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Previous: BANKFIRST CORP, S-4/A, 1998-06-12 |
Next: SCOTTS COMPANY, 8-K, 1998-06-12 |
<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
April 30, 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 April 30, 1998:
18,000,000, par value $.0001 per share.
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
QUARTERLY REPORT FORM 10-Q FOR
THREE MONTHS AND NINE MONTHS ENDED APRIL 30, 1998 AND 1997
AND FOR THE PERIOD FROM INCEPTION (AUGUST 1, 1986)
THROUGH APRIL 30, 1998
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Page
----
Balance Sheet as of April 30, 1998 and July 31, 1997 I-1
Statement of Operations for the
Three Months and Nine Months Ended April 30,
1998 and 1997 and for the Period From Inception
(August 1, 1986) Through April 30, 1998 I-2
Statement of Cash Flows for the
Three Months and Nine Months Ended April 30,
1998 and 1997 and for the Period From Inception
(August 1, 1986) Through April 30, 1998 I-3 - 4
Notes to Financial Statements I-5 - 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations I-7
PART II. OTHER INFORMATION
Signatures II-1
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
APRIL 30, 1998 (UNAUDITED) AND JULY 31, 1997
<TABLE>
<CAPTION>
ASSETS
April 30, July 31,
1998 1997
----------- -----------
(Unaudited)
<S> <C> <C>
Current assets
Cash $ 199,928 $ 99,593
Note receivable - 97,500
Accrued interest receivable - 7,734
Prepaid income taxes 395 395
----------- -----------
Total current assets 200,323 205,222
Computer equipment - at cost, less accumulated
depreciation of $13,556 at April 30, 1998
and July 31, 1997 - -
----------- -----------
$ 200,323 $ 205,222
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accrued expenses $ 15,078 $ 15,432
----------- -----------
Due to officer 164,461 159,961
----------- -----------
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
at April 30, 1998 and July 31, 1997 1,800 1,800
Additional paid-in capital 556,751 556,751
Deficit accumulated during the development stage (537,767) (528,722)
----------- -----------
20,784 29,829
----------- -----------
$ 200,323 $ 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>
Period From
Inception
(August 1,
Three Months Ended Nine Months Ended 1986)
April 30, April 30, Through
------------------------- ------------------------- April 30,
1998 1997 1998 1997 1998
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenues
Interest income $ 2,285 $ 479 $ 6,904 $ 57,161 $ 207,306
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 2,285 479 6,904 57,161 181,887
----------- ----------- ----------- ----------- -----------
Expenses
Salaries
Officer - - - - 282,980
Other - - - - 29,820
Automobile rental and expenses - - - - 28,618
Professional fees 750 2,967 6,799 10,117 179,194
Other, including rent expense incurred to officer of
$1,500 for the three months ended April 30,
1998 and 1997, $4,500 for the nine months
ended April 30, 1998 and 1997, and $70,500
for the period from inception to April 30, 1998 1,790 2,153 9,150 8,182 186,335
Licensing agreement:
Costs - - - - 11,238
Loss on termination - - - - 1,469
----------- ----------- ----------- ----------- -----------
Total expenses 2,540 5,120 15,949 18,299 719,654
----------- ----------- ----------- ----------- -----------
Net income (loss) during the development stage $ (255) $ (4,641) $ (9,045) $ 38,862 $ (537,767)
=========== =========== =========== =========== ===========
Income (loss) per common share $ -0- $ -0- $ -0- $ -0- $ (.03)
=========== =========== =========== =========== ===========
Weighted average number of shares 18,000,000 18,000,000 18,000,000 18,000,000 17,704,685
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
I-2
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Period From
Inception
(August 1,
Three Months Ended Nine Months Ended 1986)
April 30, April 30, Through
---------------------- ---------------------- April 30,
1998 1997 1998 1997 1998
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities
Net income (loss) $ (255) $ (4,641) $ (9,045) $ 38,862 $(537,767)
Adjustments to reconcile net income (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 - (353) - (353) 797
Accrued expenses (3,394) (283) (354) (3,338) 15,078
Due to officer 1,500 1,500 4,500 4,500 164,461
Other - - - - 549
--------- --------- --------- --------- ---------
Net cash provided by (used in) operating activities (2,149) (3,777) 2,835 39,671 (340,606)
--------- --------- --------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
(Continued)
I-3
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Period From
Inception
(August 1,
Three Months Ended Nine Months Ended 1986)
April 30, April 30, Through
---------------------- ---------------------- April 30,
1998 1997 1998 1997 1998
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
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 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 (2,149) (3,777) 100,335 39,671 199,928
Cash, beginning of period 202,077 105,150 99,593 61,702 -
--------- --------- --------- --------- ---------
Cash, end of period $ 199,928 $ 101,373 $ 199,928 $ 101,373 $ 199,928
========= ========= ========= ========= =========
Cash paid (received) during the periods for
Income taxes $ 622 $ 353 $ 622 $ 353 $ 6,968
========= ========= ========= ========= =========
Interest $ (2,285) $ (479) $ (6,090) $ (57,161) $(168,999)
========= ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
I-4
<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 April 30, 1998,
and its results of operations and cash flows for the three and nine month
periods ended April 30, 1998 and 1997 and from inception (August 1, 1986)
through April 30, 1998.
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
April 30, 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-5
<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 April 30, 1998, 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 nine months ended April 30, 1998.
I-6
<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 had a shareholders' equity of
$20,784 at April 30, 1998 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 nine months ended April
30, 1998 of $9,045.
The Company's principal asset at April 30,
1998 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.
o Results of Operations
The Company had a net loss of $255 for the
three months ended April 30, 1998 compared to a net
loss of $4,641 for the three months ended April 30,
1997, principally due to the receipt of interest
income on cash collected from the recovery of an old
note receivable.
I-7
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
QUARTER ENDED APRIL 30, 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
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-END> APR-30-1998
<CASH> 199,928
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 200,323
<PP&E> 13,556
<DEPRECIATION> 13,556
<TOTAL-ASSETS> 200,323
<CURRENT-LIABILITIES> 15,078
<BONDS> 0
<COMMON> 1,800
0
0
<OTHER-SE> 18,984
<TOTAL-LIABILITY-AND-EQUITY> 200,323
<SALES> 0
<TOTAL-REVENUES> 6,904
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 15,949
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (9,045)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,045)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
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