Notes
To Condensed Financial Statements
For
The Three- and Nine-Month Periods Ended September 30, 2007 and
2006
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 Financial
Officer. Pursuant to its purchase of these shares, Dorman Industries became
the
owner of 62.5% of the then outstanding common stock of the Company and currently
is the beneficial owner of 48.6% 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.
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-KSB.
The
results of operations for the three- and nine-month periods ended September
30,
2007 and 2006 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.
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 $120,000 of proceeds
from
the sale, through a private placement, of unregistered common stock in December
2006 to certain accredited investors.
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, 2007 and 2006 have been
adjusted to give effect to the one-for-five reverse stock split discussed in
Note 1. Pursuant to the terms of the agreements underlying the Net Asset Sale,
all outstanding dilutive securities, including stock options, warrants and
conversion rights under all employee and director option plans and various
warrant and note agreements, were cancelled effective March 31, 2004 and are
no
longer outstanding.