<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                             -----------------------

                                    FORM 10-K

(Mark One)

[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934

For the fiscal year ended July 31, 1999 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 33-18218-NY

                              DYNAMARK CORPORATION
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

 Delaware                                             13-3376786
-------------------------------                      -------------------
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                       Identification No.)

56 Dune Road, Atlantic Beach, New York                     11509
----------------------------------------                 ----------
(Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code: (516) 889-3690

Securities registered pursuant to Section 12(b) of the Act:

                                                       Name of each exchange
Title of each class                                    on which registered
-------------------                                    -------------------

None                                                   Not Applicable

Securities registered pursuant to Section 12(g) of the Act:

                                      None
                                ----------------
                                (Title of Class)

                  Indicate by check mark whether the 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 the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes X No

                                       2
<PAGE>

                  The voting stock of Dynamark Corporation (consisting of Common
Stock, $.0001 par value) is traded in the over-the-counter market. However, no
trades have been reported by the National Quotation Bureau, Inc. and any limited
trading may not be reflective of the market value for the Company's voting stock
held by non-affiliates. There were 18,000,000 shares of Common Stock of the
Registrant outstanding on October 25, 1999, of which approximately 3,500,000
were held by non-affiliates.

                  Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (ss.229.405 of this chapter) is not
contained herein, and will not 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]

                  Certain exhibits listed in Item 14 of Part IV have been
incorporated by reference. The index to exhibits appears on page 14.

                                       3
<PAGE>

                                     PART I

Item 1.  Business

         General

         Dynamark Corporation (hereinafter referred to as "the Company") was
organized under the laws of the State of Delaware on August 1, 1986, under the
name of Crack Rehabilitation, Inc. for the purpose of owning and operating drug
rehabilitation centers. In August 1987 the Company changed its name to Dynamark
Corporation after management elected to shift its business purpose to that of
offering product, marketing, business and real estate development, and financial
consulting services, as well as to that of acquiring an operating business or
businesses.

         The Company completed a public offering of its securities in August
1988, receiving net proceeds of approximately $557,000. Since that time, the
business purpose of the Company has evolved to that of developing or acquiring
an operating business. To date, the Company has not succeeded in accomplishing
any of its goals. In fact, during this period, only two incidental business
transactions have taken place, both related to participating in other companies'
private placements for bridge loans. In both cases the Company received some
stock from those companies as well as notes evidencing the loans, and in both
cases the participation was not in excess of 10% of the total private placement.
Both of these loans have been repaid.

         Competition

         Management is of the opinion that it will be very difficult, but not
impossible, to accomplish its present goal of acquiring an operating business.
The Company's resources are extremely limited. The funds resulting from its
public offering have been depleted by operating expenses and by business
commitments. The time management can devote to the Company's operations has been
drastically reduced. Additionally, there are numerous persons and firms, who
have greater financial resources, more experienced personnel and a lot more
available time that they can devote to a project, then the Company has or can.

                                       4
<PAGE>

                  Employees

         The Company presently employs one person who is the Company President
and who can devote only a minimum amount of time to the Company's activities.

Item 2.           Properties

         The Company currently maintains its principal offices at 56 Dune Road,
Atlantic Beach, New York, New York 11509, on a month to month basis with a
monthly rent of $500. The premises are owned by Allan P. Rothstein, President of
the Company. (See "Certain Transactions"). The Company may consider establishing
other permanent offices. However, the present facilities are adequate for the
Company's present operation.

Item 3.           Legal Proceedings

         There are no material legal proceedings pending to which the Company is
a party or by which any of its property may be subject.

Item 4.           Submission of Matters to a Vote of Security Holders

         Not applicable.

                                     PART II

Item 5.           Market for Registrant's Common Equity
                  and Related Stockholder Matters

         The Company's Common Stock is traded in the "pink sheet"
over-the-counter market. The Company's Warrants Series A and Series B Warrants
expired on March 10, 1992 and are void. The Company's Common Stock is not
actively trading and there are no available bid prices. There is no assurance
that any trading market for the Company's securities will develop.

         Dividends

         The Company has never paid a dividend on its Common Stock, and it
presently intends to retain any

                                       5
<PAGE>

earnings for use in its business. Accordingly, it is anticipated that dividends
will not be paid to the holders of Common Stock in the foreseeable future.

         Approximate Number of Equity Security Holders
         As of October 25 1999, there were 24 holders of record of the Company's
Common Stock. Such number of record owners was determined from the Company's
stockholders' records and does not include beneficial owners of the Company's
Common Stock, which shares are held in the names of various security holders,
dealers and clearing agencies.

Item 6.           Selected Financial Data.

         The following selected data for the period indicated has been derived
from the financial statements of the Company, a development stage entity. This
information should be read in conjunction with the related financial statements
and notes thereto included elsewhere in this report.

                                       6
<PAGE>

                  AS OF JULY 31, AND FOR THE PERIODS THEN ENDED
<TABLE>
<CAPTION>
                                                                                        Cumulative
                                                                                      August  1, 1986
                                                                                    (Date of Inception)
                    1999          1998            1997        1996         1995       to July 31, 1999
                    ----          ----            ----        ----         ----          -------------
<S>                <C>          <C>             <C>         <C>          <C>               <C>
Revenues (loss)    $  8,421     $  9,584        $163,495    $  3,156     $  3,787          $192,988

Net Income
(loss)             $(18,457)       8,803         140,573     (16,299)     (32,636)         (555,982)

Income (loss)
Per Common
Share                                 --             .01          --           --              (.03)

Total Assets       $203,212      201,865         205,222      61,744       73,510           203,212

Long-term debt     $171,961      168,961         159,961     153,961      147,961           171,961
</TABLE>

Item 7.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations.

         Income, consisting of interest and dividends only, reflected in
revenues for the fiscal year ended July 31, 1999 decreased from that reported
for the year ended July 31, 1998 by $1,163. Income reported during the years
ended July 31, 1994 through 1998 consisted primarily of interest and dividends
received on Company cash balances and the subsequent recovery of a promissory
note, and related accrued interest, which is reflected in income for the fiscal
year ended July 31, 1997. The note and accrued interest had been written off
prior to 1995.

         Revenues for fiscal years ended July 31, 1994 and 1993 reflect
amortization of goodwill and equity in losses of an investment aggregating
$11,062 and $9,467, respectively. In addition, $39,760 was reflected during the
year ended July 31, 1994 for a write-down of an impaired loan in default. There
were no additional write-downs for loan impairment subsequent to the year ended
July 31, 1994 since the loan had been fully written-down as of July 31, 1994.

                                       7
<PAGE>

         During the year ended July 31, 1997, revenue includes recognition of
the recovery of the principal amount of a note previously written off, together
with accrued interest thereon. Shareholders' equity during the year ended July
31, 1997 increased by $140,573, resulting primarily from the recovery of
principal and accrued and unpaid interest on a note previously written off.

         Management expects losses to continue however, unless the Company is
successful in acquiring or merging with a profitable business operation. In an
attempt to reduce losses, the president has agreed to render his services to the
Company without further compensation until there has been a turnaround. The
amount of future losses will depend upon administrative expenses, which
management believes should not exceed $30,000 per year.

         Cash and cash equivalents utilized declined from $19,840 in fiscal year
ended July 31, 1993 to $18,747 in fiscal year ended July 31, 1994, but increased
in fiscal year ended July 31, 1995 to $28,794, declined to $8,233 in the fiscal
year ended July 31, 1996, and increased to $37,891 in the fiscal year ended July
31, 1997. The increase in negative cash flow during the year ended July 31, 1995
from the year ended July 31, 1994 amounted to $10,047 and resulted from
increased professional fees. The decrease in negative cash flow during the year
ended July 31, 1996 from the year ended July 31, 1995 amounted to $20,561 and
resulted principally from decreased professional fees. The change from a
negative cash flow for the year ended July 31, 1996 of $8,233 to a positive cash
flow of $37,891 for the year ended July 31, 1997 amounted to $46,124 and
resulted principally from the recovery of a promissory note and accrued interest
previously written off. The increase in positive cash flow during the year ended
July 31, 1998 from the fiscal year ended July 31, 1997 amounted to $64,366 and
resulted from recovery of a promissory note previously written off.

         Management anticipates that negative cash flows in the immediate future
will not exceed approximately $30,000. Based upon this anticipated negative cash
flow, Management is of the opinion that

                                       8
<PAGE>

it has sufficient liquidity to operate for not less than the next twelve months.

Item 8.           Financial Statements.

         Reference is made to the Financial Statements which are annexed hereto
immediately following the signature page to this Report.

Item 9.           Changes in and Disagreement with Accountants
                  on Accounting and Financial Disclosure

         Not applicable.

Item 10.          Directors and Executive Officers.

         The directors and executive officers of the Company are as follows:

Name                       Age                 Position
----                       ---                 --------

Allan P. Rothstein         41                  President, Treasurer and Director

         All Directors serve for a term of one year and until their successors
are duly elected and qualified. All officers serve at the discretion of the
Board of Directors.

         Allan P. Rothstein has been President and a director of the Company
since its inception in August, 1986. From December, 1985 to the present, Mr.
Rothstein has served as President and Chairman of the Board of Directors of
Brown Wharton & Co., Inc., a financial services firm. From July 1990 to present
Mr. Rothstein has been a securities trader for Fahnestock & Co. From November
1984 to May 1985, Mr. Rothstein was employed at Nash Weiss & Co., a registered
broker-dealer. From May 1982 to December 1985, Mr. Rothstein was a Floor Trader,
Floor Broker and Member of the New York Futures Exchange. Mr. Rothstein received
a B.A. degree from the University of Pennsylvania in May of 1980. The portion of
business time of Mr. Rothstein devoted to the affairs of the Company varies.
However, as a general matter, the amount of time is generally less than 10% of
his business time.

                                       9
<PAGE>

Item 11.          Executive Compensation

         Allan P. Rothstein, President of the Company, was employed by the
Company under an Employment Agreement ending August 1, 1999. Mr. Rothstein
currently serves as President of the Company under an employment agreement and
receives no compensation. During the fiscal year ended July 31, 1999, Mr.
Rothstein was entitled to a salary of $50,000, which has been waived. Mr.
Rothstein is also entitled, during the term of his employment agreement, to
health insurance benefits, life insurance with premiums not to exceed $2,500 per
annum with his wife and children as beneficiaries, the use of a Company owned or
leased vehicle, and reimbursement for expenses which he may incur on behalf of
the Company. Furthermore, if Mr. Rothstein dies at any time during the term of
his employment agreement, the Company is obligated to pay to Mr. Rothstein's
estate or wife, if married, a death benefit of $15,000. Mr. Rothstein has
advised the Company that he will continue to serve the Company without payment
of salary.

         In the past, the Company's policy was to compensate directors who were
not employees of the Company in the amount of $150 per meeting and reimburse
them for the reasonable expenses incurred by them in connection with the
Company's business. At present, there are no directors who are not employees of
the Company.

Employee Incentive Stock Option Plan

         In April 1987, the Company adopted an Employee Incentive Stock Option
Plan (the "Plan") intended to qualify under the provisions of the Internal
Revenue Code of 1986. Pursuant to the Plan, the Company was authorized to grant
stock options to purchase up to 2,500,000 shares of the Company's Common Stock
to key personnel, including eligible officers, directors, employees and
independent consultants of the Company. No options were ever granted under the
Plan and, in accordance with its terms the Plan terminated on April 7, 1997.

                                       10
<PAGE>

Item 12.          Security Ownership of Certain Beneficial
                  Owners and Management

         The following table sets forth certain information as of October 25,
1999 with respect to the ownership of the Company's Common Stock by each person
known by the Company to own beneficially more than 5% of such Common Stock, by
each officer and director of the Company and by officers and directors as a
group.

                                                     Amount and Percent-
                                                     age of Beneficial
                                                       Ownership (1)
                                                       -------------

Directors, Officers                             Number of
and 5% Shareholders                               Shares             Percent
-------------------                               ------             -------

Allan P. Rothstein (2)                           1,000,000              5.5%
56 Dune Road
Atlantic Beach, New York 11909

Cynthia Rothstein (2)                           11,375,000             63.2
311 Links Drive West
Oceanside, New York 11572

Brown Wharton & Co., Inc. (2)                    1,000,000              5.5
56 Dune Road
Atlantic Beach, New York 11909

All Directors and Officers
as a Group (1 in number)                         1,000,000              5.5

(1)      Each officer, director and each 5% shareholder has sole voting and sole
         investment power with respect to all shares that he or she beneficially
         owns.

(2)      Cynthia Rothstein is the mother of Allan P. Rothstein, President of the
         Company. Such beneficial ownership does not include shares of the
         Company's Common Stock owned by Brown Wharton & Co., Inc., a company in
         which Allan P. Rothstein is the President and a principal shareholder.
         Mr. Rothstein may be deemed the beneficial owner of all but a nominal
         portion of the shares owned by Brown Wharton & Co., Inc.

                                       11
<PAGE>

Item 13.          Certain Relationships and Related Transactions

         The Company currently maintains its principal offices at 56 Dune Road,
Atlantic Beach, New York 11509, on a month-to-month basis with rent of $500 per
month. The premises are owned by Allan P. Rothstein, President of the Company.
The Company believes that the amount of monthly rent paid to Mr. Rothstein is
comparable to the amount of rent which would be charged to unaffiliated
companies for the same or similar space.

         In February 1991, the Company purchased for $100,000, $97,500 principal
amount of 10% Promissory Notes of H-Power Corp., a Delaware corporation,
headquartered in Bloomfield, New Jersey, and 25,000 common shares, par value
$.001 per share of H Power. H Power is a developmental stage enterprise engaged
in the development and exploitation of certain fuel cell and metal hydride
technologies which involve alternative energy systems. The Promissory Notes,
originally payable on February 3, 1993, were extended to be payable on the
earlier of August 1, 1994 or the closing of any public offering by H Power.
However, H Power failed to make payment when due on August 1, 1994 and
consequently was in default for a second time. On October 13, 1997 the principal
was collected in full, together with accrued and unpaid interest.

         Allan P. Rothstein, director and president of the Company beneficially
owns 300,000 shares of H Power and the Company owns 25,000 shares; together with
other members of his immediate family, they beneficially own in the aggregate
1,565,625 common shares, or 29% of the issued and outstanding shares of H Power.

                                       12
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant certifies that it has duly caused this Annual Report on Form 10-K
to be signed on its behalf by the undersigned, thereunto duly authorized, in New
York, New York on the 25th day of October, 1999.


                                           DYNAMARK CORPORATION


                                           By: /s/ Allan P. Rothstein
                                               ---------------------------------
                                               Allan P. Rothstein, President,
                                               principal executive and financial
                                               officer

Dated: October 25, 1999

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this Annual Report on Form 10-K has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the dates indicated.

     Signature             Title                                       Date
     ---------             -----                                       ----

/s/ Allan P. Rothstein     President, Treasurer                 October 25, 1999
----------------------     and Director (principal executive
Allan P. Rothstein         and financial officer)

                                       13
<PAGE>

                                  EXHIBIT INDEX

Exhibit No.       Description
-----------       -----------

3.1*  Restated Certificate of Incorporation (Exhibit 3.1 to Registration
      Statement on Form S-18, Registration No. 33-18218-NY (the "Registration
      Statement No. 33-18218-NY")

3.2*  By-laws of the Company, as amended (Exhibit 3.2 to the Registration
      Statement No. 33-18218-NY)

4.1*  Form of Common Stock Certificate (Exhibit 4.1 to the Registration
      Statement No. 33-18218-NY)

10.1* Employment Agreement dated August 25, 1987 between Allan P. Rothstein and
      the Registrant (Exhibit 10.1 to the Registration Statement No.
      33-18218-NY)

28.1* 1987 Employee Incentive Stock Option Plan (Exhibit 28.1 to the
      Registration Statement No. 33-18218-NY)

*     Incorporated by reference (pursuant to 17CFR Secs 201.24 and 240.125-32)
      to the document referenced in brackets following the description of such
      exhibits previously filed with the Commission.

                                       14
<PAGE>

                              DYNAMARK CORPORATION



                                    FORM 10-K



                     For the fiscal year ended July 31, 1999

                                       15

<PAGE>

                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                              FINANCIAL STATEMENTS

                    YEARS ENDED JULY 31, 1999, 1998 AND 1997
                AND THE PERIOD AUGUST 1, 1986 (DATE OF INCEPTION)
                                TO JULY 31, 1999

                                       AND

                          INDEPENDENT AUDITORS' REPORT



<PAGE>


                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                              FINANCIAL STATEMENTS

     YEARS ENDED JULY 31, 1999, 1998 AND 1997 AND THE PERIOD AUGUST 1, 1986
                      (DATE OF INCEPTION) TO JULY 31, 1999


                                     PART IV


Item 14. Exhibits, Financial Statement Schedules and Reports on Form 10-K


    (a)   1.  Financial Statements

              The following indicated Financial Statements of the Company
              are annexed hereto immediately following the signature page
              to this Report:
<TABLE>
<CAPTION>

                                                                                   Page
                                                                                   ----
<S>                                                                             <C>
              Independent Auditors' Report                                          F-1

              Balance Sheet - July 31, 1999 and 1998                                F-2

              Statement of Operations - years ended July 31, 1999, 1998 and
                1997 and the period August 1, 1986
                (date of inception) to July 31, 1999                             F-3 - F-4

              Statement of Changes in Shareholders' Equity (Deficiency)-
                years ended July 31, 1999, 1998 and 1997 and the
                period August 1, 1986 (date of inception) to July 31, 1999          F-5

              Statement of Cash Flows - years ended July 31, 1999, 1998 and
                1997 and the period August 1, 1986
                (date of inception) to July 31, 1999                             F-6 - F-7

              Notes to Financial Statements                                      F-8 - F-14
</TABLE>

          2.  Exhibits

              Incorporated by reference to the Exhibit Index at the end of
               this Report.

    (b)   Reports on Form 8-K

              None



<PAGE>

FRIEDMAN
ALPREN &                                                      1700 BROADWAY
GREEN LLP                                                     NEW YORK, NY 10019
CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS                  212-582-1600
                                                              FAX 212-265-4761
                                                              www.nyccpas.com




                          INDEPENDENT AUDITORS' REPORT



TO THE SHAREHOLDERS OF DYNAMARK CORPORATION

           We have audited the accompanying balance sheet of DYNAMARK
CORPORATION (a development stage company) as of July 31, 1999 and 1998, and the
related statements of operations, changes in shareholders' equity (deficiency)
and cash flows for the years ended July 31, 1999, 1998 and 1997 and for the
period August 1, 1986 (date of inception) to July 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

           We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatements. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

           In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of DYNAMARK CORPORATION
(a development stage company) as of July 31, 1999 and 1998, and the results of
its operations and its cash flows for the years ended July 31, 1999, 1998 and
1997, and for the period August 1, 1986 (date of inception) to July 31, 1999, in
conformity with generally accepted accounting principles.




                                                    Friedman Alpren & Green LLP


October 1, 1999

                                       F-1
<PAGE>

                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                                  BALANCE SHEET

                             JULY 31, 1999 AND 1998

                           ASSETS
<TABLE>
<CAPTION>
                                                               1999           1998
                                                             ---------     ---------
<S>                                                          <C>           <C>
Current assets
   Cash - Note 3                                             $ 202,987     $ 201,850
   Prepaid income taxes - Notes 2 and 10                           225            15
                                                             ---------     ---------

                                                             $ 203,212     $ 201,865
                                                             =========     =========

           LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
   Accrued expenses                                          $  28,682     $  14,878
                                                             ---------     ---------

Due to officer - Note 7                                        171,961       165,961
                                                             ---------     ---------

Commitment - Note 6                                               --            --

Shareholders' equity - Note 8
   Preferred stock, $.0001 par value; 5,000,000 shares
     authorized, none issued                                      --            --
   Common stock, $.0001 par value; 50,000,000 shares
     authorized, 18,000,000 shares issued and outstanding        1,800         1,800
   Additional paid-in capital                                  556,751       556,751
   Deficit accumulated during the development stage           (555,982)     (537,525)
                                                             ---------     ---------

                                                                 2,569        21,026
                                                             ---------     ---------

                                                             $ 203,212     $ 201,865
                                                             =========     =========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       F-2
<PAGE>

                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                             STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>

                                                                                          Cumulative
                                                                                          August 1,
                                                                                             1986
                                                                                           (Date of
                                                                                          Inception)
                                                           Year Ended July 31,                To
                                                 -------------------------------------      July 31,
                                                    1999         1998          1997          1999
                                                 ---------     ---------     ---------     ---------
<S>                                              <C>            <C>            <C>           <C>
Revenues
   Interest and dividend income                  $   8,421     $   9,584     $  65,995     $ 218,407
   Licensing revenue                                  --            --            --           1,469
   Equity in operating losses of investee -
     Note 2                                           --            --            --         (14,894)
   Amortization of excess of investment over
     net assets acquired - Note 2                     --            --            --         (17,500)
   Write-downs of investments - Note 2                --            --            --         (91,994)
   Recovery of note receivable written off -
     Note 9                                           --            --          97,500        97,500
                                                 ---------     ---------     ---------     ---------

           Total revenues                            8,421         9,584       163,495       192,988
                                                 ---------     ---------     ---------     ---------

Expenses
   Salaries
     Officer                                          --            --            --         282,980
     Other                                            --            --            --          29,820
   Automobile rental and expenses                     --            --            --          28,618
   Professional fees                                16,960         6,599        12,244       195,954
   Other, including rent expense incurred
     to officer of $6,000 in 1999, 1998 and
     1997 and $78,000 for the period from
     inception to July 31, 1999                      9,918        11,788        10,678       198,891
   Licensing agreement
     Costs                                            --            --            --          11,238
     Loss on termination                              --            --            --           1,469
                                                 ---------     ---------     ---------     ---------

           Total expenses                           26,878        18,387        22,922       748,970
                                                 ---------     ---------     ---------     ---------

           Net income (loss)                     $ (18,457)    $  (8,803)    $ 140,573     $(555,982)
                                                 =========     =========     =========     =========
</TABLE>
                                   (Continued)

   The accompanying notes are an integral part of these financial statements.

                                       F-3
<PAGE>


                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                             STATEMENT OF OPERATIONS
                                   (Continued)


<TABLE>
<CAPTION>



                                                                                                Cumulative
                                                                                                 August 1,
                                                                                                   1986
                                                                                                 (Date of
                                                                                                Inception)
                                                         Year Ended July 31,                        To
                                            ---------------------------------------------         July 31,
                                               1999            1998             1997               1999
                                            ----------      ----------      -------------      --------------
<S>                                         <C>             <C>             <C>                <C>
Basic income (loss) per common share -
   Note 2                                   $     --        $     --        $         .01      $         (.03)
                                            ==========      ==========      =============      ==============


Weighted average number of shares
   outstanding - Note 2                     18,000,000      18,000,000         18,000,000          17,733,081
                                            ==========      ==========      =============      ==============

</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                       F-4




<PAGE>


                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

            STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)

             YEARS ENDED JULY 31, 1999, 1998 AND 1997 AND THE PERIOD
               AUGUST 1, 1986 (DATE OF INCEPTION) TO JULY 31, 1999


<TABLE>
<CAPTION>


                                                                                              Deficit
                                                   Common Stock                             Accumulated
                                                 $.0001 Par Value            Additional     During the
                                              ------------------------         Paid-In       Development
                                               Shares           Amount         Capital         Stage            Total
                                               ------           ------       -----------    ------------      ----------
<S>                                          <C>             <C>             <C>             <C>              <C>
Issuance of common stock                     15,000,000      $    1,500      $     --        $     --         $    1,500

Issuance of common stock pursuant to
    a public offering - Note 8                3,000,000             300         556,751            --            557,051

Net loss for the period August 1, 1986
   (date of inception) to July 31, 1996            --              --              --          (669,295)        (669,295)
                                             ----------      ----------      ----------      ----------       ----------

Balance, July 31, 1996                       18,000,000           1,800         556,751        (669,295)        (110,744)

Net income for year ended July 31, 1997            --              --              --           140,573          140,573
                                             ----------      ----------      ----------      ----------       ----------

Balance, July 31, 1997                       18,000,000           1,800         556,751        (528,722)          29,829
                                                                                                                   1,800
                                                                                                                   1,800

Net loss for year ended July 31, 1998              --              --              --            (8,803)          (8,803)
                                             ----------      ----------      ----------      ----------       ----------

Balance, July 31, 1998                       18,000,000           1,800         556,751        (537,525)          21,026

Net loss for year ended July 31, 1999              --              --              --           (18,457)         (18,457)
                                             ----------      ----------      ----------      ----------       ----------

Balance, July 31, 1999                       18,000,000      $    1,800      $  556,751      $ (555,982)      $    2,569
                                             ==========      ==========      ==========      ==========       ==========

</TABLE>

The accompanying notes are an integral part of these financial statements.

                                       F-5

<PAGE>

                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                             STATEMENT OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                                                   Cumulative
                                                                                                                    August 1,
                                                                                                                     1986
                                                                                                                    (Date of
                                                                                                                    Inception)
                                                                             Year Ended July 31,                      To
                                                                 -------------------------------------------        July 31,
                                                                   1999             1998              1997            1999
                                                                 --------          -------          --------        ---------
<S>                                                              <C>               <C>              <C>             <C>
Cash flows from operating activities
   Net income (loss)                                             $(18,457)         $(8,803)         $140,573        $(555,982)
   Adjustments to reconcile net income (loss)
     to net cash provided by (used in)
     operating activities
       Equity in operating losses of investee                       -                -                 -               14,894
       Amortization of excess of investment
         over net assets acquired                                   -                -                 -               17,500
       Write-down of investments                                    -                -                 -               91,994
       Recovery of note receivable written off                      -                -               (97,500)         (97,500)
       Depreciation and amortization                                -                -                 -               22,155
       Changes in assets and liabilities
         Accrued interest receivable                                -                7,734            (7,734)         (24,375)
         Prepaid income taxes                                        (210)             380              (353)            (225)
         Deferred lease costs                                       -                -                 -               (7,200)
         Deposits                                                   -                -                 -                 (797)
         Deposits repaid                                            -                -                 -                  797
         Accrued expenses                                          13,804             (554)           (3,095)          28,682
         Due to officer                                             6,000            6,000             6,000          171,961
         Other                                                      -                -                 -                  549
                                                                 --------          -------          --------        ---------

           Net cash provided by (used in)
              operating activities                                  1,137            4,757            37,891         (337,547)
                                                                 --------          -------          --------        ---------
</TABLE>
                                  (Continued)

The accompanying notes are an integral part of these financial statements.

                                       F-6
<PAGE>



                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                             STATEMENT OF CASH FLOWS
                                   (Continued)


<TABLE>
<CAPTION>
                                                                                                                   Cumulative
                                                                                                                    August 1,
                                                                                                                     1986
                                                                                                                    (Date of
                                                                                                                    Inception)
                                                                             Year Ended July 31,                      To
                                                                 -------------------------------------------        July 31,
                                                                   1999             1998              1997            1999
                                                                 --------          -------          --------        ---------
<S>                                                              <C>               <C>              <C>             <C>
Cash flows from investing activities
   Investments and related advances                              $   -            $    -            $    -          $(225,013)
   Proceeds from repayment of advances                               -                 -                 -            125,000
   Collection of note receivable                                     -              97,500               -             97,500
   Acquisition of computer equipment                                 -                 -                 -            (13,556)
                                                                 --------          -------          --------        ---------

           Net cash provided by (used in)
              investing activities                                   -              97,500               -            (16,069)
                                                                 --------          -------          --------        ---------

Cash flows from financing activities
   Proceeds of sale of common stock pursuant
     to a public offering                                            -                 -                 -            576,030
   Payments of notes payable, affiliate                              -                 -                 -            (19,427)
                                                                 --------          -------          --------        ---------

           Net cash provided by financing
              activities                                             -                 -                 -            556,603
                                                                 --------          -------          --------        ---------

Net increase in cash and
   cash equivalents                                                 1,137          102,257            37,891          202,987

Cash and cash equivalents, beginning
   of period                                                      201,850           99,593            61,702            -
                                                                 --------          -------          --------        ---------

Cash, end of period                                              $202,987         $201,850          $ 99,593        $ 202,987
                                                                 ========          =======          ========        =========

Supplemental cash flow disclosures
   Income taxes paid                                             $    365         $    380          $    453        $   7,091
                                                                 ========          =======          ========        =========
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                       F-7
<PAGE>


                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS


1 - DEVELOPMENT STAGE COMPANY

          The Company, a Delaware corporation, has been in the development stage
     since its formation on August 1, 1986. It has not generated operating
     revenues as of July 31, 1999, and no assurance can be given that it will
     generate operating revenues and earnings in the future.


2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Use of Estimates

          Management uses estimates and assumptions in preparing financial
     statements. Those estimates and assumptions affect the reported amounts of
     assets and liabilities, the disclosure of contingent assets and
     liabilities, and the reported revenues and expenses.

     Stock Registration Costs

          Stock registration costs of $42,949 incurred by the Company in
     connection with its initial public offering were charged to additional
     paid-in capital.

     Amortization of Excess of Investment in H Power Corp. over Net Assets
       Acquired and Related Matters

          The $100,000 excess of the cost of the investment in H Power Corp.,
     which consisted of common stock acquired and interest-bearing loans made by
     the Company, over net assets acquired, was amortized over an estimated life
     of 20 years under the straight-line method until July 31, 1995.

          The Company accounted for its investment in H Power Corp. under the
     equity method, pursuant to Accounting Principles Board Opinion No. 18,
     until the year ended July 31, 1995, when the remaining balance of the
     investment was written off as an impairment loss. From the acquisition date
     of the investment until the balance was written off, the following amounts
     relating to the investment were included as reductions of revenues:

          Amortization of excess of investment over
            net assets acquired                                        $ 17,500
          Equity in operating losses                                     14,894
          Write-down, including accrued interest receivable,
            of $24,375                                                   91,981
                                                                       --------
                                                                       $124,375
                                                                       ========

                                  (Continued)

                                      F-8
<PAGE>


                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     Income or Loss Per Share of Common Stock

          The weighted average number of shares for purposes of computing basic
     loss per share of common stock for the cumulative period August 1, 1986
     (date of inception) to July 31, 1999 is computed as if all shares had been
     outstanding as of the beginning of the respective years.

     Deferred Income Taxes

          At July 31, 1999 and 1998, deferred tax assets consist of future
     benefits of net operating loss carryforwards. Deferred tax assets at each
     date have been reduced by a valuation allowance equal to the total of such
     assets, until realization is assured.

     Marketable Equity Securities

          At July 31, 1996, marketable equity securities, which were classified
     as available-for-sale, were valued at fair value and the unrealized gain
     was reflected in shareholders' deficiency.

          A summary of changes in the unrealized gains on available-for-sale
     securities is as follows:

                                                   1996            1995
                                                 -------          -------

          Balance, beginning of year             $3,112           $  -

          Cumulative effect of change in
            accounting principle                    -              10,925

          Decrease in unrealized gain            (3,112)           (7,813)
                                                 ------           -------

          Balance, end of year                   $ -0-            $ 3,112
                                                 =======          =======

                                  (Continued)

                                       F-9
<PAGE>


                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS


3 - CONCENTRATION OF CREDIT RISK

          The Company maintains a money market fund with a stock brokerage firm.
     The balance is insured for up to $500,000 by the Securities Investor
     Protection Corporation.


4 - MARKETABLE EQUITY SECURITIES

          The Company held 125,000 publicly traded shares of Phoenix Laser
     Systems, Inc., in which the Company had less than a controlling interest,
     of original $.0001 par value common stock valued at the lower of cost or
     market. At July 31, 1997 and 1996, the Company was holding 12,500 shares of
     this entity's $.000001 par value common stock, as a result of a 10 for 1
     reverse stock split. The shares had a market value of $1 per share on
     August 17, 1989, when they were sold to the public. At July 31, 1994, the
     securities were recorded at a cost of $13. At August 1, 1994 and July 31,
     1995, the securities were recorded at their fair values of $10,938 and
     $3,112, respectively, under the provisions of Statement of Financial
     Accounting Standards No. 115, resulting in a decrease in the unrealized
     gain of $7,813 for the year ended July 31, 1995. During the year ended July
     31, 1996, Phoenix Laser Systems, Inc. ceased operations and the Company
     recognized a realized loss of $13 on the permanent decline in value of this
     investment. Accordingly, there was no remaining unrealized gain at
     July 31, 1996.


5 - LICENSING AGREEMENT

          During the year ended July 31, 1991, the Company entered into a
     licensing agreement to distribute a video cassette. For the period in which
     the agreement was operative, the Company incurred licensing costs of
     approximately $11,200. During the year ended July 31, 1992, the agreement
     was terminated, resulting in a loss of $1,469.

                                  (Continued)

                                      F-10
<PAGE>

                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS


6 - CONSULTING AGREEMENT

          During the year ended July 31, 1992, the Company entered into an
     agreement with an entity to render consulting services to the Company in
     identifying equity or debt financing and/or potential merger candidates.
     Under the agreement, the Company paid a $5,000 nonrefundable fee to that
     entity, which was included in professional fees for the year ended July 31,
     1992. Pursuant to the agreement, the Company will be obligated to pay an
     additional $5,000 upon identification of a potential source of financing or
     a merger/acquisition candidate. The Company is also obligated to make an
     additional $15,000 payment upon the successful closing (signed letter of
     intent) of either a financing agreement or merger/acquisition. In addition,
     the agreement provides that the consulting entity will receive shares of
     Dynamark Corporation, which will be restricted pursuant to Rule 144 of the
     Securities and Exchange Commission. The agreement will terminate upon
     successful identification of financing or a merger/acquisition, or when it
     is terminated by one of the parties.

          During the year ended July 31, 1992, the Company entered into a
     transaction covered by the consulting agreement, which resulted in a letter
     of intent qualifying for compensation under the agreement. During that
     year, the transaction was aborted. The Company incurred consulting fees of
     $2,500 to this consultant in settlement of its obligation concerning the
     letter of intent.

          As of July 31, 1999, there are no pending financings or
     merger/acquisitions subject to this agreement, which remains in effect.


7 - RELATED PARTY TRANSACTIONS

     Rent

          The Company rents its principal office space from its president.
     Rentals began August 1, 1988 on a month-to-month basis at $500 per month.
     Rent expense incurred was $6,000 for each of the years ended July 31, 1999,
     1998 and 1997. As of July 31, 1999 and 1998, $46,000 and $40,000,
     respectively, of unpaid rent expense is included in the balance due to
     officer.

                                  (Continued)

                                      F-11
<PAGE>

                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS


7 - RELATED PARTY TRANSACTIONS (Continued)

     Due to Officer

          At July 31, 1999 and 1998, the balance due to officer consists of
     noninterest-bearing amounts payable to the president of the Company as
     follows:

                                                1999             1998
                                              --------         --------
              Officer's salary                $125,961         $125,961
              Rent                              46,000           40,000
                                              --------         --------
                                              $171,961         $165,961
                                              ========         ========


8 - COMMON AND PREFERRED STOCK

     Public Offering of Common Stock and Related Warrants

          Pursuant to a proposed public offering of 100,000 units, the Company,
     on July 22, 1988, sold 84,335 units (under a minimum offering) at $6.00 per
     unit, consisting of 2,530,050 shares of the Company's $.0001 par value
     common stock and warrants to purchase an additional 10,120,200 shares of
     the authorized but unissued stock. Each unit consisted of 30 shares of
     common stock, 60 Series A warrants to purchase 5,060,100 shares of common
     stock at $.25 per share, until March 10, 1992, and 60 Series B warrants to
     purchase 5,060,100 shares of common stock at $.40 per share, until March
     10, 1992. The Company had the right to redeem the warrants at $.005 each
     during the exercise period on 30 days' written notice.

          On August 8, 1988, the remaining 15,665 units were sold, representing
     469,950 shares of $.0001 common stock and the related Series A and Series B
     warrants.

          None of the Series A or Series B warrants were exercised or redeemed
     through March 10, 1992, when they expired.

                                  (Continued)

                                      F-12
<PAGE>


                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS


8 - COMMON AND PREFERRED STOCK (Continued)

     Preferred stock

          The Company has authorized 5,000,000 shares of preferred stock, $.0001
     par value, which may be issued in one or more series at the discretion of
     the board of directors, and which will be entitled to a preference over
     common stock as to dividends and liquidation values. At July 31, 1999 and
     1998, none of the preferred stock has been issued.

     Incentive Stock Options Plan

          In April 1987, the Company adopted an Employee Incentive Stock Option
     Plan under which 2,500,000 shares of the common stock of the Company were
     authorized for issuance to key personnel, including eligible officers,
     directors, employees and independent consultants. The Plan terminated on
     April 7, 1997. No options were granted under the Plan.


9 - RECOVERY OF NOTE RECEIVABLE WRITTEN OFF

          During the year ended July 31, 1997, the Company collected
     approximately $24,000 of interest on a note receivable of $97,500
     previously written off. On October 13, 1997, the principal was collected in
     full. The recovery is reflected as of July 31, 1997 in the accompanying
     financial statements.


10 - INCOME TAXES

          The Company has net operating loss carryforwards of approximately
     $422,000 available to reduce future Federal taxable income expiring during
     the years 2004 to 2019.

          Valuation allowances of $169,000 and $161,000 were reflected at July
     31, 1999 and 1998, respectively, representing the full amount of the
     related deferred tax assets.

                                  (Continued)

                                      F-13
<PAGE>

                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS

11 - SUPPLEMENTARY NONCASH INVESTING AND FINANCING ACTIVITIES

          During the period from August 1, 1986 (date of inception) to July 31,
     1987, the Company incurred deferred registration costs of $10,000 in
     connection with its initial public offering. These costs plus $90 were paid
     by the Company's affiliate on behalf of the Company. The Company issued its
     noninterest-bearing note payable of $9,990 to this affiliate plus 1,000,000
     shares of its $.0001 par value common stock, having a total par value of
     $100.

          During the year ended July 31, 1988, the Company's affiliate paid an
     additional $9,437 on behalf of the Company, for which the Company issued an
     interest-bearing note payable.

          During the period from August 1, 1986 (date of inception) to July 31,
     1987, the Company issued 14,000,000 shares of its $.0001 common stock as
     payment for $1,400 of organization costs.

          Liabilities of $141,961 for salary and rent incurred to the president
     of the Company have been shown as long-term liabilities based on the
     officer's intent not to demand payment of these obligations for a period of
     at least one year from the balance sheet date.

                                  (Continued)

                                      F-14