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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.20549

FORM 10-Q

(Mark One)

 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

 TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to ____

Commission File Number: 001-15481

SANDSTON CORPORATION

(Exact name of small business issuer as specified in its charter)

Michigan

38-2483796

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

1496 Business Park Drive, Suite A, Traverse City, Michigan

49686

(Address of principal executive offices)

(Zip Code)

(231) 943-2221

(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.  YES    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).  YES    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

Non- 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).   YES    No

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Common Stock, no par value

SDON

Over the Counter Bulletin Board

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:

18,005,239 shares outstanding as of May 13, 2022

PART I -- FINANCIAL INFORMATION

Item 1.        Financial Statements

Sandston Corporation

Condensed Balance Sheet

March 31, 2022 and December 31, 2021

    

March 31, 

    

    

2022

December 31, 

    

(Unaudited)

    

2021

Assets

Current assets:

Cash

$

121

$

203

Total assets

$

121

$

203

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

24,713

$

13,293

Total current liabilities

 

24,713

 

13,293

Shareholders’ equity (deficit):

Common stock, no par value, 30,000,000 shares authorized, 18,005,239 shares issued and outstanding at March 31,2022 and 17,987,031 issued and outstanding at December 31, 2021

 

34,036,342

 

34,033,975

Accumulated deficit

 

(34,060,934)

 

(34,047,065)

Total stockholders’ equity (deficit)

 

(24,592)

 

(13,090)

Total liabilities and stockholders’ equity (deficit)

$

121

$

203

See notes to condensed financial statements.

Page 2

Sandston Corporation

Condensed Statements of Operations

For the Three-Month Periods Ended March 31, 2022 and 2021

    

Three Months Ended March 31, 

2022

2021

    

(Unaudited)

    

(Unaudited)

Net revenues

$

$

General and administrative expenses

 

13,869

 

11,777

Operating loss

 

(13,869)

 

(11,777)

Income taxes

Net loss

$

(13,869)

$

(11,777)

Per share amounts – basic and diluted (Note 2)

nil

nil

Weighted average shares outstanding - basic and diluted (Note 2)

 

17,995,933

 

17,707,472

See notes to condensed financial statements.

Page 3

Sandston Corporation

Condensed Statements of Shareholders’ Equity

For the Three-Month Periods Ended March 31, 2022 and 2021

    

Common Stock

    

Accumulated

    

Shares

Amount

Deficit

Total

    

(Unaudited)

    

(Unaudited)

    

(Unaudited)

    

(Unaudited)

Balance, January 1, 2022

 

17,987,031

$

34,033,975

(34,047,065)

$

(13,090)

Sale of common stock

18,208

2,367

2,367

Net loss for the three months ended March 31, 2022

(13,869)

(13,869)

Balance, March 31, 2022

18,005,239

$

34,036,342

$

(34,060,934)

$

(24,592)

    

Common Stock

    

Accumulated

    

Shares

    

Amount

Deficit

Total

    

(Unaudited)

    

(Unaudited)

    

(Unaudited)

    

(Unaudited)

Balance, January 1, 2021

 

17,707,472

$

34,006,218

(34,019,697)

$

(13,479)

Net loss for the three months ended March 31, 2021

(11,777)

(11,777)

Balance, March 31, 2021

17,707,472

$

34,006,218

$

(34,031,474)

$

(25,256)

See notes to condensed financial statements.

Page 4

Sandston Corporation

Condensed Statements of Cash Flows

For the Three-Month Periods Ended March 31, 2022 and 2021

    

Three Months Ended March 31, 

2022

2021

    

(Unaudited)

    

(Unaudited)

Cash flows from operating activities:

 

  

 

  

Net loss

$

(13,869)

$

(11,777)

Adjustments to reconcile net loss to net cash flows used in operating activities:

Changes in assets and liabilities that provided (used) cash:

Accounts payable

 

11,420

 

11,777

Net cash used in operating activities

 

(2,449)

 

Cash flows from financing activities - sale of common stock

 

2,367

 

Net change in cash

 

(82)

 

Cash at beginning of period

 

203

 

203

Cash at end of period

$

121

$

203

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-Month Periods Ended March 31, 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 $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. On December 21, 2006, the Company sold 2,400,000 post-split shares to certain accredited investors for $120,000.

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 several subsequent sales of common stock to Dorman Industries in order to raise cash to pay operating expenses. Between December 30, 2010 and March 31, 2022, the Company sold to Dorman Industries a total of 7,208,258 shares at per share prices equal to the closing price the day prior to each sale, and realized proceeds of $236,136. Dorman Industries currently is the beneficial owner of 69.18% 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. 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 $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, from $120,000 of proceeds from the sale, through a private placement, to certain accredited investors of common stock in December 2006, and from $236,136 of proceeds from the sales, through private placements, of unregistered common stock to Dorman Industries in the years 2010 through 2022.

As reflected in the accompanying balance sheet at March 31, 2022, cash totals $121. Based on such balance and management’s forecast of activity levels during the period that it may remain a “public shell” corporation, management 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. There can be no assurance that Dorman Industries, which owns 69.18% of the Company’s outstanding stock, 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.

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 Net Asset Sale. The Company has no dilutive securities.

Item 2.Management’s Discussion and Analysis of Results of Operations

Three Month Periods Ended March 31, 2022 and 2021

Readers should refer to a description of the 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. Direct administrative expenses of the Company totaled $13,869 in the three month period ended March 31, 2022, an increase of $2,092, or 17.8% compared to $11,777 for the three month period ended March 31, 2021. The increase is attributable to the increase in printing and filing preparation 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) $236,136 of proceeds from sale of stock between 2010 and 2022 to Dorman Industries.

As reflected in the accompanying balance sheet at March 31, 2022, cash totals $121. 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 69.18% 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.

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.

Page 7

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 March 31, 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

May 13, 2022

/s/ Daniel J. Dorman

Date

President, CEO and Principal Financial Officer

Page 9

INDEX TO EXHIBITS

Exhibit Number

    

Description of Exhibit

31.1

Certification of the Principal Executive Officer Pursuant to Exchange Act Rules 13(A) – 14(A) or 15 (D) – 14 (A) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of the Principal Financial Officer Pursuant to Exchange Act Rules 13(A) – 14(A) or 15(D) – 14 (A) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Sec. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)

32.2

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Sec. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)

101.INS

XBRL Instance 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 - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

**Filed herewith.

Page 10

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