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Previous: PUTNAM MASTER INCOME TRUST, N-30D, 1998-12-16 |
Next: AIM INVESTMENT FUNDS, N-14/A, 1998-12-16 |
<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, 1998 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, 1998:
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, 1998 AND
FOR THE PERIOD FROM INCEPTION (AUGUST 1, 1986)
THROUGH OCTOBER 31, 1998
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
<TABLE>
<CAPTION>
Page
----
<S> <C>
Balance Sheet as of October 31,
1998 and July 31, 1998 I-1
Statement of Operations for the Three Months Ended October 31,
1998 and 1997 and for the Period From Inception (August 1,
1986) Through October 31, 1998 I-2 - 3
Statement of Cash Flows for the Three Months Ended October 31,
1998 and 1997 and for the Period From Inception (August 1,
1986) Through October 31, 1998 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
</TABLE>
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
OCTOBER 31, 1998 (UNAUDITED) AND JULY 31, 1998
ASSETS
<TABLE>
<CAPTION>
October 31, July 31,
1998 1998
----------- --------
(Unaudited)
<S> <C> <C>
Current assets
Cash $ 199,820 $ 201,850
Prepaid income taxes - 15
------------- -------------
Total current assets 199,820 201,865
Computer equipment - at cost, less accumulated
depreciation of $13,556 at October 31, 1998
and July 31, 1998 - -
------------- ---------
$ 199,820 $ 201,865
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accrued expenses $ 21,056 $ 14,878
------------- -------------
Due to officer 167,461 165,961
------------- -------------
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 (547,248) (537,525)
------------- -------------
11,303 21,026
------------- -------------
$ 199,820 $ 201,865
============= =============
</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
Three Months Ended Inception)
October 31, To
------------------------------- October 31,
1998 1997 1998
------------- ------------- -------------
<S> <C> <C> <C>
Revenues
Interest income $ 2,264 $ 2,138 $ 212,250
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 2,264 2,138 186,831
------------- ------------- -------------
Expenses
Salaries
Officer - - 282,980
Other - - 29,820
Automobile rental and expenses - - 28,618
Professional fees 8,969 2,943 187,963
Other, including rent expense incurred
to officer of $1,500 in 1998 and 1997
and $73,500 for the period from
inception to October 31, 1998 3,018 3,002 191,991
Licensing agreement:
Costs - - 11,238
Loss on termination - - 1,469
------------- ------------- -------------
Total expenses 11,987 5,945 734,079
------------- ------------- -------------
Net loss $ (9,723) $ (3,807) $ (547,248)
============= ============= =============
</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
Three Months Ended Inception)
October 31, To
----------------------------------- October 31,
1998 1997 1998
-------------- ------------- ------------
<S> <C> <C> <C>
Basic income (loss) per common share $ - $ - $ (.03)
============== ============== =============
Weighted average number of shares
outstanding 18,000,000 18,000,000 17,716,739
========== ========== ==========
</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
Three Months Ended Inception)
October 31, To
------------------------------ October 31,
1998 1997 1998
------------- ------------- ------------
<S> <C> <C> <C>
Cash flows from operating activities
Net loss $ (9,723) $ (3,807) $ (547,248)
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 15 - -
Deferred lease costs - - (7,200)
Deposits - - (797)
Deposits repaid - - 797
Accrued expenses 6,178 2,627 21,056
Due to officer 1,500 1,500 167,461
Other - - 549
------------- ------------- ----------
Net cash provided by (used in)
operating activities (2,030) 8,054 (340,714)
------------- ------------- ----------
</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
Three Months Ended Inception)
October 31, To
------------------------------ October 31,
1998 1997 1998
------------- ------------- -------------
<S> <C> <C> <C>
Cash flows from investing activities
Investments and related advances $ - $ - $ (225,013)
Proceeds from repayment of advances - - 125,000
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 (2,030) 105,554 199,820
Cash, beginning of period 201,850 99,593 -
------------- ------------- -------------
Cash, end of period $ 199,820 $ 205,147 $ 199,820
============= ============= =============
Supplemental cash flow disclosures
Income taxes paid $ -0- $ -0- $ 6,726
============= ============= =============
</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 accompanying financial statements 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, 1998, and
the results of its operations and its cash flows for the three month
periods ended October 31, 1998 and 1997 and from inception (August 1, 1986)
through October 31, 1998.
2 - INCOME OR LOSS PER SHARE OF COMMON STOCK
The weighted average number of shares for purposes of computing basic
loss per share of common stock on the cumulative net loss is computed as if
all shares had been outstanding as of the beginning of the respective
years.
3 - RESULTS OF OPERATIONS
The Company has been in the development stage since its inception on
August 1, 1986. It has not generated operating revenues as of October 31,
1998 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, 1998, there are no currently pending financings or
mergers/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, 1998 other than the
effect of incurring normal company operating expenses.
I-7
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
o Financial Condition
The Company's shareholders' equity was $11,303
at October 31, 1998 compared to $21,026 at July 31,
1998, its most recent year-end. The decrease in
shareholders' equity is due to the net loss sustained
from operations of $9,723 for the three months ended
October 31, 1998.
The Company's principal asset at October 31,
1998 and July 31, 1998 is cash. Changes in the
Company's cash balance result from the 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 incur only professional fees
and miscellaneous expenses.
o Results of Operations
The Company had a net loss of $9,723 for the
three months ended October 31, 1998 compared to a net
loss of $3,807 for the three months ended October 31,
1997, principally due to an increase in professional
fees.
I-8
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
QUARTER ENDED OCTOBER 31, 1998
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-31-1999
<PERIOD-END> OCT-31-1998
<CASH> 199,820
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 199,820
<PP&E> 13,556
<DEPRECIATION> 13,556
<TOTAL-ASSETS> 199,820
<CURRENT-LIABILITIES> 21,056
<BONDS> 0
<COMMON> 1,800
0
0
<OTHER-SE> 9,753
<TOTAL-LIABILITY-AND-EQUITY> 199,820
<SALES> 0
<TOTAL-REVENUES> 2,264
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 11,987
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (9,723)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,723)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
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