SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
/ X / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934(Fee Required)
For the Fiscal Year Ended June 30, 1998
Commission File number 333-6410
CORAL DEVELOPMENT CORP.
(Exact Name of Registrant as Specified in its Charter)
Delaware 11-3349762
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
240 Clarkson Avenue, Brooklyn NY 11226
(Address of Principal Executive Office) (Zip Code)
(718)469-3132
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
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 / /.
Indicate by check if disclosure of delinquent filers pursuant to
Item 405 or Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. /X/
As of September 18, 1997, there was no aggregate market value of
the voting stock held by non-affiliates of the Registrant due to
the fact that there was no trading market in the shares of the
Registrant.
The Number of Shares Outstanding of the Registrant at September 17,
1998 was 403,000.
PART I
1. Business
The Registrant was incorporated in November 1996 and formed by
Modern Technology Corp. (MTC). MTC distributed the 403,000 shares
to its shareholders as a dividend, on a pro-rata basis, at the rate
of one share for each 50 shares of MTC. The shares are in escrow
pursuant to Rule 419.
The Registrant proposed 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 has the
option to recommend its liquidation and dissolution.
On July 22, 1998 the Company signed an agreement to merge with
OmniComm Systems, a company in the computer software field, for
940,000 shares of the Company (which number of shares may be
increased in the event certain earning levels are attained). The
agreement is subject to Rule 419.
For the year ended June 30, 1998 the Registrant generated a
net loss of $8,817. For the period from December 17, 1996 to June
30, 1997 the Registrant generated a net loss of $578.
Item 2. Properties
As of June 30, 1998, the Registrant owned no property. The
Registrant utilizes some space in the offices of MTC for which it
pays no rent.
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholders Matters.
There is no market for the shares of the Registrant.
Number of Shareholders - 372 shareholders of record as of
9/17/98.
Dividends - None Paid.
Item 6. Selected Financial Data
Period From
For the year ended December 17, 1996
June 30, 1998 to June 30, 1997
Total Revenues $ -0- $ -0-
Net Income (Loss) (8,817) (578)
Net Income (Loss)
per share (.02) NIL
Total Assets 27,606 29,722
Long Term Debt -0- -0-
Dividends -0- -0-
Item 7. Management's Discussion and Analysis of Results of
Operations.
The Registrant is a Delaware corporation in the development
state and has not begun any formal operations. The principal
purpose of the Registrant is to find and merge with an operating
company. On July 22, 1998 the Registrant signed an agreement to
merge with OmniComm Systems, Inc., a company in the computer
software field, for 940,000 shares of the Registrant (which number
of shares may be increased in the event certain earning levels are
attained). The Registrant intends to file with the Securities and
Exchange Commission an amendment to its registration statement. At
the time this proposed amendment to the registration statement
becomes effective, the Registrant plans to ask its shareholders for
approval of the proposed merger. If 80% or more approval is
received, all of the Registrant's current 403,000 shares would be
released from escrow and distributed to its shareholders.
For the year ended June 30, 1998 the Registrant generated a
net loss of $8,817 which consisted of general and administrative
expenses. At June 30, 1998 the Registrant has total assets of
$27,606, total liabilities of $6,701 and stockholders' equity of
$20,905. For the period from December 17, 1996 to June 30, 1997
the Registrant generated a loss of $578. At June 30, 1997 the
Registrant had total assets of $29,722 and stockholders' equity of
$29,722.
On December 10, 1996 Modern Technology Corp., the parent
company of the Registrant, purchased 403,000 shares of the company
for $30,300. Modern Technology Corp. registered the Registrant's
shares with the Securities and Exchange Commission and distributed
these shares to Modern Technology Corp's stockholders in the form
of a dividend, subject to Rule 419.
Year 2000 Disclosure
The year 2000 issue is the result of computer programs being
written using two digits rather than four digits to define the
applicable year. Computer programs that have too sensitive
software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in a system failure or
miscalculations causing disruptions of operations, including among
other things, a temporary inability to process transactions, send
invoices or engage in similar normal business activities. Based on
a recent internal assessment, the Company does not anticipate that
the cost of any needed modifications will have a material effect on
results of operations.
Item 8. Financial Statements.
Attached.
Item 9. Changes in and Disagreement with Accountants on
Accounting and Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers.
The executive officers and directors of the Registrant are as
follows:
Name Age Title Term Expires
Arthur Seidenfeld 47 President and Next Annual
Director Meeting
Anne Seidenfeld 85 Treasurer, Next Annual
Secretary and Meeting
Director
Each of the above named individuals has served the Registrant
in the capacity indicated since its formation on November 19, 1996.
Arthur Seidenfeld has been President and Director of the
Registrant since its formation. Mr. Seidenfeld was awarded a B.S.
Degree in Accounting from New York University in 1972 and an M.B.A.
in Finance in 1978 from Pace University.
Since 1983 he has been President and Director of Modern
Technology Corp., a publicly traded company engaged in financial
consulting activities. He is also President and a Director of
Daine Industries Inc., a publicly traded company which through its
wholly owned subsidiary, Lite King Corp., is engaged in the
manufacture of wiring devices. From 1987 to December 1997 he was
President and a Director of Davin Enterprises, Inc., a publicly
traded company which merged (during December 1997) with Creative
Masters Ltd., a private company engaged in the manufacture of
replica cars (OTC bulletin board symbol CVMI). From July 1994
until April 1997, he was also treasurer-secretary of Soft Sail Wind
Power Inc., a newly established company engaged in wind energy
research and development activities.
Anne Seidenfeld, Treasurer, Secretary and Director, received
her diploma from Washington Irving High School, New York City, in
1931. Mrs. Seidenfeld is Treasurer, Secretary and Director of
Daine Industries Inc. and Modern Technology Corp. She served as
Treasurer, Secretary and Director of Davin Enterprises, Inc. from
1987 to December 1997.
Arthur Seidenfeld is the son of Anne Seidenfeld.
Item 11. Management - Remuneration and Transactions.
Neither officer received any remuneration.
PART IV
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
a. The following are known to Registrant to be beneficial owners
of 5% or more of the Registrant's common stock:
Title of Class
Common Stock
Name of Beneficial Owner Amount & Percentage
Nature of of Class
Beneficial
Ownership
Arthur Seidenfeld
240 Clarkson Ave
Brooklyn, New York 193,096 47.9%
Anne Seidenfeld
240 Clarkson Ave
Brooklyn, New York 48,530 12.0%
All officers and
Directors as a
Group (2) 241,626 59.9%
b. The shares owned by management are as follows:
Arthur Seidenfeld 193,096 47.9%
Anne Seidenfeld 48,530 12.0%
Item 13. Certain Relationships and Related Transactions.
None.
CORAL DEVELOPMENT CORP.
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
FILED WITH THE ANNUAL REPORT OF THE COMPANY ON
FORM 10K
Item 14. Exhibits
Financial Statements and Schedules and Reports on Form 10K
Accountant's Report
Balance Sheets as of June 30, 1998 and June 30, 1997
Statement of Shareholders' Equity For the Period November 19,
1996 (Inception) to June 30, 1998
Statement of Operations For the Year ended June 30, 1998 and
the Period from December 17, 1996 to June 30, 1997.
Statement of Cash Flows For the Year ended June 30, 1998,
Period from December 17, 1996 to June 30, 1997 and Cumulative
Amounts from Inception.
Notes to Financial Statements
Other schedules not submitted are omitted, because the
information is included elsewhere in the financial statements or
the notes thereto, or the conditions requiring the filing of these
schedules are not applicable.
Supplemental information to be furnished with reports filed
pursuant to Section 15(d) of the Securities Act of 1934 by
Registrant which have not registered securities pursuant to Section
12 of the Securities Act of 1934:
a) No annual report or proxy material has been sent to
security holders. When such report or proxy materials are
furnished to securities holders subsequent to the filing of this
report, copies shall be furnished to the Commission when sent to
securities holders.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
Dated: September 23, 1998
CORAL DEVELOPMENT CORP.
FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997
I N D E X
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT 1
BALANCE SHEETS 2
STATEMENT OF STOCKHOLDER'S EQUITY 3
STATEMENTS OF OPERATIONS 4
STATEMENTS OF CASH FLOWS 5
NOTES TO THE FINANCIAL STATEMENTS 6-7
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
To the Board of Directors and Stockholders
CORAL DEVELOPMENT CORP.
Brooklyn, New York
We have audited the accompanying balance sheets of CORAL
DEVELOPMENT CORP. (A Development Stage Enterprise) as of June 30,
1998 and 1997 and the related statements of stockholder's equity,
operations and cash flows for the period ended June 30, 1998 and
1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion
on these financial statements based upon our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above presents
fairly, in all material respects, the financial position of CORAL
DEVELOPMENT CORP. (A Development Stage Enterprise) as of June 30,
1998 and 1997, and the statement of its operations and cash flows
for the periods then ended, in conformity with generally accepted
accounting principles.
GREENBERG & COMPANY LLC
Springfield, New Jersey
August 6, 1998
Page 1 of 7
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
June 30,
1998 1997
ASSETS
ASSETS
Current assets - cash $ 1,299 $ 3,515
Deferred registration costs 26,007 25,907
Organization Expense 300 300
TOTAL ASSETS $27,606 $29,722
LIABILITIES AND STOCKHOLDER'S EQUITY
Due to parent company $ 6,701 $ -0-
TOTAL LIABILITIES 6,701 $ -0-
STOCKHOLDER'S EQUITY
Common stock par value $.001
20,000,000 shares authorized
403,000 shares issued and outstanding 403 403
Additional paid in capital 29,897 29,897
(Deficit) accumulated during the
development stage (9,395) (578)
TOTAL STOCKHOLDER'S EQUITY 20,905 29,722
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $27,606 $29,722
The accompanying notes are an integral part of this financial statement.
Page 2 of 7
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDER'S EQUITY
FOR THE PERIOD NOVEMBER 19, 1996 (INCEPTION) TO JUNE 30, 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 -
December 16, 1996 403,000 403 29,897 -0- 30,300
Net (Loss) for the
period (578) (578)
Balance -
June 30, 1997 403,000 403 29,897 (578) 29,722
Net (Loss) for the
year ended
June 30, 1998 (8,817) (8,817)
BALANCE -
JUNE 30, 1998 403,000 $403 $29,897 $(9,395) $20,905
The accompanying notes are an integral part of this financial statement.
Page 3 of 7
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
Period from
For the Year Ended December 17, 1996
June 30, 1998 to June 30, 1997
General and administrative
expenses $(8,817) $ (578)
Net (Loss) for the period $(8,817) $ (578)
Net (Loss) per share $ (0.02) $ (0.00)
Weighted average common shares
outstanding 403,000 403,000
Cumulative amounts from inception:
General and administrative
expenses $ 9,395
Net (Loss) $(9,395)
Net (Loss) per share $ (0.02)
The accompanying notes are an integral part of this financial statement.
Page 4 of 7
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
Cumulative
For The Period From Amounts
Year Ended 12/17/96 From
6/30/98 to 6/30/97 Inception
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) $(8,817) $ (578) $ (9,395)
Changes In Assets
(Increase) in Organization Expense -0- -0- (300)
Net Cash (Used In) Operating
Activities (8,817) (578) (9,695)
CASH FLOWS FROM INVESTING ACTIVITIES -0- -0- -0-
CASH FLOWS FROM FINANCING ACTIVITIES
Loan from Parent Company 6,701 -0- 6,701
Common Stock Issuance -0- -0- 30,300
(Increase) in Deferred Registration
Costs (100) (25,907) (26,007)
Net Cash Provided By (Used In)
Financing Activities 6,601 (25,907) 10,994
Net Increase (Decrease) in Cash (2,216) (26,485) 1,299
Cash, Beginning of Period 3,515 30,000 -0-
CASH, END OF PERIOD $ 1,299 $ 3,515 $ 1,299
Supplemental Disclosures of
Cash Flow Information
Cash Paid During Period for:
Income Taxes $ -0- $ -0- $ -0-
Interest $ -0- $ -0- $ -0-
The accompanying notes are an integral part of this financial statement.
Page 5 of 7
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997
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., 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 Technology Corp. is to
distribute those shares to Modern Technology Corp.'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 $10,000 available to reduce any future income
taxes. The tax benefit of these losses, approximately $3,500,
has been offset by a valuation allowance due to the
uncertainty of its realization.
Page 6 of 7
CORAL DEVELOPMENT CORP.
(A WHOLLY OWNED SUBSIDIARY)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997
(UNAUDITED)
NOTE 4: DEFERRED REGISTRATION COSTS
As of June 30, 1998, the Company has incurred deferred
registration costs of $26,007 relating to expenses incurred in
connection with the Proposed Distribution (see Note 1). Upon
consummation of this Proposed Distribution, the deferred
registration costs will be charged to equity. Should the
Proposed Distribution prove to be unsuccessful, these deferred
costs, as well as additional expenses to be incurred, will be
charged to operations.
NOTE 5: SUBSEQUENT EVENT
On July 22, 1998, the Company signed an Agreement and Plan of
Reorganization with Omnicomm Systems, Inc. (Omnicomm). The
agreement calls for Omnicomm to be merged into the Company.
Omnicomm is a privately held company engaged in the computer
software industry. The transaction is contingent upon
receiving shareholder approval from both companies and also
subject to the conditions of Rule 419 of the Securities Act of
1933 and approval by the Securities and Exchange Commission of
a post-effective amendment to the registration statement.
Page 7 of 7
CORAL DEVELOPMENT CORP.
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
COLUMN A COLUMN B COLUMN C COLUMN C COLUMN D COLUMN E
DESCRIPTION BALANCE AT ADDITIONS ADDITIONS DEDUCTIONS BALANCE AT
BEGINNING CHARGED TO CHARGED TO END OF
OF PERIOD COSTS AND OTHER PERIOD
EXPENSES ACCOUNTS
TAX BENEFIT
RESERVE $200 $3,300 $-0- $-0- $3,500
Pursuant to the requirements of the Securities Act of 1934, this
report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the date indicated.
Name and Signature Title Date
Arthur Seidenfeld President and Director Sept 23, 1998
Principal Executive Officer
Principal Financial Officer
Anne Seidenfeld Treasurer, Secretary Sept 23, 1998
and Director
Gerald Kaufman Director Sept 23, 1998
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<ARTICLE> 5
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<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> JUN-30-1998
<CASH> 1299
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1299
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 27606
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 403
<OTHER-SE> 20502
<TOTAL-LIABILITY-AND-EQUITY> 27606
<SALES> 0
<TOTAL-REVENUES> 0
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<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8817
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (8817)
<INCOME-TAX> 0
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