Sandston Corporation

Notes to Condensed Financial Statements

For The Three- and Nine-MonthSix-Month Periods Ended SeptemberJune 30, 20202021 and 20192020

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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"2004 Net Asset Sale"). The Purchaser also assumed all of the Company’s liabilities pursuant to the 2004 Net Asset Sale. Following the 2004 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-fiveone-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 SeptemberJune 30, 2020,2021, the Company sold to Dorman Industries a total of 6,721,5917,044,117 shares at per share prices equal to the closing price the day prior to each sale, and realized proceeds of $191,172.$213,001. Dorman Industries currently is the beneficial owner of 68.33%68.90% 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 2004 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 2004 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 $191,172$213,001 of proceeds from the sales, through private placements, of unregistered common stock to Dorman Industries in the years 2010 through SeptemberJune 30, 2020.

2021.

As reflected in the accompanying balance sheet at SeptemberJune 30, 2020,2021, 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 2020.2021.  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 68.33%68.90% 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.

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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.

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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 SeptemberJune 30, 20202021 and 20192020

Direct administrativeAdministrative expenses of the Company totaled $3,812$4,256 for the three month period ended SeptemberJune 30, 2020, an increase of $769, or 25.3%, over the $3,0432021, compared to $4,282 of expenses incurred in the comparable 20192020 period.  The increase is attributable to an increaseCompany’s providers charged the Company approximately the same fees in administrative fees charged by the Company’s service providers in the 2020each period.

NineSix Month Periods Ended SeptemberJune 30, 20202021 and 20192020

Direct administrativeAdministrative expenses of the Company totaled $19,874$16,033 for the ninesix month period ended SeptemberJune 30, 2020, an increase of $2,504 over the $17,370, or 14.4%, of expenses incurred2021, compared to $16,062 in the comparable 20192020 period.  The increase is attributable to an increaseCompany’s providers charged the Company approximately the same fees in administrative fees charged by the Company’s service providers in the 2020each period.

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, and c) $311,172$120,000 of proceeds from the sale of stock since that dateon December 21, 2006 to certain accredited investors, includingand d) $213,001 of proceeds from sale of stock between 2010 and 2021 to Dorman Industries.

As reflected in the accompanying balance sheet at SeptemberJune 30, 2020,2021, 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 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 2020.2021. 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. Dorman Industries owns 68.33%68.90% 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 20192020 Form 10-K and in Part II, Item 1A. Risk Factors of Sandston’s Quarterly Report on Form 10-Q for the period ended March 31, 20202021 (“First Quarter 20202021 Form 10-Q”). Except as set forth below, there have been no material changes to the risk factors previously disclosed in the 20192020 Form 10-K and in the First Quarter 20202021 Form 10-Q.

The outbreak 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.Theacquisition. 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 continuing or re-institutedquarantines, shelter-in-place orders andor 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, including 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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Not Applicable.

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(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 SeptemberJune 30, 20202021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Exhibits included herewith are set forth on the Index to Exhibits, which is incorporated herein by reference.

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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.

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