Notes to Condensed Financial Statements
For the Three- and Nine-Month Periods
Ended September 30, 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:
Periods
|
|
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 and May, 2018
|
|
|
445,258
|
|
|
|
14,177
|
|
Dorman Industries currently
is the beneficial owner of 66.55% of the Company’s outstanding common stock. Patricia A. Dorman, Mr. Dorman’s wife,
is the beneficial owner of an additional 3.62% 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 $267,510 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 September 30, 2018, cash totals $218. 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 66.55% 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- and nine-month periods ended September 30, 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- and nine-month periods ended September 30, 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.