Notes To Condensed Financial Statements
For The Three Month Periods Ended March
31, 2018 and 2017
Note 1 - Basis of Presentation
Pursuant to a recommendation
of the Company’s Board of Directors and approval by its shareholders on January 13, 2004, the Company sold to NC Acquisition
Corporation (the "Purchaser") on March 31, 2004 all of its tangible and intangible assets, including its real estate,
accounts, equipment, intellectual property, inventory, subsidiaries, goodwill, and other intangibles, except for $30,000 in cash,
(the "Net Asset Sale"). The Purchaser also assumed all of the Company’s liabilities pursuant to the Net Asset
Sale. Following the Net Asset Sale, the Company’s only remaining assets were $30,000 in cash and it had no liabilities.
It also retained no subsidiaries. On April 1, 2004 the Company amended its Articles of Incorporation to change its name from Nematron
Corporation to Sandston Corporation (the “Company”) and to implement a shareholder approved one-for-five reverse stock
split of the Company’s common stock, whereby every five issued and outstanding shares of the Company’s common stock
became one share. On April 1, 2004 the Company also sold a total of 5,248,257 post-split shares to Dorman Industries, LLC (“Dorman
Industries”) for $50,000. Dorman Industries is a Michigan Limited Liability Company wholly owned by Mr. Daniel J. Dorman,
the Company’s Chairman of the Board, President and Principal Accounting Officer. Pursuant to its purchase of these shares,
Dorman Industries became the owner of 62.50% of the then outstanding common stock of the Company. The Company has made subsequent
sales of common stock to Dorman Industries in order to raise cash to pay operating expenses:
Month and Year
|
|
Shares
|
|
|
Proceeds
|
|
December, 2010
|
|
|
500,000
|
|
|
$
|
15,000
|
|
November, 2011
|
|
|
375,000
|
|
|
|
15,000
|
|
September, 2012
|
|
|
1,500,000
|
|
|
|
15,000
|
|
November, 2013
|
|
|
361,766
|
|
|
|
10,853
|
|
February, March, and August 2014
|
|
|
733,300
|
|
|
|
21,803
|
|
March, August, and November 2015
|
|
|
394,506
|
|
|
|
15,780
|
|
February, March, April, July, August, and November 2016
|
|
|
523,867
|
|
|
|
18,635
|
|
January, February, June, July, September, November, and December 2017
|
|
|
955,883
|
|
|
|
21,262
|
|
March, 2018
|
|
|
363,333
|
|
|
|
10,900
|
|
Dorman Industries
currently is the beneficial owner of 66.38% of the Company’s outstanding common stock. Patricia A. Dorman, Mr. Dorman’s
wife, is the beneficial owner of an additional 3.64% of the Company’s outstanding common stock.
Effective April 1, 2004, the Company became
a "public shell" corporation.The Company intends to build long-term shareholder value by acquiring and/or investing
in and operating strategically positioned companies. The Company expects to target companies in multiple industry groups. The
Company has yet to acquire, or enter into an agreement to acquire, any company or entity.
During the period prior to the Net Asset
Sale, the Company’s businesses included 1) the design, manufacture, and marketing of environmentally ruggedized computers
and computer displays known as industrial workstations; 2) the design, development and marketing of software for worldwide use
in factory automation and control and in test and measurement environments; and 3) providing application engineering support to
customers of its own and third parties’ products.
Liquidity and Management Plans
The Company became a "public shell"
corporation on April 1, 2004 following the Net Asset Sale and since that date its operational activities have been limited to
considering sundry and various acquisition opportunities, and its financial activities have been limited to administrative activities
and incurring expenditures for accounting, legal, filing, printing, office and auditing services. These expenditures have been
paid with the $30,000 cash retained from the businesses that were sold, from $50,000 of proceeds from the sale of common stock
on April 1, 2004 to Dorman Industries and from $264,233 of proceeds from the sale of stock since that date to certain accredited
investors, including Dorman Industries.
As reflected in the accompanying balance
sheet at March 31, 2018, cash totals $236. Based on such balance and management’s forecast of activity levels during the
period that it may remain a “public shell” corporation, management believes that it will have to again sell through
private placement a number of additional shares of common stock to generate sufficient cash to pay its current liabilities and
its administrative expenses as such expenses become due in 2018. If the Company has not identified and consummated an acquisition
by that date, the Company will need to obtain additional funds to maintain its administrative activities as a public shell company.
Management intends to obtain such administrative funds from Dorman Industries in the form of loans or through equity sales in
an amount sufficient to sustain operations at their current level. Dorman Industries owns 66.38% of the Company’s outstanding
common stock. There can be no assurance that Dorman Industries or any other party will advance needed funds on any terms. The
Company has not identified as yet potential acquisition candidates, the acquisition of which would mean that the Company would
cease being a “public shell” and begin operating activities.
In the opinion of management, all adjustments
considered necessary for a fair presentation of the consolidated financial statements for the interim periods have been included.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations,
although the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed
consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included
in the Company’s latest annual report on Form 10-K.
The results of the operations for the three
month periods ended March 31, 2018 and 2017 are not necessarily indicative of the results to be expected for the full year. Additionally,
since the Net Asset Sale, which was effective April 1, 2004, the Company has had no revenue generating activities.
Note 2 – Earnings Per Share
The weighted average shares outstanding
used in computing basic loss per share for the three month periods ended March 31, 2018 and 2017 have been adjusted to give effect
to the five-for-one reverse stock split discussed in Note 1. The Company has no dilutive securities.