement dated April 11, 1997.
The results of the voting on the various proposals is as follows:
Proposal 1: Reduce the number of authorized Directors to between
three and twenty-one.
For Against Abstain Non-Vote
----- ------- ------- --------
1,898,513 31,726 4,877 0
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Proposal 2: The election of directors of the Corporation.
For Withheld Non-Vote
----- -------- --------
Class A Director:
J.Erik Hvide 1,759,867 27,396 97,853
Class B Directors:
Thomas M. Ferguson 50,000 0 0
Donald L. Caldera 50,000 0 0
Proposal 3: Ratification of Ernst & Young, LLP as independent
auditors.
For Against Abstain Non-Vote
--------- ------- ------- --------
1,829,502 4,837 2,924 97,853
Proposal 4: Ratification of a reverse and forward stock split.
For Against Abstain
--------- ------- -------
1,886,674 34,397 14,045
Proposal 5: Reincorporation from Nevada to Delaware and change of
company name to Seal Holdings Corporation
For Against Abstain Non-Vote
--------- ------- ------- --------
Class A: 1,602,758 28,979 17,260 236,119
Class B: 50,000 0 0 0
Proposal 6: To remove the restriction requiring the Board of
Directors to seek stockholder approval of an initial acquisition.
For* Against Abstain Non-Vote
-------- ------- ------- --------
759,609 51,822 6,753 235,499
* Does not include the 881,433 affiliated votes.
Proposal 7: Approval of the 1997 Incentive Option Plan.
For Against Abstain Non-Vote
--------- ------- ------- --------
1,596,978 84,661 17,978 235,499
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<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
2. Merger Agreement between Seal Fleet, Inc. and Seal Holdings
Corporation, attached to the proxy statement for
the annual meeting of stockholders held May 14, 1997, is
hereby incorporated herein by reference.
3.1 Articles of Incorporation of Seal Holdings Corporation,
attached to the proxy statement for the annual meeting of
stockholders of Seal Fleet, Inc. held May 14, 1997, is
hereby incorporated herein by reference.
3.2 Bylaws of Seal Holdings Corporation, attached to the
proxy statement for the annual meeting of stockholders
of Seal Fleet, Inc. held May 14, 1997, is hereby
incorporated herein by reference.
10.1 1997 Incentive Option Plan, attached to the proxy
statement for the annual meeting of stockholders of
Seal Fleet, Inc. held May 14, 1997, is hereby incorporated
herein by reference.
27 Financial Data Statement
(b) Reports on Form 8-K.
The Company filed three reports on Form 8-K during the quarter
ended June 30, 1997. On April 30, 1997, the Company filed a
report on Form 8-K to report a change in the Company's independent
auditors. On May 20, 1997, the Company filed a report on Form
8-K to announce the approval at the annual meeting of stockholders
held on May 14, 1997, of all of the proposals set forth in the
proxy statement for such annual meeting.
On June 10, 1997, the Company filed a report on Form 8-K to announce
the formation of a healthcare subsidiary, Primary Care Medical
Centers of America, Inc., to develop multi-disciplinary primary care
networks, and to assume certain business operations and executive
management of Medi-Consultants, Inc., of West Palm Beach, Florida.
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<PAGE>
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 thereunto duly authorized.
SEAL HOLDINGS CORPORATION (Registrant)
Date: August 13,1997 By /s/ James S. Goodner
- - - - - - - - - - - - - -
James S. Goodner
Vice President and
Chief Financial Officer
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<PAGE>
EXHIBIT INDEX
Exhibit Description
- -------- -----------
2. Merger Agreement between Seal Fleet, Inc. and Seal Holdings
Corporation, attached to the proxy statement for
the annual meeting of stockholders held May 14, 1997, is
hereby incorporated herein by reference.
3.1 Articles of Incorporation of Seal Holdings Corporation,
attached to the proxy statement for the annual meeting of
stockholders of Seal Fleet, Inc. held May 14, 1997, is
hereby incorporated herein by reference.
3.2 Bylaws of Seal Holdings Corporation, attached to the
proxy statement for the annual meeting of stockholders
of Seal Fleet, Inc. held May 14, 1997, is hereby
incorporated herein by reference.
10.1 1997 Incentive Option Plan, attached to the proxy statement
for the annual meeting of stockholders of Seal Fleet, Inc.
held May 14, 1997, is hereby incorporated herein by
reference.
27 Financial Data Statement
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,004
<SECURITIES> 0
<RECEIVABLES> 12
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,155
<PP&E> 99
<DEPRECIATION> (56)
<TOTAL-ASSETS> 2,238
<CURRENT-LIABILITIES> 22
<BONDS> 0
<COMMON> 2,122
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,238
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (466)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (466)
<EPS-PRIMARY> (.39)
<EPS-DILUTED> (.39)
</TABLE>
