SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[x] Quarterly Report Pursuant to Section 13 or 15(d)
Securities Exchange Act of 1934
for Quarterly Period Ended June 30, 2000
-OR-
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities And Exchange Act of 1934
for the transaction period from _________ to________
Commission File Number 33-55254-10
Seair Group, Inc.
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(Exact name of registrant as specified in its charter)
Nevada 87-0438825
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
6831 Edgewater Commerce Parkway, Suite 1110, Orlando, FL 32810
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(Address of principal executive offices, Zip Code)
(407) 445-1035
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(Registrant's telephone number, including area code)
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 preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and
(2) has been subject to such filing
requirements for the past 90 days.
Yes [ X ] No [ ]
The number of outstanding shares of the
registrant's common stock, par value $.001
as of June 30, 2000 is 2,115,960
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
SEAIR GROUP, INC.
(A DEVELOPMENT STAGE ENTITY)
CONDENSED BALANCE SHEETS
JUNE 30, DECEMBER 31,
2000 1999
(NOTE 1) (NOTE 1)
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Current assets:
Note receivable $ 25,000 $ --
Accounts receivable -- 6,435
Inventory, net -- 40,992
Prepaid expenses 78,750 1,667
----------- -----------
Total current assets 103,750 49,094
----------- -----------
Property and equipment, net -- 7,551
Other assets:
Deposits 4,740 5,140
----------- -----------
$ 108,490 $ 61,785
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank overdraft $ 984 $ 2,418
Accounts payable -- 21,149
Accrued liabilities 1,035,020 96,629
Notes payable -- 15,000
Due to stockholder 5,541 5,541
Reserve for repurchase of boats 53,000 190,000
----------- -----------
Total liabilities 1,094,545 330,737
----------- -----------
Stockholders' equity:
Common stock 2,116 1,423
Additional paid-in capital 1,941,066 1,281,759
Deficit accumulated during the development stage (2,929,237) (1,552,134)
----------- -----------
Total stockholders' equity (986,055) (268,952)
----------- -----------
$ 108,490 $ 61,785
=========== ===========
</TABLE>
Unaudited -- See accompanying notes to condensed financial statements.
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<PAGE>
SEAIR GROUP, INC.
(A DEVELOPMENT STAGE ENTITY)
CONDENSED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Six Months July 9,
Ended Ended 1986 (Date of
June 30, June 30, June 30, June 30, Inception) to
-------------------------- -------------------------- June 30,
2000 1999 2000 1999 2000
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES $ -- $ 122,629 $ -- $ 203,202 $ 365,208
COSTS AND EXPENSES:
Cost of sales -- 166,592 -- 256,822 389,631
----------- ----------- ----------- ----------- -----------
GROSS LOSS -- (43,963) -- (53,620) (24,423)
SELLING, GENERAL & ADMINISTRATIVE 1,255,761 208,433 1,350,121 362,064 2,636,188
----------- ----------- ----------- ----------- -----------
OPERATING LOSS (1,255,761) (252,396) (1,350,121) (415,684) (2,660,611)
----------- ----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE) (27,355) 31,500 (26,982) 31,500 (268,626)
----------- ----------- ----------- ----------- -----------
NET LOSS $(1,283,116) $ (220,896) $(1,377,103) $ (384,184) $(2,929,237)
=========== =========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,944,373 1,061,308 1,686,773 1,054,055
NET LOSS PER PRIMARY AND
DILUTED SHARE $ (.66) $ (.21) $ (.82) $ (.37)
=========== =========== =========== ===========
</TABLE>
Unaudited -- See accompanying notes to condensed financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
SEAIR GROUP, INC.
(A DEVELOPMENT STAGE ENTITY)
CONDENSED STATEMENTS OF CASH FLOWS
July 9, 1986
Six Months Ended (Date of
--------------------------- Inception) to
2000 1999 June 30, 2000
---- ---- -------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(1,377,103) $ (384,184) $(2,929,237)
Adjustments to reconcile net loss to
net cash flows used in operating activities:
Depreciation and amortization 3,450 3,450 9,792
Loss on disposal of assets 36,521 -- 36,521
Bad debt expense -- -- 25,000
Obsolete inventory write downs -- -- 23,144
Issuance of stock for interest -- -- 100,000
Issuance of stock for services 325,000 79,300 404,300
Reserve for repurchase of boat -- -- 190,000
Changes in assets and liabilities:
Decrease (increase) in accounts receivable 5,880 (5,179) (555)
Increase in inventory (16,306) 7,746 (80,442)
(Increase) decrease in prepaid expenses (78,750) 18,081 (80,417)
Increase in customer deposits -- (13,500) 2,500
(Decrease) increase in accounts payable (21,149) 91,505 --
Increase in accrued expenses 803,891 63,044 874,020
----------- ----------- -----------
Net cash flows used in operating activities (318,566) (139,737) (1,425,374)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease (increase) in notes receivable -- 12,500 (37,500)
Payments on notes receivable from shareholders -- -- 12,500
Purchase of property and equipment -- (2,420) (13,893)
Increase in deposits -- -- (5,140)
----------- ----------- -----------
Net cash provided by investing activities -- 10,080 (44,033)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 335,000 116,151 1,113,982
Issuance of notes payable -- 50,000 473,900
Deposits on unissued stock -- -- 24,000
Increase in due from shareholders -- -- 5,541
Payments on notes payable (15,000) -- (149,000)
----------- ----------- -----------
Net cash flows from financing activities 320,000 166,151 1,468,423
----------- ----------- -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS 1,434 36,494 (984)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD (2,418) 21,081 --
----------- ----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ (984) $ 57,575 $ (984)
=========== =========== ===========
SUPPLEMENTAL DISCLOSURES:
Conversion of debt to common stock $ -- $ -- $ 324,900
=========== =========== ===========
</TABLE>
Unaudited-See accompanying notes to condensed financial statements.
4
<PAGE>
SEAIR GROUP, INC.
(A DEVELOPMENT STATE ENTITY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION:
The accompanying consolidated financial statements have been prepared in
accordance with the instructions to Form 10-QSB and do not include all of the
information and footnotes required by generally accepted accounting principles
for complete statements. Management believes that all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of such
financial statements, have been included. The preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities as of
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. If such differences prove significant and material, Seair Group, Inc.
(the "Registrant") will file an amendment to this report on Form 10-QSB.
NOTE 2 - OPERATIONAL STATUS:
The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles, which contemplates
continuation of the Registrant as a going concern. However, the Registrant has
sustained substantial operating losses in recent years and for the six-month
period ended June 30, 2000, and the Registrant has used substantial amounts of
working capital in its operations. At June 30, 2000, current liabilities exceed
current assets by $990,795. Management believes that the acquisition discussed
in Note 4 below will lead to the overall structure necessary to fulfill the
Registrant's strategic plans and provide the opportunity to continue as a going
concern.
NOTE 3 - STOCKHOLDERS' EQUITY:
During the six months ended June 30, 2000, the Registrant raised $335,000
through the issuance of 478,571 shares of post-split common stock at $.70 per
post-split share.
During the six months ended June 30, 2000, the Company issued 214,286 shares of
its common stock to certain of its officers and employees in lieu of
compensation. The value of these shares of common stock was determined to range
from $.70 to $1.58 per share, based on the date of issue. This resulted in a
charge to earnings for compensation in the amount of $325,000.
NOTE 4 - MEMORANDUM OF UNDERSTANDING:
The Registrant's plan is to acquire an interest in a business entity which
desires to seek the perceived advantages of a corporation which is a reporting
public company pursuant to the Securities Exchange Act of 1934. On June 26,
2000, the Registrant entered into a memorandum of understanding with Our Foods
Product Group, Inc. d/b/a Jardine's, a privately held Texas corporation
("Jardine's"), to effect a share exchange with the existing Jardine's
stockholders. Jardine's manufactures a full line of high-quality Texas-style
specialty foods. Jardine's produces its products under several different brand
names, depending upon the targeted marketing channel, such as, "D.L. Jardine's
Special Edition", "Jardine's Ranch", "Shotgun Willie", "Sontaval", "W.B.
William's", "Dixie Dan", and "Jardine Gourmet." The products are marketed and
distributed through grocery, gourmet and gift retailers throughout the United
States and in a number of foreign countries.
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<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
PLAN OF OPERATION
During the six months ended June 30, 2000, the Registrant completed the
first of two transactions to change the focus of its business. First, on May 1,
2000, it completed the sale of all of the assets and certain of the liabilities
of the Seair Ultralite Flying Inflatable Boat business to Seair Ultralites, LLC
in exchange for $25,000. The consummation of this transaction resulted in the
Registrant becoming a "blank check" company, having no business or operations.
On June 26, 2000, it entered into a memorandum of understanding with Our Foods
Product Group, Inc. d/b/a Jardine's, a private Texas company ("Jardine's"), to
effect a share exchange which would result in such company becoming a
wholly-owned operating subsidiary of the Registrant.
RESULTS OF OPERATIONS
Six months ended June 30, 2000 compared to the six months ended June 30, 1999
During the six months ended June 30, 2000, the Registrant was in the
process of winding down operations in the Seair Ultralite Flying Boat business,
and pursuing a candidate for a business combination. There were no sales in the
first six months of 2000, compared to sales of $203,000 in the first six months
of 1999. Correspondingly, there was no cost of sales in the first six months of
2000, compared to $257,000 in the first six months of 1999.
Selling, general and administrative costs for the six months ended June
30, 2000 were $1,350,000 as compared to $362,000 for 1999. This increase was
primarily attributable to consulting expenses related to the sale of the
business.
Liquidity and Capital Resources
During the six months ended June 30, 2000, the Registrant raised
$335,000 through the sale of restricted common stock to several accredited
investors. These funds were primarily used to buy back the previously sold
Flying Boats in the United States due to structural defects which were
discovered in the hulls of the Flying Boats and to fund operations.
General Business Plan
The Registrant's plan has been to acquire an interest in a business
entity which desires to seek the perceived advantages of a corporation which is
a reporting public company pursuant to the Securities Exchange Act of 1934 . In
the second quarter of 2000, the Registrant terminated a memorandum of
understanding with a private company, FX BestRates. Com, Inc., and on June 26,
2000, the Registrant entered into a memorandum of understanding with Jardine's.
Jardine's manufactures a full line of high-quality Texas-style specialty foods.
Jardine's produces its products under several different brand names, depending
upon the targeted marketing channel, such as, "D.L. Jardine's Special Edition",
"Jardine's Ranch", "Shotgun Willie", "Sontaval", "W.B. William's", "Dixie Dan",
and "Jardine Gourmet." The products are marketed and distributed through
grocery, gourmet and gift retailers throughout the United States and in a number
of foreign countries. In addition to its own brands, Jardine's manufactures,
packages and distributes products under its private label program for some of
the country's most prominent food purveyors. It is anticipated that the
transaction with Jardine's will be consummated in the third quarter of 2000 and
will result in Jardine's becoming a wholly-owned operating subsidiary of the
Registrant.
6
<PAGE>
The acquisition of Jardine's calls for the issuance of common stock. As
a result, the present management and stockholders will no longer control the
Registrant. In addition, it is likely that the Registrant's sole officer and
director will, as part of the terms of the acquisition transaction, resign and
be replaced by one or more new officers and directors. The Registrant's current
stockholders will hold a substantially lesser percentage ownership interest in
the Registrant following the acquisition as a result of the issuance of a
substantial number of shares of common stock.
It is anticipated that the common stock issued in the transaction with
Jardine's will be issued in reliance upon exemptions from registration under
applicable federal and state securities laws. The issuance of additional
securities and their potential sale into any trading market may depress the
market value of the such securities in the future if such a market develops, of
which there is no assurance.
The Registrant has experienced negative cash flow since inception. If
the Jardine's transaction is not consummated, additional working capital may be
needed from additional investors, the availability and likelihood of which
cannot be assured.
Forward Looking Statements
This report contains certain forward-looking statements that are based
on current expectations. In light of the important factors that can materially
affect results, including those set forth above and elsewhere in this report,
the inclusion of forward-looking information herein should not be regarded as a
representation by us or any other person that the objectives or plans of the
Registrant will be achieved.
Assumptions relating to management decisions are subjective in many
respects and thus susceptible to interpretations and periodic revisions based on
actual experience and business developments, the impact of which may cause the
Registrant to alter its capital expenditure or other budgets, which may in turn
affect the Registrant's financial position.
Part II
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
During the six months ended June 30, 2000, the Registrant raised
$335,000 through the issuance of 478,571 shares of post-split common stock.
During the six months ended June 30, 2000, the Company issued 214,286
shares of its common stock to certain of its officers and employees in lieu of
compensation. The value of these shares of common stock was determined to range
from $.70 to $1.58 per share, based on the date of issue. This resulted in a
charge to earnings for compensation in the amount of $325,000.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibit is filed herewith:
Exhibit 27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
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<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.
SEAIR GROUP, INC.
Dated: August 21, 2000 By: /s/ Steven H. Kerr
----------------------------------
Steven H. Kerr
Chairman of the Board of
Directors and President
(duly authorized officer of the
registrant and principal financial
officer of the registrant)
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