Washington, D.C. 20549
FORM 10-Q
(Mark One)
/X/ Quarterly report pursuant to Section 13 or 15(d) of the
Securities Act of 1934
For the quarterly period ended September 30, 1997 or
/ / 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 Ave Brooklyn, New York 11226
(Address of Principal Executive Office) (Zip Code)
(718)469-3132
(Registrant's Telephone Number, Including Area Code)
(Former Name, Former Address and Former Fiscal Year,
If Changed Since Last Report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities and Exchange Act of 1934 during the preceding twelve
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 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, 1997
I N D E X
Page
ACCOUNTANTS' REVIEW REPORT 1
BALANCE SHEETS 2
STATEMENT OF STOCKHOLDERS' EQUITY 3
STATEMENTS OF OPERATIONS 4
STATEMENTS OF CASH FLOWS 5
NOTES TO THE FINANCIAL STATEMENTS 6-11
ACCOUNTANTS' REVIEW REPORT
To the Board of Directors and Stockholders
CORAL DEVELOPMENT CORP.
Brooklyn, New York
We have reviewed the balance sheet of CORAL DEVELOPMENT CORP. (A
Development Stage Enterprise) as at September 30, 1997, and the
related statements of operations, stockholders' equity and cash
flows for the three month period ended September 30, 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, 1997, and the
related statement of operations, stockholders' equity and cash
flows for the period then ended (not presented herein); and in our
report dated August 15, 1997, 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, 1997 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
October 29, 1997
Page 1 of 11
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
Sept. 30, 1997
(Unaudited) June 30, 1997
A S S E T S
Current assets-Cash $ 2,295 $ 3,515
Deferred registration costs 26,007 25,907
Organization Expense 300 300
TOTAL ASSETS $28,602 $29,722
L I A B I L I T I E S A N D S T O C K H O L D E R S' E Q U I T Y
TOTAL LIABILITIES $ -0- $ -0-
STOCKHOLDERS' EQUITY
Common Stock Par Value $.001
Authorized: 20,000,000
Shares Issued and Outstanding:
403,000 Shares 403 403
Additional Paid-In Capital 29,897 29,897
(Deficit) Accumulated during the
development stage (1,698) (578)
Total Stockholders' Equity $28,602 $29,722
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $28,602 $29,722
Subject to the comments contained in the Accountants' Review Report.
Page 2 of 11
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD NOVEMBER 19, 1996(INCEPTION) TO SEPTEMBER 30, 1997
(Deficit)
Common Accumulated Total
Stock Additional During the Share-
# of $.001 par Paid in Development holders'
Shares Value Capital Stage Equity
Initial investment 403,000 $403 $29,897 $ -0- $30,300
in capital stock
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
three months ended
September 30, 1997 (1,120) (1,120)
BALANCE AT
SEPTEMBER 30, 1997
(Unaudited) 403,000 $403 $29,897 $ (1,698) $28,602
Subject to the comments contained in the Accountants' Review Report.
Page 3 of 11
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
FOR THE PERIOD NOVEMBER 19, 1996(INCEPTION) TO SEPTEMBER 30, 1997
Period from
For the Three November 19, 1996
Months Ended (Inception) to
September 30, 1997 June 30, 1997
General and Administrative
Expenses $(1,120) $ (578)
Net (Loss) for the Period $(1,120) $ (578)
Net (Loss) per Share $(0.000) $ (0.00)
Weighted Average Common
Shares Outstanding 403,000 403,000
Cumulative Amounts from
Inception:
General and Administrative
Expenses $ 1,698
Net (Loss) $(1,698)
Subject to the comments contained in the Accountants' Review Report.
Page 4 of 11
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
Period From Cumulative
For the Three November 19, 1997 Amounts
Months Ended (inception) to From
September 30, 1997 June 30, 1997 Inception
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net (Loss) $(1,120) $(578) $(1,698)
Changes in Assets
(Increase) in
Organization Expense -0- (300) (300)
Net Cash (Used In)
Operating Activities (1,120) (878) (1,998)
CASH FLOWS FROM INVESTING
ACTIVITIES -0- -0- -0-
CASH FLOWS FROM FINANCING
ACTIVITIES
Common Stock Issuance -0- 30,300 30,300
(Increase) in Deferred
Registration Costs (100) (25,907) (26,007)
Net Cash Provided By
(Used In) Financing
Activities (100) 4,393 4,293
Net Increase (Decrease)
In Cash (1,220) 3,515 2,295
Cash, Beginning of
Period 3,515 -0- -0-
CASH END OF PERIOD $2,295 $3,515 $2,295
Subject to the comments contained in the Accountants' Review Report.
Page 5 of 11
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997
(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 SEC.
The intention of Modern is to distribute those shares to
Modern's shareholders 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.
Subject to the comments contained in the Accountants' Review Report.
Page 6 of 11
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997
(Unaudited)
(Continued)
NOTE 3: INCOME TAXES
The Company follows Statement of Financial Accounting
Standards No. 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 $1,698 available to reduce any
future income taxes. The tax benefit of these losses,
approximately $600, has been offset by a valuation
allowance due to the uncertainty of its realization.
NOTE 4: DEFERRED REGISTRATION COSTS
As of September 30, 1997, 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.
Page 7 of 11
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997
(Unaudited)
(Continued)
NOTE 5: INTERIM FINANCIAL REPORTING
The unaudited financial statements of the Company for the
period July 1, 1997 to September 30, 1997 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 11
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. The management
of the Registrant is presently actively seeking a possible merger
candidate although no assurance can be given that a merger will be
successfully completed within the 18 month period referred to
above.
For the three months ended September 30, 1997, the
Registrant generated a net loss of $1,120. For the period from
inception (November 19, 1996) to June 30, 1997, the Registrant
generated a net loss of $578. At September 30, 1997, the
Registrant has total assets of $28,602, consisting of cash of
$2,295, deferred registration costs of $26,007 and organization
expense of $300. There were no liabilities and stockholders'
equity of $28,602.
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 Senior 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 J. Seidenfeld
President, Chief Executive and
Chief Financial Officer
November 12, 1997
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