Form 10-Q SANDSTON CORP For: Jun 30
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.20549
FORM
(Mark One)
For the quarterly period ended
For the transition period from _____ to ____
Commission File Number:
(Exact name of small business issuer as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
(
(Issuer’s telephone number, including area code)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ YES ☒ NO
Indicate by check mark if the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act ☐ YES ☒ NO
Indicate by check mark whether the issuer (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act during the past 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. ☒ ☐ NO
Indicate by check mark whether the registrant has submitted electronically every Interactive Data file required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ ☐ NO
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer ☐ | Accelerated Filer ☐ |
Smaller Reporting Company | |
| Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered |
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: No par value Common Stock:
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
Sandston Corporation
Condensed Balance Sheet
June 30, 2022 and December 31, 2021
| June 30, |
|
| |||
2022 | December 31, | |||||
| (Unaudited) |
| 2021 | |||
Assets | ||||||
Current assets: | ||||||
Cash | $ | | $ | | ||
Total assets | $ | | $ | | ||
Liabilities and Stockholders’ Equity (Deficit) | ||||||
Current liabilities: | ||||||
Accounts payable | $ | | $ | | ||
Total current liabilities |
| |
| | ||
Stockholders’ equity (deficit): | ||||||
Common stock, |
| |
| | ||
Accumulated deficit |
| ( |
| ( | ||
Total stockholders’ equity (deficit) |
| ( |
| ( | ||
Total liabilities and stockholders’ equity (deficit) | $ | | $ | |
See notes to condensed financial statements.
Page 2
Sandston Corporation
Condensed Statements of Operations
For the Three- and Six-Month Periods Ended June 30, 2022 and 2021
| Three Months Ended June 30, |
| Six Months Ended June 30, | |||||||||
2022 | 2021 | 2022 | 2021 | |||||||||
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
| (Unaudited) | |||||
Net revenues | $ | | $ | | $ | | $ | | ||||
General and administrative expense |
| |
| |
| |
| | ||||
Loss before income taxes |
| ( |
| ( |
| ( |
| ( | ||||
Income taxes | | | | | ||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Loss per share amounts – basic and diluted (Note 2): | $ | — | $ | — | $ | — | $ | — | ||||
Weighted average shares outstanding – basic and diluted (Note 2): |
| |
| |
| |
| |
See notes to condensed financial statements.
Page 3
Sandston Corporation
Condensed Statements of Shareholders’ Equity
For the Three- and Six-Month Periods Ended June 30, 2022 and 2021
| Common Stock |
| Accumulated |
| |||||||
Shares | Amount | Deficit | Total | ||||||||
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
| (Unaudited) | ||||
Balance, January 1, 2022 |
| | $ | | ( | $ | ( | ||||
Sale of common stock | | | — | | |||||||
Net loss for the three months ended March 31, 2022 | — | — | ( | ( | |||||||
Balance, March 31, 2022 | | $ | | $ | ( | $ | ( | ||||
Sale of common stock | | | — | | |||||||
Net loss for the three months ended June 30, 2022 | — | — | ( | ( | |||||||
Balance, June 30, 2022 |
| | $ | | $ | ( | $ | ( |
| Common Stock |
| Accumulated |
| |||||||
Shares |
| Amount | Deficit | Total | |||||||
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
| (Unaudited) | ||||
Balance, January 1, 2021 |
| | $ | | $ | ( | $ | ( | |||
Net loss for the three months ended March 31, 2021 | — | — | ( | ( | |||||||
Balance, March 31, 2021 | | | ( | ( | |||||||
Sale of common stock | | | — | | |||||||
Net loss for the three months ended June 30, 2021 | — | — | ( | ( | |||||||
Balance, June 30, 2021 |
| | $ | | $ | ( | $ | ( |
See notes to condensed financial statements.
Page 4
Sandston Corporation
Condensed Statements of Cash Flows
For the Six-Month Periods Ended June 30, 2022 and 2021
| Six Months Ended June 30, | |||||
2022 | 2021 | |||||
| (Unaudited) |
| (Unaudited) | |||
Cash flows from operating activities: |
|
|
|
| ||
Net loss | $ | ( | $ | ( | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Changes in assets and liabilities that provided (used) cash: | ||||||
Accounts payable |
| |
| | ||
Net cash used in operating activities |
| ( |
| ( | ||
Cash flows from financing activities - sale of common stock |
| |
| | ||
Net increase (decrease) in cash |
| ( |
| | ||
Cash at beginning of period |
| |
| | ||
Cash at end of period | $ | | $ | | ||
Supplemental disclosures of cash flow information: | ||||||
Cash paid for interest | $ | | $ | | ||
Cash paid for income taxes |
| |
| |
See notes to condensed financial statements.
Page 5
Sandston Corporation
Notes to Condensed Financial Statements
For The Three- and Six-Month Periods Ended June 30, 2022 and 2021
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 $
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
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 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. These businesses were sold on March 31, 2004 to the Purchaser.
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 $
As reflected in the accompanying balance sheet at June 30, 2022, cash totals $
Page 6
Note 2 – Loss per Share
Loss per share is calculated using the weighted average number of common shares outstanding during the periods presented. There are no outstanding dilutive stock options and warrants; all outstanding stock options and warrants were cancelled effective with the 2004 Net Asset Sale. The Company has no dilutive securities.
Item 2.Management’s Discussion and Analysis of Results of Operations
Readers should refer to a description of the 2004 Net Asset Sale described in Note 1 to the condensed financial statements included in this Form 10-Q. As described therein, the net assets and industrial controls businesses of the Company were sold effective as of the close of business on March 31, 2004. Since April 1, 2004, the Company has not engaged in any revenue generating activities, although it has considered various investment opportunities and it has incurred administrative expenses related to legal, accounting and administrative activities. The Company has had no employees since that date. The administrative activities of the Company are performed by the Chairman, who also serves as the CEO, President and Principal Financial Officer.
Three Month Periods Ended June 30, 2022 and 2021
Administrative expenses increased by $1,683, or 39.5%, to $5,939 for the three-month period ended June 30, 2022, compared to $4,256 of expenses incurred in the comparable 2021 period, primarily relating to professional and printing/filing fees.
Six Month Periods Ended June 30, 2022 and 2021
Administrative expenses increased by $3,775, or 23.5%, to $19,808 for the six-month period ended June 30, 2022, compared to $16,033 in the comparable 2021 period, primarily related to professional and printing/filing fees.
Liquidity and Capital Resources
Primary sources of liquidity for the Company following the March 31, 2004 Net Asset Sale have been cash balances that have been used to pay administrative expenses. Operating expenses of the Company have been funded with a) $30,000 cash retained from the businesses that were sold, b) $50,000 of proceeds from the sale of common stock on April 1, 2004 to Dorman Industries, c) $120,000 of proceeds from the sale of stock on December 21, 2006 to certain accredited investors, and d) $237,446 of proceeds from sale of stock between 2010 and 2022 to Dorman Industries.
As reflected in the accompanying balance sheet at June 30, 2022, cash totals $88. 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 2022. 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 69.19% 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.
While it is the Company’s objective to ultimately be able to use the securities of the Company as a currency in the acquisition of portfolio businesses, the initial acquisitions of portfolio businesses may require the Company to be infused with additional capital thereby diluting the Company’s shareholders, including Dorman Industries to the extent that it does not participate in the capital infusion.
Uncertainties Relating to Forward Looking Statements
Information regarding Risk Factors appears in Part I, Item 1A. Risk Factors of the 2021 Form 10-K. Except as set forth below, there have been no material changes to the risk factors previously disclosed in the 2021 Form 10-K.
Page 7
The continuing effects of the novel coronavirus (“COVID-19”) may adversely affect our ability to identify acquisition targets and if identified, to evaluate, negotiate, and close on any acquisition. The worldwide COVID-19 pandemic has negatively affected the global economy, and it is likely to continue to do so. Since the beginning of January 2020, the outbreak has caused significant volatility and disruption in the financial markets both globally and in the United States. If COVID-19, or another highly infectious or contagious disease, continues to spread or the response to contain it is unsuccessful, we could experience material adverse effects on our business. The extent of such effects will depend on future developments that are highly uncertain and cannot be predicted, including the geographic spread of the virus, the overall severity of the disease, the duration of the outbreak, the measures that have be taken, or future measures, by various governmental authorities in response to the outbreak (such as quarantines, shelter-in-place orders and travel restrictions) and the possible further impacts on the global economy.
The impact of the COVID-19 pandemic depends on factors beyond our knowledge or control, including the duration and severity of the outbreak, whether there are additional significant increases in the number of cases in future periods, and actions taken to contain its spread and mitigate the public health effects.
Item 3.Quantitative and Qualitative Disclosures About Market Risk
Not Applicable.
Item 4.Controls and Procedures
(a) | Evaluation of disclosure controls and procedures. |
As of the end of the period covered by this Quarterly Report on Form 10-Q, the Company performed an evaluation under the supervision of, and with the participation of, management, including our Chief Executive Officer and Chief Financial Officer, of the design and effectiveness of our disclosure controls and procedures (as defined in rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective in the timely and accurate recording, processing, summarizing and reporting of material financial and non-financial information within the time periods specified within the Securities and Exchange Commission’s rules and forms. Our Chief Executive Officer and Chief Financial Officer also concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely discussions regarding required disclosure.
(b) | Changes in internal controls. |
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) during the quarter ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 6.Exhibits and Reports on Form 10-Q
Exhibits included herewith are set forth on the Index to Exhibits, which is incorporated herein by reference.
Page 8
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Sandston Corporation | |
August 15, 2022 | /s/ Daniel J. Dorman | |
Date | President, CEO and Principal Financial Officer |
Page 9
INDEX TO EXHIBITS
Exhibit Number |
| Description of Exhibit |
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.** | |
101.SCH | XBRL Taxonomy Extension Schema Document** | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document** | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document** | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document** | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document** | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)** |
** | Filed herewith. |
Page 10
EXHIBIT 31.1
Certification of the Principal Executive Officer Pursuant to Exchange Act Rules 13A-14(A)/15D-14(D) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Daniel J. Dorman, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of Sandston Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting. |
Date: | August 15, 2022 |
| /s/ Daniel J. Dorman | |
| | | Name: | Daniel J. Dorman |
| | | Title: | President and Chief Executive Officer |
| | | | (Principal Executive Officer) |
EXHIBIT 31.2
Certification of the Principal Financial Officer Pursuant to Exchange Act Rules 13A-14(A)/15D-14(D) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Daniel J. Dorman, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of Sandston Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements and other financial information included in this quarterly report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of director (or persons performing the equivalent functions): |
a. | All significant deficiencies in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting. |
Date: | August 15, 2022 |
| /s/ Daniel J. Dorman | |
| | | Name: | Daniel J. Dorman |
| | | Title: | President and Chief Executive Officer |
| | | | (Principal Financial Officer) |
EXHIBIT 32.1
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Sec. 1350
(Section 906 of the Sarbanes-Oxley Act of 2002)
Pursuant to 18 U.S.C. Sec. 1350, the undersigned officer of Sandston Corporation (the “Company”) hereby certifies, to such officer’s knowledge, that the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: | August 15, 2022 |
| /s/ Daniel J. Dorman | |
| | | Name: | Daniel J. Dorman |
| | | Title: | President and Chief Executive Officer |
| | | | (Principal Executive Officer) |
The foregoing certification (i) accompanies the filing and is being furnished solely pursuant to 18 U.S.C. Sec. 1350, (ii) will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and (iii) will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the small business issuer specifically incorporates it by reference.
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Sandston Corporation and will be retained by Sandston Corporation and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Sec. 1350
(Section 906 of the Sarbanes-Oxley Act of 2002)
Pursuant to 18 U.S.C. Sec. 1350, the undersigned officer of Sandston Corporation (the “Company”) hereby certifies, to such officer’s knowledge, that the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: | August 15, 2022 |
| /s/ Daniel J. Dorman | |
| | | Name: | Daniel J. Dorman |
| | | Title: | President and Chief Executive Officer |
| | | | (Principal Financial Officer) |
The foregoing certification (i) accompanies the filing and is being furnished solely pursuant to 18 U.S.C. Sec. 1350, (ii) will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and (iii) will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the small business issuer specifically incorporates it by reference.
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Sandston Corporation and will be retained by Sandston Corporation and furnished to the Securities and Exchange Commission or its staff upon request.
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