SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934
For the quarterly period ended September 30, 1998
/ / Transition report pursuant to Section 13 or 15(d) of the
Securities Act of 1934
For the transition period from to
Commission File number 333-6410
CORAL DEVELOPMENT CORP.
(Exact Name of Registrant as Specified in its Charter)
Delaware 11-3349762
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
240 Clarkson Avenue, Brooklyn NY 11226
(Address of Principal Executive Office) (Zip Code)
(718)469-3132
(Registrant's Telephone Number, Including Area Code)
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 and Exchange Act of 1934 during the preceding twelve
months and (2) has been subject to such filing requirements for the
past ninety days.
Yes / X / No / /
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes / / No / /
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date. 403,000
10Q-1
CORAL DEVELOPMENT CORP.
FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
I N D E X
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT 1
BALANCE SHEETS 2
STATEMENT OF STOCKHOLDER'S EQUITY 3
STATEMENTS OF OPERATIONS 4
STATEMENTS OF CASH FLOWS 5
NOTES TO THE FINANCIAL STATEMENTS 6-7
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
To the Board of Directors and Stockholders
CORAL DEVELOPMENT CORP.
Brooklyn, New York
We have reviewed the balance sheets of CORAL DEVELOPMENT CORP. (A
Development Stage Enterprise) as of September 30, 1998 and the
related statements of operations, stockholder's equity and cash
flows for the three month periods ended September 30, 1998 and
1997, in accordance with standards established by the American
Institute of Certified Public Accountants.
A review of interim financial information consists principally of
obtaining an understanding of the system for the preparation of
interim financial information, applying analytical review
procedures to financial data, and making inquiries of persons
responsible for financial and accounting matters. It is
substantially less in scope than an examination in accordance with
generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the balance sheet as of June 30, 1998, and the
related statements of operations, shareholders' equity and cash
flows for the year then ended (not presented herein); and in our
report dated August 6, 1998, we expressed an unqualified opinion on
those financial statements. In our opinion, the information set
forth in the accompanying balance sheet as of June 30, 1998 is
fairly stated in all material respects in relation to the balance
sheet from which it has been derived.
GREENBERG & COMPANY LLC
Springfield, New Jersey
November 2, 1998
Page 1 of 7
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
Sept 30, 1998 June 30,
(Unaudited) 1998
ASSETS
ASSETS
Current assets - cash $ 514 $ 1,299
Deferred registration costs 26,007 26,007
Organization expense 300 300
TOTAL ASSETS $26,821 $27,606
LIABILITIES AND STOCKHOLDERS' EQUITY
Due to parent company $12,451 6,701
Total Liabilities 12,451 6,701
STOCKHOLDER'S EQUITY
Common stock par value $.001
Authorized: 20,000,000 shares
Shares Issued and Outstanding:
403,000 Shares 403 403
Additional paid in capital 29,897 29,897
(Deficit) accumulated during the
development stage (15,930) (9,395)
Total Stockholders' Equity 14,370 20,905
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $26,821 $27,606
Subject to the comments contained in the Accountants' Review Report.
Page 2 of 7
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDER'S EQUITY
FOR THE PERIOD NOVEMBER 19, 1996 (INCEPTION) TO SEPTEMBER 30, 1998
(Deficit)
Common Accumulated Total
Stock Additional During the Share-
# of $.001 par Paid in Development holder's
Shares Value Capital Stage Equity
Initial investment
in capital stock 403,000 $403 $29,897 $ -0- $30,300
BALANCE AT
DECEMBER 16, 1996 403,000 403 29,897 -0- 30,300
Net (Loss) for the
period (578) (578)
BALANCE AT
JUNE 30, 1997
(Audited) 403,000 403 29,897 (578) 29,722
Net (Loss) for
the year ended
June 30, 1998 (8,817) (8,817)
BALANCE AT
JUNE 30, 1998
(Audited) 403,000 403 29,897 (9,395) 20,905
Net (Loss) for the
three months ended
September 30, 1998 (6,535) (6,535)
BALANCE AT
SEPTEMBER 30, 1998
(Unaudited) 403,000 $403 $29,897 $(15,930) $14,370
Subject to the comments contained in the Accountants' Review Report.
Page 3 of 7
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
FOR THE PERIOD NOVEMBER 19, 1996 (INCEPTION) TO SEPTEMBER 30, 1998
(UNAUDITED)
Period from
For the Three For the Three Nov. 19, 1996
Months Ended Months Ended (inception) to
Sept 30, 1998 Sept 30, 1997 Sept 30, 1998
General and administrative
expenses $(6,535) $(1,120) $(15,930)
Net (Loss) for the period $(6,535) $(1,120) $(15,930)
Net (Loss) per share $ (0.02) $ (0.00) $ (0.04)
Weighted average common
shares outstanding 403,000 403,000 403,000
Subject to the comments contained in the Accountants' Review Report.
Page 4 of 7
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Cumulative
For the Three For the Three Amounts
Months Ended Months Ended From
Sept 30, 1998 Sept 30, 1997 Inception
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) $(6,535) $(1,120) $(15,930)
Changes In Assets
(Increase) in Organization Expense -0- -0- (300)
Net Cash (Used In) Operating
Activities (6,535) (1,120) (16,230)
CASH FLOWS FROM INVESTING ACTIVITIES -0- -0- -0-
CASH FLOWS FROM FINANCING ACTIVITIES
Loan from Parent Company 5,750 -0- 12,451
Common Stock Issuance -0- -0- 30,300
(Increase) in Deferred Registration
Costs -0- (100) (26,007)
Net Cash Provided By (Used In)
Financing Activities 5,750 (100) 16,744
Net Increase (Decrease) in Cash (785) (1,220) 514
Cash, Beginning of Period 1,299 3,515 -0-
CASH, END OF PERIOD $ 514 $ 2,295 $ 514
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Taxes $ -0- $ -0- $ -0-
Interest $ -0- $ -0- $ -0-
Subject to the comments contained in the Accountants' Review Report.
Page 5 of 7
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED)
NOTE 1: ORGANIZATION AND NATURE OF OPERATIONS
Coral Development Corp. (CDC) is a Delaware corporation. CDC
is in the development stage and has not begun any formal
operations. CDC's office is located in New York. The
principal purpose of CDC is to find and merge with an
operating company. The Company's fiscal year end is June 30.
On December 10, 1996 Modern Technology Corp. (Modern), the
parent company of Coral Development Corp., purchased 403,000
shares of the company for $30,300. The shares of the Company
were registered on June 6, 1997 with the Securities and
Exchange Commission. The intention of Modern is to distribute
those shares to Modern's stockholders in the form of a
dividend.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING POLICIES
Coral Development Corp.'s accounting policies conform to
generally accepted accounting principles. Significant
policies followed are described below.
ESTIMATES IN FINANCIAL STATEMENTS
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
NOTE 3: INCOME TAXES
The Company follows Statement of Financial Accounting
Standards No. 109 (FAS 109), "Accounting for Income Taxes."
FAS 109 is an asset and liability approach that requires the
recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been
recognized in the Company's financial statements or tax
returns. The Company has net operating loss carry forwards of
approximately $16,000 available to reduce any future income
taxes. The tax benefit of these losses, approximately $5,600,
has been offset by a valuation allowance due to the
uncertainty of its realization.
Page 6 of 7
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED)
NOTE 4: DEFERRED REGISTRATION COSTS
As of September 30, 1998, the Company has incurred deferred
registration costs of $26,007 relating to expenses incurred in
connection with the Proposed Distribution (see Note 1). Upon
consummation of this Proposed Distribution, the deferred
registration costs will be charged to equity. Should the
Proposed Distribution prove to be unsuccessful, these deferred
costs, as well as additional expenses to be incurred, will be
charged to operations.
NOTE 5: INTERIM FINANCIAL REPORTING
The unaudited financial statements of the Company for the
period July 1, 1998 to September 30, 1998 have been prepared
by management from the books and records of the Company, and
reflect, in the opinion of management, all adjustments
necessary for a fair presentation of the financial position
and operations of the Company as of the period indicated
herein, and are of a normal recurring nature.
Page 7 of 7
PART 1. Financial Information
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Coral Development Corp. (The Registrant) was incorporated in
November 1996 and formed by Modern Technology Corp. (MTC) who presently
owns all 403,000 outstanding shares. MTC has distributed the 403,000
shares (in escrow) to its shareholders as a dividend, on a pro-rata
basis, at the rate of one share for each fifty shares of MTC.
The Registrant proposes to combine with an existing privately
held company. A combination may be structured as a merger,
consolidation, exchange of Registrant's common stock for stock or assets
or any other form which will result in the combined enterprises being a
publicly held corporation. If the Company is unable to consummate a
suitable combination within 18 months from the effective date of its
Registration Statement (June 6, 1997) (under Rule 419) then the
securities will be released from escrow and returned promptly to MTC and
its Board of Directors will probably recommend its liquidation and
dissolution.
On July 22, 1998 the Registrant signed an Agreement and Plan
of Reorganization with Omnicomm Systems, Inc. (Omnicomm). The agreement
calls for Omnicomm to be merged into the Registrant. Omnicomm is a
privately held company engaged in the computer software industry. The
transaction is contingent upon receiving shareholder approval from both
companies and also subject to the conditions of Rule 419 of the
Securities Act of 1933 and approval by the Securities and Exchange
Commission of a post-effective amendment to the registration statement.
Subsequent to September 30, 1998, MTC and Coral determined
that they would be unable to meet the time limitations imposed by Rule
419. However, it is the intention of all parties to the Agreement to
continue with the merger of Coral and Omnicomm and for Coral to
distribute its (Coral's) shares to its shareholders as a dividend
following an effective Form 10SB to be filed under the Securities
Exchange Act of 1934, which is expected to be filed in early December
1998.
For the three months ended September 30, 1998, the Registrant
generated a net loss of $6,535. For the year ended June 30, 1998, the
Registrant generated a net loss of $8,817. At September 30, 1998 the
Registrant had total assets of $26,821, consisting of cash of $514,
deferred registration costs of $26,007 and organization expense of $300.
There were liabilities of $12,451 and stockholders' equity of $14,370.
No salaries have been paid to the officers and directors of
the Registrant since inception.
Part 2. Other Information
Item 1. Legal Proceedings. None.
Item 2. Changes in Securities. None.
Item 3. Defaults upon Senion Securities. None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Materially Important Events. None.
Item 6. Exhibits and Reports on Form 8-K. None.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CORAL DEVELOPMENT CORP.
By
Arthur Seidenfeld
President, Chief Executive and
Chief Financial Officer
November 12, 1998