SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest reported): July 21, 2003
Sealant Solutions, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
0-22954 65-0952186
(Commission File Number) (IRS Employer Identification No.)
16 North Main Street, Suite 395
New City, NY 10956
(Address of Principal Executive Offices)(Zip Code)
(845) 634-7979
(Registrant's Telephone Number, Including Area Code)
29 Abbey Lane, Middleboro, Massachusetts 02346
(Former Name or Former Address, if Changed Since Last Report)
INFORMATION TO BE INCLUDED IN THE REPORT
Item 1. Changes in Control of Registrant
On July 21, 2003 (the "Effective Date"), Pursuant to a Stock Purchase Agreement
and Share Exchange ("Agreement") and Amendment thereto ("Amendment") between
Sealant Solutions, Inc., a Delaware corporation with its principal place of
business located at 29 Abbey Lane, Middleboro, Massachusetts 02346 ("Sealant" or
the "Company") and PowerChannel, Inc., a Delaware corporation with its principal
place of business located at 16 North Main Street, Suite 395, New City, New York
10956 ("PowerChannel"), PowerChannel merged into Sealant. Pursuant to the
Amendment, the separate existence of PowerChannel ceased to exist and Sealant
continued as the surviving corporation. In addition, Sealant has agreed to
change its name to Powerchannel, Inc.
Pursuant to the terms of the Agreement, Michael Fasci remained on the Board of
Directors of the Company, Edward Fasci resigned from the Company's Board of
Directors and Steven Lampert was appointed to fill the vacancy on the Board of
Directors of the Company. In addition, Michael Fasci resigned as President and
Chief Executive Officer of Sealant and Steve Lampert was appointed as President,
Chief Executive Officer, Chief Financial Officer and Secretary of Sealant.
The Acquisition was approved by the unanimous consent of the Board of Directors
of Sealant and PowerChannel on July 21, 2003.
The following table sets forth information regarding the beneficial ownership of
the shares of the Common Stock (the only class of shares previously issued by
Sealant) at July 21, 2003, by (i) each person known by the Company to be the
beneficial owner of more than five percent (5%) of the Company's outstanding
shares of Common Stock, (ii) each director of the Company, (iii) the executive
officers of the Company, and (iv) by all directors and executive officers of the
Company as a group, prior to and upon completion of this Offering. Each person
named in the table, has sole voting and investment power with respect to all
shares shown as beneficially owned by such person and can be contacted at the
address of the Company.
NAME OF SHARES OF
TITLE OF CLASS BENEFICIAL OWNER COMMON STOCK PERCENT OF CLASS
- ------------------------------------------------------------------------------
5% STOCKHOLDERS
Common Steven Lampert 4,097,025(1) 36.54%
Common Michael E. Fasci 1,126,433 10.05%
(1) Includes 254,652 shares held in the name of Karen Lampert, the wife of
Steven Lampert.
DIRECTORS AND NAMED EXECUTIVE
OFFICERS
Common Steven Lampert 4,097,025 36.54%
Common Michael E. Fasci 1,126,433 10.05%
DIRECTORS AND 5,223,458 46.59%
OFFICERS AS A
GROUP
The following is a biographical summary of the directors and officers of the
Company:
Steven Lampert
Steven Lampert was appointed as President, Chief Executive Officer, Chief
Financial and Director of the Company on July 21, 2003. Mr. Lampert has been the
President and Chief Executive Officer of PowerChannel, Inc. since 1998. In such
capacities his responsibilities include managing the day to day operations of
the Company and its divisions. Prior to PowerChannel, Mr. Lampert co-founded
Long Distance Direct and was its Chief Executive Officer from December 1991.
Prior to founding LDDI, Mr. Lampert was President of Comtec, Inc., a New York
based telecommunications corporation that pioneered interactive voice-response
telephony, from November 1985 through November 1991. Prior to 1985, Mr. Lampert
served as a Director of Telecommunications for NBC and Corning Labs. Mr Lampert
holds a BA degree from Hunter College, New York. Mr Lampert also serves as
Director and Executive Deputy Chairman of PowerChannel Europe and PowerChannel
Limited.
Michael Fasci
Michael E. Fasci joined the Company in August, 1998, as a director and has
served as Chairman of the Company's Audit Committee since January 1999, and as
Chief Executive Officer since August, 2000. Mr. Fasci is the founder, President
and Chief Executive Officer of Process Engineering Services, Inc., which has its
principal executive offices located in Raynham, Massachusetts. Process
Engineering Services, Inc. designs and manufactures pollution recovery equipment
for the manufacturing industry with clients worldwide. Since founding the
company in 1987, he has grown the company in each successive year to where it is
today with annual sales in excess of 1 million. In 1997, Mr. Fasci qualified
for, and currently maintains Enrolled Agent status with the Internal Revenue
Service. He also has developed a financial consulting and tax practice that
serves primarily corporate clients. Mr. Fasci also currently owns and manages a
number of other small businesses.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Pursuant to the Amendment to Stock Purchase Agreement and Share Exchange,
PowerChannel merged with and into Sealant and PowerChannel shall cease to exist
and Sealant shall continue as the surviving corporation. In addition, Sealant
has agreed to change its name to PowerChannel, Inc.
Based on such merger, we have adopted a new business plan. Our principal product
is low-cost access to the Internet and the physical hardware to deliver it
through the use of the consumer's existing television. It is the only product of
its kind focused specifically on the Hispanic market, using a bilingual
(English/Spanish) approach to meet the needs of the differing generations within
the Hispanic community, and offering value to the subscriber through offers,
discounts, coupons and prizes. We have our operations mainly in New York and Los
Angeles but aspire to expand throughout the United States and South America.
We believe that our subscription-based business will be profitable. We have
formed a number of strategic alliances and commercial relationships designed in
aggregate to enable it to offer our services to the Hispanic market, both in the
United States and South America, the lowest-cost hardware and access to the
Internet available through the television. The alliances and relationships will
focus initially on the Los Angeles and New York sectors of the market.
The PowerChannel home page offers the subscriber an English/Spanish language
option at the click of a button. Our portal points the subscriber to all the
major Hispanic portals and to links with Hispanic commercial, educational and
community sites. The reach of our links is designed to embrace the full extent
of diverse Hispanic cultural and ethnic interests. As we develop, we will
continue to utilize the already existing and successful Hispanic-specific
content of others to enhance the practical sense of community that its planned
household penetration creates.
The management team has considerable experience in building businesses from a
standing start. Most relevant of the varied businesses which between them they
have built or managed are companies in telecommunications (where substantial
consumer audiences were addressed and captured) and marketing services (where
data and data-related marketing services were sold to major international
consumer product and services groups). As a team, the present management was
responsible for developing the PowerChannel product and service to the point of
launch in an associated company in the United Kingdom. The management team also
includes a strong Hispanic element, with extensive marketing experience in
relation to the Hispanic community in the United States.
We aim to have certain distinct, if not unique, features within a five-year
timeframe. These features include the only sub-$100 Internet solution in the US,
a core paying subscriber base of 200,000, and an unrivalled focus on the
Hispanic community. At the same time, the financial model is designed to
generate profits at relatively modest subscriber levels. We believe that
demonstration of progress towards achieving its business model will make us an
attractive acquisition target for companies in various fields including
Internet, marketing services and Hispanic media.
We offer low-cost access to the Internet and the physical hardware to deliver it
through the use of the consumer's existing television. The product is targeted
specifically at the Hispanic market and primarily to households who are
currently not online. A review of the United States consumer market indicates
that domestic Internet penetration in certain minority groupings is below 25%.
It is these minority groups that we are targeting. We are working with a number
of affinity groups and Hispanic organizations to establish marketing programs to
attract these minority groups.
We have specifically targeted the Hispanic Community in the United States. The
Hispanic population comprises 12.5% of the 283.8 million people in the United
States. Despite being the fastest growing minority community in the United
States today, Hispanic Americans have the lowest Internet penetration of any
major ethnic group. Language barriers are a major deterrent for Hispanics use of
the Internet. We offer a Spanish Language option on its product.
We realize that creating strategic alliances are key to building a successful
business. Currently, we have alliances with the following businesses:
o Famsa - one of Mexico's largest retail chains with more than 250
locations, is rapidly expanding a major retail presence in Southern
California and other US Hispanic major markets, with 5 stores already
open in Southern California and plans for at least fifteen more.
o Terra Lycos - a global Internet group with a presence in 43 countries
in 20 languages, reaching 115 million users per month around the world.
The group, resulting from Terra Networks S.A.'s acquisition of Lycos,
Inc. in October 2000, operates some of the most popular Web sites in
the United States, Canada, Europe, Asia and Latin America, and is the
largest access provider in Spain and Latin America.
Terra Lycos has the largest global footprint of any Internet portal
with more than 140 sites in 41 countries through its network of Web
sites as well as through joint venture partnerships. Terra Lycos's
financial strength, including a cash balance of more than 2 billion
euros, the company is one of the best capitalized Internet companies
and is poised to continue with the rapid expansion of its global
presence.
o ESPN Deportes is the world leader in sports news, information and
broadcasting targeted to the Spanish speaking markets. ESPN Deportes
highlights international sports news and events, with particular
attention to Spanish speaking countries and popular Hispanic sports.
o Wal-Mart is the largest retailer in the US with over 4,000 locations.
PowerChannel will be in 6 stores before the end of July and an
additional fifty locations by the end of 2003.
We are also in negotiations with several other significant commercial entities
that address the Hispanic market in order to extend our strategic alliances in
that market.
We have recently received favorable publicity for its product, with features on
Telemundo and in the Hispanic press. We have identified our target customer
profile as companies that are focusing their marketing efforts on reaching out
to ethnic communities such as Hispanics for test marketing, direct sales and
market research applications. The United States Hispanic market has become
fruitful ground for companies who want to expand their market share or increase
revenues. We believe that we will bring the new age of advertising via the
Internet into the homes of many Hispanic communities.
Our product was launched by Powerchannel, Inc. in June 2002 and since then has
been generating revenues. We have identified marketing approaches that are both
economically and sales effective. The marketing approach is a four pronged
approach that includes a relationship with Terra Lycos which will enable us to
launch in Peru; a relationship with Famsa in both their Los Angeles and Mexico
stores; a relationship with Walmart where we will be in 50 locations by the end
of 2003; and a relationship with Salton who is a leading domestic designer.
We operate in the same space as many other Internet access companies, such as
other computer and TV based ISP services, dial-up ISPs, cable companies,
interactive television and other providers of Internet access to the general
public. We do not know of any other competitor who is targeting the Hispanic
community through low cost TV Internet access. MSN TV is the only realistic
provider of through the television Internet access, however, our offering is far
lower than the MSN TV package.
Our business involves the collection of consumer data and the distribution of
information about consumers to numerous entities, including, to a limited
extent, direct marketers. Using the Internet to acquire consumer or household
data has created hypersensitivity towards privacy standards in data collection.
We believe that our business method of data collection will benefit tremendously
from this legislative environment because we only acquire and use data developed
from permission-based sources.
We are not currently subject to direct regulation by any government agency in
the United States, other than regulations applicable to businesses generally,
such as registering to operate a business within each state or collect sales
tax. However, due to the increasing popularity of the Internet, it is possible
that a number of laws and regulations may be adopted with respect to the
Internet. Our business is also subject to the FCC regulations for compliance
with various suitability mandates in order for our set-top boxes to access the
public telephone networks such as FCC Part 68 and Underwriter's laboratory for
electrical and fire safety. We have utilized highly reputable testing
organizations to ensure its compliance with all safety regulations.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired:
None
(c) Exhibits
Number Exhibit
- ------ -------
10.1 Stock Purchase Agreement and Share Exchange
10.2 Amendment to Stock Purchase Agreement and Share Exchange
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.
SEALANT SOLUTIONS, INC.
By: /s/ Steve Lampert
----------------------
Steven Lampert
President
July 25, 2003