<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, 1999 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, 1999:
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, 1999 AND
FOR THE PERIOD FROM INCEPTION (AUGUST 1, 1986)
THROUGH OCTOBER 31, 1999
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Condensed Financial Statements:
Page
----
Balance Sheet as of October 31,
1999 and July 31, 1999 I-1
Statement of Operations for the Three Months
Ended October 31, 1999 and 1998 and for the
Period From Inception (August 1, 1986)
Through October 31, 1999 I-2 - 3
Statement of Cash Flows for the Three Months
Ended October 31, 1999 and 1998 and for the
Period From Inception (August 1, 1986)
Through October 31, 1999 I-4 - 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
The accompanying notes are an integral part of these financial statements.
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEET
OCTOBER 31, 1999 (UNAUDITED) AND JULY 31, 1999
ASSETS
<TABLE>
<CAPTION>
October 31, July 31,
1999 1999
----------- -----------
(Unaudited)
<S> <C> <C>
Current assets
Cash $ 187,618 $ 202,987
Prepaid income taxes 225 225
----------- -----------
$ 187,843 $ 203,212
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
Current liabilities
Accrued expenses $ 21,917 $ 28,682
----------- -----------
Due to officer 173,461 171,961
----------- -----------
Shareholders' equity (deficiency)
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 ( 566,086) (555,982)
----------- -----------
( 7,535) 2,569
----------- -----------
$ 187,843 $ 203,212
----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
I-1
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Cumulative
August 1,
1986
(Date of
Inception)
Three Months Ended To
October 31, October 31,
1999 1998 1999
--------- --------- ----------
<S> <C> <C> <C>
Revenues
Interest and dividend income $ 2,112 $ 2,264 $ 220,519
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 2,112 2,264 195,100
--------- --------- ---------
Expenses
Salaries
Officer - - 282,980
Other - - 29,820
Automobile rental and expenses - - 28,618
Professional fees 8,234 8,969 204,188
Other, including rent expense incurred
to officer of $1,500 for the three months ended
October 31, 1999 and 1998 and $79,500 for the
period from inception to October 31, 1999 3,982 3,018 202,873
Licensing agreement
Costs - - 11,238
Loss on termination - - 1,469
--------- --------- ---------
Total expenses 12,216 11,987 761,186
--------- --------- ---------
Net loss $ (10,104) $ (9,723) $(566,086)
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
I-2
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Cumulative
August 1,
1986
(Date of
Three Months Ended Inception)
October 31, To
----------------------------- October 31,
1999 1998 1999
---------- ---------- ----------
<S> <C> <C> <C>
Basic income (loss) per common share $ - $ - $ (.03)
========== ========== ==========
Weighted average number of shares
outstanding 18,000,000 18,000,000 17,738,117
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
I-3
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Cumulative
August 1,
1986
(Date of
Inception)
Three Months Ended To
October 31, October 31,
1999 1998 1999
--------- -------- --------
<S> <C> <C> <C>
Cash flows from operating activities
Net loss $ (10,104) $ (9,723) $(566,086)
Adjustments to reconcile net loss to net
cash 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 - - ( 24,375)
Prepaid income taxes - 15 ( 225)
Deferred lease costs - - ( 7,200)
Deposits - - ( 797)
Deposits repaid - - 797
Accrued expenses ( 6,765) 6,178 21,917
Due to officer 1,500 1,500 173,461
Other - - 549
--------- -------- --------
Net cash used in operating activities ( 15,369) (2,030) (352,916)
--------- -------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
(Continued)
I-4
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Cumulative
August 1,
1986
(Date of
Three Months Ended Inception)
October 31, To
------------------------ October 31,
1999 1998 1999
-------- -------- ----------
<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
Acquisition of computer equipment - - ( 13,556)
Net cash used in investing activities - - ( 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 (15,369) (2,030) 187,618
Cash, beginning of period 202,987 201,850 -
Cash, end of period $ 187,618 $ 199,820 $ 187,618
Supplemental cash flow disclosures
Income taxes paid $ 1,169 $ -0- $ 8,260
</TABLE>
The accompanying notes are an integral part of these financial statements.
I-5
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
1 - GENERAL
The accompanying unaudited condensed financial statements presented
herein include the accounts of Dynamark Corporation. The foregoing
statements contain all adjustments (consisting only of normal recurring
adjustments) which are, in the opinion of the Company's management,
necessary to present fairly the financial position of the Company as of
October 31, 1999, and the statements of operations and the statements of
cash flows for the three months ended October 31, 1999 and 1998 and from
inception (August 1, 1986) through October 31, 1999. Certain information and
footnote disclosures normally included in financial statements have been
condensed or omitted pursuant to the rules and regulations of the Securities
and Exchange Commission. These condensed financial statements should be read
in conjunction with the financial statements and notes thereto included in
the Company's annual report on Form 10-K for the year ended July 31, 1999.
The results of operations for the three months ended October 31, 1999 are
not necessarily indicative of the results of operations for the year ending
July 31, 2000.
2 - 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,
1999, and no assurance can be given that it will generate revenues and
earnings in the future.
I-6
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
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.
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, 1999, 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 October 31, 1999, other than
the effect of incurring normal 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 (deficiency) was
$7,535 at October 31, 1999 compared to $2,569 at July 31,
1999, its most recent year-end. The decrease in shareholders'
equity (deficiency) is due to the net loss of $10,104
sustained from operations for the three months ended October
31, 1999.
The Company's principal asset at October 31, 1999 and
July 31, 1999 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, it is likely to
incur only professional fees and miscellaneous expenses.
o Results of Operations
The Company had a net loss of $10,104 for the three
months ended October 31, 1999 compared to a net loss of
$9,723 for the three months ended October 31, 1998.
I-8
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
QUARTER ENDED OCTOBER 31, 1999
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-31-2000
<PERIOD-END> OCT-31-1999
<CASH> 187,618
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 187,843
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 187,843
<CURRENT-LIABILITIES> 21,917
<BONDS> 0
1,800
0
<COMMON> 0
<OTHER-SE> (9,335)
<TOTAL-LIABILITY-AND-EQUITY> 187,843
<SALES> 0
<TOTAL-REVENUES> 2,112
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 12,216
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (10,104)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (10,104)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
