<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                    FORM 10-Q
                   Quarterly Report Under Section 13 or 15(d)
                     of The Securities Exchange Act of 1934




For quarter ended                                        Commission file number
January 31, 2001                                             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) 889-3630
                                                          ---------------------

                                      N/A
--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.

         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
                                              ---     ---

         Common Stock outstanding as of January 31, 2001:
           18,000,000, par value $.0001 per share.

<PAGE>

                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                         QUARTERLY REPORT FORM 10-Q FOR
                     THREE MONTHS ENDED JANUARY 31, 2001 AND
                 FOR THE PERIOD FROM INCEPTION (AUGUST 1, 1986)
                            THROUGH JANUARY 31, 2001


                                TABLE OF CONTENTS

                          PART I. FINANCIAL INFORMATION


<TABLE>
<CAPTION>
                                                                                 Page
                                                                                 ----
<S>                                                                              <C>
Item 1.   Condensed Financial Statements:

            Balance Sheet as of January 31,
              2001 and July 31, 2000                                                1

            Statement of Operations and Comprehensive Income (Loss) for
              the Three and Six Months Ended January 31, 2001 and 2000 and
              the Period from inception (August 1, 1986) through
              January 31, 2001                                                      2

            Statement of Cash Flows for the Six Months Ended January 31,
              2001 and 2000 and the Period from inception (August 1, 1986)
              through January 31, 2001                                         3 - 4

            Notes to Financial Statements                                      5 - 8


Item 2.   Management's Discussion and Analysis of Financial
            Condition and Results of Operations


                     PART II. OTHER INFORMATION


Signatures                                                                         1
</TABLE>

<PAGE>

                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                             CONDENSED BALANCE SHEET

                 JANUARY 31, 2001 (UNAUDITED) AND JULY 31, 2000


<TABLE>
<CAPTION>
                                     ASSETS
                                     ------
                                                                                     January 31,           July 31,
                                                                                         2001                2000
                                                                                   ---------------      ---------
                                                                                    (Unaudited)
<S>                                                                                <C>                  <C>
Current assets
   Cash                                                                            $      177,182       $       33,482
   Investments                                                                          1,058,600              145,592
                                                                                   --------------       --------------

                                                                                   $    1,235,782       $      179,074
                                                                                   ==============       ==============

                LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)

Current liabilities
   Accrued expenses                                                                $       46,717       $       21,015

Due to officer                                                                            180,961              177,961

Deferred income tax liability                                                             208,964                   --
                                                                                   --------------       --------------

                                                                                          436,642              198,976
                                                                                   --------------       --------------

Shareholders' equity (deficiency)
   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                                      (458,087)            (578,453)
   Accumulated other comprehensive income - unrealized
     gain on securities available for sale, net of income taxes                           698,676                   --
                                                                                   --------------       --------------

                                                                                          799,140              (19,902)
                                                                                   --------------       --------------

                                                                                   $    1,235,782       $      179,074
                                                                                   ==============       ==============
</TABLE>

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

                                       -1-
<PAGE>

                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

        CONDENSED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                                                      Cumulative
                                                                                                                       August 1,
                                                                                                                         1986
                                                                                                                       (Date of
                                                         Three Months Ended                   Six Months Ended        Inception)
                                                             January 31,                          January 31,             to
                                                 -------------------------------   -------------------------------    January 31,
                                                       2001             2000            2001              2000           2001
                                                 --------------   --------------   --------------   --------------   ------------
<S>                                              <C>              <C>              <C>              <C>              <C>
Revenues
   Interest and dividend income                  $        2,098   $        2,345   $        6,680   $        4,457   $     232,560
   Licensing revenue                                         --               --               --               --           1,469
                                                 --------------   --------------   --------------   --------------   -------------
           Total revenues                                 2,098            2,345            6,680            4,457         234,029
                                                 --------------   --------------   --------------   --------------   -------------

Expenses
   Salaries                                                  --               --               --               --         312,800
   Automobile rental and expenses                            --               --               --               --          28,618
   Professional fees                                      7,207            4,344           31,368           12,578         244,358
   Licensing agreement                                       --               --               --               --          12,707
   Other                                                  2,917            3,592            5,906            7,574         217,705
                                                 --------------   --------------   --------------   --------------   -------------
           Total expenses                                10,124            7,936           37,274           20,152         816,188
                                                 --------------   --------------   --------------   --------------   -------------
                                                         (8,026)          (5,591)         (30,594)         (15,695)       (582,159)
                                                 --------------   --------------   --------------   --------------   -------------

Losses on investment accounted for under
   the equity method                                         --               --               --               --        (124,388)
Recovery of note receivable                                  --               --               --               --          97,500
                                                 --------------   --------------   --------------   --------------   -------------
                                                             --               --               --               --         (26,888)
                                                 --------------   --------------   --------------   --------------   -------------

           Net loss before income tax benefit            (8,026)          (5,591)         (30,594)         (15,695)       (609,047)

Income tax benefit                                           --               --          150,960               --         150,960
                                                 --------------   --------------   --------------   --------------   -------------

           Net income (loss)                             (8,026)          (5,591)         120,366          (15,695)       (458,087)

Other comprehensive income (loss) - unrealized
  gain (loss) on marketable securities,
  net of income tax benefit
  (expense) of $545,857 and $(359,924)               (1,059,606)              --          698,676               --         698,676
                                                 --------------   --------------   --------------   --------------   -------------
           Comprehensive income (loss)           $   (1,067,632)  $       (5,591)  $      819,042   $      (15,695)  $     240,589
                                                 ==============   ==============   ==============   ==============   =============
Basic and diluted earnings (loss) per common
  share                                          $           --   $           --   $          .01   $           --   $         .03
                                                 ==============   ==============   ==============   ==============   =============
Weighted average number of shares outstanding        18,000,000       18,000,000       18,000,000       18,000,000      17,760,693
                                                 ==============   ==============   ==============   ==============   =============
</TABLE>

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

                                       -2-
<PAGE>

                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                        CONDENSED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                                Cumulative
                                                                                                                 August 1,
                                                                                                                   1986
                                                                                                                 (Date of
                                                                                 Six Months Ended                Inception)
                                                                                    January 31,                      to
                                                                          -------------------------------       January 31,
                                                                             2001                2000               2001
                                                                          -----------         -----------       -----------
<S>                                                                       <C>                 <C>                <C>
Cash flows from operating activities
   Net income (loss)                                                      $   120,366         $   (15,695)       $  (458,087)
   Adjustments to reconcile net income (loss) to net cash
     used in operating activities
       Losses on investment accounted for under the
         equity method                                                             --                  --            124,388
       Recovery of note receivable                                                 --                  --            (97,500)
       Depreciation and amortization                                               --                  --             22,155
       Changes in assets and liabilities
         Accrued interest                                                      (4,408)                 --            (28,783)
         Deferred income taxes                                               (150,960)                 --           (150,960)
         Deferred lease costs                                                      --                  --             (7,200)
         Accrued expenses                                                      25,702              (2,423)            46,717
         Due to officer                                                         3,000               3,000            180,961
         Other                                                                     --                  --                549
                                                                          -----------         -----------        -----------
           Net cash used in operating activities                               (6,300)            (15,118)          (367,760)
                                                                          -----------         -----------        -----------
</TABLE>

                                   (Continued)

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

                                       -3-
<PAGE>

                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                        CONDENSED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                                 Cumulative
                                                                                                                  August 1,
                                                                                                                    1986
                                                                                                                  (Date of
                                                                                 Six Months Ended                Inception)
                                                                                    January 31,                      to
                                                                          -------------------------------        January 31,
                                                                             2001                2000               2001
                                                                          -----------         -----------       ------------
<S>                                                                       <C>                 <C>                <C>
Cash flows from investing activities
   Investments and related advances                                       $   150,000         $        --        $   (95,605)
   Collection of note receivable                                                   --                  --             97,500
   Acquisition of computer equipment                                               --                  --            (13,556)
                                                                          -----------         -----------        -----------
           Net cash provided by (used in) investing activities                150,000                  --            (11,661)
                                                                          -----------         -----------        -----------

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 (decrease) in cash                                               143,700             (15,118)           177,182

Cash, beginning of period                                                      33,482             202,987                 --
                                                                          -----------         -----------        -----------
Cash, end of period                                                       $   177,182         $   187,869        $   177,182
                                                                          ===========         ===========        ===========
Supplemental cash flow disclosures
   Income taxes paid                                                      $       135         $       -0-        $     9,323
                                                                          ===========         ===========        ===========
</TABLE>

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

                                       -4-

<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 January 31, 2001, and no assurance can be given that it will
    generate operating revenues and earnings in the future.

2 - BASIS OF PRESENTATION

         The condensed financial statements have been prepared in accordance
    with generally accepted accounting principles for interim financial
    information and applicable rules and regulations of the Securities and
    Exchange Commission. They do not include all of the information and
    footnotes required by generally accepted accounting principles for complete
    financial statements. In the opinion of management, all adjustments
    (consisting primarily of normal recurring adjustments) considered necessary
    for a fair presentation have been included. The results of operations for
    the periods presented are not necessarily indicative of the results to be
    expected for the full year. The accompanying financial statements should be
    read in conjunction with the Company's audited financial statements and
    Form 10-k for the year ended July 31, 2000.

3 - Summary of significant accounting policies

    Income Taxes

         The Company applies the asset and liability method of accounting for
    income taxes. Under the asset and liability method, deferred tax assets and
    liabilities are recognized for the estimated future tax consequences
    attributable to differences between the financial statement carrying
    amounts of existing assets and liabilities and their respective tax bases.
    Deferred tax assets and liabilities are measured using the enacted tax
    rates in effect for the year in which those temporary differences are
    expected to be recovered or settled.


                                   (Continued)

                                       -5-
<PAGE>

                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS


3 - Summary of significant accounting policies (continued)

    Earnings (Loss) Per Common Share

         The Company applies Financial Accounting Standards Board (FASB)
    Statement No. 128, "Earnings per Share", which requires dual presentation
    of basic and diluted earnings per share ("EPS") for complex capital
    structures on the face of the statement of operations. Basic and diluted
    EPS has been computed by dividing net income (loss) by the weighted average
    number of common shares outstanding for the period. During the three and
    six months ended January 31, 2001 and 2000, basic and diluted loss per
    share was less than $.01. The Company has not issued any dilutive potential
    common stock since inception.

    Investments

         At January 31, 2001, the Company held 125,000 common shares of H Power
    Corp., which are classified as available-for-sale securities.
    Available-for-sale securities are recorded at fair value. Unrealized
    holding gains and losses, net of the related income tax effect, are
    excluded from earnings and are reported in shareholders' equity as a
    separate component of other comprehensive income. Dividend and interest
    income are recognized when earned.

    Effects of Recently Issued Accounting Pronouncements

         In September 1998, the Financial Accounting Standards Board issued
    FASB Statement No. 133, "Accounting for Derivative Instruments and Hedging
    Activities", which requires entities to recognize all derivatives in their
    financial statements as either assets or liabilities measured at fair value.
    FASB Statement No. 133 also specifies new methods of accounting for hedging
    transactions, prescribes the items and transactions that may be hedged and
    specifies detailed criteria to be met to qualify for hedge accounting. FASB
    Statement No. 133, as amended by FASB Statement No. 137 and FASB Statement
    No. 138, is effective for fiscal quarters beginning after June 15, 2000. The
    Company currently does not use derivative instruments as defined by FASB
    Statement Nos. 133 and 138 and, accordingly, these statements have no effect
    on its results of operations or its financial position.

        In December 1999, the Securities and Exchange Commission staff released
    Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial
    Statements" ("SAB 101"). SAB 101 provides interpretive guidance on the
    recognition, presentation and disclosure of revenue in the financial
    statements. The Company does not believe that the adoption of SAB 101 will
    have a material effect on the Company's financial results.


                                   (Continued)

                                       -6-
<PAGE>

                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS

4 - INVESTMENT IN H POWER CORP.

        Prior to August 1, 2000, the Company accounted for its investment in H
    Power Corp. using the equity method because it was part of a group of
    certain related parties and affiliates which owned approximately 18 percent
    of that corporation. During the year ended July 31, 1995, the Company
    recognized an other-than-temporary impairment of value in this investment
    due to H Power Corp.'s continuing losses and wrote the carrying value down
    to zero.

        On August 10, 2000, H Power Corp. consummated an initial public offering
    ("IPO"). In July 2000, in connection with the IPO, H Power Corp. authorized
    a five-for-one split. In addition, in April 2000, certain parties related to
    the Company agreed to resign from H Power Corp.'s Board of Directors and
    accept certain restrictions on voting and transferring their shares and
    seeking proxies. Consequently, the group of related parties and affiliates
    no longer exercises significant influence over H Power Corp. and, beginning
    in the quarter ending October 31, 2000, the Company accounted for the
    investment as available-for-sale marketable equity securities. Unrealized
    holding losses on the H Power Corp. shares, which are reflected in other
    comprehensive income, were $1,605,463 and $-0- for the three months ended
    January 31, 2001 and 2000, respectively. At January 31, 2001, the H Power
    Corp. shares had a quoted market price of $8.4688 per share, for a total
    investment of $1,058,600.

5 - INCOME TAXES

        At July 31, 2000, the Company has net operating loss carryforwards of
    approximately $444,000, expiring during the years 2004 to 2020, available to
    reduce future Federal taxable income. In accordance with FASB Statement No.
    109, "Accounting for Income Taxes", the Company had recorded a valuation
    allowance fully offsetting the deferred tax asset related to its net
    operating loss carryforwards. The valuation allowance was based on
    management's estimates and analysis that it was more likely than not that
    the related deferred tax assets would not be realized.

        At January 31, 2001, the Company recorded an accumulated unrealized gain
    on marketable securities of approximately $1 million, which is presented,
    net of taxes, in other comprehensive income. Consequently, the Company
    believes that the realization of deferred tax benefits was more likely than
    not and, accordingly, recorded a deferred tax asset of $150,960.

                                   (Continued)

                                       -7-
<PAGE>

                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS


5 - INCOME TAXES (Continued)

        The primary components of the Company's deferred tax assets and
    liabilities and the related valuation allowances are as follows:

                                                        Three Months Ended
                                                            January 31,
                                                  -----------------------------
                                                      2001             2000
                                                  ------------      -----------
          Gross deferred tax assets
            Net operating loss carryforwards      $    150,960      $  444,000

          Valuation allowance                               --        (444,000)

          Gross deferred tax liabilities
            Unrealized gain on investments             359,924              --
                                                  ------------      ----------

                                                  $    208,964      $      -0-
                                                  ============      ==========


6 - Related party transactions

        The Company rents its principal office space from its president on a
    month-to-month basis at $500 per month. Rent expense incurred was $1,500 for
    each of the three months ended January 31, 2001 and 2000.

        At January 31, 2001 and 2000, the balance due to officer consists of
    noninterest-bearing amounts payable to the president of the Company as
    follows:

                                                       2001            2000
                                                  -------------    ------------
          Officer's salary                        $     125,961    $    125,961
          Rent                                           55,000          49,000
                                                  -------------    ------------
                                                  $     180,961    $    174,961
                                                  =============    ============

        These liabilities have been classified as noncurrent based on the
    president's intent not to demand payment before February 1, 2002.


                                       -8-
<PAGE>

Item 2. Management's Discussion and Analysis of
        Financial Condition and Results of Operations.
        ----------------------------------------------

        Financial Condition.

            The Company is a development stage company and has had minimal
        revenue to date. The Company is relying on existing resources to fund
        its continuing operation. Additional sources of liquidity are expected
        to be available from the Company's investment in H Power Corp.'s common
        shares. During the year ended July 31, 1995, the Company wrote the
        carrying value of this investment to zero due to H Power Corp.'s
        continuing losses. On August 10, 2000, H Power Corp. consummated an
        initial public offering (IPO). In connection with this IPO, H Power
        Corp. authorized a five to one split, which increased the number of the
        Company's shares to 125,000. In addition, in April 2000, certain parties
        related to the Company agreed to resign from H Power Corp.'s Board of
        Directors and accept certain restrictions on voting and transferring
        their shares and seeking proxies. Consequently, the group of related
        parties and affiliates no longer exercises significant influence over H
        Power Corp. and, beginning in the quarter ending October 31, 2000, the
        Company accounted for the investment as available-for sale marketable
        equity securities. In prior periods the investment was accounted for
        using the equity method. At January 31, 2001, the H Power Corp. shares
        had a quoted market price of $8.4688 per share, for a total investment
        of $1,058,600. On this basis, the Company reported at January 31, 2001
        $698,676, as accumulated other comprehensive income from unrealized gain
        on securities available for sale, net of income taxes, and deferred
        income tax liability of $208,964, comprised of gross deferred tax
        liabilities from such unrealized gain ($359,924) less the income tax
        benefit ($150,960) available from net loss carryforward of
        approximately $444,000.

        Results of Operations

            The Company reported a net loss of $8,026 for the three-month period
        ended January 31, 2001, compared to a net loss of $5,591 for the
        three-month period ended January 31, 2000. The Company reported net
        income of $120,366 for the six month period ended January 31, 2001,
        compared to a net loss of $15,695 for the six-month period ended January
        31, 2000. The increase is attributable primarily to an income tax
        benefit of $150,960, which results from the Company's believes that
        realization of deferred tax benefits respecting its net operating loss
        carryforward was more likely than not.

                                      -9-
<PAGE>

                              DYNAMARK CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                         QUARTER ENDED JANUARY 31, 2001


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.

DATE:                                 DYNAMARK CORPORATION



                                      By:
----------------------------------       --------------------------------------
                                                 Allan Rothstein
                                                 President and Director

                                      -10-