<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] Annual Report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1994.
[ ] Transition Report pursuant to section 13 or 15(d) of the Securities
Act of 1934.
Commission File No. 0-10039
SEAHAWK CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
New Jersey 22-2267658
(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
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g)of the Act:
Common Stock, no par value
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 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 [ ] NO [X]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of 10,932,811 shares of Registrant s Common
Stock held by non-affiliates of the Registrant is $109,933 as of December
18, 1995, based upon the quoted closing sale price of $0.01 per share for
the Common Stock in the over-the-counter market on such date.
Number of shares of Common Stock outstanding as of December 31, 1995:
27,281,302 shares.
Documents Incorporated By Reference: None<PAGE>
<PAGE> 2
SEAHAWK CAPITAL CORPORATION
ANNUAL REPORT ON FORM 10-K
Table of Contents
<TABLE>
<CAPTION>
Item No. Page
- -------- ----
<S> <C> <C>
PART I:
1. Business ............................................... 3
2. Properties ............................................. 7
3. Legal Proceedings ...................................... 7
4. Submission of Matters to Vote of Security Holders ...... 7
PART II
5. Market for the Registrant's Common Stock and
Related Stockholder Matters ...................... 7
6. Selected Financial Data ................................ 9
7. Management's Discussion and analysis of Financial
Condition and Results of Operations .............. 10
8. Financial Statements and Supplementary Data ............ 13
9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure ........... 26
PART III
10. Directors and Executive Officers of the Registrant ..... 26
11. Executive Compensation ................................. 28
12. Security Ownership of Certain Beneficial
Owners and Management ............................ 29
13. Certain Relationships and Related Transactions ......... 30
PART IV
14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K .............................. 30
SIGNATURE PAGE ............................................... 35
/TABLE
<PAGE>
<PAGE> 3
PART I
ITEM 1. BUSINESS
INTRODUCTION AND GENERAL DEVELOPMENT OF BUSINESS
For the period from February 1992 to July, 1994, Seahawk
Capital Corporation (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.
During 1993, the Company elected to concentrate its
resources on the activities of SRC Food Group Limited ("SRCF"), a
company based in the United Kingdom. The Company owns a 70%
interest in SRCF through its wholly-owned subsidiary Seahawk
Foods International, Inc. ("Seahawk Foods"). SRCF controls
80.26% of Scotcoast Limited ("Scotcoast"), an operating business
that was primarily engaged in production and marketing of frozen
potato products through a proprietary processing facility in
Glasgow, Scotland. Due to continued losses from Scotcoast s
operations, the Company and SRCF elected not to provide further
support to Scotcoast. Scotcoast is in the process of being
liquidated. The Company recorded the loss on its investment in
Scotcoast in 1994.
As discussed in Note 2 to the financial statements (Item 8
of this Report), effective December 31, 1994, the Company
disposed of its 73.4% interest in Seahawk Overseas Exploration
Corporation ("Overseas") to John C. Fitton, a former director of
the Company in exchange for shares of the Company's common stock
held by him. The Board of Directors of the Company determined
that the Company's retention of Overseas shares was inconsistent
with future planned operations of the Company. The Company's
interest in Overseas has been treated as a discontinued operation
in the accompanying consolidated statements of operations.
Other than the Company's ongoing interest in Seahawk Foods
and its subsidiaries and its interest in Overseas disposed of in
1994, the Company's other investments had been written off in
1993.
<PAGE>
<PAGE> 4
Based on the above events, the Company had no significant
assets or active business operations as of December 31, 1994. In
the last half of 1994, former management sought an acquisition of
assets or a merger with another operating entity in exchange for
Company securities in an effort to sustain the Company as a
viable entity. However, the Company's former management was
unable to locate a suitable transaction for this purpose. As
discussed below, in May 1995 the Company issued and sold common
stock and common stock purchase warrants representing a
controlling interest in the Company for $150,000 in cash; all
members of its former management other than Robert S.
Friedenberg, simultaneously resigned as officers and directors of
the Company. The Company's current business strategy is to
negotiate the acquisition of one or more new business operations
through an acquisition of stock or assets of another entity. In
view of the Company's limited financial resources, this strategy
anticipates the Company will issue additional securities and/or
promissory notes as the consideration for an acquisition, which
may be further dilutive to the interests of existing
stockholders.
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%. As a result 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.
At December 31, 1994, the Company has a stockholders
equity of only $55,055. Also, the Company has incurred net
losses in most of the past 10 years. Presently, the Company's
only operations are related to SRCF, which are not significant in
amount, and its 50% interest in PEICO, Limited, which have been
written off and 33.3% interest in Extruco, Limited which was
disposed of in August 1995, as discussed in Note 5 of the
financial statements in Item 8 of this Report. The Company
continues to explore opportunities for the recovery of its losses
from Scotcoast, as well as pursuing the potential of exploiting
the food processing technology within PEICO.
Because of net losses over the past several years, 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 through 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.
<PAGE> 5
It is not expected that the Company will achieve
profitability in the year ended December 31, 1995. Further,
there is no assurance that the Company will achieve profitability
thereafter. 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.
The Company was incorporated in New Jersey in 1979 and was
formerly named Seahawk Oil International, Inc. Effective May 8,
1995, Seahawk's principal office is located at 1010 Kings Highway
South, Suite 1-D, Cherry Hill, New Jersey 08034-5074, telephone
609-428-3845. Its former address was 18552 MacArthur Boulevard,
Suite 395, Irvine, California 92175.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
During 1993 and 1994, the Company's principal business was
food processing and distribution. See Note 4 to the financial
statements (Item 8 of this Report) for 1992 industry segment
information.
DESCRIPTION OF BUSINESS
As indicated above, in 1993 the Company elected to
concentrate its resources on the activities of SRCF, a company
based in the United Kingdom. The Company owns a 70% interest in
SRCF through its wholly-owned subsidiary, Seahawk Foods. SRCF
controls 80.26% of Scotcoast, an operating business primarily
engaged in production and marketing of frozen potato products
through a proprietary processing facility in Glasgow, Scotland.
Other than its investment in Seahawk Foods and its
subsidiaries, the Company is engaged in no other business.
SEAHAWK FOODS
Seahawk Foods has acted as a distributor of agricultural
products since 1991. Due to lack of capital resources, Seahawk
Foods has discontinued efforts to expand its food distribution
activities. Sales of agricultural products were approximately
$227,000 and $656,000 in 1993 and 1992, respectively.
SRCF AND SCOTCOAST
As indicated above, due to continued losses from
operations, the Company and SRCF elected not to provide further
support to Scotcoast. Scotcoast is in the process of being
liquidated. The Company recorded the loss on its investment in
Scotcoast in 1994.
<PAGE>
<PAGE> 6
SRCF also owns 50% of the capital stock of PEICO Limited,
which is presently not material to the assets or operations of
SRCF. If suitable third-party financing commitments were to be
obtained before December 15, 1996, certain rights of SR
Consultants to develop a french fry factory (the "Humberside
Factory Project") is to be transferred to, and developed by SRCF.
If the third party financing is obtained for the Humberside
Factory Project before December 15, 1996 on terms approved by
SRCF's board of directors, Seahawk Foods is committed to transfer
5% of the current outstanding equity in SRCF to SR Consultants.
The management of SRCF is composed primarily of Messrs.
Clive Hayden and Edward Daly.
Due to a disagreement amongst the shareholders of Extruco,
Limited, SRCF disposed of its 33.3% interest in this project in
August 1995. (See Note 5 to the financial statements included in
Item 8 of this Report.)
OVERSEAS
Overseas, as noted above, was sold to its president and
chief executive officer effective December 31, 1994. Overseas
had an option and a royalty interest in two exploratory oil and
gas concessions in Belize, Central America, and a carried working
interest in Senegal and Sierra Leone, West Africa. Overseas had
no financial obligations associated with its working interest
prospects related to participation in funding of seismic
activities and drilling of the first exploratory wells. Overseas
also held a carried working interest under three letters of
intent involving six producing fields in Russia, Kyrgyzstan and
Uzbekistan. The joint venture is awaiting approval of the Russian
Ministry of Fuels and Power before additional financing can be
solicited to develop these fields.
The President and chief executive officer of Overseas was
John C. Fitton, who also served as a director of the Company. On
January 3, 1994, Mr. Fitton exercised an option to purchase to
purchase 1 million shares of Overseas common stock at $0.005 a
share, which increased his share in Overseas common stock to 12%.
EMPLOYEES
The Company currently has no employees. The Company's
President serves without compensation. Its administrative and
financial needs, including its Chief Financial Officer, are met
by two persons on a part-time consulting basis. From 1993 to May
8, 1995, the Company's President and Chief Executive Officer was
Dale D. Simbro. From 1979 to May 8, 1995, Mr. Simbro was also a
director of the Company. Mr. Simbro devoted less than 50% of his
time to the affairs of the Company.
<PAGE>
<PAGE> 7
Seahawk Foods and SRCF had no employees during 1994. The
two principals of SR Consultants acted as full time management
for Scotcoast. Overseas employed its President, John C. Fitton,
on a full-time basis and had no other full time employees.
Each of the Company's officers and directors has agreed to
devote such time as such person believes, in such person's sole
discretion, is necessary to the operations of the Company.
Except for the equity interest of John C. Fitton in Overseas and
a minor amount of Overseas' shares held by other former officers
and directors of the Company, to the best of its knowledge there
are no investments of the Company in which any officer, director
or affiliate of the Company is a participant except in his
capacity as an officer and/or director or affiliate of the
Company.
ITEM 2. PROPERTIES
Beginning in May 1995, the Company utilizes office space in
Cherry Hill, New Jersey where one of its part-time officers is
located. Such office space is provided on a month to month
basis. Previously the Company leased office space in Irvine,
California.
The Company owns no property nor does it have any long-term
leases.
ITEM 3. LEGAL PROCEEDINGS
Inapplicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Inapplicable.
PART II
ITEM 5. MARKET FOR THE REGISTRANT S EQUITY AND RELATED
STOCKHOLDER MATTERS
Until March 31, 1992, the Company's common stock was quoted
in the National Association of Securities Dealers Automated
Quotation system ("NASDAQ") under the symbol "SEAK". In view of
the Company's inability to meet amended listing requirements for
inclusion in NASDAQ, since April 1992, the Company's common stock
has traded in the over-the-counter market and is quoted on the
NASD Electronic Bulletin Board under the symbol "SEAK".
During 1994, three broker-dealers made a market in the
Company s common stock: Paragon Capital Corp.; Pennsylvania
Merchants Group; and Sherwood Securities Corp.
<PAGE> 8
The following table sets forth, for the calendar quarters
indicated, the high and low bid and asked prices per share for
the Company's common stock as reported by the National Quotation
Bureau, Inc. Quotations by the National Quotation Bureau, Inc.
represent interdealer prices without adjustment for retail
markups, markdowns, or commission, and do not necessarily reflect
actual transactions.
<TABLE>
<CAPTION>
Bid Asked
-------------------- -------------------
High Low High Low
-------- -------- ------- -------
<S> <C> <C> <C> <C>
1993:
First quarter $0.03125 $0.03125 $0.0625 $0.0625
Second quarter 0.03125 0.03125 0.0625 0.0625
Third quarter 0.03125 0.03125 0.0625 0.0625
Fourth quarter 0.03125 0.03125 0.0625 0.0625
1994:
First quarter $0.01 $0.01 $0.03 $0.03
Second quarter 0.01 0.01 0.03 0.03
Third quarter 0.01 0.01 0.03 0.03
Fourth quarter 0.01 0.01 0.03 0.03
</TABLE>
At December 31, 1994, there were 12,281,302 shares of the
Company's common stock outstanding held by approximately 3,266
persons. As of the date of this report, the last quote on the
Company's stock was $.01 a share as of December 18, 1995. The
closing price was $0.01 and the bid and asked prices were $.01
and $.03, respectively.
The Company did not declare or pay cash or stock dividends
on the Common Stock during 1994 or 1993. Due to the current and
anticipated cash requirements, plus the Company s recent history
of losses, the Board of Directors does not anticipate the payment
of cash dividends in the foreseeable future.
<PAGE>
<PAGE> 9
ITEM 6. SELECTED FINANCIAL DATA
The following summary sets forth certain selected financial
information for the years ended December 31, 1990 to 1994 derived
from the audited financial statements of the Company. Such
information should be read in conjunction with the financial
statements and the report of R. Andrew Gately & Co. contained in
Item 8 of this report.
The information set forth in the table may not be
indicative of future financial condition or results of
operations. The information for the years 1990 to 1993 have been
restated for the discontinued operations (see Note 2 to the
financial statements (Item 8 of this Report).
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Revenues .......... $478,474 $738,239 $701,633 $566,018 $556,607
Income (loss)
from continuing
operations ....... (451,969) (603,307) (422,458) (380,791) 25,089
Income (loss)
from continuing
operations per
common share and
common share
equivalent ....... $(.03) $(.05) $(.03) $(.03) $.00
Total assets ...... $75,691 $1,348,169 $1,493,417 $1,836,924 $2,240,829
</TABLE>
The Company distributed a $0.005 cash dividend on March 15, 1991.
<PAGE>
<PAGE> 10
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of
Financial Condition and Results of Operation is that of the new
management of the Company (see Items 1 and 8 of this Report)
based on their knowledge of the operations during the periods
discussed.
RESULTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1994 COMPARED TO
YEAR ENDED DECEMBER 31, 1993
The Company's consolidated revenues of $478,474 during 1994
were $259,881, 35% less than in 1993. The decline was almost
entirely related to the Company's discontinuance of support of
Scotcoast in the second quarter of 1994. Scotcoast's sales were
$346,474 in 1994 (first quarter) vs. $714,122 (approximately
three quarters in 1993). As more fully discussed in Item 1 of
this Report, SRCF discontinued its support of Scotcoast due to
the continuing losses of Scotcoast. Scotcoast is presently in
liquidation. The Company's interest and other income decreased
from $16,567 to $12,846 (22%) mainly due to the reduced level of
investable funds.
Total expenses for 1994 were $930,327 compared to $1,341,546
in 1993. The decrease of $411,219 (31%) is due primarily to a
$401,580 decrease in Scotcoast's cost of sales, $182,452 in
Scotcoast's general and administrative expenses and $279,873
relating to Seahawk Foods discontinuing their efforts to expand
its food distribution activities. This was offset by the
$302,856 increase in loss on investments which was due to the
write off of the Company s interests in Scotcoast and PEICO and
the write-down of its investment in Extruco as discussed in Items
1 and 8 of this Report and a $111,558 increase in SRCF's general
and administrative expenses due to the inclusion of a full year
in 1994 vs. one month in 1993.
YEAR ENDED DECEMBER 31, 1993 COMPARED TO
YEAR ENDED DECEMBER 31, 1992
As more fully discussed in Note 2 to the financial
statements (Item 8 of this Report), the financial statements have
been restated for discontinued operations.
The Company generated consolidated revenues of $738,239
during 1993 compared to revenues of $701,633 during the same
period in 1992, representing an increase of $36,606 or 5.2%. The
increase in total revenues is due primarily to the consolidation
of Scotcoast Limited which accounted for revenues of $494,948.
The Scotcoast facility in Glasgow, Scotland which resumed
production during April 1993 has increased its monthly sales from
approximately $41,000 in April to more than $115,000 in February
<PAGE> 11
1994. Orders for other exports to and from Poland and the United
States were $229,896 compared to $656,000 in 1992. The Company
discontinued its exports to and from Poland due to the lack of
orders and to the high degree of risk associated with collection
of funds. Interest and other income decreased $28,676, from
$45,243 in 1992 to $16,567 in 1993, mostly due to the largely
reduced level of investable funds in 1993 and lower interest
rates.
Total expenses for 1993 were $1,341,546 compared to
$1,124,091 during the same period in 1992. The increase of
$217,455 or 19.3% is due to the consolidation of Scotcoast
Limited which accounted for $972,053 or 66.7% of total expenses.
The main components of expenditures were cost of sales to
foreign customers which increased $555,966 in 1992 to $866,754 in
1993, or approximately 56%. Costs associated with exports of
poultry and agricultural products accounted for $208,758 and cost
of goods sold by Scotcoast accounted for $657,996. Scotcoast
incurred a negative gross margin of $163,040 on sales of
$494,948. The high level of costs associated with Scotcoast
represent the effort of reviving operations in April 1993 with a
minimum of sales level to support overhead and production costs.
General and administrative expenses also increased from
$400,496 in 1992 to $459,712 in 1993, mostly due to the
consolidation of Scotcoast which accounted for general and
administrate expenses of $308,225. The increase in expenses
attributable to the addition of Scotcoast was largely offset by
cost cutting measures associated with reduction of personnel and
discontinuance of other European investing activities, and the
minority interest in SRC Food Group Limited and Scotcoast
Limited.
Provision for loss on investments decreased from $163,875 in
1992 to $6,952 in 1993.
INCOME TAXES
Because of losses incurred, the Company had, as of December
31, 1994, aggregate federal operating losses of more than $12.5
million. Since there is no assurance such losses will be
utilized, a valuation reserve for the full amount has been
provided. Further, the sale of the Company's common stock
discussed in Note 8 to the financial statements in Item 8 of this
Report will, under current income tax regulations, eliminate the
Company's ability to utilize most of the net operating carry
forwards.
INFLATION
Inflation and changing prices has not had a material impact
on the Company's operations during 1994 or 1993.
<PAGE> 12
OUTLOOK FOR 1995
It is not expected that the Company will achieve
profitability in the year ended December 31, 1995. Further, there
is no assurance that the Company will achieve profitability
thereafter.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1994, the Company has a stockholders' equity
of only $55,055. Also, the Company has incurred net losses in
most of the past 10 years. Presently, the Company's only
operations are related to SRCF, which are 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, as discussed above. As more fully discussed in
Note 8 to the financial statements in Item 8 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 as additional operating businesses are acquired and
operate profitably, the Company s activities have been financed
through the proceeds from the sale of common stock in May 1995
and the disposition of SRCF s interest in Extruco, Limited. 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 year ended December 31, 1995. Further, there
is no assurance that the Company will achieve profitability
thereafter. Except for the funds from the sale of the Company's
common stock in May 1995 and from the sale of its interests in
Extruco, Limited, both discussed above, all other cash resources
had been spent for operating expenses and accrued liabilities as
of May 1995. Until such time as the Company acquires an
operating business, as to which there can be no assurance, no
revenues are anticipated and the Company's monthly operating
expenses since May 1995 are estimated by management at
approximately $25,000 a month. 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.
COMMITMENTS
There were no material commitments for capital expenditures
at December 31, 1994.
<PAGE>
<PAGE> 13
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Auditors........................ 14
Consolidated Balance Sheets at December 31, 1994
and 1993........................................ 15
Consolidated Statements of Operations for the
Years Ended December 31, 1994, 1993 and 1992.... 16
Consolidated Statements of Shareholders Equity
for the Years Ended December 31, 1994, 1993,
and 1992........................................ 17
Consolidated Statements of Cash Flows for the Years
ended December 31, 1994, 1993 and 1992.......... 18
Notes to Consolidated Financial Statements............ 19
</TABLE>
<PAGE>
<PAGE> 14
REPORT OF INDEPENDENT AUDITORS
Board of Directors
Seahawk Capital Corporation
Cherry Hill, New Jersey
We have audited the accompanying consolidated balance sheet of
Seahawk Capital Corporation as of December 31, 1994 and 1993, and
the related consolidated statement of operations, shareholders
equity and cash flow for the years then ended. The financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on the financial
statement based on our audit.
We conducted our audits 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 statement is 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 audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Seahawk Capital Corporation at December 31,
1994 and 1993 and the consolidated results of their operations
and their cash flows for the years then ended, in conformity with
generally accepted accounting principles.
/s/ R. ANDREW GATELY & CO.
R. ANDREW GATELY & CO.
Orange County, California
December 28, 1995<PAGE>
<PAGE> 15
SEAHAWK CAPITAL CORPORATION
Consolidated Balance Sheets
As of December 31, 1994 and 1993
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents............... $ 17,250 $ 466,607
Notes and accounts receivable, net
of allowances for uncollectible
accounts............................. 3,451 392,662
Inventory............................... 110,313
---------- ----------
Total current assets.............. 20,701 969,582
---------- ----------
Property, plant and equipment, at cost:
Plant and equipment..................... 287,243
Oil and gas properties, accounted for
under the successful efforts method.. 9,421
Office furniture and equipment.......... 6,486
----------
303,150
Less accumulated depreciation........... 16,272
----------
Net property and equipment........ 286,878
----------
Other assets:
Other................................ 54,990 91,709
---------- ----------
$ 75,691 $1,348,169
========== ==========
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 20,636 $ 551,199
Joint venture advances.................. 155,272
---------- ----------
Total current liabilities......... 20,636 706,471
---------- ----------
Commitments and contingencies
Minority interest......................... 28,157
----------
Stockholders' equity:
Common stock, no par value:
Authorized shares - 100,000,000
Issued - 13,137,082 shares (including
in 1994, 855,780 shares in treasury). 12,701,325 12,726,450
Deficit................................. (12,645,194) (12,112,909)
Cumulative translation adjustment....... (1,076)
---------- ----------
Total stockholders' equity....... 55,055 613,541
---------- ----------
$ 75,691 $ 1,348,169
=========== ===========
</TABLE>
See notes to accompanying financial statements.
<PAGE>
<PAGE> 16
SEAHAWK CAPITAL CORPORATION
Consolidated Statements of Operations
For The Three Years Ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
1994 1993 1992
-------- --------- ----------
<S> <C> <C> <C>
REVENUES:
Sales to customers................... $ 346,474 $ 714,122 $ 641,390
Commissions and fees................. 119,038 7,550 15,000
Interest and other................... 12,846 16,567 45,243
-------- --------- ---------
478,358 738,239 701,633
-------- --------- ---------
COSTS AND EXPENSES:
Cost of sales to customers........... 262,452 866,754 555,966
General and administrative........... 352,951 459,712 400,496
Loss on investments.................. 309,808 6,952 163,875
Depreciation......................... 2,691 7,616 2,297
Other................................ 2,425 512 1,457
-------- --------- ---------
930,327 1,341,546 1,124,091
-------- --------- ---------
LOSS FROM CONTINUING
OPERATIONS...................... (451,969) (603,307) (422,458)
Discontinued operations.............. (80,316) (29,737) (79,886)
-------- --------- ---------
NET LOSS............................. $ (532,285) $ (633,044) $ (502,344)
======== ======== ========
PER COMMON SHARE AND COMMON
EQUIVALENT SHARE:
Loss from continuing
operations................... $ (0.03) $ (0.05) $ (0.03)
Net loss........................ (0.04) (0.05) (0.04)
WEIGHTED AVERAGE SHARES
OUTSTANDING..................... 13,137,082 13,137,082 12,859,967
========== ========== ==========
</TABLE>
See accompanying notes to financial statements.<PAGE>
<PAGE> 17
SEAHAWK CAPITAL CORPORATION
Consolidated Statements of Stockholders' Equity
For the Years Ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
Common Stock Cumulative
----------------------- Translation
Shares Amount (Deficit) Adjustment Total
---------- ----------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C>
DECEMBER 31, 1991..... 12,482,082 $12,660,950 $(10,977,521) $1,683,429
Stock issued to
purchase minority
interest in
subsidiary.......... 655,000 65,500 65,500
Net loss for 1992..... (502,344) (502,344)
---------- ---------- ---------- ---------
AT DECEMBER 31, 1992.. 13,137,082 12,726,450 (11,479,865) 1,246,585
Net loss for 1993..... (633,044) (633,044)
---------- ---------- ---------- ----------
AT DECEMBER 31, 1993.. 13,137,082 12,726,450 (12,112,909) 613,541
Shares reacquired
in disposition of
subsidiary (held
in treasury)........ (855,780) (25,125) (25,125)
Cumulative
translation
adjustment.......... $(1,076) (1,076)
Net loss for 1994..... (532,285) (532,285)
---------- ---------- ---------- ------ --------
AT DECEMBER 31, 1994.. 12,281,302 $12,701,325 $(12,645,194) $(1,076) $ 55,055
========== ========== =========== ====== ========
</TABLE>
See accompanying notes to financial statements.<PAGE>
<PAGE> 18
SEAHAWK CAPITAL CORPORATION
Consolidated Statements of Cash Flows
For the Years Ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
1994 1993 1992
--------- ---------- ----------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net loss............................... $(532,285) $ (633,044) $ (502,344)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Depreciation and amortization...... 2,691 7,616 2,297
Gain on sale of oil and gas assets. (14,837)
Loss on investments................ 149,935 6,952 163,875
Expired property interests......... 58,121
Other.............................. 8,906 (35,628) 10,487
Changes in assets and liabilities:
Accounts receivable.............. 121,692 (11,391) (381,271)
Inventory........................ (34,255) (110,313)
Accounts payable................. 80,520 510,776 (12,821)
Joint venture advances........... (155,272) 206,409
Other current assets............. 73,048
Other current liabilities........ (19,933)
Other liabilities................ (32,625)
Minority interest in
losses of subsidiaries............... (66,758) (258,240) (47,693)
-------- --------- ---------
Net cash used in operating activities.. (424,826) (523,272) (497,287)
-------- --------- ---------
INVESTMENT ACTIVITIES:
Proceeds from sale of oil
and gas assets....................... 56,144
Cash transferred on
transfer of Overseas................. (27,602)
Investment in joint ventures........... (51,137) (93,000)
Capital expenditures................... (7,597)
-------- --------- ---------
Net cash used in investing activities.. (27,602) (51,137) (44,453)
-------- --------- ---------
FINANCING ACTIVITIES - Minority
investment in subsidiary............. 5,000
--------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (1,929)
-------- --------- ---------
NET DECREASE IN CASH
AND CASH EQUIVALENTS................. (449,357) (574,409) (541,740)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD.................. 466,607 1,041,016 1,582,756
-------- --------- ---------
CASH AND CASH EQUIVALENTS,
END OF PERIOD........................ $ 17,250 $ 466,607 $1,041,016
======== ========= =========
NON-CASH INVESTING ACTIVITY:
Transfer of net assets in subsidiary:
Net assets of subsidiary transferred
including $27,602 cash............. $ 25,025
Fair value of Seahawk common stock
reacquired......................... (25,025)
========
</TABLE>
See accompanying notes to financial statements.<PAGE>
<PAGE> 19
SEAHAWK CAPITAL CORPORATION
Notes to Consolidated Financial Statements
For The Years Ended December 31, 1994, 1993 and 1992
1. BASIS OF FINANCIAL PRESENTATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS - Since February 1992, Seahawk
Capital Corporation (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.
During 1993, the Company elected to concentrate its
resources on the activities of SRC Food Group Limited
("SRCF"), a company based in the United Kingdom. The
Company owns a 70% interest in SRCF through its wholly-owned
subsidiary Seahawk Foods International, Inc. ("Seahawk
Foods"). SRCF controlled 80.26% of Scotcoast Limited
("Scotcoast"), an operating business primarily engaged in
production and marketing of frozen potato products through a
proprietary processing facility in Glasgow, Scotland. As
more fully discussed in Note 5, due to continued losses from
Scotcoast operations, the Company and 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
had an equity investment in PEICO Limited which was formed
to utilize certain rights and processes of SRCF. As
discussed in Note 5, because this company has not to date
been able to obtain financing needed to begin operations,
this investment has also been written off. SRCF's similar
33.3% investment in Extruco Limited was disposed of in
August 1995.
As discussed in Note 2, effective December 31, 1994, the
Company disposed of its 73.4% interest in Seahawk Overseas
Exploration Corporation ("Overseas"). The Board of
Directors of the Company determined that the Company's
retention of Overseas shares was inconsistent with future
planned operations of the Company. The Company's interest
in Overseas has been treated as a discontinued operation in
the accompanying consolidated statements of operations.
Other than the Company's ongoing interest in Seahawk Foods
and its subsidiaries, written off in 1994, and its interest
in Overseas disposed of in 1994, the Company s other
investments were written off in 1993. Based on the above
<PAGE> 20
events, the Company had no significant assets or active
business operations as of December 31, 1994. In the last
half of 1994, former management sought an acquisition of
assets or a merger with another operating entity in exchange
for Company securities in an effort to sustain the Company
as a viable entity. However, the Company's former
management was unable to locate a suitable transaction for
this purpose. As discussed below, in May 1995 the Company
issued and sold common stock and common stock purchase
warrants representing a controlling interest in the Company
for $150,000 in cash; all members of its former management
other than Robert S. Friedenberg, simultaneously resigned as
officers and directors of the Company. The Company's
current business strategy is to negotiate the acquisition of
one or more new business operations through an acquisition
of stock or assets of another entity. In view of the
Company s limited financial resources, this strategy
anticipates the Company will issue additional securities
and/or promissory notes as the consideration for an
acquisition, which may be further dilutive to the interests
of existing stockholders.
At December 31, 1994, the Company has stockholders' equity
of only $55,055. Also, the Company has incurred net losses
in most of the past 10 years. Presently, the Company's only
operations are related to SRCF, which are 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, as discussed above. As more
fully discussed in Note 8, in May 1995, the Company sold
15,000,000 previously unissued shares of its common stock
for $150,000 in cash.
Because of 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 through the proceeds from the sale of common stock
in May 1995.
It is not expected that the Company will achieve
profitability in the year ended December 31, 1995. 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.
<PAGE> 21
BASIS OF PRESENTATION - The consolidated financial
statements include the accounts of Seahawk Capital
Corporation and its subsidiaries. All intercompany accounts
and transactions have been eliminated.
CASH AND CASH EQUIVALENTS - The Company considers all highly
liquid debt instruments with original maturities of less
than 90 days to be cash equivalents.
PROPERTY AND EQUIPMENT - Depreciation is provided on the
straight-line method over the estimated useful lives of the
assets.
FOREIGN CURRENCY TRANSLATION - The functional currency of
the Company's non-U.S. subsidiaries is the local currency of
the subsidiary. Adjustments resulting from the translation
of financial statements are reflected as a separate
component of stockholders' equity. Transaction gains and
losses are reported in current operations.
LOSS PER SHARE - Loss per common share is computed by
dividing the income or loss by the weighted average number
of common shares outstanding. No common equivalent shares
were used in the calculations since their effect would be
antidilutive.
2. DISCONTINUED OPERATIONS
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 who resigned in May 1995) 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 $.03 per share, the mean between the bid and ask
prices of $.02 and $.04). Accordingly, common stock was
reduced by this amount for the shares reacquired.
The results of Overseas have been reported separately as a
component of discontinued operation in the accompanying
consolidated statements of operations. Prior years
consolidated financial statements have been restated to
present Overseas as a discontinued operation.
<PAGE>
<PAGE> 22
Summarized results of Overseas are as follows:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Revenues, principally
commissions and fees.......... $ 35,077 $ 86,266 $ 94,444
------- ------- -------
Expenses:
General and administrative.... 81,662 114,264 116,209
Expired property interests.... 33,730 1,739 58,121
------- ------- -------
115,392 116,003 174,300
------- ------- -------
Loss............................ $(80,315) $(29,737) $(79,886)
======= ======= =======
</TABLE>
The net assets relating to the discontinued operations
included in the accompanying balance sheet at December 31,
1993:
<TABLE>
<S> <C>
Cash............................................ $ 84,052
Accounts receivable............................. 192,678
Property-net.................................... 9,421
Accounts payable................................ (481)
Advance payable to joint venture................ (155,272)
--------
Net assets...................................... $ 130,398
========
</TABLE>
3. COMMON STOCK, STOCK OPTIONS AND WARRANTS
At the Company's 1994 annual meeting, the Company's
shareholders 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.
See Note 2 as to the reacquisition of 855,780 shares of the
Company's stock in 1994. These shares are held as treasury
shares. Also, see Note 8 as to the sale, after December 31,
1994, of 15,000,000 previously unissued shares of the
Company's common stock and transferable warrants to purchase
up to 70,000,000 shares of the Company's common stock.
Under the Company's Incentive Stock Option Plan (the "Plan")
approved by the Company s shareholders in June 1992,
2,000,000 shares of the Company's common stock are reserved
for granting options to certain key officers and employees
who own less than 10% of the outstanding common stock of the
<PAGE> 23
Company. Outstanding options for 425,000 shares
exercisableat $0.10 a share were forfeited in May 1995.
There are no remaining options outstanding.
4. BUSINESS SEGMENT INFORMATION
During 1993 and 1994, the Company's principal business was
food processing and distribution. The Company's principal
businesses in 1992 were (i) oil and gas exploration and
development, (ii) food distribution, and (iii) medical
equipment distribution.
The following table presents certain information regarding
these industry segments for the year ended December 31,
1992.
<TABLE>
<CAPTION>
Sales Identi-
To Outside Operating fiable
Customers Loss Assets
--------- -------- ------
<S> <C> <C> <C>
Oil and gas exploration
and development.................. $ 73,020 $(117,769) $ 439,711
Food distribution................... 656,390 ( 38,269) 266,242
Medical equipment distribution...... (105,651)
Corporate........................... 66,667 (240,655) 787,464
------- ------- ---------
Consolidated........................ $796,077 $(502,344) $1,493,417
======= ======= =========
</TABLE>
5. FOREIGN OPERATIONS
In March 1993, Seahawk Foods Seahawk Foods, Inc. ("Seahawk
Foods") negotiated an agreement under which it assumed
operational control of Scotcoast Limited, a frozen potato
product processing facility in Glasgow, Scotland. Seahawk
Foods and its British and Scottish partners have obtained
the rights to a proprietary processing method to make "twice
Baked" potatoes and potato skins for the consumer, catering
and restaurant markets throughout the United Kingdom and the
European Community. The facility, which was acquired from
receivership, had been placed in receivership due to lack of
funds necessary to meet operating requirements.
In December 1993, Seahawk Foods negotiated an agreement with
Systems Research Consultants ("SR Consultants"), under which
the interest of both companies in Scotcoast Limited and in a
joint venture were contributed into a newly formed
subsidiary, SRC Food Group Limited ("SRCF"). Seahawk Foods
paid an additional sum of $303,000 and acquired a 70%
interest in SRCF. SR Consultants contributed its 11.8%
interest in Scotcoast to SRCF in addition to SF Consultants
<PAGE> 24
interests in other food processing technology rights to
acquire the balance of 30%.
Seahawk and SRCF and its partners planned to use Scotcoast's
facility and production equipment as a base to expand
operations from Scotland to other European countries. Under
the agreement, Scotcoast Limited has the right to occupy its
present premises in Glasgow, Scotland, and to lease the
facility's equipment from its former parent company for a
term of five years. Due to continued losses from Scotcoast
operations, the Company and 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>
<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 had 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' 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.
In 1993, the Company discontinued the activities of
MedConsult (USA), Inc. and disposed of its 51% interest.
MedConsult was incorporated to market medical supplies in
Eastern Europe with MedConsult, GmbH of Vienna, Austria.
<PAGE>
<PAGE> 25
Foreign operations included in the accompanying consolidated
financial statements are as follows:
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Revenues.................. $473,924 $494,948
Expenses.................. 875,359 828,921
Loss from continuing
operations............. (401,335) (333,973)
Total assets.............. 58,803 927,734
</TABLE>
There were no foreign operations in 1992.
6. CONTINGENCIES
The Company is obligated to pay severance compensation to a
former officer and current director of $1,500 a month until
February 1996.
7. INCOME TAXES
The Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 109, "Accounting for Income Taxes"
effective January 1, 1993. There was no cumulative effect
of adopting SFAS No. 109 on the Company's financial
statements for 1993. Restatement of prior years for the
effect of SFAS No. 109 would not have materially changed
previously reported losses.
There was no provision for current income taxes (domestic or
foreign) in 1994, 1993 and 1992. Due to the uncertainty of
the Company's ability to utilize loss carry forwards in
future years, there was no provision for deferred income
taxes in 1994, 1993 and 1992.
The only significant item comprising the Company s net
deferred taxes as of December 31, 1994 and 1993 was the
Company's operating loss carry forwards in excess of $12.5
million. Since there is no assurance such losses will be
utilized, a valuation reserve for the full amounts has been
provided. Further, the sale of the Company's common stock
discussed in the following Note 8 to the financial
statements will, under current income tax regulations,
eliminate substantially all the net operating carry
forwards.
<PAGE> 26
8. 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.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS AND EXECUTIVE OFFICERS
The Company's directors and executive officers as of the
date of this report are as follows:
<TABLE>
<CAPTION>
Name Age Position
- --------------- --- --------------------
<S> <C> <C>
Jonathan B. Lassers (*) 30 Director, President and
Chief Executive Officer
Edward Daly (*) 52 Director & Vice President
Annemarie L. Arias (*) 57 Director, Secretary & Treasurer
Robert S. Friedenberg 59 Director
</TABLE>
- -----------------------------------
(*) - Elected as Directors and Officers as of May 8, 1995.
Jonathan B. Lassers, a private investor acquired a
controlling interest in Seahawk Capital Corporation in May 1995
and was elected President and Chief Executive Officer at that
time. Mr. Lassers is occupied primarily with the interests of
Seahawk Capital Corporation. Since 1987 he has worked on start
ups and restructuring with companies in the health care, real
estate and food service industries.
<PAGE> 27
Edward Daly, has been a director of SRC Food Group Limited
since December 1993 as well as serving as managing director of
Scotcoast Limited. He has been a director of SRC Limited, a
Scarborough, UK based food and food processing consultancy
business advising vegetable processing companies throughout the
worked since 1990. Prior to his jointing SRC Limited, he worked
with McCain Foods (GB) Limited as a management accountant.
Annamarie L. Arias is a qualified paralegal and has worked
within the legal profession on an international basis for more
than five years. Currently, she devotes part of her time as
Secretary and Treasurer of Seahawk Capital Corporation.
Robert S. Friedenberg founded the Company in 1979 and was
principally occupied as its Chief Executive Officer from 1979
until his resignation as an executive officer in February 1993.
He has served as a director of the Company since 1979. He has a
Bachelor of Science degree in geology from Franklin & Marshal
College in Lancaster, Pennsylvania. He has served as a director
of the Company since 1979.
All directors serve for a term of one year and until their
successors are duly elected. Officers serve at the discretion of
the Board of Directors.
The Board of Directors held two meetings during the year
ended December 31, 1994. No director attended fewer than 75% of
the aggregate of all meetings of the Board of Directors. Actions
by the Board of Directors other than at such meetings were held
by unanimous written consent. There are currently no committees
of the Board of Directors. There are no family relationships
between any of the Company's current directors and executive
officers, except that Annamarie L. Arias is Jonathan Lassers
aunt.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE
ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as
amended, (the "Exchange Act") requires the Company's executive
officers, directors and persons who beneficially own more than
10% of the Company's equity securities file initial reports of
ownership and reports of changes in ownership with the Securities
and Exchange Commission and are required by law to provide copies
of such filings to the Company. The Company has an internal
reporting program, through monthly questionnaires, of monitoring
changes in beneficial ownership of its securities held by
officers, directors and known 10% beneficial owners which was in
effect from 1992 until October 1994 and has subsequently been
reactivated in July 1995. Based solely upon a review of the
copies of reports furnished to the Company as a result of its
internal program, copies of filings with the Securities and
<PAGE> 28
Exchange Commission provided to the Company by its officers,
directors and 10% beneficial owners, and information involving
securities transactions to which the Company was a party, the
Company believes that Section 16(a) filing requirements
applicable to its executive officers, directors and greater than
10% beneficial shareholders were complied with as of December 31,
1994.
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY EXECUTIVE COMPENSATION
There were no executive officers of the Company or any of
its subsidiaries whose salary and bonus exceeded $100,000 for the
fiscal years ended December 31, 1994, 1993 or 1992.
STOCK OPTIONS
There were no executive officers of the Company or any of
its subsidiaries who received or exercised stock options, stock
appreciation rights or other stock awards from the Company during
the last fiscal year ended December 31, 1994.
All options granted by the Company held by executive
officers and directors of the Company at December 31, 1994 were
returned to the Company and canceled as of May 8, 1995. No
options were granted or were exercised during the year ended
December 31, 1994 or subsequently. Other than the Company's
Incentive Stock Option Plan, the Company does not have any other
compensation plans involving stock appreciation rights or
long-term incentive plans or deferred pension or profit-sharing
plans.
COMPENSATION OF DIRECTORS AND EMPLOYMENT AGREEMENTS
Each Director is paid $500 per meeting attended for his
services as a director. As indicated above, stock options
received by certain directors granted in 1992 were returned to
the Company and canceled as of May 8, 1995. The Company's Bylaws
permit compensation of directors, and the Board reserves the
right to change its policy as to compensation of directors from
time to time.
The Company has no employment agreements with any of its
executive officers.
STOCK OPTION PLAN
The Company had provided a long-term incentive tied to
performance of its common stock through its 1992 Stock Option
Plan (the "Plan"). All options granted by the Company under this
Plan held by executive officers and directors of the Company at
<PAGE> 29
December 31, 1994 were returned to the Company and canceled as of
May 8, 1995. At December 31, 1994, there were options
outstanding to purchase 425,000 shares of the Company's common
stock at an average price of $0.10 a share of which 375,000
options were held by four executive officers or directors of the
Company. None of the options granted under the Plan were
exercised and all outstanding options were canceled in May 1995.
EXERCISE OF OPTION GRANTED BY SUBSIDIARY
On January 4, 1994, John C. Fitton, a director of the
Company, exercised an option to purchase 1,000,000 shares of
Seahawk Overseas Development Corporation ("Overseas"), an oil and
gas subsidiary in which Mr. Fitton serves as President, at an
option price of $0.005 a share ($5,000 total). Before exercise
of the option, Mr. Fitton owned 53,835 shares of Overseas common
stock; after giving effect to the option exercised, the
percentage of ownership represented by 6,440,000 shares owned by
the Company in Overseas was reduced from 83% to 73.4% and Mr.
Fitton s ownership increased to 12%. As more fully discussed in
Items 1 and 8 of this Report, Mr. Fitton purchased the Company's
Overseas common shares in exchange for the Company's common stock
held by Mr. Fitton as of December 31, 1994.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth information as to shares of
the Company's common stock owned by (I) each person known by
management to beneficially own more than 5% of the Company s
outstanding common stock, (ii) each of the Company s directors,
and (iii) all executive officers and directors of the Company as
a group as of December 31, 1995:
<TABLE>
<CAPTION>
Shares Beneficially
Owned(2)
----------------------
Name or Group(1) Amount %
- ---------------- ------ ---
<S> <C> <C>
Directors:
Jonathan B. Lassers (3)............ 85,000,000 87.4%
1010 Kings Highway South
Suite 1-D
Cherry Hill, NJ 08034-5074
Robert S. Friedenberg (4).......... 1,348,491 1.4%
30 Southpoint Drive
Sugarloaf Key, FL 33044
All directors and executive
officers as a group [4 in
number](5)....................... 86,348,491 88.8%
</TABLE>
<PAGE> 30
- -------------------------------
(1) To the best knowledge of the Company's management the
persons named in the table have sole voting and investment
power with respect to all shares shown to be beneficially
owned by them, subject to the information contained in the
footnotes to this table.
(2) Common stock includes, where applicable, shares beneficially
owned and shares issuable upon exercise of Class A common
stock purchase warrants ("Class A Warrants") that were fully
exercisable or exercisable within a period of 60 days from
the date of this Report.
Percentages in the table are based upon 27,280,646 shares of
common stock outstanding (after giving effect to the
issuance of 15,000,000 shares directly owned by Mr. Lassers)
plus 70,000,000 shares issuable upon exercise of Class A
Warrants.
(3) Common stock includes 15,000,000 shares directly owned by
Mr. Lassers plus 70,000,000 shares issuable upon exercise of
Class A Warrants that were fully exercisable as of the date
of this Report.
(4) Common stock includes 1,273,491 shares directly owned by Mr.
Friedenberg plus 75,000 shares owned by a family corporation
in which Mr. Friedenberg has a 20% equity interest.
(5) Includes shares described in Notes 3 and 4 above.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As more fully discussed in Item 1 of this Report and Note 2
to the financial statements (Item 8 of this Report), the Company
disposed of its 73.4% interest in Seahawk Overseas Development
Corporation to John C. Fitton, a former director of the Company,
in exchange for shares of the Company's common stock held by him.
Reference is made to Item 1 of this Report for a discussion
of the purchase of a controlling interest in the Company by
Jonathan B. Lassers in May 1995. Following that transaction, Mr.
Lassers was elected an executive officer and director of the
Company.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a) Documents filed as part of this Report.
1. Financial Statements - see Index to Financial Statements
included in Item 8 of this Report.
<PAGE> 31
2. Financial Statement Schedules - All schedules are omitted
since the required information is not present in amounts
sufficient to require submission of the schedule, or because
the information required is included in the Consolidated
Financial Statements and notes thereto.
(b) Exhibits.
* Indicates exhibits filed herewith. All other exhibits are
incorporated by reference to prior filings.
## Denotes management contract or compensation plan or
arrangement.
<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
3.1.1 Certificate of Incorporation of the Registrant as
filed with the Secretary of State of New Jersey on
August 7, 1979 (incorporated by reference to Exhibit
3.1.1 filed with Registrant's Report on Form 10-K for
the Year ended December 31, 1991).
3.1.2 Certificate of Amendment to Registrant's Certificate
of Incorporation, as filed with the Secretary of
State of New Jersey on May 19, 1980 (incorporated by
reference to Exhibit 3.1.2 filed with Registrant's
Report on Form 10-K for the Year ended December 31,
1991).
3.1.3 Certificate of Amendment to Registrant's Certificate
of Incorporation, as filed with the Secretary of
State of New Jersey in April 1981 (incorporated by
reference to Exhibit 3.1.3 filed with Registrant's
Report on Form 10-K for the Year ended December 31,
1991).
3.1.4 Certificate of Amendment to Registrant's Certificate
of Incorporation, as filed with the Secretary of
State of New Jersey on April 24, 1986 (incorporated
by reference to Exhibit 3.1.4 filed with Registrant's
Report on Form 10-K for the Year ended December 31,
1991).
3.1.5 Certificate of Amendment to Registrant's Certificate
of Incorporation, as filed with the Secretary of
State of New Jersey on July 15, 1988 (incorporated by
reference to Exhibit 3.1.5 filed with Registrant's
Report on Form 10-K for the Year ended December 31,
1991).
<PAGE> 32
Exhibit
Number Description
3.1.6 Certificate of Amendment to Registrant's Certificate
of Incorporation, as filed with the Secretary of
State of New Jersey on November 28, 1989
(incorporated by reference to Exhibit 3.1.6 filed
with Registrant's Report on Form 10-K for the Year
ended December 31, 1991).
* 3.1.7 Certificate of Amendment to Registrant's Certificate
of Incorporation, as filed with the Secretary of
State of New Jersey on August 15, 1994.
3.2.1 ByLaws of the Registrant adopted August 7, 1979
(incorporated by reference to Exhibit 3.2.1 filed
with Registrant's Report on Form 10-K for the Year
ended December 31, 1991).
3.2.2 Amendments adopted March 8, 1982 to ByLaws of the
Registrant (incorporated by reference to Exhibit
3.2.2 filed with Registrant's Report on Form 10-K for
the Year ended December 31, 1991).
4.1 Form of certificate evidencing shares of Registrant's
common stock (incorporated by reference to Exhibit
4.1 filed with Registrant's Report on Form 10-K for
the Year ended December 31, 1991).
## 10.1 Stock Option Agreement dated January 4, 1989, as
amended August 27, 1991, between Seahawk Overseas
Exploration Corporation and John C. Fitton
(incorporated by reference to Exhibit 10.1 filed with
Registrant's Report on Form 10-K for the Year ended
December 31, 1991).
## 10.2 Release and Severance Agreement dated February 12,
1993 between Seahawk Capital Corporation and Robert
S. Friedenberg (incorporated by reference to Exhibit
10.2 filed with Registrant's Report on Form 10-K for
the Year ended December 31, 1992).
## 10.3 Registrant's 1992 Stock Option Plan (incorporated by
reference to Exhibit 10.3 filed with Registrant's
Report on Form 10-K for the Year ended December 31,
1993).
10.4 Agreement dated February 24, 1995 between the
Registrant and Jonathan B. Lassers as to the purchase
of common stock (incorporated by reference to Exhibit
10.1 filed with Registrant's Report on Form 8-K dated
as of May 8, 1995).
<PAGE> 33
Exhibit
Number Description
10.5 Amendment Agreement dated May 1, 1995 between the
Registrant and Jonathan B. Lassers as to the purchase
of common stock and common stock purchase warrants
(incorporated by reference to Exhibit 10.2 filed with
Registrant's Report on Form 8-K dated as of May 8,
1995).
10.6 Class A Common Stock Purchase Warrants issued by the
Registrant covering 70 million shares of common stock
exercisable until December 31, 1997 at $0.01 per
share (incorporated by reference to Exhibit 10.3
filed with Registrant's Report on Form 8-K dated as
of May 8, 1995).
10.7 Stock Exchange Agreement dated as of December 31,
1994 among the Registrant, John C. Fitton and Seahawk
Overseas Exploration Corporation (incorporated by
reference to Exhibit 10.4 filed with Registrant's
Report on Form 8-K dated as of May 8, 1995).
10.8 Stock Purchase Agreement dated March 1, 1993 among
Seahawk Foods International, Inc., Scotcoast Limited,
Coastal Foods Financial, Systems Research
Consultants, Ltd. and Gordon & Innes Ltd.
(incorporated by reference to Exhibit 10.5 filed with
Registrant's Report on Form 10-K for the Year ended
December 31, 1992).
10.9 Agreement dated November 20, 1992 among Coastal Foods
Financial, Macrocom (212) Limited [former name of
Scotcoast Limited] and Claymore Group Limited
(incorporated by reference to Exhibit 10.5(A) filed
with Registrant's Report on Form 10-K for the Year
ended December 31, 1992).
10.10 First Amendment dated March 1, 1993 among Coastal
Foods Financial and Scotcoast Limited (incorporated
by reference to Exhibit 10.5(B) filed with
Registrant's Report on Form 10-K for the Year ended
December 31, 1992).
10.11 Memorandum of Association of SRC Food Group Limited
as amended by Special Resolution passed on December
15, 1993 (incorporated by reference to Exhibit
10.13.1 filed with Registrant's Report on Form 10-K
for the Year ended December 31, 1993).
<PAGE> 34
Exhibit
Number Description
10.12 New Articles of Association of SRC Food Group Limited
as adopted by Special Resolution passed on December
15, 1993 (incorporated by reference to Exhibit
10.13.2 filed with Registrant's Report on Form 10-K
for the Year ended December 31, 1993).
10.13 Co-operation Agreement dated December 15, 1993
between Seahawk Foods International Inc. and System
Research Consultants Limited relating to SRC Food
Group Limited (incorporated by reference to Exhibit
10.13.3 filed with Registrant's Report on Form 10-K
for the Year ended December 31, 1993).
* 21 Subsidiaries of the Registrant.
</TABLE>
<PAGE>
<PAGE> 35
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Acto of 1934, the Registrant has caused this
report to be signed on its behalf by the undersigned thereunto
duly authorized.
Dated: February 15, 1996
SEAHAWK CAPITAL CORPORATION
(Registrant)
By: /s/ Jonathan B. Lassers
-------------------------
Jonathan B. Lassers,
President, Principal
Executive Officer and
Principal Financial Officer
By: /s/ Annemarie L. Arias
--------------------------
Annemarie L. Arias,
Secretary-Treasurer
Principal Accounting Officer
Pursuant to the requirements of the Securities Act of
1934, this report has been signed by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- --------- -------- ----
<S> <C> <C>
/s/ Jonathan B. Lassers February 15, 1996
- -----------------------
Jonathan B. Lassers Director
Principal Executive Officer
Principal Financial Officer
/s/ Annemarie L. Arias February 15, 1996
- -----------------------
Annemarie L. Arias Director
Principal Accounting Officer
/s/ Robert S. Friedenberg February 15, 1996
- -------------------------
Robert S. Friedenberg Director
</TABLE>
<PAGE> 1
FILED
Aug 15 1994
LONNA R. HOOKS
Secretary of State
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
SEAHAWK CAPITAL CORPORATION
The undersigned corporation, organized under the laws of
the State of New Jersey, to amend its Certificate of
Incorporation, does hereby certify as follows:
FIRST: The name of the corporation is SEAHAWK CAPITAL
CORPORATION.
SECOND: To effect an amendment in the corporation's
Certificate of Incorporation, the following paragraph thereof is
amended to read as follows:
Paragraph 4 of the Certificate of Incorporation is amended
in its entirety to read as follows:
"4. The aggregate shares which the
Corporation shall have authority to issue
is One Hundred Million (100,000,000)
shares of no par common stock."
THIRD: The foregoing Amendment to the Certificate of
Incorporation was adopted by the shareholders at an annual
meeting held on July 29, 1994.
FOURTH: The total number of shares outstanding and
entitled to vote on the Amendment was 13,137,082 shares of common
stock. The number of shares that voted for the adoption of the
Amendment was 8,998,828; the number of shares that voted against
<PAGE> 2
the adoption of the Amendment was 227,379; and the number of
shares that abstained or were unvoted were 3,910,875 shares.
SIXTH: The foregoing Amendment to the Certificate of
Incorporation shall become effective upon filing.
IN WITNESS WHEREOF, SEAHAWK CAPITAL CORPORATION, has caused
its duly authorized officers to execute this Certificate of
Amendment this 15th day of July, 1994.
SEAHAWK CAPITAL CORPORATION
By: /s/ DALE D. SIMBRO
-------------------------
Dale D. Simbro, President
ATTEST:
/s/ LINDA GENTRY
- ---------------------------------
Linda Gentry, Assistant Secretary
EXHIBIT 21
SUBSIDIARIES OF SEAHAWK CAPITAL CORPORATION
(With Percentage Ownership and Jurisdictions of Incorporation)
<TABLE>
<CAPTION>
Jurisdiction
of Percentage
Subsidiary Incorporation Ownership
- ---------------------------------------- -------------- ---------
<S> <C> <C>
SEAHAWK OVERSEAS EXPLORATION CORPORATION California 0%
(See Note 1)
EUROHAWK CORPORATION Delaware 100%
Subsidiary of Eurohawk Corporation:
----------------------------------
SEAHAWK FOODS INTERNATIONAL, INC. Delaware 100%
Subsidiary of Seahawk
Foods International, Inc.:
--------------------------
SRC FOOD GROUP LIMITED United Kingdom 70%
Subsidiaries of
SRC Food Group Limited:
-----------------------
SCOTCOAST LIMITED United Kingdom 80.26%
PEICO, LIMITED United Kingdom 50%
EXTRUCO, LIMITED Canada 0%
(See Note 2)
</TABLE>
- ----------------------------------------------
Note 1 - The Company's 73.4% interest in Seahawk Overseas
Exploration Corporation was disposed of on
December 31, 1994.
Note 2 - The Company's 33 1/3% interest in Extruco, Limited
was disposed of in August 1995.
<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> Dec-31-1994
<PERIOD-TYPE> 12-MOS
<CASH> 17,250
<SECURITIES> 0
<RECEIVABLES> 3,451
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 20,701
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 75,691
<CURRENT-LIABILITIES> 20,637
<BONDS> 0
0
0
<COMMON> 12,701,325
<OTHER-SE> (12,646,270)
<TOTAL-LIABILITY-AND-EQUITY> 75,691
<SALES> 346,474
<TOTAL-REVENUES> 478,358
<CGS> 262,452
<TOTAL-COSTS> 618,094
<OTHER-EXPENSES> 2,462
<LOSS-PROVISION> 309,808
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (451,969)
<INCOME-TAX> 0
<INCOME-CONTINUING> (451,969)
<DISCONTINUED> (80,316)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (532,285)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
