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Previous: BANKFIRST CORP, DEF 14A, 1999-03-12 |
Next: NEW AMERICA HIGH INCOME FUND INC, N-30D, 1999-03-12 |
<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
January 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 January 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 AND SIX MONTHS ENDED JANUARY 31, 1999 AND 1998
AND FOR THE PERIOD FROM INCEPTION (AUGUST 1, 1986)
TO JANUARY 31, 1999
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Page
----
Item 1. Financial Statements:
Balance Sheet as of January 31, 1999
and July 31, 1998 I-1
Statement of Operations for the Three Months
and Six Months Ended January 31, 1999 and
1998 and for the Period From Inception
(August 1, 1986) to January 31, 1999 I-2
Statement of Cash Flows for the Three Months
and Six Months Ended January 31, 1999 and
1998 and for the Period From Inception
(August 1, 1986) to January 31, 1999 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
JANUARY 31, 1999 (UNAUDITED) AND JULY 31, 1998
ASSETS
<TABLE>
<CAPTION>
January 31, July 31,
1999 1998
--------- ---------
(Unaudited)
<S> <C> <C>
Current assets
Cash $ 200,451 $ 201,850
Prepaid income taxes -- 15
--------- ---------
Total current assets 200,451 201,865
Computer equipment - at cost, less accumulated
depreciation of $13,556 at January 31, 1999
and July 31, 1998 -- --
--------- ---------
$ 200,451 $ 201,865
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accrued expenses $ 25,011 $ 14,878
--------- ---------
Due to officer 168,961 165,961
--------- ---------
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
at January 31, 1999 and July 31, 1998 1,800 1,800
Additional paid-in capital 556,751 556,751
Deficit accumulated during the development stage (552,072) (537,525)
--------- ---------
6,479 21,026
--------- ---------
$ 200,451 $ 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
Three Months Ended Six Months Ended (Date of
January 31, January 31, Inception) to
---------------------------- ---------------------------- January 31,
1999 1998 1999 1998 1999
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues
Interest income $ 2,089 $ 2,481 $ 4,353 $ 4,619 $ 214,339
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 2,089 2,481 4,353 4,619 188,920
------------ ------------ ------------ ------------ ------------
Expenses
Salaries
Officer -- -- -- -- 282,980
Other -- -- -- -- 29,820
Automobile rental and expenses -- -- -- -- 28,618
Professional fees 3,955 4,000 12,924 6,943 191,918
Other, including rent expense incurred to
officer of $1,500 for the three months
ended January 31, 1999 and 1998, $3,000
for the six months ended January 31,
1999 and 1998, and $75,000 for the
period from inception to January 31, 1999 2,958 3,464 5,976 6,466 194,949
Licensing agreement:
Costs -- -- -- -- 11,238
Loss on termination -- -- -- -- 1,469
------------ ------------ ------------ ------------ ------------
Total expenses 6,913 7,464 18,900 13,409 740,992
------------ ------------ ------------ ------------ ------------
Net loss $ (4,824) $ (4,983) $ (14,547) $ (8,790) $ (552,072)
============ ============ ============ ============ ============
Basic loss per common share $ -- $ -- $ -- $ -- $ (.03)
============ ============ ============ ============ ============
Weighted average number of shares 18,000,000 18,000,000 18,000,000 18,000,000 17,722,404
============ ============ ============ ============ ============
</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>
Cumulative
August 1,
1986
Three Months Ended Six Months Ended (Date of
January 31, January 31, Inception) to
---------------------- ------------------------ January 31,
1999 1998 1999 1998 1999
------- ------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities
Net loss $(4,824) $(4,983) $(14,547) $ (8,790) $(552,072)
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 3,955 413 10,133 3,040 25,011
Due to officer 1,500 1,500 3,000 3,000 168,961
Other -- -- -- -- 549
------- ------- -------- -------- ---------
Net cash provided by (used in)
operating activities 631 (3,070) (1,399) 4,984 (340,083)
------- ------- -------- -------- ---------
</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>
Cumulative
August 1,
1986
Three Months Ended Six Months Ended (Date of
January 31, January 31, Inception) to
--------------------- ---------------------- January 31,
1999 1998 1999 1998 1999
--------- --------- --------- --------- ---------
<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 631 (3,070) (1,399) 102,484 200,451
Cash, beginning of period 199,820 205,147 201,850 99,593 --
--------- --------- --------- --------- ---------
Cash, end of period $ 200,451 $ 202,077 $ 200,451 $ 202,077 $ 200,451
========= ========= ========= ========= =========
Supplemental cash flow disclosures
Income taxes paid $ -0- $ -0- $ -0- $ -0- $ 6,726
========= ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
I-4
<PAGE>
(Continued)
I-4
<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 January 31, 1999, and
its results of operations and cash flows for the three and six month
periods ended January 31, 1999 and 1998 and from inception (August 1, 1986)
to January 31, 1999.
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 January 31,
1999, 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 terminated. The Company incurred consulting fees
of $2,500 to this consultant in settlement of its obligation concerning the
letter of intent.
At January 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 July 31, 1998, other than
the effect of incurring normal operating expenses.
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's shareholders' equity was $6,479 at January
31, 1999 compared to $21,026 at July 31, 1998, its most
recent year-end. The decrease in shareholders' equity is due
to the net loss of $14,547 sustained from operations for the
six months ended January 31, 1999.
The Company's principal asset at January 31, 1999 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, it is likely to
incur only professional fees and miscellaneous expenses.
o Results of Operations
The Company had a net loss of $4,824 for the three
months ended January 31, 1999 compared to a net loss of
$4,983 for the three months ended January 31, 1998.
I-7
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
QUARTER ENDED JANUARY 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
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