<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported): March 26, 1996
DYNAMICWEB ENTERPRISES, INC.
(Exact Name of Registrant as specified in its charter)
New Jersey 0-10039 22-2267658
(State or other (Commission (I.R.S. Employer)
jurisdiction of incorporation) File Number) Identification No.)
1033 Route 46 East, Suite A-102
Clifton, New Jersey 07013
(Address of Principal Executive Offices)
Registrant'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 of Principal Executive Offices)
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FORM 8-K
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
See Item 2 of this Report relating to the Registrant's acquisition
of DynamicWeb Transactions Systems, Inc. and related changes in
control.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On March 26, 1996, the Registrant acquired 100% of the common stock
of DynamicWeb Transaction Systems, Inc. in exchange for 7,168,631
(later amended to 5,723,621), post-split shares of the Registrant.
The acquisition was approved by the Shareholders at a shareholder's
meeting held on March 26, 1996.
As a pre-requisite to the acquisition, the Registrant effected a 1-
for-100 reverse stock split on March 5, 1996. As a consequence of
such reverse split the Registrant's symbol was temporarily changed
to "SEAKD", and the post-split stock was assigned the CUSIP Number
812014-20-7. However, on May 14, 1996, the Company amended its
Certificate of Incorporation changing the Registrant's name to
DynamicWeb Enterprises, Inc. (the "Company") and increasing the
authorized number of shares to 50,000,000, $.0001 par value. As a
result of the name change, the Registrant's symbol was changed and
is currently "DWEB" and the CUSIP Number is 268060-10-0.
A condition of the acquisition was that the management of the
Registrant resign in favor of the new management of DynamicWeb
Transaction Systems, Inc. The new management of the Registrant
took control on March 26, 1996.
The Company is engaged in the development of integrated application
software for information exchange and electronic commerce over the
Internet. The Company developed a family of products designed to
ease the transition from traditional methods of transacting
business to electronic commerce over the Worldwide Web. There is
a patent pending on this software, trademarked DynamicWeb Search
Engine, 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<PAGE>
<PAGE> 3
transactions across the Internet, such as buying and selling
merchandise and services.
The Registrant has minimal assets at this time, but is actively
marketing its software and believes it is positioned to make an
impact on the Internet electronic commerce market. To date, the
Company's operations 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 its products. The Company will also continue to
improve its existing products and continue with the development of
firewall products for providing security over the Internet. It
also intends to develop products that produce seamless intergration
with EDI. These development activities will be financed through
current working capital and from 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 employs 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 two 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.
The above summary information does not purport to be complete, and
is qualified in its entirety by reference to the Stock Purchase
Agreement filed as Exhibit 1 to this Form 8-K.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS
On March 26, 1996, Jonathan Lassers and Annemarie L. Arias resigned
in favor of Steven L. Vanechanos, Jr. and Steven L. Vanechanos, Sr.
as Directors of the Registrant in accordance with the Acquisition
Agreement.<PAGE>
<PAGE> 4
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of business acquired:
(1) Audited financial statements of DynamicWeb Transaction
Systems, Inc. for the year ended September 30, 1995.
(2) Financial Statements of DynamicWeb Enterprises, Inc. as
of March 31, 1996 and the three and six month periods then ended
are incorporated by reference to Form 10-QSB filed concurrently
herewith.
(b) Pro forma financial information
As discussed in Items 1 and 2 of this Report, Seahawk Capital
Corporation ("Seahawk") acquired all of the outstanding shares of
DynamicWeb Transaction Systems, Inc. ("DWEB"). For accounting
purposes, the acquisition has been treated as a recapitalization of
DWEB with DWEB as the acquirer (reverse acquisition). The ongoing
business of Seahawk will be that of DWEB. As a result, the
historical financial statements of DWEB will become the financial
statements of Seahawk. Further, Seahawk had no assets or
liabilities or operations at March 26, 1996, the date of the
transaction. Therefore, no proforma information is provided.
(c) Exhibits
Exhibit 10.14 - Stock Purchase Agreement dated March 5, 1996
between the Registrant and the Shareholders of DynamicWeb
Transaction Systems, Inc. (incorporated by reference to Exhibit
10.14 filed with Registrant's Form 10-KSB for the year ended
December 31, 1995.)
Exhibit 10.14(A) - Amendment to Exhibit 10.14 dated May 14,
1996 (incorporated by reference to Exhibit 10.14 filed with
Registrant's Form 10-KSB for the year ended December 31, 1995.)
Exhibit 10.14(B) - Amendment to Exhibit 10.14 dated June 13,
1996 (incorporated by reference to Exhibit 10.14 filed with
Registrant's Form 10-QSB for the period ended March 31, 1996.)
Exhibit 27 - Financial Data Schedule
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ITEM 8. CHANGE IN FISCAL YEAR
The Company has changed its fiscal year end from December 31 to
September 30, the fiscal year end of DWEB. As discussed in Items
2 and 7 of this Report, the ongoing business of the Company is that
of DWEB. As a result, the historical financial statements of DWEB
will become the financial statements of the Company. Form 10-QSB
for the period ended March 31, 1996 contained the financial
statements of the Company for the period from October 1, 1995 to
March 31, 1996.
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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
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders DynamicWeb Transaction Systems, Inc.
We have audited the accompanying balance sheet of DynamicWeb Transaction Systems
Inc. (a development stage company) as of September 30, 1995 and the related
statements of operations, stockholders' deficiency and cash flows for the period
February 1, 1995 (date of inception) to September 30, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of DynamicWeb Transaction Systems,
Inc. as of September 30, 1995 and the results of its operations and its cash
flows for the period February 1, 1995 (date of inception) to September 30, 1995
in conformity with generally accepted accounting principles.
/s/Allen G. Roth
Allen G. Roth, P.A.
New York, New York
March 26, 1996
<PAGE>
DYNAMICWEB TRANSACTION SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
SEPTEMBER 30, 1995
<TABLE>
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash $ 84
Accounts receivable, less allowance for doubtful accounts of $400 1,370
-----
TOTAL CURRENT ASSETS 1,454
PROPERTY AND EQUIPMENT, less accumulated depreciation of $657 10,609
OTHER ASSETS 245
-------
$12,308
=======
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES: Due to affiliate (Notes 3, 4, and 5) $28,903
STOCKHOLDERS' DEFICIENCY:
Common stock, $. 001 par value. Authorized 15,000,000 shares;
issued and outstanding 2,387,770 shares $ 2,388
Additional paid-in capital 10,977
Deficit accumulated during the development stage (29,960)
--------
TOTAL STOCKHOLDERS' DEFICIENCY (16,595)
--------
$12,308
=======
</TABLE>
See notes to financial statements.
<PAGE>
DYNAMICWEB TRANSACTION SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FEBRUARY 1, 1995 (INCEPTION) TO SEPTEMBER 30,1995
<TABLE>
<S> <C> <C>
SALES $ 5,770
COST AND EXPENSES:
Cost of sales $ 5,066
Selling, general and administrative expenses 27,967
Research and development 11,040
Depreciation 657
------
TOTAL COSTS AND EXPENSES 44,730
------
NET LOSS BEFORE INCOME TAX BENEFIT (38,960)
INCOME TAX BENEFIT (Note 4) 9,000
-------
NET LOSS ($29,960)
=========
</TABLE>
See notes to financial statements.
<PAGE>
DYNAMICWEB TRANSACTION SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' DEFICIENCY
FEBRUARY 1, 1995 (INCEPTION) TO SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
DEFICIT
ADDITIONAL ACCUMULATED
COMMON STOCK PAID-IN DURING THE
SHARES AMOUNT CAPITAL DEVELOPMENT
STAGE
-------- -------- --------- -----------------
<S> <C> <C> <C> <C>
BALANCE, FEBRUARY 1, 1995 0 $ 0 $ 0 $ 0
ISSUANCE OF COMMON
STOCK 2,387,770 2,388 10,977
NET LOSS (29,960)
------------------------------------------------
BALANCE -
SEPTEMBER 30, 1995 2,387,770 $2,388 $10,977 ($29,960)
===========================================
=====
</TABLE>
See notes to financial statements
<PAGE>
DYNAMICWEB TRANSACTION SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FEBRUARY 1, 1995 (INCEPTION) TO SEPTEMBER 30, 1995
<TABLE>
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss ($29,960)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation 657
Provision for bad debts 400
Changes in assets and liabilities:
Accounts receivable (1,770)
Other assets (245)
---------
Net cash used in operating activities (30,918)
=========
INVESTING ACTIVITIES:
Purchases of equipment (11,266)
FINANCING ACTIVITIES:
Loans from affiliate $28,903
Issuance of common stock 13,365
-------
Net cash provided by financing activities 42,268
-------
NET INCREASE IN CASH 84
Balance, February 1, 1995 0
-------
Balance, September 30, 1995 $ 84
=======
SUPPLEMENTAL DISCLOSURES:
Cash paid during the year for:
Interest $0
Income taxes $0
</TABLE>
See notes to financial statements.
<PAGE>
DYNAMICWEB TRANSACTION SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,1995
1. Basis of Presentation
On February 1, 1995 Megascore, Inc. ("Megascore") 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. In February 7, 1996 that business and the related net assets
were acquired by DynamicWeb Transaction Systems, Inc. ("The Company") in
exchange for 2,387,770 common shares which were concurrently distributed
pro-rata to Megascore shareholders. Accordingly, the Company and Megascore
became separate entities under common control. The financial statements give
retroactive effect to this transaction.
At September 30, 1995 the Company was in the development stage.
2. Significant Accounting Policies
Property and Equipment
Property and equipment are stated at cost. Maintenance and repairs are expensed
as incurred. Depreciation is provided using the straight-line method over five
years, the estimated useful life of such assets.
Revenues
The Company provides access to the Internet and related technology support
services to its customers. Revenues from these services are recognized as the
services are provided.
Research and Development Costs
Research and development costs are charged to expense as incurred.
3. Due to Affiliate
The amount due to affiliate results primarily from advances made by Megascore on
behalf of the Company to finance the Company's operations for the year ended
September 30, 1995.
4. Income Taxes
Federal and state income tax benefits resulting from the Company's pre-tax loss
for the year ended September 30, 1995 were computed as if the Company bad filed
separate tax returns from that of its affiliated entity, Megascore. Such
benefits were computed using a combined effective tax rate of 22.65 percent.
The resultant tax benefit of $9,000 was offset against the amount due to
affiliate at September 30,1995.
5. Related Party Transactions
The Company shared space and facilities with Megascore, rent free, during the
year ended September 30, 1995. Under this arrangement a portion of the
occupancy costs, salaries and administrative expenses paid by Megascore were
allocated to the Company in lieu of rent. Such costs amounted to $11,239 for
the above period.
6. Acquisition
On March 26, 1996 the Company was acquired by Seahawk Capital Corporation, a
publicly held corporation. The Company received 93 percent of Seahawk's
outstanding common shares (5,723,631 shares) in exchange for all of the
Company's outstanding common shares. For accounting purposes the transaction is
treated as a recapitalization of
<PAGE>
DYNAMICWEB TRANSACTION SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,1995
(Cont.)
the Company, with the Company deemed to be the acquirer. Accordingly, the
historical financial statements prior to March 26, 1996 will be those of the
Company after financial statements are issued for a period which includes the
date of the acquisition.
Pro forma information is not presented as the transaction was not a business
combination. Seahawk had no assets at March 26, 1996 and generated no revenues
for both the year ended December 31, 1995 and for the period January 1, 1996 to
March 26, 1996 while incurring expenses of $283,000 and $39,000 during these
respective periods.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000317788
<NAME> DynamicWeb Enterprises, Inc.
<MULTIPLIER> 1
<S> <C>
<FISCAL-YEAR-END> Sep-30-1995
<PERIOD-START> Feb-01-1995
<PERIOD-END> Sep-30-1995
<PERIOD-TYPE> 8-MOS
<CASH> 84
<SECURITIES> 0
<RECEIVABLES> 1,770
<ALLOWANCES> (400)
<INVENTORY> 0
<CURRENT-ASSETS> 1,454
<PP&E> 11,266
<DEPRECIATION> (657)
<TOTAL-ASSETS> 12,308
<CURRENT-LIABILITIES> 28,903
<BONDS> 0
0
0
<COMMON> 2,388
<OTHER-SE> (18,983)
<TOTAL-LIABILITY-AND-EQUITY> 12,308
<SALES> 5,770
<TOTAL-REVENUES> 5,770
<CGS> 5,066
<TOTAL-COSTS> 44,730
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (38,960)
<INCOME-TAX> 9,000
<INCOME-CONTINUING> (29,960)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (29,960)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
