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 June 30, 2001
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 Number)
of incorporation or 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 [ ] No [X]
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 June 30, 2001, the issuer had outstanding 252,350 common units and 596,803
preferred units.
EXPLANATORY NOTE
COR Development, LLC ("COR") has re-evaluated whether the independent
auditor review obtained with respect to its report on Form 10-QSB for the
quarterly period ended June 30, 2001 was in compliance with the standards
set forth by Statement of Auditing Standards 100 (which supersedes Statement
of Auditing Standards 71) . Based on its re-evaluation, COR now believes
that the review was not in compliance with such standards; as such, COR
retained the independent auditing firm of Mayer Hoffman McCann, P.C. to
perform such review.
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COR has also re-evaluated whether it was required to file an Annual Report
on Form 10-KSB for the fiscal year ended December 31, 2000. Based on its
re-evaluation, COR now believes that it was required to file such an Annual
Report.
The review by Mayer Hoffman McCann, P.C. is now completed. This report
is being filed to amend and restate the following item contained in COR's
report on Form 10-QSB for the quarterly period ended June 30, 2001, originally
filed with the Securities and Exchange Commission on August 30, 2001:
* Item 1. Financial Statements
* Notation above indicating that while Section 15(d) of the Securities
Act of 1934 required COR to files its Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2000, COR had not filed such Annual Report as
of August 30, 2001.
In order to preserve the nature and character of the disclosures set forth
in such items as originally filed, this report continues to speak as of the
date of the original filing, and COR has not updated the disclosures in this
report to speak as of a later date. All information contained in this amendment
is subject to updating and supplementing as provided in our reports filed with
the Securities and Exchange Commission subsequent to August 30, 2001.
INDEX
PART I FINANCIAL INFORMATION ...........................................4
Item 1. Condensed Financial Statements (Unaudited) ...............4
Condensed Balance Sheets .................................4
Condensed Statements of Operations (Unaudited) ...........5
Condensed Statements of Cash Flows (Unaudited) ...........5
Notes to Condensed Financial Statements (Unaudited) ......6
Item 2. Management's Discussion and Analysis or Plan
Of Operation) ..........................................................8
PART II OTHER INFORMATION .............................................9
Items 1 Legal Proceedings .............................................9
Items 2 Changes in Securities and Use of Proceeds .....................9
Items 3 Defaults Upon Senior Securities ..............................10
Items 4 Submission of Matters to a Vote of Security Holders ..........10
Items 5 Other Information ............................................10
Items 6 Exhibits and Reports on Form 8-K .............................10
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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.
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ITEM 1. CONDENSED FINANCIAL STATEMENTS
COR DEVELOPMENT, LLC
(A Development Stage Company)
CONDENSED BALANCE SHEETS
(Unaudited)
Unaudited
June 30,2001 December 31, 2000
Assets
Land $ 11,256,808 $ ---
Costs of development 470,385 153,155
Cash and cash equivalents 280,022 6,283,998
Unamortized financing costs 23,000 15,000
Total assets $ 12,030,215 $ 6,452,153
Liabilities
Accounts payable $ $ 107,484
Accrued interest ---
Other loans and advances 88,905 6,332,423
Note payable to bank 3,350,000
Total liabilities 3,438,905 6,439,907
Commitments and contingencies --- ---
Temporary equity - units issued in
violation of state securities laws 8,563,660
Members' Equity (Deficit)
Capital Contributed ---
Excess (deficit) accumulated during the
development stage 27,650 12,246
Total members' equity (deficit) 27,650 12,246
Total liabilities and members'
equity (deficit) $ 12,030,215 $ 6,452,153
NOTE: The balance sheet at December 31, 2000 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by U.S. generally accepted accounting principles for
complete financial statements.
See notes to condensed financial statements.
Page 4
COR DEVELOPMENT, LLC
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
March 24,
2000
Quarter Six Months (inception)
Ended Ended through
June 30, June 30, June 30,
2001 2001 2001
INCOME
Investment income $ 4,336 $ 15,446 $ 27,861
EXPENSES
General and administrative 42 211
Depreciation and amortization
Total expenses 42 211
Net income (loss) $ 4,336 $ 15,404 $ 27,650
Income(Loss) per unit $ .005 $ .017
COR DEVELOPMENT, LLC
(A Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
March 24,
Six 2000
Months (inception)
Ended through
June 30, June 30,
2001 2001
Operating activities:
Net income (loss) $ 15,404 $ 27,650
Adjustment to reconcile net income
(loss) to net cash flows from
operating activities
Depreciation and amortization
Increase (decrease) in operating liabilities
Accounts Payable
NET CASH FLOWS FROM
OPERATING ACTIVITIES 15,404 27,650
Investing activities:
Purchase of land (11,256,808) (11,256,808)
Costs of land development (347,819) (420,424)
Purchase of property and equipment
NET CASH FLOWS FROM
INVESTING ACTIVITIES (11,631,627) (11,677,232)
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Financing activities
Equity contributions from units issued
in public offering 8,563,660 8,563,660
Other loans and advances for the
purchase of units (6,243,518) 88,905
Net 2,320,142 8,652,565
Proceeds from note payable to bank 5,500,000 5,500,000
Repayment of note payable to bank (2,150,000) (2,150,000)
Offering costs (49,895) (49,895)
Cost of bank financing (8,000) (23,000)
Overdraft
NET CASH FLOWS FROM
FINANCING ACTIVITIES 5,612,247 11,929,670
NET (DECREASE) INCREASE IN
CASH AND CASH EQUIVALENTS (6,003,976) 280,022
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 6,283,998 ---
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 280,022 $ 280,022
Cash paid:
Interest $ --- $ ---
Non-cash transactions related to
investing activities:
Change in accrued interest on
bank loan allocated to land $ --- $ ---
Change in accrued other cost
of development allocated to $ 107,484 $ ---
land
COR DEVELOPMENT, LLC
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
June 30, 2001
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 three months ended June 30, 2001 are not necessarily
indicative of the results that may be expected for the year ended December 31,
2001. 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, 2000.
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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 u
ncertainty.
INDEPENDENT ACCOUNTANTS' REPORT
To the Members
COR DEVELOPMENT, LLC
We have reviewed the condensed balance sheet of COR Development, LLC (a
development stage company) as of June 30, 2001 and the related condensed
statements of operations and cash flows for the for the three-month and
six month period ended June 30, 2001 and the period from inception
(March 24, 2000) through June 30, 2001. These financial statements are
the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted 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 condensed financial statements referred to above for
them to be in conformity with accounting principles generally accepted in
the United States of America.
We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the balance sheet of COR Development,
LLC (a development stage company) as of December 31, 2000 and the results of
its operations and its cash flows for the period from inception (March 24,
2000) through December 31, 2000 (not presented herein); and in our report
dated August 20, 2003, we expressed an unqualified opinion on those financial
statements. In addition, our report included an explanatory paragraph
regarding a going concern uncertainty. In our opinion, the information set
forth in the accompanying condensed balance sheet as of December 31, 2000,
is fairly stated, in all material respects, in relation to the balance sheet
from which it has been derived.
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. As discussed in the notes to the 2000 financial
statements, 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.
Mayer Hoffman McCann P.C.
Leawood, Kansas
August 20, 2003
Page 7
Item 2. Management's Discussion and Analysis or Plan of Operation.
The Registrant, COR Development, LLC ("Registrant" or "COR Development"),
a Kansas limited liability company, has not had any revenues during the past
two (2) years.
For the next twelve (12) months, the Registrant, COR Development, will be
actively involved in the development of the 47 acres that were purchased in part
with the proceeds of the offering of the common units and preferred units.
During the next few months, COR Development will be finalizing the site plans
for the building of the facilities for the office and retail space. We will then
be conducting meetings with the staff of the City of Leawood, Kansas and
meetings with adjacent property owners in preparation for receiving approval of
the site plans and receiving building permits for the construction of the
facilities.
We will employ a construction company for the construction of the
facilities and the overall management of the construction. As of this date,
we have selected Walton Construction Co., Inc. to act as the general contractor
for the building of the facilities, but no contract has been executed for these
services. As of this date, we also have selected a company to serve as the
entity to assist with securing the approval of the site plans and to obtain
tenants for the facilities.
During the coming twelve months, construction will commence on the
facilities. This construction will involve selective demolition, earthwork,
construction of underground duct and utility structures, construction of
sanitary sewerage and storm drainage and installation of pavement.
At this time, we have sufficient cash to proceed forward with the development
of the real estate until we obtain a construction loan. We anticipate obtaining
a construction loan at the end of the current calendar year or at the beginning
of the next calendar year. We currently anticipate that the principal amount of
the construction loan will be approximately $39,000,000. This construction loan
will provide sufficient funds to proceed with the construction. If a
construction loan is not obtained, we will not be able to continue with the
construction of the facilities.
Based upon the current site plans, there will be approximately 500,000
square feet of retail, hotel and office space. The facilities will be on 36
acres. The current site plans will include a 120-room hotel, 197,000 square
feet of retail space, 243,000 square feet of office space, a bank and five
restaurants. The current site plans provide more square feet of retail and
office space then originally anticipated in the prospectus which indicated
a combined 329,000 square\ feet of retail and office space. The
reconfiguration of the facilities on the property has allowed for more space
to use and to rent.
The construction will continue for an extended time. We anticipate that the
construction of all of the facilities should occur in 2005.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Registrant is not currently involved in any legal proceedings.
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. There have been no sales of unregistered securities.
The effective date of the registration statement of Registrant was November
3,2000. The offering was commenced on November 6, 2000. No sales of securities
were made until January 2001.
There are two classes of securities, common units and preferred units.
The offering has now 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. The
Registrant could only offer a total of 1,600,000 units. To the date of the
termination of the offering on May 7, 2001, 252,350 common units and 596,803
preferred units were sold, which provided proceeds of $8,491,530. The offering
price was $10.00 per unit for either a preferred unit or a common unit. There
was no underwriter engaged or employed for this offering. The amount registered
of each class of security, the aggregate pric 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 $16,000,000 252,350 $2,523,500
Preferred Units 1,600,000 $16,000,000 596,803 $5,968,030
From the effective date of the registration statement to June 30, 2001, the
amount of the expenses incurred with respect to the issuance and distribution of
the securities was $49,894.60 for legal fees, accounting fees and the costs of
the printing of prospectuses and unit certificates. As disclosed in the
registration statement, Arthur E. Fillmore, II, one of the managers of
Registrant, is a member of Craft Fridkin & Rhyne, L.L.C. This firm provided
legal counsel to Registrant during the registration of its securities. Mr.
Fillmore, however, did not charge Registrant any fees for any of his time spent
in the registration process.
The total amount of proceeds available from the effective date of the
registration statement, November 3, 2000, to June 30, 2001 was $8,640,565.33.
Out of these proceeds, the Registrant used the sum of $5,406,807.09 to purchase
real estate on which it will build facilities that will consist of office and
retail space. The Registrant also had the sum of $280,021.75 invested in an
account offering interest on such funds. The Registrant used the sum of
$280,021.75 for its working capital needs during this time. No managers of the
Registrant or persons owning ten percent (10%) or more of any class of these
securities received any of these payments.
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.
Page 9
Item 3. Defaults Upon Senior Securities.
There have no defaults on any indebtedness of Registrant.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters have been submitted to a vote of the holders of the registered
securities.
Item 5. Other Information.
At COR Development's managers meeting on May 8, 2001, two (2) individuals
resigned. Those individuals are Gregory R. Walton and Estel Hipp. They resigned
to allow their companies to effectively negotiate "arm's-length" contracts or
agreements with COR Development. Those two individuals were replaced by
J. Frederick Ball and J. Scott Harrison.
The managers have recommended the selection of independent auditors, Marks
Nelson Vohland & Campbell, LLC, PA ("NMVC"). NMVC has reviewed COR
Development's financial data and information, before this document was filed
or submitted to the Securities and Exchange Commission. None of the financial
statements for COR Development's previous years have contained any adverse
opinion or disclaimer of opinion, or was qualified or modified as an
uncertainty, audit scope or accounting principles, nor have there been at any
time, any disagreements between COR Development and its auditors on any matter
of accounting principles or practice, financial statement disclosure or auditing
scope or procedure.
Item 6. Exhibits and Reports on Form 8-K.
(a) There are no exhibits included with this report.
All exhibits have either been previously filed or are not applicable to the
Registrant.
(b) There has been no Form 8-K filed by Registrant.
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 22, 2003 By:/s/ Robert M. Adams
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Robert M. Adams, Manager of
COR Development, LLC
SIGNATURE TITLE
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