<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
WITH ACCOMPANYING INFORMATION
THREE MONTHS ENDED APRIL 30, 2000 AND 1999
<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, 2000 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, 2000:
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, 2000 AND 1999
AND FOR THE PERIOD FROM INCEPTION (AUGUST 1, 1986) TO APRIL 30, 2000
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
<TABLE>
<S> <C> <C>
Item 1. Condensed Financial Statements:
Page
Balance Sheet as of April 30, 2000 and July 31, 1999 I-1
Statement of Operations for the Three Months and Nine Months
Ended April 30, 2000 and 1999 and for the Period From
Inception (August 1, 1986) to April 30, 2000 I-2
Statement of Cash Flows for the
Three Months and Nine Months Ended April 30,
2000 and 1999 and for the Period From Inception
(August 1, 1986) to April 30, 2000 I-3 - 4
Notes to Condensed 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
</TABLE>
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
APRIL 30, 2000 (UNAUDITED) AND JULY 31, 1999
<TABLE>
<CAPTION>
ASSETS
April 30, July 31,
2000 1999
-------------- --------
(Unaudited)
<S> <C> <C>
Current assets
Cash $ 188,886 $ 202,987
Prepaid income taxes 225 225
------------- -------------
$ 189,111 $ 203,212
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
Current liabilities
Accrued expenses $ 31,926 $ 28,682
------------- -------------
Due to officer 176,461 171,961
------------- -------------
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 ( 577,827) ( 555,982)
------------- -------------
( 19,276) 2,569
------------- -------------
$ 189,111 $ 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
Three Months Ended Nine Months Ended (Date of
April 30, April 30, Inception) to
--------------------------- ---------------------------- April 30,
2000 1999 2000 1999 2000
------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
Revenues
Interest income $ 2,475 $ 2,079 $ 6,932 $ 6,432 $ 225,339
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 2,475 2,079 6,932 6,432 199,920
------------ ------------ ------------ ------------ ------------
Expenses
Salaries
Officer - - - - 282,980
Other - - - - 29,820
Automobile rental and expenses - - - - 28,618
Professional fees 5,667 2,400 18,245 15,324 214,199
Other, including rent expense incurred
to officer of $1,500 for the three months
ended April 30, 2000 and 1999, $4,500 for the
nine months ended April 30, 2000 and 1999,
and $50,500 for the period from inception
to April 30, 2000 2,958 2,143 10,532 8,119 209,423
Licensing agreement
Costs - - - - 11,238
Loss on termination - - - - 1,469
------------ ------------ ------------ ------------ ------------
Total expenses 8,625 4,543 28,777 23,443 777,747
------------ ------------ ------------ ------------ ------------
Net loss during the development stage $ (6,150) $ (2,464) $( 21,845) $ (17,011) $ (577,827)
============ ============ ============ ============ ============
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 18,000,000
============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
I-2
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Cumulative
August 1, 1986
Three Months Ended Nine Months Ended (Date of
April 30, April 30, Inception) to
----------------------------- ----------------------------- April 30,
2000 1999 2000 1999 2000
------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities
Net loss $ (6,150) $ (2,464) $ (21,845) $ (17,011) $ (577,827)
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 - - - - ( 24,375)
Prepaid income taxes - - 15 ( 225)
Deferred lease costs - - - - ( 7,200)
Deposits - - - - ( 797)
Deposits repaid - - - - 797
Accrued expenses 5,667 2,400 3,244 12,533 31,926
Due to officer 1,500 1,500 4,500 4,500 176,461
Other - - - - 549
------------- ------------- ------------- ------------- -------------
Net cash provided by (used in)
operating activities 1,017 1,436 ( 14,101) 37 (351,648)
------------- ------------- ------------- ------------- -------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
(Continued)
I-3
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Cumulative
August 1, 1986
Three Months Ended Nine Months Ended (Date of
April 30, April 30, Inception) to
---------------------------- --------------------------- April 30,
2000 1999 2000 1999 2000
------------- ------------- ------------- ------------- -------------
<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
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 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 1,017 1,436 ( 14,101) 37 188,886
Cash, beginning of period 187,869 200,451 202,987 201,850 -
------------- ------------- ------------- ------------- -------------
Cash, end of period $ 188,886 $ 201,887 $ 188,886 $ 201,887 $ 188,886
============= ============= ============= ============= =============
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>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO 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
April 30, 2000, and the statements of operations and cash flows for the
three month and nine month periods ended April 30, 2000 and 1999 and from
inception (August 1, 1986) through April 30, 2000. 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 and nine
months ended April 30, 2000 are not necessarily indicative of the results
of operations for the year ending July 31, 2000.
2 - 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 April 30,
2000, and no assurance can be given that it will generate revenues and
earnings in the future.
3 - 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 CONDENSED FINANCIAL STATEMENTS
3 - 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, 2000, there are no currently pending financings or
merger/acquisitions subject to this agreement, which remains in effect.
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 (deficiency)
was $(19,276) at April 30, 2000 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 $21,845 sustained from operations for the nine
months ended April 30, 2000.
The Company's principal asset at April 30, 2000
and July 31, 1999 is cash. Changes in the Company's
cash balance result from the payment of operating
expenses.
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 $6,150 and $2,464
for the three months ended April 30, 2000 and 1999,
respectively, compared to a net loss of $21,845 and
$17,011, respectively, for the nine months ended April
30, 2000 and 1999.
o Liquidity and Capital Resources
There have been no material changes in the
Company's financial position, liquidity or capital
resources since April 30, 2000, other than the effect
of incurring normal operating expenses.
I-7
<PAGE>
DYNAMARK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
QUARTER ENDED JANUARY 31, 2000
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
