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 December 31, 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 000-25203
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
DECEMBER 31, 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 4-5
STATEMENTS OF CASH FLOWS 6
NOTES TO THE FINANCIAL STATEMENTS 7-8
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 December 31, 1998 and the
related statements of operations, stockholder's equity and cash
flows for the six month periods ended December 31, 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, shareholder's 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
January 21, 1999
Page 1 of 8
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
Dec 31, 1998 June 30,
(Unaudited) 1998
ASSETS
ASSETS
Current assets - cash $ 431 $ 1,299
Deferred registration costs 48,930 26,007
Organization expense 300 300
TOTAL ASSETS $49,661 $27,606
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accrued expense $ 8,465 $ -0-
Due to parent company 27,660 6,701
TOTAL CURRENT LIABILITIES 36,125 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 (16,764) (9,395)
Total Stockholder's Equity 13,536 20,905
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $49,661 $27,606
Subject to the comments contained in the Accountants' Review Report.
Page 2 of 8
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDER'S EQUITY
FOR THE PERIOD NOVEMBER 19, 1996 (INCEPTION) TO DECEMBER 31, 1998
(Deficit)
Common Accumulated Total
Stock Additional During the Stock-
# 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
six months ended
December 31, 1998 (7,369) (7,369)
BALANCE AT
DECEMBER 31, 1998
(Unaudited) 403,000 $403 $29,897 $(16,764) $13,536
Subject to the comments contained in the Accountants' Review Report.
Page 3 of 8
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
FOR THE PERIOD NOVEMBER 19, 1996 (INCEPTION) TO DECEMBER 31, 1998
(Unaudited)
Period from
For the Three For the Three Nov. 19, 1996
Months Ended Months Ended (inception) to
Dec. 31, 1998 Dec. 31, 1997 Dec. 31, 1998
General and administrative
expenses $( 834) $(6,319) $(16,764)
Net (Loss) for the period $( 834) $(6,319) $(16,764)
Net (Loss) per share $ (0.00) $ (0.02) $ (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 8
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
FOR THE PERIOD NOVEMBER 19, 1996 (INCEPTION) TO DECEMBER 31, 1998
(Unaudited)
For the Six For the Six
Months Ended Months Ended
Dec. 31, 1998 Dec. 31, 1997
General and administrative
expenses $(7,369) $(7,439)
Net (Loss) for the period $(7,369) $(7,439)
Net (Loss) per share $ (0.02) $ (0.02)
Weighted average common
shares outstanding 403,000 403,000
Subject to the comments contained in the Accountants' Review Report.
Page 5 of 8
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
(Unaudited)
Cumulative
For the Six For the Six Amounts
Months Ended Months Ended From
Dec 31, 1998 Dec 31, 1997 Inception
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) $(7,369) $(7,439) $(16,764)
Changes In Assets
(Increase) in Organization Expense -0- -0- (300)
Increase (Decrease) in Accrued
Expenses 8,465 1,500 8,465
Net Cash Provided By (Used In)
Operating Activities 1,096 (5,939) (8,599)
CASH FLOWS FROM INVESTING ACTIVITIES -0- -0- -0-
CASH FLOWS FROM FINANCING ACTIVITIES
Loans from Parent Company 20,959 4,451 27,660
Common Stock Issuance -0- -0- 30,300
(Increase) in Deferred Registration
Costs (22,923) (100) (48,930)
Net Cash Provided By (Used In)
Financing Activities (1,964) 4,351 9,030
Net Increase (Decrease) in Cash (868) (1,588) 431
Cash, Beginning of Period 1,299 3,515 -0-
CASH, END OF PERIOD $ 431 $ 1,927 $ 431
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 6 of 8
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED DECEMBER 31, 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 7 of 8
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1998
(UNAUDITED)
NOTE 4: DEFERRED REGISTRATION COSTS
As of December 31, 1998, the Company has incurred deferred
registration costs of $48,930 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 December 31, 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 8 of 8
PART 1. Financial Information
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Coral Development Corp. ("the Company") was incorporated under
the laws of Delaware on November 19, 1996 by Modern Technology Corp
(MTC). The Company originally completed a "blind pool/blank check"
offer pursuant to Rule 419 by having MTC distribute Company shares as a
dividend to MTC shareholders. On July 22, 1998 it signed an agreement
with OmniComm Systems Inc. (OmniComm) whereby the Company and OmniComm
would merge and the Company would issue 940,000 shares to the
Shareholders of OmniComm in exchange for all their shares (which are all
the outstanding shares of OmniComm). However, the Company, OmniComm and
MTC agreed to merge as planned and subsequently to distribute the Coral
shares as a dividend to MTC shareholders. As the Company is no longer
a "blind pool/blank check" due to the combination with OmniComm, this
distribution may be made without compliance with Rule 419 but will be
accompanied by a Form 10-SB filed on December 22, 1998. The Company
shares owned by MTC will be distributed to MTC shareholders on the basis
of one Coral share for each fifty (50) MTC shares.
All references to the description of business will actually be
to OmniComm's business to date as Coral has not conducted any business
to date other than to organize and seek an acquisition candidate.
Business Overview
OmniComm is an information and technology integration company
located in Coconut Grove, Florida. The Company provides customized,
integrated solutions for its customers' networking needs by combining a
comprehensive offering of dynamic web and data base applications with
its expertise in designing and configuring networks.
From date of inception (March 4, 1997) to July 26, 1998,
OmniComm Systems, Inc. (formerly known as The Premisys Group, Inc.) was
a systems integrator: a provider of services and products designed to
build, manage and enhance computer network infrastructures, local and
wide area, for businesses.
On July 26, 1998 the Company, through its wholly owned
subsidiary OmniCommerce Systems, Inc. acquired all of the issued and
outstanding shares of Education Navigator, Inc. a Florida corporation.
OmniCommerce provides the technical and business know how to integrate
existing legacy hardware networks and data into applications for e-
commerce, extranets, intranets, virtual private networks (VPN's) and
private networks.
For the nine month period ending September 30, 1998, the
Company (OmniComm) had a gross profit of $504,014 on revenues of
$1,382,192 and a net loss of $2,065. The net loss is primarily
attributed to the acquisition of Education Navigator.
For the three months ended December 31, 1998 the Registrant
generated a net loss of $834. For the three months ended December 31,
1997 the Registrant generated a net loss of $6,319. At December 31,
1998 the Registrant had total assets of $48,661, consisting of cash of
$431, deferred registration costs of $48,930 and organization expense of
$300. There were liabilities of $36,125 and stockholders' equity of
$13,536.
No salaries have been paid to the officers and directors of
the Registrant since inception.
Year 2000 Compliance
The Registrant has evaluated the impact of the Year 2000 issue
on the business and does not expect to incur significant costs with Year
2000 compliance. The Registrant believes that all software and hardware
requirements to enable it to cope with the Year 2000 issue have been or
are being currently implemented. However, there can be no assurance
that unanticipated costs may arise in implementing these requirements.
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
February 11, 1999