<PAGE>
<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[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: September 30, 1994
Commission File No. 0-10039
SEAHAWK CAPITAL CORPORATION
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(Exact name of registrant as specified in its charter)
New Jersey 22-2267656
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(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
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609)428-3845
(Not applicable)
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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 November 30,
1995: 28,137,082 shares.
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SEAHAWK CAPITAL CORPORATION
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
<S> <C> <C>
Page
Number
Part I. FINANCIAL INFORMATION........................... 3
Item 1. Financial Statements:
Consolidated Balance Sheets at September
30, 1994 and December 31, 1993................ 3
Consolidated Statements of Operations for the
Three Months and Nine Months Periods ended
September 30, 1994 and September 30, 1993..... 5
Consolidated Statement of Changes in
Stockholders' Equity for the
Nine Months ended September 30, 1994.......... 6
Consolidated Statements of Cash Flows
for the Nine Month Periods ended
September 30, 1994 and 1993.................... 7
Notes to Consolidated Financial Statements
at September 30, 1994......................... 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations... 11
Part II. Other Information............................... 13
Signatures ................................................ 14
</TABLE>
<PAGE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
SEAHAWK CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
(unaudited)
------------ ------------
<S> <C> <C>
ASSETS:
Current Assets:
Cash and cash equivalents.......... $ 232,360 $ 466,607
Note and accounts receivable,
net of allowances for
doubtful accounts of $-0-........ 60,319 392,662
Inventory, at cost................. -- 110,313
---------- ----------
Total current assets............. 292,679 969,582
---------- ----------
Property and equipment, at cost:
Plant and equipment................ -- 287,243
Oil and gas properties,
accounted for under the
"successful efforts" method...... 9,421 9,421
Office furniture and equipment..... -- 6,486
---------- ----------
9,421 303,150
Less accumulated depreciation...... -- 16,272
---------- ----------
Net property and equipment....... 9,421 286,878
---------- ----------
Other assets......................... 55,795 91,709
---------- ----------
Total Assets......................... $ 357,895 $1,348,169
========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<PAGE> 4
SEAHAWK CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS -- continued
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
(unaudited)
------------ ------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities...................... $ 21,340 $ 551,199
Joint venture advances............. -- 155,272
Reserve for loss................... 159,264 --
---------- ----------
Total current liabilities........ 180,604 706,471
---------- ----------
Commitments and contingencies
Minority interest.................... -- 28,157
---------- ----------
Stockholders' equity:
Common stock, no par value,
50,000,000 shares authorized;
13,137,082 shares issued and
outstanding...................... 12,726,450 12,726,450
Translation adjustment............. (56) --
Deficit............................ (12,549,103) (12,112,909)
---------- ----------
Total stockholders' equity..... 177,291 613,541
---------- ----------
Total Liabilities and
Stockholders' Equity............... $ 357,895 $1,348,169
========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<PAGE> 5
SEAHAWK CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ending Nine Months Ending
September 30, September 30,
-------------------- --------------------
1994 1993 1994 1993
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Sales to customers. -- $ 344,836 $ 351,644 $ 622,909
Commission and fees $ 41,685 33,424 127,685 58,693
Interest and other. 9,956 8,489 14,255 23,263
--------- --------- --------- ---------
51,641 386,749 493,584 704,865
--------- --------- --------- ---------
Costs and expenses:
Cost of sales...... -- 431,389 260,242 579,210
General and
administrative... 87,474 104,146 354,538 519,640
Loss on investments -- -- 309,808 --
Depreciation....... -- 574 2,728 2,484
Other.............. -- -- 2,462 --
--------- ------- --------- ---------
87,474 536,109 929,778 1,101,332
--------- --------- --------- ---------
Net loss............. $ (35,833) $(149,360) $(436,194) $(396,467)
========= ========= ========= =========
Net loss per
common and common
equivalent share... $ (0.00) $(0.01) $(0.03) $(0.03)
========= ========= ========= =========
</TABLE>
See accompanying notes to financial statements
<PAGE>
<PAGE> 6
SEAHAWK CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Nine Months Ended September 30, 1994
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Cumulative
---------------------- Translation
Shares Amount (Deficit) Adjustment Total
---------- ----------- ------------ --------- --------
<S> <C> <C> <C> <C> <C>
Balance,
December 31, 1993.. 13,137,082 $12,726,450 $(12,112,909) $613,541
Cumulative
translation
adjustment......... $(56) (56)
Net loss for the
nine months ended
September 30, 1994. (436,194) (436,194)
---------- ----------- ------------ --------- --------
Balance,
September 30, 1994. 13,137,082 $12,726,450 $(12,549,103) $(56) $177,291
========== =========== ============ ========= =========
</TABLE>
See accompanying notes to financial statements
<PAGE>
<PAGE> 7
SEAHAWK CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Month Periods Ended September 30, 1994 and 1993
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
---------------------------
1994 1993
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss........................... $(436,194) $(396,467)
Adjustments to reconcile
net loss to net cash
used in operating activities:
Loss on investments............ 299,859 --
Depreciation................... 2,691 2,482
Changes in assets
and liabilities.............. (112,105) 15,946
--------- ---------
Net cash used by
operating activities............. (245,749) (378,039)
--------- ---------
INVESTING ACTIVITIES
Capital expenditures............... -- (51,777)
Other.............................. -- (20,548)
--------- ---------
Net cash used in
investing activities............. -- (72,325)
--------- ---------
FINANCING ACTIVITIES
Minority investment in subsidiary.. 5,000 --
--------- ---------
EFFECT OF EXCHANGE RATE
CHANGES ON CASH.................. 6,502 --
--------- ---------
NET DECREASE IN CASH
AND CASH EQUIVALENTS............. (234,247) (450,364)
CASH AND CASH EQUIVALENTS:
At beginning of period............. 466,607 1,041,016
--------- ---------
At end of period................... $232,360 $ 590,652
========= =========
</TABLE>
See accompanying notes to financial statements
<PAGE>
<PAGE> 8
SEAHAWK CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(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 the
Company at September 30, 1994 and 1993 and for the three and nine
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 for the
interim periods covered by such statements in accordance with
generally accepted accounting principles. These financial
statements do not include all the disclosures associated with the
Company's annual financial statements and accordingly should be
read in conjunction with such statements. Certain information
and footnote disclosures normally included in consolidated
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to rules of the Securities and Exchange Commission.
Reference is made to Note 1 of the notes to consolidated
financial statements contained in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1993 for a
summary of significant accounting policies utilized by the
Company. It is suggested that the consolidated financial
statements at September 30, 1994 and 1993 be read in conjunction
with the audited consolidated financial statements and notes
thereto included in the Company's latest Annual Report on Form
10-K. The information for the nine months periods ended
September 30, 1994 and 1993 are not necessarily indicative of the
operating results for the entire year.
Since February 1992, the Company operated as a Business
Development Company ( BDC ) under the Investment Company Act of
1940 (the Act ). In July 1994, the Company notified the
Securities and Exchange Commission that it withdrew its election
to be subject to the Act. The Company has changed the nature of
its business to cease to be a BDC. Such change was authorized by
the vote of a majority of its outstanding voting securities at
the Company s annual meeting of stockholders held on July 15,
1994.
Loss per share calculations are based upon 13,137,082 shares
in all periods presented, based upon the weighted average number
of common and common equivalent shares outstanding during the
periods.
<PAGE> 9
2. INVESTMENTS IN SUBSIDIARY COMPANIES
Due to continued losses from Scotcoast, Limited
("Scotcoast") operations, the Company and SRC Food 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. The
loss on investments for 1994 in the accompanying statement of
consolidated operations includes the following:
<TABLE>
<CAPTION>
Loss on
Investments
---------
<S> <C>
Net assets of Scotcoast................... $ 113,973
Loan made in 1994 to Scotcoast............ 8,927
SRCF guarantee of Scotcoast loans......... 149,040
---------
$ 271,940
=========
</TABLE>
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. The loss on
investments for 1994 in the accompanying statement of
consolidated operations includes $37,868 applicable to the loss
on Extruco and the write-off of PEICO.
Foreign operations included in the accompanying consolidated
financial statements are as follows:
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------- --------
1994 1993
-------- --------
<S> <C> <C>
Revenues................... $454,960 $441,363
Expenses................... 759,395 597,155
Loss from continuing
operations............... (304,435) (155,792)
Total assets............... 248,142 257,677
</TABLE>
<PAGE> 10
3. SUBSEQUENT EVENTS
Effective December 31, 1994, the Company transferred its
approximately 73% interest in Seahawk Overseas Exploration
Corporation ("Overseas") to John C. Fitton (then a Director of
the Company) in exchange for 855,780 shares of the Company's
common stock.
At December 31, 1994, the Company's equity in the net assets
of Overseas was approximately $25,000. This amount approximated
the market value of the shares at that date (based on $0.03 per
share, the mean between the bid and ask prices of $0.02 and
$0.04).
Summarized results of Overseas included in the accompanying
statement of operations for the nine months ended September 30,
1994 are as follows:
<TABLE>
<CAPTION>
Nine Months Ended September 30,
----------------------
1994 1993
-------- --------
<S> <C> <C>
Revenues, principally
commissions and fees........ $ 34,190 $ 62,883
Expenses, principally
general and administrative.. 63,929 84,134
-------- --------
Loss.......................... $(29,739) $(21,251)
======== ========
</TABLE>
The net assets relating to the discontinued operations
included in the accompanying balance sheet at September 30, 1994:
<TABLE>
<CAPTION>
Discontinued
Operations
------------
<S> <C>
Cash....................... $ 3,974
Accounts receivable........ 27,993
Property-net............... 9,421
Accounts payable........... (787)
---------
Net assets................ $ 80,601
=========
</TABLE>
<PAGE> 11
At the Company's 1994 annual meeting, the Company's
stockholders authorized an amendment to the Company's certificate
of incorporation increasing the number of its authorized shares
of common stock from 50 million to 100 million shares.
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
resigned as directors and officers.
ITEM 2. 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
new management's understanding of the financial condition and the
results of operations for the periods presented.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1994, the Company has a stockholders'
equity of $210,509. 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 this second quarter,
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 Notes 2 and 3 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.
<PAGE>
<PAGE> 12
Because of the above mentioned net losses, the Company's
cash flows from operating activities have been negative. Until
such time as 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: NINE MONTHS ENDED SEPTEMBER 30, 1994
COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 1993
The Company generated consolidated revenues of $493,584 in
the nine months ended September 30, 1994 (the "1994 Period")
compared to revenues of $704,865 during the nine months ended
September 30, 1993 (the "1993 Period"). This decrease of
$211,281 was due primarily to the revenues generated by Scotcoast
included for only the first quarter of 1994 compared to their
revenue in the second and third quarter of 1993. Scotcoast was
not an operating subsidiary for the first quarter of 1993.
Commission and fees increased $68,992 in the 1994 Period over the
1993 Period mainly due to the services provided by SRCF during
the 1994 Period. SRCF was not acquired until December 1993.
Interest and other income decreased primarily as a result of
lower interest paid by financial institutions and the reduced
level of investable funds.
Total expenses for the 1994 Period of $929,778 were $171,554
less than the 1993 Period. This decrease was primarily due the
decline in cost of sales of $318,968 and the decline in general
and administrative expenses of $165,102 relating to the above
discussed decrease in sales revenue of Scotcoast. These declines
were offset by the $309,808 charge in the second quarter of 1994
relating to the loss on Scotcoast and PEICO Limited and the
write-down of Extruco, Limited to amount realized in 1995 from
its disposal. Cost of sales increased $112,421 due to the
increase in sales revenues of Scotcoast.
<PAGE>
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The 1994 annual meeting of the Company s stockholders was
held on June 29, 1994 and adjourned to July 15, 1994 in order to
obtain sufficient proxies for a quorum. The matters voted on at
the annual meeting held on July 15, 1994 included (i) the
election of 5 directors; (ii) a proposal to ratify the
appointment of R. Andrew Gately & Co. as independent auditors of
the Company for the fiscal year ending December 31, 1994; (iii)
a proposal that the Company withdraw its election to be
classified as a Business Development Company as defined in
sections 55 through 65 of the Investment Company Act of 1940 and
terminate its status as an investment company; and, (iv) a
proposal to amend the Company s certificate of incorporation to
increase the number of its authorized shares of Common Stock from
50 million to 100 million shares. All of these proposals are
described in greater detail in the Company s proxy statement
dated May 25, 1994 (definitive copies of which were filed with
the Securities and Exchange Commission). The results of voting
on matters presented to the meeting were as follows:
(i) Incumbent directors Robert S. Friedenberg, John C.
Fitton, Barry F. Chaitin, John T. Mahoney and Dale D.
Simbro were reelected directors of the Company for a
term of one year and until the next annual meeting of
stockholders, with each nominee receiving 9,358,306
votes in favor of their election.
(ii) The proposal to ratify the appointment of R. Andrew
Gately & Co. as independent auditors of the Company for
the fiscal year ending December 31, 1994 was approved by
a vote of 9,344,742 votes in favor and 24,960 votes
against.
(iii) The proposal that the Company withdraw its election to
be classified as a Business Development Company as
defined in sections 55 through 65 of the Investment
Company Act of 1940 and terminate its status as an
investment company was approved by a vote of 7,250,658
votes in favor and 54,401 votes against.
(iv) The proposal that the Company s certificate of
incorporation be amended to increase the number of its
authorized shares of Common Stock from 50 million to 100
million shares was approved by a vote of 8,998,828 votes
in favor and 227,379 votes against.
<PAGE>
<PAGE> 14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
<TABLE>
<CAPTION>
Exhibit
No. Description
- -------- ---------------------
<S> <C>
27 Article 5 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K. No reports on Form 8-K were filed
during the quarter ended September 30, 1994.
SIGNATURES
Pursuant to the requirements of Section 13 of 15(d) 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.
Dated: December 15, 1995
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
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary information
extracted from the Consolidated Statements of
Operations and Consolidated Balance Sheets of
Seahawk Capital Corporation and is qualified in
its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000317788
<NAME> SEAHAWK CAPITAL CORPORATION
<MULTIPLIER> 1
<S> <C>
<FISCAL-YEAR-END> Dec-31-1994
<PERIOD-START> Jan-01-1994
<PERIOD-END> Sep-30-1994
<PERIOD-TYPE> 9-MOS
<CASH> 232,360
<SECURITIES> 0
<RECEIVABLES> 60,319
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 292,679
<PP&E> 9,421
<DEPRECIATION> 0
<TOTAL-ASSETS> 357,895
<CURRENT-LIABILITIES> 351,241
<BONDS> 0
0
0
<COMMON> 12,726,450
<OTHER-SE> (12,549,159)
<TOTAL-LIABILITY-AND-EQUITY> 357,895
<SALES> 351,644
<TOTAL-REVENUES> 493,584
<CGS> 260,242
<TOTAL-COSTS> 617,508
<OTHER-EXPENSES> 2,462
<LOSS-PROVISION> 309,808
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (436,194)
<INCOME-TAX> 0
<INCOME-CONTINUING> (436,194)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (436,194)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
