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Previous: NEXTEL COMMUNICATIONS INC, S-4/A, 1997-12-16 |
Next: AMERICAN REALTY TRUST INC, 8-K/A, 1997-12-16 |
<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, 1997 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, 1997:
18,000,000, par value .0001 per share.
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
QUARTERLY REPORT FORM 10-Q FOR
THREE MONTHS ENDED OCTOBER 31, 1997 AND
FOR THE PERIOD FROM INCEPTION (AUGUST 1, 1986)
THROUGH OCTOBER 31, 1997
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Page
----
Balance Sheet - October 31,
1997 and July 31, 1997 I-1
Statement of Operations - Three Months Ended
October 31, 1997 and 1996 and the Period
August 1, 1986 (date of inception)
to October 31, 1997 I-2 - 3
Statement of Cash Flows - Three Months Ended
October 31, 1997 and 1996 and the Period
August 1, 1986 (date of inception)
to October 31, 1997 I-4 - 5
Notes to Financial Statements I-6 - 7
Item 2. Management's Discussion and Analysis
of Financial Conditions and Results
of Operations I-8
PART II. OTHER INFORMATION
Signatures II-1
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
OCTOBER 31, 1997 (UNAUDITED) AND JULY 31, 1997
ASSETS
------
<TABLE>
<CAPTION>
October 31, July 31,
1997 1997
----------- --------
(Unaudited)
<S> <C> <C>
Current assets
Cash $ 205,147 $ 99,593
Note receivable - 97,500
Accrued interest receivable - 7,734
Prepaid income taxes 395 395
------------- -------------
Total current assets 205,542 205,222
Computer equipment - at cost, less accumulated
depreciation of $13,556 in 1997 and 1996 - -
------------- -------------
$ 205,542 $ 205,222
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
-------------------------------------------------
Current liabilities
Accrued expenses $ 18,059 $ 15,432
------------- -------------
Due to officer 161,461 159,961
------------- -------------
Shareholders' equity
Preferred stock, $.0001 par value; 5,000,000 shares
authorized, none issued - -
Common stock, $.0001 par value; 50,000,000 shares
authorized, 18,000,000 shares issued and outstanding 1,800 1,800
Additional paid-in capital 556,751 556,751
Deficit accumulated during the development stage ( 532,529) (528,722)
------------- -------------
26,022 29,829
------------- -------------
$ 205,542 $ 205,222
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
I-1
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Cumulative
August 1,
1986
(Date of
Inception)
Three Months Ended To
October 31, October 31,
1997 1996 1997
------------- ------------- ------------
<S> <C> <C> <C>
Revenues
Interest income $ 2,138 $ 685 $ 202,540
Licensing revenue - - 1,469
Amortization of excess of investment over
net assets acquired - - ( 17,500)
Equity in operating losses of investee - - ( 14,894)
Write-downs of investments - - ( 91,994)
Recovery of note receivable written off - - 97,500
------------- ------------- ----------
Total revenues 2,138 685 177,121
------------- ------------- ----------
Expenses
Salaries
Officer - - 282,980
Other - - 29,820
Automobile rental and expenses - - 28,618
Professional fees 2,943 3,150 175,338
Other, including rent expense incurred
to officer of $1,500 in 1997 and 1996
and $67,500 for the period from
inception to October 31, 1997 3,002 3,001 180,187
Licensing agreement:
Costs - - 11,238
Loss on termination - - 1,469
------------- ------------- ----------
Total expenses 5,945 6,151 709,650
------------- ------------- ----------
Net loss $ (3,807) $ (5,466) $( 532,529)
============= ============= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
(Continued)
I-2
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Cumulative
August 1,
1986
(Date of
Inception)
Three Months Ended To
October 31, October 31,
1997 1996 1997
---------- ----------- ------------
<S> <C> <C> <C>
Income (loss) per common share $ -0- $ -0- $ (.03)
========== ========== ==========
Weighted average number of shares
outstanding 18,000,000 18,000,000 17,691,560
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
I-3
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Cumulative
August 1,
1986
(Date of
Inception)
Three Months Ended To
October 31, October 31,
1997 1996 1997
------------- ------------- ------------
<S> <C> <C> <C>
Cash flows from operating activities
Net loss $ (3,807) $ (5,466) $ (532,529)
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities
Equity in operating losses of investee - - 14,894
Amortization of excess of investment
over net assets acquired - - 17,500
Write-down of investments - - 91,994
Recovery of note receivable written off - - ( 97,500)
Depreciation and amortization - - 22,155
Changes in assets and liabilities
Accrued interest receivable 7,734 - ( 24,375)
Prepaid income taxes - - ( 395)
Deferred lease costs - - ( 7,200)
Deposits - - ( 797)
Deposits repaid - - 797
Accrued expenses 2,627 1,950 18,059
Due to officer 1,500 1,500 161,461
Other - - 549
------------- ------------- -------------
Net cash provided by (used in)
operating activities (carried forward) 8,054 (2,016) (335,387)
------------- ------------- -------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
(Continued)
I-4
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Cumulative
August 1,
1986
(Date of
Inception)
Three Months Ended To
October 31, October 31,
1997 1996 1997
------------- ------------- ------------
<S> <C> <C> <C>
Net cash provided by (used in)
operating activities (brought forward) $ 8,054 $ (2,016) $ (335,387)
------------- ------------- ------------
Cash flows from investing activities
Investments and related advances - - (225,013)
Proceeds from repayment of advances - - 125,000
Proceeds from collection of note receivable 97,500 - 97,500
Acquisition of computer equipment - - ( 13,556)
------------- ------------- ------------
Net cash provided by (used in)
investing activities 97,500 - ( 16,069)
------------- ------------- ------------
Cash flows from financing activities
Proceeds of sale of common stock pursuant
to a public offering - - 576,030
Payments of notes payable, affiliate - - ( 19,427)
------------- ------------- ------------
Net cash provided by financing
activities - - 556,603
------------- ------------- ------------
Net increase (decrease) in cash 105,554 (2,016) 205,147
Cash, beginning of period 99,593 61,702 -
------------- ------------- ------------
Cash, end of period $ 205,147 $ 59,686 $ 205,147
============= ============= ============
Supplemental cash flow disclosures
Income taxes paid $ -0- $ -0- $ 6,346
============= ============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
I-5
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
1 - 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 position of the Company as of October 31,
1997, and its results of operations and cash flows for the three month
periods ended October 31, 1997 and 1996 and from inception (August 1, 1986)
through October 31, 1997.
2 - 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.
3 - RESULTS OF OPERATIONS
The Company has been in the development stage since its inception on
August 1, 1986. The Company has not generated operating revenues as of
October 31, 1997 and no assurance can be given that it will generate
revenues and earnings in the future.
4 - CONSULTING AGREEMENT
During the year ended July 31, 1992, 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 was included in professional fees for the year ended July 31,
1992. 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. 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. In addition,
the agreement 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 specifies that it will
terminate upon successful identification of financing or a
merger/acquisition, or when it is terminated by one of the parties.
(Continued)
I-6
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
4 - CONSULTING AGREEMENT (Continued)
During the year ended July 31, 1992, the Company entered into a
transaction covered by the consulting agreement, which resulted in a letter
of intent qualifying for compensation under the agreement. During that
year, the transaction was aborted. The Company incurred consulting fees of
$2,500 to this consultant in settlement of its obligation concerning the
letter of intent.
As of October 31, 1997, there are no currently pending financings or
merger/acquisitions subject to this agreement, which remains in effect.
5 - LIQUIDITY AND CAPITAL RESOURCES
There have been no material changes in the Company's financial
position, liquidity or capital resources since July 31, 1997 other than the
effect of incurring normal company operating expenses discussed in Note 3
and the collection of a note receivable of $97,500 and related interest of
$8,548 during the current quarter.
I-7
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS
. Results of Operations
The Company had a net loss of $3,807 for the
three months ended October 31, 1997 compared to $5,466
for the three months ended October 31, 1996,
principally due to less professional fees being
incurred and more interest income being earned during
the current period.
. Financial Condition
The Company had a shareholders' equity of $26,022
at October 31, 1997 compared to $29,829 at July 31,
1997, its most recent year-end. The decrease in
shareholders' equity is due to the net loss sustained
from operations during the three months ended October
31, 1997 of $3,807.
The Company's principal asset at October 31,
1997 and its prior year ended July 31, 1997 continues
to be cash. Changes in the Company's cash balance
result from a one-time collection of approximately
$106,000 from an old note receivable and a portion of
interest due on it, less payment of operating expenses,
primarily professional fees.
The Company is expected to remain in the
development stage for the foreseeable future. As such,
the Company is likely to only incur professional fees
and miscellaneous expenses in the future.
I-8
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
QUARTER ENDED OCTOBER 31, 1997
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
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-END> OCT-31-1997
<CASH> 205,147
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 205,542
<PP&E> 13,556
<DEPRECIATION> 13,556
<TOTAL-ASSETS> 205,542
<CURRENT-LIABILITIES> 18,059
<BONDS> 0
<COMMON> 1,800
0
0
<OTHER-SE> 26,022
<TOTAL-LIABILITY-AND-EQUITY> 205,542
<SALES> 0
<TOTAL-REVENUES> 2,138
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,945
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,807)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,807)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
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