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.
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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.
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