-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FZCpERy3ihnddg+nqewwYuazF85kjHbLH3u/KxI38R6+4hQ6unbCqv9qNu4Gol6d gi98ygxfztyN/qbDYrwB/w== 0000807397-00-000013.txt : 20000517 0000807397-00-000013.hdr.sgml : 20000517 ACCESSION NUMBER: 0000807397-00-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARK SOLUTIONS INC CENTRAL INDEX KEY: 0000807397 STANDARD INDUSTRIAL CLASSIFICATION: PREFABRICATED METAL BUILDINGS & COMPONENTS [3448] IRS NUMBER: 112864481 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-72099 FILM NUMBER: 636970 BUSINESS ADDRESS: STREET 1: 1515 BROAD ST STREET 2: PARKWAY TECHNICAL CENTER CITY: BLOOMFIELD STATE: NJ ZIP: 07003 BUSINESS PHONE: 9738930500 MAIL ADDRESS: STREET 1: 1515 BROAD ST STREET 2: PARKWAY TECHNICAL CENTER CITY: BLOOMFIELD STATE: NJ ZIP: 07003 FORMER COMPANY: FORMER CONFORMED NAME: SHOWCASE COSMETICS INC DATE OF NAME CHANGE: 19920703 10-Q 1 MARCH 31, 2000 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------- FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE - ----- SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: March 31, 2000 ------------------- 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: 0-17118 ------------------------- Mark Solutions, Inc. --------------------------------- (Exact Name of Registrant as Specified in Its Charter) Delaware 11-2864481 --------------- ----------------- (State or Other Jurisdiction (I.R.S. Employer of Incorporation) Identification No.) Parkway Technical Center 1515 Broad Street Bloomfield, New Jersey 07003 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code: (973) 893-0500 ---------------------------- Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report Indicate by check whether registrant (1) has 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date: Common Stock, $ .01 par value: 7,279,571 shares outstanding as of May 15, 2000. The registrant is obligated to issue up to an additional 69,500 shares of Common Stock, which have not been issued due to prohibitions on beneficial ownership. MARK SOLUTIONS, INC. Form 10-Q for Quarter Ended March 31, 2000 Index Part I. Financial Information Page No. Item 1. Financial Statements Consolidated Balance Sheets as of March 31, 2000 and June 30, 1999. . . 3-4 Consolidated Statements of Operations for the Nine Months and Three Months Ended March 31, 2000 and 1999 . . . . . . . . 5 Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2000 and 1999 . . . . . . . . . . . . . . . 6 Notes to Consolidated Financial Statements . . . 7-8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 9-12 Part II. Other Information Item 2. Changes in Securities and Use of Proceeds . . . 13 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . 13 Signatures 13 2 Mark Solutions, Inc. and Subsidiaries Consolidated Balance Sheets
Asset March 31, 2000 June 30, 1999 -------------- ------------- Current Assets: Cash and cash equivalents $ 502,709 $ 298,167 Note receivable 224,844 250,000 Accounts receivable 4,353,050 4,744,459 Costs and estimated earnings in excess of billings on uncompleted contracts 452,612 1,006,955 Deferred tax asset 548,477 500,000 Prepaid expenses 32,295 64,706 ----------- ---------- Total Current Assets 6,113,987 6,864,287 Property and equipment, net 1,389,300 1,224,110 Other Assets: Cost in excess of net assets of business acquired less accumulated amortization of $804,768 and $647,313 at March 31, 2000 and June 30, 1999, respectively 244,923 402,378 Deferred tax asset - 500,000 Other assets 90,804 79,939 ----------- ---------- Total Other Assets 335,727 982,317 --------- ----------- Total Assets $7,839,014 $9,070,714 ========== =========
3 Mark Solutions, Inc. and Subsidiaries Consolidated Balance Sheets
Liabilities and Stockholders' Equity March 31, 2000 June 30, 1999 ----------------------- ------------------ Current Liabilities: Accounts payable $2,776,739 $3,617,608 Current maturities of long-term debt 490,882 365,000 Current portion of obligations under capital leases 109,186 87,292 Due to related parties 34,311 177,977 Notes payable to officers/stockholders 200,000 375,000 Deferred revenues - 655,874 Litigation settlement 250,000 300,000 Accrued liabilities 167,108 253,299 ----------- ----------- Total Current Liabilities 4,028,226 5,832,050 Other Liabilities: Long-term debt excluding current maturities 14,133 369,961 Long-term portion of obligations under capital leases 115,794 135,017 Convertible notes 950,000 - ------------ ----------- Total Other Liabilities 1,079,927 504,978 Commitments and Contingencies - - Stockholders' Equity: Common stock, $.01 par value, 50,000,000 shares authorized, 6,858,873 and 5,525,296 shares issued and outstanding at March 31, 2000 and June 30, 1999, respectively 68,589 55,253 Preferred stock, $1.00 par value, $10 liquidation value; 5,000,000 shares authorized: Series A; authorized and issued 122,000 shares; -0- and 24,000 outstanding at March 31, 2000 and June 30, 1999 respectively - 24,000 Series B; authorized and issued 153,000 shares; -0- and 6,000 outstanding at March 31, 2000 and June 30, 1999 respectively - 6,000 Series D; authorized and issued 20,000 shares; 20,000 and -0- outstanding at March 31, 2000 and June 30, 1999 respectively 20,000 - Additional paid-in capital 36,191,083 34,432,927 Deficit (33,666,905) (31,916,792) Accumulated other comprehensive income 168,796 183,000 Treasury stock, at cost; 17,500 shares at March 31, 2000 and June 30, 1999 (50,702) (50,702) ------------ ------------ Total Stockholders' Equity 2,730,861 2,733,686 ---------- ---------- Total Liabilities and Stockholders' Equity $7,839,014 $9,070,714 ========== ==========
4 Mark Solutions, Inc. and Subsidiaries Consolidated Statement of Operations
Nine Months Nine Months Three Months Three Months Ended Ended Ended Ended March 31, 2000 March 31, 1999 March 31, 2000 March 31, 1999 ----------------- ----------------- ----------------- ----------------- Revenues: Sales $ 11,917,198 $ 5,573,978 $ 3,370,496 $ 2,637,461 ------------------ --------------------- ----------------- ---------------- Costs and Expenses: Cost of sales 9,013,121 3,500,422 3,837,156 2,352,575 General, and administrative expenses 2,095,446 1,823,328 695,382 732,161 Marketing costs 1,274,132 722,675 523,544 304,756 Software costs 1,033,263 895,548 325,293 345,269 Amortization expense 157,455 157,455 52,485 52,485 Litigation settlement 275,000 2,000 - - ------------------ --------------------- ----------------- ---------------- Total Costs and Expenses 13,848,417 7,101,428 5,433,860 3,787,246 ------------------ --------------------- ----------------- ---------------- Operating Income(Loss) (1,931,219) (1,527,450) (2,063,364) (1,149,785) ------------------ --------------------- ----------------- ---------------- Other Income (Expenses): Interest income 76,273 51,458 55,199 7,143 Other income 124,220 -- 124,220 Interest expense (169,387) (37,500) (49,967) (16,736) Loss on sale of securities - (6,216) - (6,216) Imputed Interest expense on convertible debentures - (109,667) - (54,833) ------------------ --------------------- ----------------- ---------------- 31,106 (101,925) 129,452 (15,809) ------------------ --------------------- ----------------- ---------------- Income before Income Tax Benefit $ (1,900,113) $ (1,629,375) $ (1,933,912) $ (1,165,594) Income Tax Benefit 150,000 1,200,000 1,200,000 ------------------ --------------------- ---------------- ---------------- Net Income(Loss) $ (1,750,113) $ (429,375) $ (1,933,912) $ 34,406 =================== ==================== ================ ================ Basic Earnings(Loss) Per Share $ (0.30) $ (0.09) $ (0.31) $ 0.01 =================== ==================== ================= ================ Fully Dilutes Income(Loss)Per Share $ (0.30) $ (0.09) $ (0.31) $ 0.01 =================== ==================== ================= ================ Weighted Average Number of Basic Shares Outstanding 5,835,964 4,800,758 6,307,144 4,752,898 =================== ==================== ================= ================ Weighted Average Number of Fully Diluted Shares Outstanding 5,835,964 4,800,758 6,307,144 5,515,044 =================== ==================== ================= ================ Dividends Paid $ - $ - $ - $ - =================== ==================== ================= ================
5
Mark Solutions, Inc. and Subsidiaries Consolidated Statements of Operations Nine Months Nine Months Ended Ended March 31, 2000 March 31, 1999 ------------------ ------------------- Cash Flows From Operating Activities: Net loss $(1,750,113) $ (429,375) Adjustments to reconcile net loss to net cash used for operating activities: Depreciation and amortization 454,243 312,819 Deferred Imputed interest on convertible debentures - 109,667 Securities issued for services 235,270 - Securities issued for litigation 250,000 - Deferred tax asset 451,523 (1,200,000) (Increase) decrease in assets: Restricted cash - 1,234,005 Accounts Receivable 391,409 (1,628,972) Notes Receivable 25,156 (250,000) Inventory - (380,988) Billing in excess of contract revenue recognized 554,343 (528,227) Other current assets 32,411 110,909 Other assets (10,865) (32,871) Increase (decrease) in liabilities: Accounts payable (840,869) 1,270,856 Due to related parties (143,666) 98,249 Deferred revenue (655,874) - Litigation settlement payable 50,000 - Customer deposits - 83,506 Accrued liabilities (86,191) (15,317) Net adjustments to reconcile net loss to ----------- ---------- net cash provided by (used for)operating activities 606,890 (816,364) Net Cash Provided by (Used for) ----------- ---------- Operating Activities 1,143,223 (1,245,739) ----------- ---------- Cash Flows From Investing Activities: Acquisition of property and equipment (477,758) (508,867) Net Cash (Used for) ----------- ---------- Investing Activities (477,758) (508,867) ----------- ---------- Cash Flows From Financing Activities: Collection of subscriptions receivable - 1,231,000 Proceeds from sale of stock 260,000 - Proceeds from warrant conversions 1,024,323 - Increase in short term borrowing - 425,000 Proceeds of equipment loans less repayments (227,275) (11,223) Repayment of notes payable officer (175,000) - Proceeds from convertible debentures 950,000 - Deposit on stock repurchase - (222,000) Debt issue costs - (109,667) Payment of stock related costs (6,525) (25,169) Purchase of treasury stock - (50,702) ----------- ---------- Net Cash Provided by Financing Activities 1,825,523 1,237,239 ----------- ---------- Net increase(decrease) in Cash 204,542 (517,367) Cash and Cash Equivalents at Beginning of Period 298,167 564,577 ----------- ---------- Cash and Cash Equivalents at End of Period $ 502,709 $ 47,210 =========== ==========
6 Mark Solutions, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 1 INTERIM FINANCIAL INFORMATION The consolidated balance sheet of the Company as of March 31, 2000, the consolidated statement of operations for the nine months and three months ended March 31, 2000 and 1999 and the consolidated statements of cash flows for the nine months ended March 31, 2000 and 1999 are unaudited and have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position, results of operations and cash flows 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. The June 30, 1999 balance sheet data is derived from the audited consolidated financial statements. The attached financial statements should be read in connection with the consolidated financial statements and notes hereto included in the Company's Annual Report on Form 10-K for the year ended June 30, 1999. Certain reclassifications have been made to the current and prior year amounts to conform to the current period presentation. Note 2 INVENTORIES Basic earnings (loss) per common share is computed by dividing the net earnings by the weighted average number of shares of common stock outstanding during the period. Dilutive earnings per share gives effect to stock options and warrants which are considered to be dilutive common stock equivalents. Note 4 CONVERTIBLE DEBENTURES On April 14, 2000, Mark effected a $2,250,000 private placement (the "Private Placement") to three investors, considering of (i) $2,250,000 two-year principal amount convertible notes (the "Convertible Notes") and (ii) warrants to purchase 450,000 shares of Common Stock (the "Warrants"). As partial consideration, the investors exchanged $1,250,000 in short-term debt for $1,250,000 principal amount of Convertible Notes and 250,000 Warrants. 7 Mark Solutions, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 3 SEGMENT INFORMATION The Company's two industry segments are modular steel cells for the corrections industry and software applications for the medical industry. The following is a summary of selected consolidated financial information for the Company's industry segments:
Modular Steel Medical Intersegment Products Products Charges Total ----------- ----------- ----------- ----------- Nine Months Ended March 31, 2000 Revenues $10,309,574 $ 1,607,624 $ - $11,917,198 Interest income 586,448 964 (511,139) 76,273 Interest expense 160,850 519,676 (511,139) 169,387 Depreciation and amortization 219,205 77,583 157,455 454,243 Segment pre-tax profit 573,336 (2,315,994) (157,455) (1,900,113) Segment assets 17,355,631 1,206,195 (10,722,812) 7,839,014 Capital expenditures 228,991 248,767 - 477,758 Nine Months Ended March 31, 1999 Revenues $ 4,622,834 $ 951,144 $ - $ 5,573,978 Interest income 420,697 968 (370,207) 51,458 Interest expense 140,596 217,074 (210,503) 147,167 Depreciation and amortization 83,169 72,195 157,455 312,819 Segment pre-tax profit 226,092 (1,525,903) (329,564) (1,629,375) Segment assets 13,620,247 790,371 (7,807,382) 6,603,236 Capital expenditures 303,058 205,809 - 508,867
The following table presents revenues by country based on the location of the use of the product or service: 3/31/00 3/31/99 -------- -------- United States $10,548,043 $ 5,045,581 Norway 667,000 - Korea 135,524 - Spain 257,263 296,275 United Kingdom 228,768 150,667 Turkey 80,600 81,455 Ireland 145,000 - ----------- ----------- $11,917,198 $ 5,573,978 =========== =========== The following table presents long-lived assets by country based on the location of the assets: 3/31/00 ------- United States $ 955,346 United Kingdom 433,954 ----------- $ 1,389,300 =========== 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General Mark's results of operations, liquidity, and working capital position have been historically impacted by sporadic sales of its principal products, modular steel cells and IntraScan II PACS software. Mark's modular steel cell is an alternative to traditional construction methods, and penetration into the construction market has met resistance typically associated with an unfamiliar product. Accordingly, Mark has been, and will continue to be, subject to sales fluctuations until its modular cell technology obtains broader acceptance in the construction market. Based on the increase in the number of projects being designed for steel cells, management believes its cells are receiving greater market acceptance as a viable alternative to concrete. Mark continues to promote it steel cells to the architectural, engineering, and construction communities by making sales presentations, participating in trade shows, conducting selected direct mail campaigns and engaging in other marketing activities. Mark has increased its steel cell marketing expenditures to more aggressively pursue projects and to persuade the construction industry to increase the use of steel cells. Mark believes this investment has been successful to date and is necessary to achieve profitability. Mark will continue to review its overhead and personnel expenses based on operating results and prospects. Mark is continually bidding on and soliciting joint venture opportunities regarding construction projects. For its fiscal year ending June 30, 2000 Mark expects to bid on approximately $10,000,000 in cell projects which are specified steel only, and $5,000,000, which include steel as an equal to concrete. Revenues from any major project would substantially improve Mark's operating results and cash flow, although no assurances can be given that any of these projects will be awarded to Mark. For the nine months ended March 31, 2000, Mark was awarded $9,838,000 of the $10,600,000 in correctional cell projects it bid on, lost $300,000 and remains under consideration for the balance of the projects. MarkCare markets the IntraScan II PACS software as part of comprehensive PACS proposals made by MarkCare's strategic partners. MarkCare's principal marketing partner is Data General Corporation, a subsidiary of EMC Corporation. In response to increased interest from its strategic partners and prospective customers, MarkCare accelerated its development and marketing efforts. Sales of the IntraScan II PACS software began to generate material revenues in the fiscal year ended June 30, 1999 and management expects these revenues to increase during fiscal 2000 although no assurances can be given in this regard. If the IntraScan marketing plan is successful, management believes 9 that the revenues will be more constant then those presently generated by modular steel cell sales, and will reduce fluctuations in Mark's consolidated results of operations and financial condition. Results of Operations The substantial majority of Mark's operating revenues for the reported periods were derived from the sale of its modular steel cells. For the three months ended March 31, 2000, modular steel cells represented 89.4% of total operating revenue. Management believes that the sale of cells will continue to represent a majority of Mark's operating revenues through June 30, 2000. Revenues from sales for the three months ended March 31, 2000, increased 27.8% to $3,370,496 from $2,637,461 for the comparable period. This increase is attributable to additional modular steel cell projects. Cost of sales for the three months ended March 31, 2000, consisting of materials, labor and fixed factory overhead expense increased by 70.0% to $3,998,243 from $2,352,575 for the comparable period. Cost of sales as a percentage of revenues was 118.6% for the three months ended March 31, 2000 as compared to 89.2% for the prior comparable period. This increase is due to labor overruns on several projects being manufactured simultaneously to meet deadlines. In addition, Mark recorded a significant charge for installation on one project due to unforeseen site conditions. These installation costs were estimated at $250,000, as compared to actual costs running approximately $700,000. Mark is attempting to recoup some of these cost overruns from its sub contractor. General and administrative expenses for the three months ended March 31, 2000, decreased 5.0% to $695,382 from $732,161 for the comparable period. The decrease is attributable to a reduction in general overhead costs and the reallocation of resources to marketing and development. Marketing costs for the three months ended March 31, 2000, increased 71.8% to $523,544 from $304,756 for the comparable period. This increase in due to the expanded marketing efforts for its two products, modular steel cells and IntraScan II PACS software. Software costs for the three months ended March 31, 2000 related to IntraScan II PACS, decreased 5.8% to $325,293 from $345,269 for the comparable period. Mark has stabilized its development costs and has focused working capital on marketing its IntraScan II PACS software and related items in response to increased interest from distributors and potential customers. Revenues from sales for the nine months ended March 31, 2000, increased 113.8% to $11,917,198 from $5,573,978 for the comparable period. This increase is attributable to increases in both modular steel cell and IntraScan II PACS 10 software projects. For the nine months ended March 31, 2000, modular steel cells represented 86.5% of total operating revenue. Cost of sales for the nine months ended March 31, 2000, consisting of materials, labor and fixed factory overhead expense increased by 157.5% to $9,013,121 from $3,500,422 for the comparable period. Cost of sales as a percentage of revenues was 75.6% for the nine months ended March 31, 2000 as compared to 62.8% for the prior comparable period. This increase is due to labor overruns on several projects being manufactured simultaneously to meet deadlines. In addition, Mark recorded a significant charge for installation on one project due to unforeseen site conditions. These installation costs were estimated at $250,000, as compared to actual costs running approximately $700,000. Mark is attempting to recoup some of these cost overruns from its sub contractor. General and administrative expenses for the nine months ended March 31, 2000, increased 14.9% to $2,095,446 from $1,823,328 for the comparable period. The increase is attributable to the additional staffing in response to sales growth and prospects in both business segments. Marketing costs for the nine months ended March 31, 2000, increased 76.3% to $1,274,132 from $722,675 for the comparable period. This increase is due to the expanded marketing efforts for its two products, modular steel cells and IntraScan II PACS software. Software costs for the nine months ended March 31, 2000 related to IntraScan II PACS, increased 15.4% to $1,033,263 from $895,548 for the comparable period. Mark has stabilized its development costs and has focused working capital on marketing its IntraScan II PACS software and related items in response to increased interest from distributors and potential customers. Liquidity and Capital Resources Mark's working capital requirements result principally from staff and management overhead, office expense and marketing efforts. Mark's working capital requirements have historically exceeded its working capital from operations due to sporadic sales. Accordingly, Mark has depended on and, absent continued improvements in operations, will depend on new capital in the form of equity or debt financing to meet its working capital deficiencies, although no assurances can be given that such financing will be available. Mark believes its present available working capital from existing contracts and from anticipated contracts is sufficient to meet its operating requirements through December 31, 2000. If Mark requires additional capital, it will continue to principally look to private sources. Mark did not maintain any inventory at March 31, 2000 and June 30, 1999. While Mark presently does not have any material commitments for capital expenditures, management believes that its working capital requirements for inventory and other manufacturing related costs will significantly increase with increases in product orders. 11 For the nine months ended March 31, 2000, Mark had negative cash flow from operating activities of $1,143,223, most of which is attributable to the net operating loss sustained for the period. For the nine months ended March 31, 2000, Mark had negative cash flow from investing activities of $477,758, all of which is attributable to the purchase of property and equipment. Mark has no present intention of making any acquisition, which would have a material negative or positive effect on cash flow. For the nine months ended March 31, 2000, financing activities provided $1,825,523 in cash, principally due to the proceeds from stock sales, the exercise of warrants and the sale of convertible debentures. Cash and cash equivalents increased from $298,167 at June 30, 1999 to $502,709 at March 31, 2000 due to proceeds from stock and debenture sales; warrant exercises, offset by a loss from operations. Working capital increased to $2,085,761 at March 31, 2000 from $1,032,237 at June 30, 1999 primarily due to proceeds from stock and debenture sales; warrant exercises, offset by operating losses. Forward Looking Statements Except for the historical information contained herein, the matters discussed in this report are forward looking statements under the federal securities law. These statements are based on current plans and expectations of Mark and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual results to differ include whether cell and PACS projects are awarded to Mark and the timing of their completion, timely collection of receivables, meeting current and future financial requirements, competition and changes in PACS related technology. Year 2000 Disclosure After an evaluation and analysis of its operations, including its financial and operational computer systems applications, Mark has concluded no material adverse effect on its operations will occur due to Year 2000 software failures. To the extent modifications are required, management believes the related costs will not materially affect Mark's financial position. 12 PART II OTHER INFORMATION Item 2. Changes in Securities and Use of Proceeds On March 2, 2000, Mark agreed to reduce the exercise price of warrants to purchase 343,750 shares of Common Stock from $6.00 to $2.00 per share and warrants to purchase 62,500 from $3.00 to $2.00 per share. All of the warrants were subsequently exercised. In January 2000, an investor notified Mark of his intention to exercise an option to purchase 20,000 shares of preferred stock each convertible into Common Stock at $10.00 per preferred share divided by 75% of the trading price and warrants to purchase 25,000 shares of Common Stock at $6.00 per share. On January 19, 2000, Mark agreed to issue 100,000 shares of Common Stock in lieu of the convertible preferred stock and also issued the warrants. In February 2000, Mark issued 186,500 shares of Common Stock to ten persons and entities as compensation for services rendered or material provided. Each of the foregoing transactions was effected in reliance on the registration exemption provided by Section4 (2) of the Securities Act as not involving a public offering due to the limited nature of the offering and the individuals' relationship with Mark. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit No. Exhibit Description 27.1 Financial Data Schedule (b) Reports on Form 8-K for the Quarter ending March 31, 2000 Date of Report Item Reported April 14, 2000 5. Other events SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed by the undersigned thereunto duly authorized. Date: May 15, 2000 MARK SOLUTIONS INC. By:/s/ Michael Nafash ----------------------- Chief Financial Officer 13 EX-27 2 FDS MARK SOLUTIONS,INC,
5 0000807397 Mark Solutions, Inc. 9-MOS JUN-30-2000 JUL-01-1999 MAR-31-2000 502,709 0 4,577,894 0 0 6,113,987 3,871,762 2,485,978 7,839,014 4,028,226 115,935 0 20,000 68,589 2,642,272 2,730,861 11,917,198 11,917,198 9,013,121 13,848,417 0 0 169,387 (1,900,113) (150,000) 0 0 0 0 (1,750,113) (.30) (.30)
-----END PRIVACY-ENHANCED MESSAGE-----