<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For Quarter ended Commission file number
October 31, 1995 33-18218-NY
DYNAMARK CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-3376786
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
56 Dune Road, Atlantic Beach, New York 11509
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 889-3630
N/A
Former name, former address and former fiscal year, if changed since
last report.
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 X No
Common Stock outstanding as of October 31, 1995:
18,000,000, par value .0001 per share.
<PAGE>
DYNAMARK CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
QUARTERLY REPORT FORM 10-Q FOR
THREE MONTHS ENDED OCTOBER 31, 1995 AND
FOR THE PERIOD FROM INCEPTION (AUGUST 1, 1986)
THROUGH OCTOBER 31, 1995
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
Page
Balance Sheets at October 31,
1995 and July 31, 1995 I-1
Statements of Operations for the Three Months
Ended October 31, 1995 and 1994 and for the
Period From Inception (August 1, 1986)
through October 31, 1995 I-2
Statements of Cash Flows for the Three Months
Ended October 31, 1995 and 1994 and for the
Period From Inception (August 1, 1986)
through October 31, 1995 I-3 - 5
Notes to Financial Statements I-6 - 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations I-8
PART II. OTHER INFORMATION
Signatures II-1
<PAGE>
DYNAMARK CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
OCTOBER 31, 1995 (UNAUDITED) AND JULY 31, 1995
ASSETS
October 31, July 31,
1995 1995
(Unaudited)
Current assets:
Cash $ 69,579 $ 69,935
Prepaid income taxes 430 450
-------- --------
Total current assets 70,009 70,385
-------- --------
Marketable equity securities - available for sale - 3,125
Computer equipment - at cost, less
accumulated depreciation of $13,556
at October 31 and July 31, 1995 - -
-------- --------
$ 70,009 $ 73,510
======== ========
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current liabilities:
Accrued liabilities and total
current liabilities $ 23,547 $ 16,882
-------- --------
Due to officer 149,461 147,961
-------- --------
Shareholders' deficiency:
Preferred stock - par value $.0001:
Authorized - 5,000,000 shares
Issued and outstanding - none
Common stock - par value $.0001:
Authorized - 50,000,000 shares
Issued and outstanding - 18,000,000 shares
at October 31 and July 31, 1995 1,800 1,800
Additional paid-in capital 556,751 556,751
Deficit accumulated during
the development stage (661,550) (652,996)
-------- --------
(102,999) (94,445)
Unrealized gain to reflect marketable equity
securities available for sale at market - 3,112
-------- --------
(102,999) (91,333)
-------- --------
$ 70,009 $ 73,510
======== ========
The accompanying notes are an integral part of these financial
statements.
I-1
<PAGE>
DYNAMARK CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Period
from
inception
(August 1,
1986)
Three months ended through
October 31, October
1995 1994 31, 1995
Revenue:
Interest income $ 909 $ 965 $ 132,147
Licensing revenue - - 1,469
Amortization of excess of fair
value of investment over its
book value at acquisition - - (17,500)
Equity in operating
losses of investee - (14,894)
Loss on write-downs for
impairment of investments (13) - (91,994)
---------- ---------- ----------
Total revenue 896 965 9,228
---------- ---------- ----------
Expenses:
Salaries:
Officer - - 282,980
Other - - 29,820
Automobile rental and expenses - - 28,618
Professional fees 6,865 12,500 157,267
Other, including rent expense
incurred to officer and director
of $1,500 in 1995 and 1994 and
$55,500 for the period from
inception to October 31, 1995 2,585 2,215 159,386
Licensing agreement:
Costs - - 11,238
Loss on termination - - 1,469
---------- ---------- ----------
Total expenses 9,450 14,715 670,778
---------- ---------- ----------
Net loss during the
development stage $ (8,554) $ (13,750) $ (661,550)
========== ========== ==========
Loss per common share $ - $ - $ (.04)
========== ========== ==========
Weighted average number 18,000,000 18,000,000 17,624,870
========== ========== ==========
The accompanying notes are an integral part of these financial
statements.
I-2
<PAGE>
DYNAMARK CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Period
from
inception
(August 1,
1986)
Three months ended through
October 31, October
1995 1994 31, 1995
Operating activities:
Net loss $(8,554) $(13,750) $(661,550)
Adjustments to reconcile net loss
to net cash provided (required)
by operating activities:
Amortization of excess of fair
value of investment over its
book value at acquisition - - 17,500
Equity in operating
losses of investee - - 14,894
Loss on write-downs for
impairment of investments 13 - 91,994
Depreciation and amortization - 43 22,155
Payment of deferred lease costs - - (7,200)
Payment of deposits - - (797)
Reduction in deposits - - 797
Changes in operating
assets and liabilities:
Increase in accrued
interest receivable - - (24,375)
(Increase) decrease in
prepaid income taxes 20 - (430)
Increase in accrued liabilities 6,665 13,100 23,547
Increase in due to officer 1,500 1,500 149,461
Other business taxes paid
by affiliate on behalf
of the Company - - 549
------- -------- ---------
Net cash provided (required)
by operating activities (356) 893 (373,455)
------- -------- ---------
Investing activities:
Purchase of investments
and related advances - - (225,013)
Proceeds of repayment of advances
related to investments - - 125,000
Acquisition of computer equipment - - (13,556)
------- -------- ---------
Net cash required by
investing activities - - (113,569)
------- -------- ---------
Subtotal (carried forward) (356) 893 (487,024)
The accompanying notes are an integral part of these financial
statements.
I-3
<PAGE>
DYNAMARK CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Period
from
inception
(August 1,
1986)
Three months ended through
October 31, October
1995 1994 31, 1995
Subtotal (brought forward) $ (356) $ 893 $(487,024)
------- ------- ---------
Financing activities:
Proceeds of sale of common stock
pursuant to public offering - - 576,030
Payments of notes payable - affiliate - - (19,427)
------- ------- ---------
Net cash provided by
financing activities - - 556,603
------- ------- ---------
Net increase (decrease) in cash
and cash equivalents (356) 893 69,579
Cash - beginning 69,935 98,729 -
------- ------- ---------
Cash - end $69,579 $99,622 $ 69,579
======= ======= =========
Cash paid (received) during
the periods for:
Income taxes $ 384 $ - $ 5,893
======= ======= =========
Interest $ (909) $ (965) $(107,772)
======= ======= =========
The accompanying notes are an integral part of these financial
statements.
I-4
<PAGE>
DYNAMARK CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED OCTOBER 31, 1995 AND 1994
AND FOR THE PERIOD FROM INCEPTION
(AUGUST 1, 1986) TO OCTOBER 31, 1995
(UNAUDITED)
Supplementary disclosures of noncash
investing and financing activities:
o Deferred registration costs,
organization costs, notes
payable - affiliate and
shareholders' equity:
During the period from inception (August 1, 1986) to July
31, 1987, the Company incurred deferred registration costs of
$10,000 in connection with its then anticipated initial public
offering. These costs were paid for by the Company's affiliate
on behalf of the Company. During the aforementioned period, the
affiliate also paid $90 of the other business taxes on behalf of
the Company. In consideration for the above described disburse-
ments of $10,090, the Company issued its noninterest bearing note
payable of $9,990 to this affiliate, plus 1,000,000 shares of its
$.0001 common stock for $100.
During the year ended July 31, 1988, the Company's affiliate
paid an additional $9,437 on behalf of the Company, consisting of
$459 of other business taxes and $8,978 of stock registration
costs, for which the Company issued an interest bearing note
payable to this affiliate.
During the period from inception (August 1, 1986) to July
31, 1987, the Company issued 14,000,000 shares of its $.0001
common stock for $1,400, representing organization costs paid by
the person to whom the shares were issued.
The accompanying notes are an integral part of these financial
statements.
I-5
<PAGE>
DYNAMARK CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 1995 AND 1994
(UNAUDITED)
Note A: General:
The financial statements contained within are unaudited
but reflect all adjustments which, in the opinion of the
Company, are necessary to fairly present the financial posi-
tion of the Company as of October 31, 1995, and its results
of operations and cash flows for the three month periods
ended October 31, 1995 and 1994 and from inception (August 1,
1986) through October 31, 1995.
Note B: Loss per share:
Loss per common share is computed as if all shares
issued during a year had been outstanding as of the beginning
of that year. Stock options and warrants have not been
included in the calculation since inclusion of such shares
would be anti-dilutive.
Note C: Results of operations:
The Company has been in the development stage since its
inception on August 1, 1986. The Company and its subsidi-
aries have not generated operating revenues as of October 31,
1995 and no assurance can be given that they will generate
revenues and earnings in the future.
Note D: Employment of consultant:
During the month of October 1991, the Company entered
into an agreement with an entity to render consulting
services to the Company in identifying equity or debt
financing and/or potential merger candidates. Under the
agreement, the Company paid a $5,000 nonrefundable fee to
that entity, which has been included within professional fees
during the three months ended October 31, 1991. Pursuant to
the agreement terms, the Company will be obligated to pay an
additional $5,000 upon identification of a potential source
of financing or a merger/acquisition candidate for the Compa-
ny. The Company is also obligated to make an additional
$15,000 payment upon the successful closing (signed letter of
intent) of either a financing agreement or merger/acquisition
for the Company. In addition, the agreement also provides
that the consulting entity will receive shares of Dynamark
Corporation, which will be restricted pursuant to Rule 144
of the Securities and Exchange Commission. The agreement
I-6
<PAGE>
DYNAMARK CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 1995 AND 1994
(UNAUDITED)
Note D: Employment of
consultant: (continued)
specifies that it will terminate upon successful identifica-
tion of financing or a merger/acquisition or at such time as
it is terminated by one of the parties.
As of October 31, 1995, there are no currently pending
financings or merger/acquisitions subject to this agreement.
Note E: Liquidity and
capital resources:
There have been no material changes in the Company's
financial position, liquidity or capital resources since July
31, 1995 other than the effect of incurring normal company
operating expenses discussed in Note C.
Note F: Impairment of investment in
marketable equity securities -
available for sale:
Due to the filing of bankruptcy of the investee, a loss
on write down for impairment of the Company's investment in
marketable securities has been recorded in the amount of $13.
Coincident to the aforementioned write-off, the Company has
also reflected a reversal of an unrealized gain previously
recorded to reflect those marketable equity securities avail-
able for sale at market of $3,112, as follows:
Unrealized gain to reflect marketable
equity securities available for sale
at market at July 31, 1995 $3,112
Less: Reversal of the aforementioned
unrealized gain during the
quarter ended October 31, 1995
resulting from impairment of
the investment 3,112
-----
Unrealized gain to reflect marketable
equity securities available for sale
at market at October 31, 1995 $ -
=====
I-7
<PAGE>
DYNAMARK CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 1995 AND 1994
(UNAUDITED)
Item 2. Management's discussion and
analysis of financial conditions
and results of operations:
o Results of operations:
The Company had a net loss of $8,554 for the three
months ended October 31, 1995 compared to $13,750 for
the three months ended October 31, 1994, principally due
to less professional fees being incurred during the
current period.
o Financial condition:
The Company had a shareholders' deficiency of
$102,999 at October 31, 1995 compared to $91,333 at July
31, 1995, its most recent year-end. The increase in
shareholders' deficiency is due to the net loss
sustained from operations during the three months ended
October 31, 1995 of $8,554 and the reversal of unreal-
ized gain to reflect available for sale marketable
equity securities at market of $3,112 for an investment
written off as impaired during the current period.
I-8
<PAGE>
DYNAMARK CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
QUARTER ENDED OCTOBER 31, 1995
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Registrant has duly caused this
Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
DATE: DYNAMARK CORPORATION
By:
- - ------------------------- -----------------------------
ALLAN ROTHSTEIN
President and Director
II-1
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<PERIOD-END> OCT-31-1995
<CASH> 69,579
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 70,009
<PP&E> 13,556
<DEPRECIATION> 13,556
<TOTAL-ASSETS> 70,009
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<COMMON> 1,800
0
0
<OTHER-SE> 556,751
<TOTAL-LIABILITY-AND-EQUITY> 70,009
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<INCOME-PRETAX> (8,554)
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