UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K/A

(Mark One)

 

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

	For the fiscal year ended December 31, 2020    or

 

¨	TRANSITION REPORT PURSUANT TO 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

(Name of small business issuer 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	49868
(Address of principal executive offices)	(Zip Code)

(231) 943-2221

(Issuer's telephone number)

 

Securities registered under Section 12(b) of the Exchange Act: None

 

Securities registered under Section 12(g) of the Exchange Act: Common Stock, no par value

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ¨ Yes x 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 x No

 

Indicate by check mark whether the issuer (1) filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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. x Yes ¨ No

 

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

 

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 definition 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	x	Smaller reporting company	x
		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). x Yes ¨ No

 

The aggregate market value of the voting stock held by non-affiliates as of June 30, 2020, the last day of the Registrant’s second quarter, computed by reference to the closing price of such stock on such date as quoted on the OTCBB, was approximately $396,000. For purposes of this computation only, all executive officers, directors, and beneficial owners of more than 10% of the outstanding Common Stock, are assumed to be affiliates.

 

The number of shares outstanding of the issuer's Common Stock on March 29, 2021 was 17,707,472.

 

DOCUMENTS INCORPORATED BY REFERENCE: None

EXPLANATORY NOTE

 

This Amendment No. 1 on Form 10-K/A (this “Amendment”) to the Annual Report on Form 10-K of Sandston Corporation (the “Company”) for the fiscal year ended December 31, 2020, initially filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2021 (the “Original Filing”), is being filed to correct an administrative error in the Original Filing. The Original Filing inadvertently failed to print the conformed signature of Plante & Moran, PLLC on the Report of Independent Registered Public Accounting Firm (the “Audit Report”). The Company had received the manually signed Audit Report from Plante & Moran, PLLC prior to filing the Original Filing.

 

This Amendment is being filed to add “/s/ Plante & Moran, PLLC” to the Audit Report. This Amendment includes Item 8, “Financial Statements and Supplemental Data” in its entirety and without change from the Original Filing other than the addition of the conformed signature of Plante & Moran, PLLC.

 

In addition, pursuant to the rules of the SEC, the exhibit list included in Item 15 of Part IV of the Original Filing has been amended to contain currently-dated certifications from the Company’s Chief Executive and Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002. The certifications of the Company’s Chief Executive and Financial Officer are filed as exhibits to this Amendment.

 

Except for the foregoing amended information, this Amendment does not amend or update any other information contained in the Original Filing. Therefore, this Amendment should be read together with other documents that the Company has filed with the SEC subsequent to the filing of the Original Filing. Information in such reports and documents updates and supersedes certain information contained in the Original Filing.

PART II

 

Item 8.

FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

 

The information required by this item appears beginning on page F-1 following the signature pages of this report and is incorporated herein by reference.

PART IV

 

Item 15.

Exhibits and Financial Statement Schedules.

 

(a)

The following financial statements are included in this Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

 

1.

Report of Independent Registered Public Accounting Firm

 

2.

Balance Sheets as of December 31, 2020 and 2019

 

3.

Statements of Operations for the years ended December 31, 2020 and 2019

 

4.

Statements of Stockholders’ Equity for the years ended December 31, 2020 and 2019

 

5.

Statements of Cash Flows the years ended December 31, 2020 and 2019

 

6.

Notes to Financial Statements for the years ended December 31, 2020 and 2019

 

All financial statement schedules have been omitted as the required information is either inapplicable or included in the Financial Statements or related notes.The following exhibits are either filed as part of this report or are incorporated herein by reference:

 

(b)

Exhibits:

 

Exhibit No.	Description
31.01	Certification of Principal Executive Officer pursuant to 15 U.S.C. 78m(a) or 78o(d) (Section 302 of the Sarbanes Oxley Act of 2002)**
31.02	Certification of Principal Financial Officer pursuant to 15 U.S.C. 78m(a) or 78o(d) (Section 302 of the Sarbanes Oxley Act of 2002)**
32.01	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**
32.02	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

UNDERTAKING

 

The Company will furnish to any shareholder a copy of any of the exhibits listed above upon written request and upon payment of a specified reasonable fee, which fee shall be equal to the Company’s reasonable expenses in furnishing the exhibit to the shareholder. Requests for exhibits and information regarding the applicable fee shall be direct to: Mr. Daniel J. Dorman, President and Chief Executive Officer, at the address of the principal executive offices set forth on the cover of this Report on Form 10-K.

 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized

 

Sandston Corporation

 

By:	/s/ Daniel J. Dorman	Dated:	April 13, 2021
	Daniel J. Dorman, Chairman, President and Chief Executive Officer (Principal Executive Officer and Principal Financial Officer)
By:	/s/ Laurence J. De Fiore	Dated:	April 13, 2021
	Lawrence J. De Fiore, Director
By:	/s/ Richard A. Walawender	Dated:	April 13, 2021
	Richard A. Walawender, Director

Financial Statements

and Report of

Independent Registered Public Accounting Firm

 

Sandston Corporation

 

December 31, 2020 and 2019

SANDSTON CORPORATION

 

Table of Contents

 

	Page
Report of Independent Registered Public Accounting Firm	F-2
Balance Sheets as of December 31, 2020 and 2019	F-3
Statements of Operations for the years ended December 31, 2020 and 2019	F-4
Statements of Stockholders’ Equity for the years ended December 31, 2020 and 2019	F-5
Statements of Cash Flows for the years ended December 31, 2020 and 2019	F-6
Notes to Financial Statements for the years ended December 31, 2020 and 2019	F-7 to F-9

Report of Independent Registered Public Accounting Firm

 

To the Stockholders and Board of Directors of Sandston Corporation

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheets of Sandston Corporation (the “Company”) as of December 31, 2020 and 2019, the related statements of operations, stockholders' equity, and cash flows for each of the years in the two-year period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”).  In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America.

 

Going Concern

 

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has sustained recurring losses from operations, negative working capital, and insufficient liquidity, which raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

The Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

Critical Audit Matter

 

Critical audit matters are matters arising from the current audit period of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

 

We have served as the Company’s auditor since 2004.

 

/s/ Plante & Moran, PLLC

 

Southfield, Michigan

March 29, 2021

Sandston Corporation

Balance Sheets

December 31, 2020 and 2019

 

Assets

 

		December 31,
		2020				2019
Current assets:
Cash		$	203			$	197
Total assets		$	203			$	197
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable		$	13,682			$	23,926
Stockholders’ equity (deficit):
Common stock, no par value; 30,000,000 shares authorized; 17,707,472 and 17,195,683 shares issued and outstanding at December 31, 2020 and 2019			34,006,218				33,971,238
Accumulated deficit			(34,019,697	)			(33,994,967	)
Total stockholders’ equity (deficit)			(13,479	)			(23,729	)
Total liabilities and stockholders’ equity (deficit)		$	203			$	197

 

 

See accompanying notes to financial statements.

Sandston Corporation

Statements of Operations

For the Years Ended December 31, 2020 and 2019

 

		Year Ended December 31,
		2020				2019
Net revenues		$	-			$	-
General and administrative expenses			24,730				20,420
Operating loss			(24,730	)			(20,420	)
Income taxes			-				-
Net loss		$	(24,730	)		$	(20,420	)
Loss per share - basic and diluted (Note 2):		$	nil			$	nil
Weighted average shares - basic and diluted (Note 2):			17,431,226				16,974,868

 

 

See accompanying notes to financial statements.

Sandston Corporation

Statements of Stockholders’ Equity

For the Years Ended December 31, 2020 and 2019

 

		Common Stock								Accumulated
		Shares				Amount				Deficit				Total
Balance, January 1, 2019			16,665,661			$	33,951,249			$	(33,974,547	)		$	(23,298	)
Sale of common stock			530,022				19,989								19,989
Net loss for the year ended December 31, 2019											(20,420	)			(20,420	)
Balance, December 31, 2019			17,195,683				33,971,238				(33,994,967	)			(23,729	)
Sale of common stock			511,789				34,980								34,980
Net loss for the year ended December 31, 2020											(24,730	)			(24,730	)
Balance, December 31, 2020			17,707,472			$	34,006,218			$	(34,019,697	)		$	(13,479	)

 

 

See accompanying notes to financial statements.

Sandston Corporation and Subsidiaries

Statements of Cash Flows

For the Years Ended December 31, 2020 and 2019

 

		Year Ended December 31,
		2020				2019
Cash flows from operating activities:
Net loss		$	(24,730	)		$	(20,420	)
Adjustments to reconcile net loss to net cash flows used in operating activities:
Change in current assets and liabilities that provided (used) cash:
Accounts payable			(10,244	)			419
Net cash used in operating activities			(34,974	)			(20,001	)
Cash flows from financing activities – sale of common stock			34,980				19,989
Net increase (decrease) in cash and cash equivalents			6				(12	)
Cash at beginning of year			197				209
Cash at end of year		$	203			$	197
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest		$	-			$	-
Cash paid for income taxes			-				-

 

 

See accompanying notes to financial statements.

Sandston Corporation and Subsidiaries

Notes to Financial Statements

For the Years Ended December 31, 2020 and 2019

 

Note 1 - Basis of Presentation and Business

 

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 December 31, 2020, the Company sold to Dorman Industries a total of 6,910,491 shares at per share prices equal to the closing price the day prior to each sale, and realized proceeds of $206,434. Dorman Industries currently is the beneficial owner of 68.67% 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 $206,434 of proceeds from the sales, through private placements, of unregistered common stock to Dorman Industries in the years 2010 through 2020.

 

As reflected in the accompanying balance sheet at December 31, 2020, cash totals $203. 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 2021. 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 68.67% 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.

 

Note 2 - Summary of Accounting Principles

 

Income Taxes

 

Income taxes are accounted for under the asset-and-liability method. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future. Such deferred income tax asset and liability computations are based on enacted tax laws and rates. A valuation allowance is established when necessary to reduce deferred income tax assets to the amount expected to be realized.

 

Stock Option Plans

 

The Company’s Long-Term Incentive Plan (the “Incentive Plan”), adopted in April 1999, provides for the granting of awards to purchase a total of 250,000 shares of common stock to key employees and others. No options were granted in 2020 or 2019.

 

Loss Per Share

 

Loss per share is calculated using the weighted average number of common shares outstanding during the years presented. The weighted average shares outstanding used in computing loss per share was 17,431,226 and 16,974,868 for the years ended December 31, 2020 and 2019, respectively. There are no outstanding dilutive stock options and warrants. All outstanding stock options and warrants were cancelled effective with the Net Asset Sale.

 

Note 3 - Taxes on Income

 

Income tax expense is $-0- for both 2020 and 2019, including $-0- in current taxes and $-0- in deferred taxes for both 2020 and 2019.

 

A reconciliation of income tax expense recognized to income taxes at statutory rates is as follows:

 

		Year Ended December 31,
		2020				2019
Tax benefit computed at statutory rates (21% in 2020 and 2019)		$	(5,200	)		$	(4,200	)
Change in valuation allowance			(5,200	)			(4,200	)
Income tax expense		$	-0-			$	-0-

 

At December 31, 2020, the Company has net operating loss carryforwards (“NOLs”) of approximately $450,000 that can be used to offset future taxable income, and such NOLs result in a gross deferred tax asset of approximately $93,500 at that date. These NOLs expire in varying amounts through 2037 for losses prior to 2018, and the NOLs generated in 2018 and thereafter have no expiration date. Realization of these NOLs is subject to annual limitations under current IRS regulations pursuant to change in control provisions and is dependent on the existence of future taxable income. At December 31, 2020 and 2019, a valuation allowance has been recognized for the entire amount of the Company’s net deferred tax asset. The valuation allowance increased by $5,200 in 2020, increasing from $88,000 at December 31, 2019 to $93,500 at December 31, 2020.

 

Note 4 – Long-Term Incentive Plan

 

All option and share amounts reflected in the following disclosures have been adjusted for the one-for-five reverse stock split on April 1, 2004. The Company’s Long-Term Incentive Plan (the “Incentive Plan”), adopted in April 1999, provides for the granting of awards to purchase a total of 250,000 shares of common stock to key employees and others. Awards may be made by the Compensation Committee of the Board of Directors in the form of incentive stock options, non-qualified stock options, restricted stock or performance shares, provided that the Committee may not grant options to any salaried employee during any three-year period to purchase more than 100,000 shares.

 

The exercise price for each option granted under the Incentive Plan cannot be less than the fair market value of the common stock on the date of the grant. The Incentive Plan’s Committee has latitude in setting the vesting and exercise periods, but generally the options vest over a three-year period and had a ten-year term.

 

The Incentive Plan authorizes the Committee to grant restricted stock awards pursuant to which shares of Common Stock will be awarded, subject to restrictions on transfer that lapse over a period of time or upon achievement of performance goals, as determined by the Committee. Participants who receive restricted stock grants are entitled to dividend and voting rights on the awarded shares prior to the lapse of restrictions on such awards.

 

The Committee is also authorized to grant performance share awards under the Incentive Plan that are payable at the discretion of the Committee in cash, shares of Common Stock, or a combination of each, upon achievement of performance goals established by the Committee. The Committee will determine the terms and conditions of restricted stock and performance share awards, including the acceleration or lapse of any restrictions or conditions of such awards. Outstanding options under the Incentive Plan were cancelled as of March 31, 2004. There were no option grants in the years ended December 31, 2020 and 2019, and there are no outstanding options as of December 31, 2020 or 2019.