SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended 06/30/2003
Commission file number 333-41636
COR DEVELOPMENT, LLC
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(Exact name of small business issuer as specified in its charter)
Kansas 48-1229527
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(State or other jurisdiction (IRS Employer Identification
of incorporation or Number)
organization)
13720 Roe
Leawood, Kansas 66224
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(Address of principal executive offices)
913-897-0120
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(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
past 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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
As of August 11, 2003, the issuer had outstanding 254,850 common
units and 601,416 preferred units, for a total of 856,266 units, all of
which are voting units.
INDEX
PART I FINANCIAL INFORMATION ..........................................2
Item 1. Condensed Financial Statements (Unaudited) ................2
Condensed Balance Sheets .......................2
Condensed Statements of Operations (Unaudited) ............3
Condensed Statements of Cash Flows (Unaudited) ............3
Notes to Condensed Financial Statements (Unaudited) .......4
Item 2. Management's Discussion and Analysis or Plan
of Operation .............5
Item 3. Controls and Procedures ...................................9
PART II OTHER INFORMATION .............................................9
Item 1 Legal Proceedings .......................................9
Item 2 Changes in Securities and Use of Proceeds ................9
Item 3 Defaults Upon Senior Securities .........................11
Item 4 Submission of Matters to a Vote of Security Holders .....11
Item 5 Other Information .......................................11
Item 6 Exhibits and Reports on Form 8-K ........................11
CERTIFICATIONS .......................................................12
CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-QSB and the information incorporated by
reference may include "forward-looking statements" within the meaning of
Section 27A of the Securities Act, as amended, and Section 21E of the
Exchange Act, as amended. In particular, your attention is directed to Part I,
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operation. We intend the disclosure in these sections and throughout
the Quarterly Report on Form 10-QSB to be covered by the safe harbor provisions
for forward-looking statements. All statements regarding our expected financial
position and operating results, business strategy, financing plans and the
outcome of any contingencies are forward-looking statements. These statements
can sometimes be identified by our use of forward-looking words such as "may",
"believe", "plan", "will", "anticipate", "estimate", "expect", "intend" and
other phrases of similar meaning. Known and unknown risks, uncertainties and
other factors could cause the actual results to differ materially from those
contemplated by the statements. The forward-looking information is based on
various factors and assumptions.
Although we believe that our expectations that are expressed in these
forward-looking statements are reasonable, there can be no assurance that our
expectations will turn out to be correct. Our actual results could be materially
different from our expectations, including the following:
general economic and business conditions, both nationally and in the
regions in which we operate;
demographic changes;
existing governmental regulations and changes in, or the failure to
comply with, governmental regulations;
our ability to manage the contemplated construction and to find tenants
to occupy the proposed constructed space;
liability and other claims asserted against us;
competition in the commercial property lease marketplace;
our ability to attract and retain qualified personnel;
changes in generally accepted accounting principles; and
the availability and terms of capital to fund the contemplated
construction of the buildings.
This list is intended to identify some of the principal factors that could
cause actual results to differ materially from those described in the
forward-looking statements included elsewhere in this report. These factors
are not intended to represent a complete list of all risks and uncertainties
inherent in our business, and should be read in conjunction with the more
detailed cautionary statements included in our other SEC filings.
ANY FORWARD-LOOKING STATEMENTS INCLUDED IN THIS FORM 10-QSB REFLECT
MANAGEMENT'S BEST JUDGMENT BASED ON FACTORS CURRENTLY KNOWN AND INVOLVE
RISKS AND UNCERTAINTIES. ACTUAL RESULTS MAY VARY MATERIALLY.
Page 1
ITEM 1. CONDENSED FINANCIAL STATEMENTS
COR DEVELOPMENT, LLC
(A Development Stage Company)
CONDENSED BALANCE SHEETS
(Unaudited)
(Unaudited)
June 30, 2003 December 31, 2002
Assets
Land $ 14,136,222 $ 13,136,329
Cash and cash equivalents 0 21,653
Property and equipment, at cost 5,024 5,024
Accumulated depreciation (2,008) (1,506)
Unamortized financing costs 11,500 13,800
Total assets $ 14,150,738 $ 13,175,300
Liabilities
Accounts payable and Bank overdraft $ 609,691 $ 47,304
Accrued interest 90,621 82,926
Other loans and advances 88,905 88,905
Note payable to bank 5,075,711 4,611,764
Total liabilities 5,864,928 4,830,899
Commitments and contingencies --- ---
Temporary equity - units subject to 8,513,765 8,513,765
recission
Members' Equity (Deficit)
Capital Contributed --- ---
Deficit accumulated during the
development stage (227,955) (169,363)
Total members' equity (deficit) (227,955) (169,363)
Total liabilities and members'
equity (deficit) $ 14,150,738 $ 13,175,300
NOTE: The balance sheet at December 31, 2002 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See notes to condensed financial statements.
Page 2
COR DEVELOPMENT, LLC
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
March 24,
2000
Quarter Six Months Quarter Six Months (inception)
Ended Ended Ended Ended Through
June 30, June 30, June 30, June 30, June 30,
2003 2003 2002 2002 2003
INCOME
Investment income $ 56 $ 143 $ 143 $ 318 $ 30,763
EXPENSES
General and administrative 55,933 55,933 --- --- 245,209
Depreciation and
amortization 1,401 2,802 1,401 2,802 13,509
Total expenses 57,334 58,735 1,401 2,802 258,718
Net income (loss) $ (57,278) $(58,592) $ (1,258) $ (2,484) $(227,955)
Income(Loss) per unit $ (.066) $ (.068) $ (.001) $ (.002)
COR DEVELOPMENT, LLC
(A Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Six March 24,2000
months months (inception)
Ended Ended through
June 30, June 30, June 30,
2003 2002 2003
Operating activities:
Net income (loss) $ (58,592) $ (170,677) $ (1,226)
Adjustment to reconcile net
income(loss) to net cash flows
from operating activities
Depreciation and amortization 2,802 2,802 13,509
Increase (decrease) in operating
liabilities Accounts Payable 55,933 (37,598) 55,933
NET CASH FLOWS FROM
OPERATING ACTIVITIES 143 (37,280) (158,513)
Investing activities:
Purchase of land --- --- (11,256,808)
Costs of land development (712,496) (585,611) (2,461,789)
Purchase of property and equipment --- --- (5,024)
NET CASH FLOWS FROM
INVESTING ACTIVITIES (712,496) (585,611) (13,723,621)
Financing activities
Equity contributions from units
issued in public offering --- --- 8,563,660
Other loans and advances for the
purchase of units --- --- 88,905
Page 3
Net --- --- 8,652,565
Proceeds from note payable to bank 463,947 631,694 7,032,711
Repayment of note payable to bank --- --- (1,957,000)
Offering costs --- --- (49,895)
Cost of bank financing --- --- (23,000)
Overdraft 226,753 --- 226,753
NET CASH FLOWS FROM
FINANCING ACTIVITIES 690,700 631,694 13,882,134
NET (DECREASE) INCREASE IN
CASH AND CASH EQUIVALENTS (21,653) 8,803 ---
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 21,653 --- ---
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ --- 8,803 ---
Cash paid:
Interest $ (168,446) $ (350,524) $ (515,083)
Non-cash transactions related to
investing activities:
Change in accrued interest on
bank loan allocated to land $ (7,696) $ 144,711 $ (90,621)
Change in accrued other costs
of Development allocated to $ (279,700) $ --- $ (327,004)
land
COR DEVELOPMENT, LLC
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
June 30, 2003
1. Basis of presentation
The accompanying unaudited condensed financial statements of COR Development,
LLC (the Company) have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-QSB. Accordingly, 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 considered necessary for a fair presentation have been included.
Operating results for the six months ended June 30, 2003 are not necessarily
indicative of the results that may be expected for the year ended
December 31, 2003. For further information, refer to the financial statements
and footnotes included in the COR Development, LLC annual report on Form
10-KSB for the year ended December 31, 2002.
2. Going concern
The accompanying financial statements have been prepared on a going concern
basis, which contemplates continuity of the Company's operations and
realization of its assets and payment of its liabilities in the ordinary course
of business. On April 7, 2003 the Company's management determined that the
equity securities issued in 2001 by the Company in a public offering were not
in compliance with applicable state exemptions from registration and may be
subject to rescission. This condition raises substantial doubt about the
Company's ability to continue as a going concern. The financial statements
do not include any adjustments to reflect the possible future effect on the
recoverability and classification of assets or the amounts and classification
of liabilities that may result from the outcome of this uncertainty.
Page 4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Generally.
This item should be read in conjunction with the consolidated financial
statements and other items contained elsewhere in this report.
For the next twelve (12) months, COR will be actively involved in the
development of 47 acres located at the intersection of 137th and Nall
in Leawood, Kansas.
We expect COR's primary sources of revenue to be:
1) the sale of 6 undeveloped pad sites over the next two years;
2) the leasing of space in the commercial buildings; and
3) the sale of the commercial buildings after a period of
operation and at the time that holders of a majority of the units shall
approve the sale, which is currently contemplated to be by the end of
2015.
We propose to accomplish four purposes with the real estate. First, we will
develop and sell six (6) pad sites over the next two years. Second, we plan to
develop and build commercial office and retail space and will engage a
management company to lease this space. Based upon the current site plans,
there will be approximately 360,000 square feet of retail and office space,
consisting of 220,000 square feet of retail space, a maximum of 50,000 square
feet of pad space (which is expected to include a bank and three restaurants),
and 90,000 square feet of office space. These facilities will be located on
approximately 34 acres. Previous SEC filings by COR reflected that the site
may include a hotel. At this time, COR does not expect that a hotel will be
part of the development at the site.
Third, we plan to donate a total of approximately 15 acres to the Church
of the Resurrection for use in the development of its worship and
educational facilities. Fourth, we plan to develop the commercial buildings
in a manner that provides parking fields that can be utilized by the Church
of the Resurrection for its Sunday services and other programs and
activities.
Johnson County, Kansas has experienced a significant expansion of commercial
office space over the past ten years. Since 2000, the vacancy rate for
commercial property in Johnson County has increased substantially while
average rental rates for commercial property have stabilized and even declined
slightly. These market conditions may make it difficult or infeasible
to reach our projected vacancy and rent targets.
Work has commenced at the site, including grading and storm sewer work. We
anticipate that construction on the buildings will commence in late 2003 and
should be completed by 2005. In late October, 2001, we finalized and filed
with the City of Leawood, Kansas, our original site plans for the building
of the facilities for the office and retail space. In conjunction with the
filing of the site plans, we requested the zoning necessary for the proposed
development. Because of subsequent and significant changes to the site plan,
it was necessary to re-submit plans to the City. A revised site plan and
accompanying documentation was submitted to the City of Leawood on May 31,
2002. Plan approval with the City of Leawood is a three-step process in
which the City's Planning Commission must give preliminary approval of the
development plan, the City Council must give its preliminary approval of the
plan, and finally the Planning Commission must give its final approval of the
plan. City officials may ask for revisions to the plan at various points in
this process. We held an informal work session with the Planning Commission
on October 8, 2002 to discuss the preliminary plan and received Planning
Commission feedback, and on October 28, 2002 we secured preliminary plan
approval by the Planning Commission. In February 2003 we received zoning
approval and final site plan approval. Additional site plan approvals are
required as each specific building is designed and submitted for permitting.
With regard to a majority of the capital improvements and public right of way
included in the proposed development, the cost of those developments must be
allocated between COR and the Church of the Resurrection. COR and the Church
of the Resurrection have agreement in principal on this allocation and the
Kansas Attorney General's office has approved such allocation on the benefit
district petitions approved by the City of Leawood thus far.
Page 5
The City Council for the City of Leawood has passed a resolution of intent to
approve approximately $6,250,000 to issue special benefit district bonds in
connection with the special benefit district improvements for the development.
On Monday, August 4, 2003, the City Council authorized the Mayor of Leawood to
execute a contract with Walton Construction Co., Inc. for the construction of
a portion of these special benefit district improvements. COR has filed a
letter of credit with the City of Leawood in satisfaction of a requirement for
proceeding with the special benefit district work. However, there are still
several issues that must be resolved prior to issuance of bonds on all special
benefit district improvements, including the participation in a benefit
district by the owner of property immediately north of the COR property. If
such issues cannot be resolved, that could potentially defeat the ability of
COR to develop the real estate and meet its business objectives.
We cannot assure you that the City of Leawood will approve the
site plans on a building-by-building basis or issue any or all of the
necessary permits required for us to develop the real estate as
proposed. If the City of Leawood fails to approve the site plans on a
building-by-building basis, or if the City of Leawood or other local
governments or regulatory authorities fail to issue one or more necessary
permits, we anticipate that we will not be able to conduct the development
without significant revision to our current plan of operation.
We will employ a construction management company to take responsibility
for the overall management of the construction, including preparing the
pad sites for sale and developing and constructing the commercial
buildings. We have tentatively selected Walton Construction Co., Inc. to act
as the construction manager for the building of the facilities, but COR is
considering whether it would be preferable for Walton Construction Co., Inc. to
serve as general contractor instead. COR currently has no written contract
with Walton Construction Co., Inc. However, the City Council for the City of
Leawood has authorized the Mayor of Leawood to execute a contract with Walton
Construction Co., Inc. for the construction of a portion of the special benefit
district improvements discussed above. We have also hired Red Development
Services, L.L.C., pursuant to a written contract, to perform real estate
development services including to secure the approval of the site plans, to
perform leasing services including obtaining tenants for the facilities, and to
manage maintenance of the buildings. COR's managers will provide oversight of
Red Development, L.L.C. and any construction management company and/or general
contractor.
Over the next twelve (12) months, COR intends to focus its efforts on securing
tenant commitments and leases for the purposes of obtaining a phase one
construction loan. We expect to begin phase one of construction, by which we
mean construction of a multi-tenant building and the construction and proposed
pad sites, in late 2003.
We anticipate that including the phase one construction loan, we will need to
obtain a total of approximately $39,000,000 in construction loans to complete
development as planned. The development will continue for an extended time -
we currently anticipate that construction of all of the proposed facilities
should be completed by 2005. We are currently attempting to obtain a
non-recourse phase one construction loan and we can provide no assurance that
such a loan will be available at all or on terms that are suitable to COR.
Further, if we do not obtain approximately $39,000,000 in total construction
loans, we expect that we will not be able to complete the construction of all
the facilities as proposed.
Page 6
We expect phase one construction to be funded by a phase one construction loan
and by proceeds from pad site sales. We anticipate the phase one construction
loan to be approximately $18,000,000 to $19,000,000, and that the proceeds of
this loan will be used to completely satisfy COR's existing debt from the
purchase of the land. (See Item 5, "Market for Common Equity and Related
Stockholder Matters.") However, without one or more construction loans,
currently we do not have sufficient capital to begin phase one construction
or to otherwise develop the land as planned. In connection with the letter
of credit discussed above, COR has made additional agreements with a lender
who proposes to provide additional funds toward phase one. However, the
managers believe that the lender will not extend funds toward phase one
without the completion of the rescission offer discussed below. (See Item 2,
"Management's Discussion and Analysis or Plan of Operation - Rescission
Offer.") Further, the lender may impose additional requirements or conditions
in addition to completion of the rescission offer currently proposed by COR.
We can provide no assurance that such requirements or conditions will be
suitable to COR.
On March 11, 2003 COR signed a lease with Ultimate Electronics, Inc., pursuant
to which Ultimate is to occupy approximately 31,000 square feet of this
multi-tenant building. This lease may be terminated if the multi-tenant
building is not completed by May 1, 2004, subject to delays caused by events
outside the reasonable control of COR.
We also anticipate that at least two pad sites will be sold during or before
COR's fiscal year 2004. We expect the proceeds from such sales will be used
for construction of the facilities, including the pad sites. We currently
have one contract for the sale of a pad site for a price within our projected
sale range; this contract was entered on March 11, 2003 and was originally
scheduled to close in June 2003, with two 30-day extensions available to the
purchaser. The purchaser has exercised these extensions, and closing under
the contract is currently scheduled to take place in August 2003. COR has
entered a letter of intent with respect to the sale of a second pad site.
COR continues to pursue the completion of these sales, as well as the sales
of the remaining four (4) pad sites.
We cannot assure you that we will be successful in entering more leases or
pad site sale contracts. We cannot assure you that we will be successful
in all necessary loans including without limitation the proposed initial
construction loan described above.
Factors such as cost overruns, unanticipated expenses and other factors
may require us to seek more loans than we currently estimate to be
necessary. We cannot project the impact that shortfalls in financing,
cost overruns or unanticipated expenses might have on our plan of
operations, but any of these factors or other factors could defeat our
ability to complete the development as proposed.
Rescission Offer.
COR's registration statement with respect to the Units was originally
filed with the Securities and Exchange Commission on July 18, 2000.
Pursuant to review and comment by the SEC, it was amended on September 8, 2000
and amended again on October 18, 2000. This registration statement became
effective on November 3, 2000.
Applicable Kansas statute requires that any security offered or sold in Kansas
must first be registered with the Kansas Securities Commissioner or exempt
from registration. Applicable Missouri statute requires that any security
offered or sold in Missouri must first be registered with the Missouri
Securities Division or exempt from registration. COR did not file a
registration statement with either the Kansas Securities Commissioner or the
Missouri Securities Division prior to making sales of the Common Units and
Preferred Units in these states. Further, neither the Common Units nor the
Preferred Units were exempt from registration in either Kansas or Missouri.
As such, COR's sale of the Common and Preferred Units in Kansas and Missouri
appears to have violated both Kansas and Missouri securities statutes.
Page 7
As a result, we expect that during the 30-day period following the date on
which this Report on Form 10-QSB is filed, COR will issue a rescission offer
to all purchasers of Common Units and Preferred Units who resided in Kansas
at the time of purchase and who currently reside in Kansas. The offer is
proposed to be an offer by COR to all such purchasers to repurchase for cash
all Common Units and Preferred Units held by such purchasers, for the amount
of consideration paid plus interest of fifteen percent (15%) per year from
the date of purchase.
We expect that the rescission offer will give each offeree a 30-day
opportunity to accept the repurchase offer, and that each offeree who fails
to accept the offer within that 30-day period will be barred from bringing
suit to seek damages for the failure to register. We expect to issue cash
to each accepting offeree within ten (10) days of notification of acceptance
to COR.
COR and the Kansas Securities Commissioner have signed a mutually
satisfactory consent order. The Kansas consent order requires COR to pay a
$6,300 fine. It also requires COR to pay $1,700 representing fees COR would
have been required to submit had it registered the units prior to sale.
A consent order between COR and the Missouri Securities Division has been
executed by COR and submitted to the Missouri Securities Commissioner for
approval. Approval is expected on or prior to Friday, August 22, 2003. The
Missouri consent order requires COR to pay $2,000 to Missouri's Investor
Education Fund. It also requires COR to mail a cover letter enclosing the
consent order to the 36 purchasers who lived in Missouri at the time of
purchase, and to promptly honor any demand for payment resulting from the
failure to register in Missouri.
At this time, it is not possible for COR to determine the specific amount
of offerees expected to accept the offer. If a substantial number of offerees
accept the offer, COR may, depending on the terms of the rescission offer, be
required to generate cash on a very short-term basis, and may be required to
obtain a loan to make the required cash payments and/or payments of principal
and interest to offerees who have accepted the rescission offer. COR has not
determined whether its existing debt from the purchase of the land (see Item 5,
"Market for Common Equity and Related Stockholder Matters") is or is not
subject to acceleration as a result of the violation of Kansas and Missouri
statutes and/or the rescission offer. COR is in communication with its lender
regarding these violations and the rescission offer. To date COR has not
received any indication that the lender believes the loan can accelerated, nor
that the lender will seek acceleration even if available. However, we can
give no assurance that the lender will continue to refrain from seeking
recourse available to it, if any. Further, we can give no assurance that any
loan necessitated by the rescission offer will be available on acceptable
terms to COR.
COR's plan of operations, construction schedule, and ability to maintain
existing financing and obtain new construction loans may be adversely affected
by the statutory violations as well as by the results of the proposed
rescission offer.
Page 8
ITEM 3. CONTROLS AND PROCEDURES
In response to recent legislation and additional requirements, we reviewed our
internal control structure and our disclosure controls and procedures. As a
result of such review we implemented changes primarily to formalize and
document the procedures. We have designed our disclosure controls and
procedures to ensure that material information related to COR is made known to
the manager serving as our principal executive officer and the manager serving
as our principal financial officer on a regular basis, in particular during
the period in which the quarterly reports are being prepared. As required, we
will evaluate the effectiveness of these disclosure controls and procedures on
a quarterly basis, and did so on approximately August 13, 2003, a date within
90 days prior to the filing of this quarterly report. We believe as of that
date, such controls and procedures are operating effectively as designed.
Based on our most recent evaluation, COR's management concluded that COR's
disclosure controls and procedures are adequate to ensure the clarity and
material completeness of COR's disclosure in its periodic reports required to
be filed with the SEC and there are no significant deficiencies or material
weaknesses in the design or operation of internal controls which could
significantly affect our ability to record, process, summarize and report
financial data.
There were no significant changes in COR's internal controls or in other
factors that could significantly affect these controls subsequent to the
date of their evaluation.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Registrant is not currently involved in any legal proceedings other than
seeking approval of site plans and zoning as described above in Item 2,
"Management's Discussion and Analysis or Plan of Operation - Generally," and
the rescission offer process described above in Item 2, "Management's
Discussion and Analysis or Plan of Operation - Rescission Offer."
We are in a dispute with James Taylor Associates regarding their billings
for services. We are investigating the claim and securing information with
which to evaluate the sums due if any. The claim made was for a balance due
for services rendered and a claim for profit that would have arisen had they
provided service for the duration of the design of the project. COR is
vigorous in its investigation and does not consider that it has any liability
for services or profit for the duration of the project.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
There have been no changes in the terms of, or the rights evidenced by, the
registered securities. As of June 30, 2003, there have been no sales of
securities that were not registered under the Securities Act of 1933.
However, there have been certain sales of securities that were not registered
under applicable state laws. (See Item 2, "Management's Discussion and
Analysis or Plan of Operation - Rescission Offer.")
The following use of proceeds information is being disclosed in
connection with COR's registration statement filed on Form SB-2 with
an effective date of November 3, 2000, SEC File Number 333-41636.
The offering was commenced on November 6, 2000 but no sales of
securities were made until January 2001. The offering terminated on
May 7, 2001.
Page 9
The offering included two classes of securities, Common Units and
Preferred Units. The offering terminated before all of the registered
Common Units and Preferred Units were sold. A total of 1,600,000 units
were registered that consisted of a collective 1,600,000 of common
units and preferred units. From January 2001 to the date of the
termination of the offering on May 7, 2001, 254,850 Common Units and 601,416
Preferred Units were sold, which provided proceeds of $8,562,660. The
offering price was $10.00 per unit for either a Common Unit or a Preferred
Unit. No underwriter was engaged or employed for this offering. The amount
registered of each class of security, the aggregate price of the offering
amount registered, the amount sold of each security and the aggregate offering
price of the amount sold are as follows:
TITLE OF EACH AGGREGATE
REGISTERED AMOUNT AGGREGATE AMOUNT OFFERING
SECURITY REGISTERED OFFERING PRICE SOLD PRICE SOLD
Common Units 1,600,000 $16,000,000 254,850 $2,548,500
Preferred Units 1,600,000 $16,000,000 601,416 $6,014,160
As of August 11, 2003, the issuer had outstanding 254,850 common
units and 601,416 preferred units, for a total of 856,266 units, all of
which are voting units.
There has been no market for these units and we currently contemplate
that there will be no public market for the units. No underwriter was
involved in the above sales. No underwriting discounts were extended
and no commissions were paid in connection with the above sales. COR has
not declared any dividends on either the Common Units or Preferred Units
during the last two fiscal years or in any subsequent period. We do not
anticipate that COR will issue any dividends on either the Common Units
or Preferred Units for the foreseeable future.
From the effective date of the registration statement to December 31, 2001,
the net offering proceeds available from the sales of COR Common Units and
Preferred Units, after taking into account the expenses discussed above, was
$8,441,635.40. The total purchase price of the real estate was $11,256,808,
including closing costs of $29,558. From the effective date of the
registration statement to December 31, 2001, COR used $5,756,808 from equity
contributions byCOR members and $5,500,000 in proceeds from a bank loan to
purchase thereal estate. From January through April, 2001, COR used members'
equity contributions to repay a total of $2,150,000 of the bank loan.
COR also invested $280,021.75 in an interest bearing account during
that period.
The net offering proceeds available from the sales of COR Common Units
and Preferred Units after taking into account the expenses discussed
above, was $8,441,635.40. The total purchase price of the real estate
was $11,256,808, including closing costs of $29,558. To pay the
purchase price, COR used $5,756,808 from equity contributions by COR
members and $5,500,000 in proceeds from a bank loan. COR subsequently
used members' equity contributions to repay a total of $2,150,000 of
the bank loan and invested $280,021.75 in an interest bearing account.
Page 10
The use of the proceeds set forth above does not constitute a material
change in the use of proceeds set forth in the prospectus of the
Registrant.
COR provides the following information for all securities that COR sold within
the past three (3) years without registering the securities under the
Securities Act of 1933:
Total
Price Offering
Date # Units per Unit Price Buyer
3/31/00 1 $10.00 $10.00 CORnerstone
Development, LLC
No underwriter was involved in the above sale. No underwriting
discounts were extended and no commissions were paid in connection
with the above sale. The net offering proceeds from the sale were
$10.00 and were used toward COR's working capital needs.
COR has not established any equity compensation plans and we do not
expect that COR will do so in the foreseeable future.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
There have been no defaults on any indebtedness of Registrant.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of the holders of the registered
securities during the period covered by this report.
ITEM 5. OTHER INFORMATION.
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits - None. All exhibits have either been previously filed or are
not applicable to the Registrant.
(b) Reports on Form 8-K - None.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
COR DEVELOPMENT, LLC
(Registrant)
Date: August 14, 2003 By:/s/ Robert M. Adams
---------------------------
Robert M. Adams, Manager of
COR Development, LLC
SIGNATURE TITLE
Page 11
CERTIFICATIONS
Chief Executive Officer
I, Robert M. Adams, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of COR Development,
LLC;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for
the registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: August 14, 2003 /s/ Robert M. Adams
---------------------------
Robert M. Adams, Manager
COR Development, LLC
Page 12
Chief Financial Officer
I, Arthur E. Fillmore, II, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of COR Development,
LLC;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for
the registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: August 14, 2003 /s/ Arthur E. Fillmore, II
---------------------------
Arthur E. Fillmore, II, Manager
COR Development, LLC
Page 13
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of COR Development, LLC (the
"Company") on Form 10-QSB for the quarterly period ended September 30, 2002,as
filed with the Securities and Exchange Commission on the date hereof(the
"Report"), the undersigned, in the capacities and dates indicated below,
hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully
complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and (2) The information contained in the Report fairly
presents, in all material respects, the financial condition and results of
operations of the Company.
Date: August 14, 2003 /s/ Robert M. Adams
---------------------------
Robert M. Adams, Manager
COR Development, LLC
Date: August 14, 2003 /s/ Arthur E. Fillmore, II
---------------------------
Arthur E. Fillmore, II, Manager
COR Development, LLC