SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934 (Fee Required)
For The Fiscal Year Commission File #2-80891-NY
Ended June 30, 1997
MODERN TECHNOLOGY CORP.
(Exact Name of Registrant as Specified in its Charter)
Nevada 11-2620387
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
461 Beach 124 Street. P.O.B. 7. Belle Harbor, New York 11694
(Address of Principal Executive Office) (Zip Code)
(718)474-6568
(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 mark 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 Common Stock $.0001 par value
at September 19, 1997 was 20,150,000.
PART 1
1. Business
The Registrant is engaged in aiding prospective clients in
obtaining financing and in providing managerial services to client
companies. During the year ended June 30, 1997, the Registrant was
involved in providing managerial services to Davin Enterprises Inc.
("Davin") which it also had aided in obtaining financing. The
Registrant received managerial fees of $9,600 from Davin during the
year ended June 30, 1997.
Presently, the Registrant is seeking out joint venture
candidates and companies for which it can aid in providing
financing and managerial services although no assurances can be
given that the Registrant will be successful in gaining new clients
in the near future.
During December 1996 the Registrant purchased 403,000 shares
of Coral Development Corp. for $30,300. The Registrant has
registered these shares with the Securities and Exchange Commission
with the intention to distribute those shares to the Registrant's
shareholders in the form of a dividend. This distribution can only
be made after a merger agreement with a private company is signed
and at least 80% of the Registrant's shareholders approve such
merger. At this time, Coral Development Corp. is seeking a merger
partner. No assurance can be given that a merger agreement will be
signed and that at least 80% of the shareholders of the Registrant
will approve such merger agreement.
During the year ended June 30, 1996, the Registrant purchased
25,000 shares of Delta Three Inc. for $25,000-. Delta Three Inc.
is a telecommunications provider, using Internet technology for
voice transmission. During the quarter ended September 30, 1997
the Registrant sold its 25,000 shares of Delta Three Inc. for
$50,000.
During the fiscal year ended June 30, 1997, the Registrant had
net income of $11,925. Its revenue for the year ended June 30,
1997 was derived from management income amounting to $9,600,
interest income of $33,445 and a gain on securities sales of
$29,940. Total revenues for the year ended June 30, 1997 amounted
to $72,985.
Item 2. Properties.
As of June 30, 1997, the Registrant owned no property. The
Registrant has its offices in the home of its officers, using
approximately 200 square feet 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.
During the past three fiscal years there was no market for the
shares of the Registrant.
Number of Shareholders - 370 shareholders of record of 9/15/97.
Dividends - None paid.
Item 6. Selected Financial Data
for the Year ended June 30,
1997 1996 1995 1994 1993
Total Revenues $72,985 $40,449 $40,708 $31,278 $36,803
Operating Income
(Loss) 6,388 (2,709) (14,375) (10,694) (2,255)
Net Income (Loss) 11,925 (3,720) (14,375) (10,694) (2,255)
Net Income (Loss)
per share NIL NIL NIL NIL NIL
Total Assets 731,238 718,443 721,014 735,389 747,283
Long Term Debt -0- -0- -0- -0- -0-
Dividends -0- -0- -0- -0- -0-
Item 7. Management's Discussion and Analysis of Results of
Operations.
The Registrant had net income after taxes of $11,925 for the
year ended June 30, 1997. A net loss for the year ended June 30,
1996 amounted to $3,720.
Fiscal year 1997 revenues and income was influenced by
interest income, management income and gains from the sale of
securities. During fiscal year 1997, the revenues amounted to
$72,985 as compared with fiscal year 1996 revenes of $40,449.
Operating expenses rose in fiscal year 1997 as compared with the
comparative fiscal year 1996 figure. The net income figure for
fiscal year 1997 was principally due to the sale of securities (TTR
Inc. shares).
The Registrant has been receiving a monthly management fee of
$800 from Davin for the fiscal year ended June 30, 1997. The
Registrant provides administrative, clerical, bookkeeping and other
services to Davin. At June 30, 1996, the Registrant owned 501,000
restricted shares of Davin, at a cost of $7,950, representing 25.8%
of the outstanding shares of Davin.
During December 1996 the Retistrant purchased 403,000 shares
of Coral Development Corp. for $30,300. The Registrant has
registered these shares with the Securities and Exchange Commission
with the intention to distribute those shares to the Registrant's
shareholders in the form of a dividend. This distribution can only
be made after a merger agreement with a private company is signed
and at least 80% of the Registrant's shareholders approve such
merger. At this time Coral Development Corp. is seeking a merger
partner. No assurance can be given that a merger agreement will be
signed and that at least 80% of the shareholders of the Registrant
will approve such merger agreement.
During fiscal year 1995, the Registrant purchased an
investment in TTR Inc., amounting to a 10% promissory note in the
amount of $25,000 with warrants for 4,000 shares exercisable at
$.01 per share at the time of a TTR initial public offering. TTR
Inc. was incorporated for the purpose of designing, developing and
marketing computer software products. During the year ended June
30, 1996 the Registrant purchased 25,000 shares of Delta Three Inc.
for $25,000. Delta Three Inc. is a telecommunications provider
using Internet technology for voice transmission. The 10%
promissory note plus interest has been repaid to the Registrant.
The Registrant also exercised its warrants and realized a gain of
$29,940.
During the year ended June 30, 1997 the Registrant recognized
a complete loss on its investment and loan to Soft Sail Wind Power
Inc. (Soft Sail). At the present time the Registrant does not
believe Soft Sail will be able to repay its debt to the Company and
has therefore considered its debt and equity investment in Soft
Sail to be worthless. The loss on the loan was $11,400 and the
loss in the current year on its equity investment was $16,005.
At June 30, 1997 the Registrant's total assets amounted to
$731,238 and as compared with $718,443 for total assets at June 30,
1996. At June 30, 1997, stockholders' equity amounted to $728,019,
as compared with $716,094 at June 30, 1996.
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 46 President and Next Annual
Director Meeting
Anne Seidenfeld 84 Treasurer, Secretary Next Annual
and Director Meeting
Gerald Kaufman 56 Director Next Annual
Meeting
Each of the above named individuals has served the Registrant
in the capacity indicated since its formation on July 27, 1982
(with the exception of Anne Seidenfeld who became a director of the
Registrant on March 31, 1989 and treasurer on December 17, 1989 and
Gerald Kaufman who became a director in 1990.
Arthur Seidenfeld, has been president and a director of the
Registrant since its formation. Mr. Seidenfeld was awarded a B.S.
Degree in Accounting from New York University in 1972 and a M.B.A.
Degree in Finance in 1978 from Pace University.
He is also president and 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. He is also president and director of Davin Enterprises,
Inc., a publicly traded company that went public in Sept. 1987,
which is seeking out appropriate business opportunities and which
also has an equity position in Target Vision, Inc., a privately
owned company in the computerized communication field. 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. Since December 1996, he has
been president and director of Coral Development Corp., a public
company whose intention is to merge with an operating company.
Anne Seidenfeld, Treasurer, Secretary and Director, received
her diploma from Washington Irving High School, New York City, in
1931. Mrs. Seidenfeld is the Treasurer, Secretary and Director of
Daine Industries, Inc., Davin Enterprises, Inc and Coral
Development Corp.
Gerald Kaufman, Director, has been a practicing attorney for
over twenty five years. He has served as a director of the
Registrant, along with being a director of Daine Industries Inc.
and Davin Enterprises, Inc. since November 1990. He has also been
a director of American Mayflower Life Insurance Co. since 1973.
Arthur Seidenfeld is the son of Anne Seidenfeld.
Item 11. Management-Remuneration and Transactions.
During the fiscal year ended June 30, 1997, management
salaries were as follows:
Anne Seidenfeld - Treasurer-Secretary $7,200
The Company's president, Arthur Seidenfeld, did not receive a
salary for the year ended June 30, 1997. Anne Seidenfeld, the
Company's treasurer and secretary, pursuant to an oral agreement
with the Company earned $7,200 as an annual salary effective
through June 30, 1997.
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 & Nature of Percentage
Beneficial Ownership of Class
Arthur Seidenfeld
461 Beach 124 Street
Belle Harbor, New York 9,654,820 47.9%
Anne Seidenfeld
461 Beach 124 Street
Belle Harbor, New York 2,426,500 12.0%
All Officers and
Directors as a Group (3) 12,081,320 59.9%
b. The shares owned by management are as follows:
Common Stock.
Name of Beneficial Owner Amount & Nature of Percentage
Beneficial Ownership of Class
Arthur Seidenfeld 9,654,820 47.9%
Anne Seidenfeld 2,426,500 12.0%
Item 13. Certain Relationships and Related Transactions:
For the year ended June 30, 1997, the Registrant received
management fees from Davin Enterprises, Inc. amounting to $9,600.
Arthur Seidenfeld, President and a director of the Registrant owns
29.4% of the outstanding shares of Davin Enterprises, Inc. Anne
Seidenfeld, Treasurer-Secretary and a director of the Registrant
owns 0.2% of the outstanding shares of Davin Enterprises, Inc.
MODERN TECHNOLOGY CORP.
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
FILED WITH THE ANNUAL REPORT OF THE COMPANY
ON FORM 10-K
ITEM 14 - EXHIBITS
Financial Statements and Schedules and Reports on Form 8-K.
ACCOUNTANT'S REPORT
BALANCE SHEET AS OF JUNE 30, 1997 AND JUNE 30, 1996
STATEMENT OF STOCKHOLDERS' EQUITY FOR THE PERIOD JULY 1, 1994 TO
JUNE 30, 1997
STATEMENT OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 1995, 1996 AND
1997
STATEMENT OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 1995, 1996 AND
1997
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.
MODERN TECHNNOLOGY CORP.
FINANCIAL STATEMENTS
JUNE 30, 1997 AND 1996
I N D E X
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 1
CONSOLIDATED BALANCE SHEETS 2
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY 3
CONSOLIDATED STATEMENTS OF OPERATIONS 4
CONSOLIDATED STATEMENTS OF CASH FLOWS 5
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 6-10
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Stockholders
MODERN TECHNOLOGY CORP.
Belle Harbor, New York 11694
We have audited the accompanying consolidated balance sheets of
MODERN TECHNOLOGY CORP. as at June 30, 1997 and 1996 and the
related consolidated statements of operations and stockholders'
equity and cash flows for each of the three years in the period
ended June 30, 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 audit 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 statements presentation. We believe that our audits
provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements enumerated
above present fairly, in all material respects, the consolidated
financial position of MODERN TECHNOLOGY CORP. at June 30, 1997 and
1996, and the consolidated results of its operations and cash flows
for the three years in the period ended June 30, 1997, in
conformity with generally accepted accounting principles.
GREENBERG & COMPANY LLC
Springfield, New Jersey
August 15, 1997
Page 1 of 10
MODERN TECHNOLOGY CORP.
CONSOLIDATED BALANCE SHEETS
June 30,
1997 1996
A S S E T S
CURRENT ASSETS
Cash and Cash Equivalents $647,886 $616,268
EQUIPMENT - At Cost 9,939 9,939
Less: Accumulated Depreciation 9,939 9,939
-0- -0-
OTHER ASSETS
Investments, At Cost 49,770 74,770
Investments, At Equity -0- 16,005
Loan Receivable - Affiliate -0- 11,400
Deferred Tax Asset 7,375 -0-
Deferred Registration Costs 25,907 -0-
Other Assets 300 -0-
83,352 102,175
TOTAL ASSETS $731,238 $718,443
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
CURRENT LIABILITIES
Accrued Expenses and Taxes $ 3,219 $ 2,349
STOCKHOLDERS' EQUITY
Common Stock Par Value $.0001
Authorized: 150,000,000 Shares
Issued and Outstanding: 20,150,000
Shares 2,015 2,015
Paid-In Capital 495,161 495,161
Retained Earnings 230,843 218,918
728,019 716,094
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $731,238 $718,443
The accompanying notes are an integral part of these financial statements.
Page 2 of 10
MODERN TECHNOLOGY CORP.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD JULY 1, 1994 TO JUNE 30, 1997
Total
Par Retained Stock-
# of Value Paid-In Earnings holders'
Shares $.0001 Capital (Deficit) Equity
BALANCES AT
JULY 1, 1994 20,150,000 $2,015 $495,161 $237,013 $734,189
Net Income (Loss)
for the Year Ended
June 30, 1995 (14,375) (14,375)
BALANCES AT
JUNE 30, 1995 20,150,000 2,015 495,161 222,638 719,814
Net Income (Loss)
for the Year Ended
June 30, 1996 (3,720) (3,720)
BALANCES AT
JUNE 30, 1996 20,150,000 2,015 495,161 218,918 716,094
Net Income (Loss)
for the Year Ended
June 30, 1997 11,925 11,925
BALANCES AT
JUNE 30, 1997 20,150,000 $2,015 $495,161 $230,843 $728,019
The accompanying notes are an integral part of these financial statements.
Page 3 of 10
MODERN TECHNOLOGY CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
For The Years Ended June 30,
1997 1996 1995
REVENUES
Interest Income $33,445 $30,849 $ 31,108
Management Income 9,600 9,600 9,600
Gain on Securities Sales 29,940 -0- -0-
72,985 40,449 40,708
EXPENSES
Officers' Salaries 7,200 7,200 8,200
General and Administrative
Expenses 31,992 26,472 31,925
(Loss) on Worthlessness of
Affiliate (27,405) -0- -0-
Equity in (Loss) of
Affiliated Company -0- (9,486) (14,958)
66,597 43,158 55,083
INCOME (LOSS) BEFORE TAXES 6,388 (2,709) (14,375)
OTHER EXPENSES & TAXES
Income Tax (Expense) Benefit 5,537 (1,011) -0-
NET INCOME (LOSS) $11,925 $(3,720) $(14,375)
INCOME PER SHARE NIL NIL NIL
NUMBER OF WEIGHTED AVERAGE
SHARES OUTSTANDING 20,150,000 20,150,000 20,150,000
The accompanying notes are an integral part of these financial statements.
Page 4 of 10
MODERN TECHNOLOGY CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Years Ended June 30,
1997 1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 11,925 $ (3,720) $(14,375)
Adjustments to Reconcile Net Income
to Net Cash Provided By (Used In)
Operating Activities:
Changes in Assets and Liabilities:
Decrease (Increase) In Deferred Taxes (7,375) -0- -0-
Decrease (Increase) in Deferred
Registration Costs (25,907) -0- -0-
Decrease (Increase) in Other Assets (300) -0- -0-
Increase (Decrease) Accrued
Expenses and Taxes 870 1,149 -0-
Net Cash Provided By (Used In)
Operating Activities (20,787) (2,571) (14,375)
CASH FLOWS FROM INVESTING ACTIVITIES:
Write Down of Investments and Loan 27,405 9,486 14,958
Purchase (Sale) of Securities 25,000 (25,000) (65,449)
Loan - Affiliate -0- (11,400) -0-
Net Cash (Used In) Provided By
Investing Activities 52,405 (26,914) (50,491)
Net Increase (Decrease) in Cash
and Cash Equivalents 31,618 (29,485) (64,866)
Cash and Cash Equivalents,
Beginning of Year 616,268 645,753 710,619
CASH AND CASH EQUIVALENTS,
END OF YEAR $647,886 $616,268 $645,753
Supplemental Disclosures Of Cash Flow Information
Cash Paid During The Period For:
Taxes $ 623 $ -0- $ -0-
Interest $ -0- $ -0- $ -0-
The accompanying notes are an integral part of these financial statements.
Page 5 of 10
MODERN TECHNOLOGY CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1997 AND 1996
NOTE 1: ORGANIZATION AND NATURE OF OPERATIONS
Modern Technology Corp. (Modern) is a Nevada corporation.
Modern is engaged in aiding prospective clients in obtaining
financing and in providing managerial services to client
companies. Modern's office is located in New York. Modern's
clients are located throughout the world.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING POLICIES
Modern Technology Corp.'s accounting policies conform to
generally accepted accounting principles. Significant
policies followed are described below.
BASIS OF PRESENTATION
The accompanying consolidated financial statements include the
accounts of its wholly owned subsidiary Coral Development Corp
(Coral). All significant intercompany balances and
transactions have been eliminated in consolidation. Modern
invested $30,300 in Coral during the quarter ended December
31, 1996.
RECLASSIFICATIONS
Certain items from prior periods within the financial
statements have been reclassified to conform to current period
classifications.
CASH AND CASH EQUIVALENTS
Cash equivalents consist of highly liquid, short-term
investments with maturities of 90 days or less. The carrying
amount reported in the accompanying balance sheets
approximates fair value.
ESTIMATES IN FINANCIAL STATEMENTS
The preparation of 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 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.
Page 6 of 10
MODERN TECHNOLOGY CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1997 AND 1996
(Continued)
INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 109,
"Accounting for Income Taxes." SFAS 109 has as its basic
objective the recognition of current and deferred income tax
assets and liabilities based upon all events that have been
recognized in the financial statements as measured by the
provisions of the enacted tax laws.
Valuation allowances are established when necessary to reduce
deferred tax assets to the estimated amount to be realized.
Income tax expense represents the tax payable for the current
period and the change during the period in the deferred tax
assets and liabilities.
DEFERRED REGISTRATION COSTS
As of June 30, 1997, the Company's subsidiary, Coral, has
incurred deferred registration costs of $25,907 relating to
expenses incurred in connection with the Proposed Distribution
of Coral's securities. Upon consumation 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 3: INVESTMENT IN EQUITY SECURITIES (At Cost)
Investments in Non Marketable Equity Securities consist of the
following:
June 30, June 30,
1997 1996
Investment in 25,000 Shares
of Delta Three, Inc. $25,000 $25,000
Investment in TTR Inc.
10% Promissory Note -0- 25,000
Investment in 72 million
restricted shares in
Daine Industries, Inc. 15,900 15,900
Investment in 50,100,000
restricted shares in
Davin Enterprises, Inc. 7,950 7,950
Investments in other
restricted securities 920 920
$49,770 $74,770
Page 7 of 10
MODERN TECHNOLOGY CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1997 AND 1996
(Continued)
The Company purchased 72 million shares of Daine Industries,
Inc. stock at a cost of $15,900. This represents 29% of the
total outstanding shares of common stock.
The Company purchased 50,100,000 shares of Davin Enterprises,
Inc. at a cost of $7,950. This represents 25.8% of the total
outstanding shares of common stock.
The Company purchased an investment in TTR Inc., a 10%
promissory note in the amount of $25,000 with warrants for
4,000 shares exercisable at $.01 at the time of a TTR initial
public offering. TTR Inc. incorporated for the purpose of
designing, developing, and marketing computer software
products. During the quarter ended March 31, 1997, TTR
completed its initial public offering and repaid the note with
interest. The Company also exercised its warrants and
realized a gain of $29,940.
The Company purchased 25,000 shares of Delta Three Inc. for
$25,000. Delta Three, Inc. is a telecommunications provider
using Internet technology for voice transmission.
NOTE 4: INVESTMENT IN AFFILIATE
Investment in Soft Sail Wind Power Inc. (Soft Sail)
(representing approximately 36% of the outstanding common
stock).
The summarized unaudited financial information below
represents the Company's nonsubsidiary affiliate:
Balance Sheet Data at June 30, 1996
Total Assets $12,656
Total Liabilities 11,400
Net Assets 1,256
Company's Equity in Net Assets 452
Earnings Data
Net Earnings (Loss) (26,350)
Company's Equity in Net
Earnings (Loss) (9,486)
During the year ended June 30, 1997 the Company recognized a
complete loss on its investment and loan to Soft Sail. There
is no financial information available since June 30, 1996. At
the present time the Company does not believe Soft Sail will
be able to repay its debt to the Company and has therefore
considered its debt and equity investment in Soft Sail to be
worthless. The loss on the loan was $11,400 and the loss in
the current year on its equity investment was $16,005.
Page 8 of 10
MODERN TECHNOLOGY CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1997 AND 1996
(Continued)
NOTE 5: INCOME TAXES
The provision for income taxes is comprised of the
following:
6/30/97 6/30/96 6/30/95
Current $ 1,838 $1,011 $-0-
Deferred (7,375) -0- -0-
$(5,537) $1,011 $-0-
The provision for income taxes differs from the amount
computed by applying the statutory federal income rate as
follows:
6/30/97 6/30/96 6/30/95
Expected statutory amount $ 781 $1,011 $-0-
Net operating loss (7,375) -0- -0-
State income taxes, net
of federal benefit 1,057 -0- -0-
$(5,537) $1,011 $-0-
Deferred income taxes reflect the net tax effects of
temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes
and amounts used for income tax purposes and the impact
of available net operating loss carryforwards. The net
operating loss of approximately $25,000 will expire in
fiscal year June 30, 2012.
The tax effect of significant temporary differences,
which comprise the deferred tax assets are as follows:
6/30/97 6/30/96 6/30/95
Deferred tax assets:
Net operating loss
carry forwards $ 7,375 $-0- $-0-
Net deferred tax (assets) $(7,375) $-0- $-0-
NOTE 6: POSTRETIREMENT BENEFITS
The company does not maintain any employee benefits
currently. The company does not maintain a plan for any
postretirement employee benefits, therefore, no provision
was made under FAS's 106 and 112.
NOTE 7: RELATED PARTY TRANSACTIONS
Davin Enterprises, Inc. (Davin) entered into an oral
agreement with Modern Technology Corp. providing for the
partial use of office space for Davin on a month to month
basis. The company does not pay rent but pays a
management fee of $9,600 per year to Modern Technology
Corp. for services. There were no outstanding balances
between any companies.
Page 9 of 10
MODERN TECHNOLOGY CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1997 AND 1996
(Continued)
Arthur Seidenfeld, President and a director of the
Company, owns 14.5% of the outstanding shares of Daine
Industries, Inc. and 29.4% of the outstanding shares of
Davin Enterprises, Inc. Anne Seidenfeld, Treasurer,
Secretary and a director of the Company, owns 12% of the
outstanding shares of Modern Technology Corp. Anne
Seidenfeld is Arthur Seidenfeld's mother.
Page 10 of 10
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.
MODERN TECHNOLOGY CORP.
By Arthur J. Seidenfeld
President, Principal Executive Officer
and Principal Financial Officer
Dated: September 29, 1997
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 Title Date
Arthur Seidenfeld President and Director September 29, 1997
Anne Seidenfeld Treasurer, Secretary September 29, 1997
and Director
Gerald Kaufman Director September 29, 1997
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