-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WNe4BRbzp+zVfOe3Hw9Y6hAZgA3A9602y+wIiglhEgs0YbeajHwDCpc0hAgORq8s LWJMi7CXnegmxQQCHdnQsA== 0001011835-96-000004.txt : 19961122 0001011835-96-000004.hdr.sgml : 19961122 ACCESSION NUMBER: 0001011835-96-000004 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 DATE AS OF CHANGE: 19961121 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ORION ACQUISITION CORP II CENTRAL INDEX KEY: 0001011835 STANDARD INDUSTRIAL CLASSIFICATION: 6770 IRS NUMBER: 133863260 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-20837 FILM NUMBER: 96667248 BUSINESS ADDRESS: STREET 1: 1430 BROADWAY STREET 2: 13TH FL CITY: NEW YORK STATE: NY ZIP: 10018 BUSINESS PHONE: 2123911392 MAIL ADDRESS: STREET 1: 1430 BROADWAY 13TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10018 10QSB 1 QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: September 30, 1996 _ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 000-20837 Orion Acquisition Corp. II (Exact name of registrant as specified in its charter) Delaware 13-3863260 (State of Incorporation) (I.R.S. Employer Identification No.) 1430 Broadway, 13th Floor New York, New York 10018 10018 (Address of principal executive office) (Zip code) Registrant's telephone number, including area code: (212)391-1392 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 Exchange Act of 1934 during the preceding 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 ___ Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 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 X No ___ As of October 31, 1996, 890,000 shares of Common Stock were issued and outstanding. PART 1. FINANCIAL INFORMATION ITEM 1: Financial Statements ORION ACQUISITION CORP. II (A Corporation in the Development Stage) STATEMENTS OF OPERATIONS (Unaudited) Period From Inception (October 19, 1995) Three Months Ended Nine Months Ended through September 30, September 30, September 30, 1996 1996 1996 Interest income $ 100,770 $ 102,584 $ 102,584 Interest expense -- (57,694) (57,694) Operating expense (35,913) (35,913) (35,913) _____________ ____________ _____________ Income before income taxes 64,857 8,977 8,977 Income taxes (2,500) (2,500) (2,500) _____________ ____________ ______________ Net income $ 62,357 $ 6,477 $ 6,477 _____________ ___________ ______________ Primary and fully-diluted earnings per share $ .05 $ .09 ____________ ____________ Weighted average common and common equivalent shares outstanding 2,422,000 799,000 See Notes to Unaudited Financial Statements
ORION ACQUISITION CORP. II (A Corporation in the Development Stage) BALANCE SHEET (Unaudited) September 30, 1996 ASSETS Cash $ 672,262 Restricted cash 9,324 US Treasury Bonds - restricted 7,998,644 Accrued investment interest receivable 90,980 ______________ Total assets $ 8,771,210 ______________ LIABILITIES AND STOCKHOLDERS' EQUITY Accrued expenses $ 23,328 Common stock subject to possible conversion 159,920 shares at redemption value, 1,600,793 Stockholders' equity: Convertible preferred stock, $.01 par value, 1,000,000 shares authorized: 110 shares issued and outstanding 1 Common stock, $.01 par value, 10,000,000 shares authorized; 890,000 shares issued and outstanding (which includes shares subject to possible redemption) 8,900 Additional paid-in capital 7,133,304 Retained earnings 4,884 _____________ Total stockholders' equity 7,147,089 _____________ Total liabilities and stockholders' equity $ 8,771,210 _____________ See Notes to Unaudited Consolidated Financial Statements
ORION ACQUISITION CORP. II (A Corporation in the Development Stage) STATEMENTS OF CASH FLOWS (Unaudited) Period From Inception (October 19, 1995) Nine Months Ended through September 30, September 30, 1996 1996 Cash flows from operating activities: Net income $ 6,477 $ 6,477 Changes in working capital: Increase in accrued investment receivables (90,980) (90,980) Increase (decrease) in accounts payable and accrued expenses 23,328 23,328 _________________ __________________ Cash used in operating activities (61,175) (61,175) _________________ __________________ Cash flows from investing activities: Purchase of U.S. Treasury Bonds and other increases in restricted cash (8,007,968) (8,007,968) _________________ ___________________ Cash flows from financing activities: Issue of Units and Redeemable Class B Purchase Warrants, net of underwriting discounts 9,330,738 9,330,738 Public offering expenses (589,333) (589,333) _________________ ___________________ Cash provided by financing activities 8,741,405 8,741,405 _________________ ___________________ Net increase in cash 672,262 672,262 Cash at beginning of period -- -- _________________ __________________ Cash at end of Period $ 672,262 $ 672,262 _________________ __________________ See Notes to Unaudited Financial Statements
ORION ACQUISITION CORP. II (A Corporation in the Development Stage) NOTES TO UNAUDITED FINANCIAL STATEMENTS 1. Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with instructions to Form 10-Q and do not include all 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 which were of a normal and recurring nature have been included. The results of operations for any interim period are not necessarily indicative of the results for the year. These unaudited financial statements should be read in conjunction with Form 8-K filed with the Securities and Exchange Commission on July 12, 1996. 2. Organization and Business Operations Orion Acquisition Corp. II (the "Company") was incorporated in Delaware on October 19, 1995 for the purpose of raising capital to fund the acquisition of an unspecified operating business. All activity to date relates to the Company's formation and fund raising. The Company has selected December 31, as its fiscal year end. The registration statement for the Company's Initial Public Offering (the "Offering") became effective on July 2, 1996. The Company consummated the Offering on July 9, 1996 and raised net proceeds of $8,891,293 (see Note 3). The Company's management has broad discretion with respect to the specific application of the net proceeds of the Offering, although substantially all of the net proceeds of the Offering are intended to be generally applied toward consummating a business combination with an operating business ("Business Combination"). Furthermore, there is no assurance that the Company will be able to successfully effect a Business Combination. An aggregate of $8,000,000 of the net proceeds will be held in an escrow account which will be invested until released in short-term United States Government Securities, including treasury bills and cash and cash equivalents ("Proceeds Escrow Account"), subject to release at the earlier of (i) consummation of its first Business Combination or (ii) liquidation of the Company (see below). The remaining proceeds will be used to pay for business, legal and accounting due diligence on prospective acquisitions, costs relating to the Offering and continuing general and administrative expenses in addition to other expenses. The Company, prior to the consummation of any Business Combination, will submit such transaction to the Company's stockholders for their approval, even if the nature of the acquisition is such as would not ordinarily require stockholder approval under applicable state law. All of the Company's original stockholders, including all directors and the Company's executive officers, have agreed to vote their respective shares of common stock in accordance with the vote of the majority of the shares voted by all other stockholders of the Company ("non-affiliated public stockholders") with respect to any such Business Combination. A Business Combination will not be consummated unless approved by a vote of two-thirds of the shares of common stock owned by non-affiliated public stockholders. At the time the Company seeks stockholder approval of any potential Business Combination, the Company will offer ("Redemption Offer") each of the non-affiliated public stockholders of the Company the right, for a specified period of time not less than 20 calendar days, to redeem his shares of common stock. The per share redemption price ("Liquidation Value") will be determined by dividing the greater of (i) the Company's net worth or (ii) the amount of assets of the Company in the escrow account including all interest earned thereon by the number of shares held by such non-affiliated public stockholders. In connection with the Redemption Offer, if non-affiliated public stockholders holding less than 20% of the common stock elect to redeem their shares, the Company may, but will not be required to, proceed. The Company will redeem such shares by applying the Liquidation Value to the number of shares to be redeemed. In any case, if non-affiliated public stockholders holding 20% or more of the common stock elect to redeem their shares, the Company will not proceed with such potential Business Combination and will not redeem such shares. Accordingly, a portion of the net proceeds from the Offering (19.99% of the amount held in the Trust Fund) has been classified as common stock subject to possible redemption in the accompanying balance sheet at the estimated redemption value. All shares of the common stock outstanding immediately prior to the date of the Offering have been placed in escrow until the earlier of (i) the occurrence of the first Business Combination, (ii) 18-months from the effective date of the Offering or (iii) 24-months from the effective date of the Offering if prior to the expiration of such 18-month period the Company has become a party to a letter of intent or a definitive agreement to effect a Business Combination, in which case such period, shall be extended six months. During the escrow period, the holders of escrowed shares of common stock will not be able to sell or otherwise transfer their respective shares of common stock (with certain exceptions), but will retain all other rights as stockholders of the Company, including without limitation, the right to vote escrowed shares in accordance with a vote of a majority of the shares voted by non-affiliated public stockholders with respect to a Business Combination or liquidation proposal. If the Company does not effect a Business Combination within 18-months from the effective date or 24-months from the effective date if the extension criteria have been satisfied, the Company will submit for stockholder consideration a proposal to liquidate the Company and , if approved, distribute to the then holders of common stock (issued in the Offering or acquired in the open market thereafter) all assets remaining available for distribution after payment of liabilities and after having made appropriate provisions for the payment of liquidating distributions upon each class of stock, if any, having preference over the common stock. 3. Public Offering On July 9, 1996 the Company sold 800,000 units ("Units") in the Offering and 320,000 Class B redeemable common stock purchase warrants ("Class B Warrant"). Subsequently, on August 5, 1996, the underwriters exercised their overallotment option to purchase 48,000 Class B Warrants. Each Unit consists of one share of the Company's common stock and one Class A redeemable common stock purchase warrant ("Class A Warrant"). Each Class A Warrant entitles the holder to purchase from the Company one share of common stock at an exercise price of $9.00 commencing on the date of a Business Combination and expiring on the fifth anniversary from such date, and each Class B Warrant entitles the holder to purchase one Unit at an exercise price of $0.125 commencing on the date of a Business Combination and expiring on the first anniversary from such date. The Class A Warrants and Class B Warrants are redeemable, each as a class, in whole and not in part, at a price of $.05 per warrant upon 30 days notice at any time provided that the Company has consummated a Business Combination and the last sale price of the common stock on all ten trading days ending on the day immediately prior to the day on which the Company gives notice of redemption, has been $11.00 or higher. 4. Investments A substantial portion of the assets of the Company are invested in U.S. Treasury Bonds having maturities up to one year. Aggregate market value of these securities as of September 30, 1996, totaled approximately $7,899,000. These securities, in addition to the restricted cash as shown on the balance sheet, are held in an escrow account with a bank. The ultimate use of these funds are restricted as described in Note 2. 5. Stockholders' Equity (a) Private Placement In January 1996, the Company completed a private offering to a limited group of investors which consisted, in aggregate, of $100,000 in unsecured promissory notes bearing interest at 8% per annum. The notes were repaid on the consummation of the Company's Offering together with accrued interest totaling $3,533. In addition, the Company also issued to the private placement investors 15,000 shares of common stock for $7,500. The notes were discounted $37,500 for financial statement reporting purposes as a result of the fair value attributed to the common stock issued to the private placement shareholders. The effective rate on the notes was approximately 45%. (b) Preferred Stock The Company is authorized to issue 1,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors. The Company has outstanding 110 shares of Series A preferred stock which is owned by CDIJ Capital Partners, L.P., an indirect affiliate of Bright Licensing Corp. The purchase price for such shares was $11,000 in the aggregate, which was paid simultaneously with the consummation of the Offering. The Series A preferred stock are non-voting and are each convertible into 1,000 shares of common stock for a period of one year following the consummation of a Business Combination. In the event that a Business Combination does not occur within 18-months from the effective date, or 24-months from the effective date if the extension criteria are satisfied, the Series A preferred stock will be redeemed by the Company at its original cost basis. (c) Options The Company has granted options to purchase 100,000 Units to Cranbrooke Corporation, a Delaware corporation which is affiliated with two officers of the Company. The option is exercisable for a period of three years from the date of a Business Combination at an exercise price of $12.50 per Unit. The option is fully vested; however, the options will be canceled if Mr. Kramer and Mr. Remley cease to serve as directors or executive officers of the Company prior to the Business Combination. The shares issuable upon exercise of the options and underlying warrants may not be sold or otherwise transferred for 120 days subsequent to the first Business Combination. 6. Commitments On September 6, 1996, the Company entered into an agreement with Ladenburg, Thalmann & Co., Inc. ("Ladenburg") to assist the Company as its exclusive financial advisor in connection with its acquisition targeting activities. The Company will pay the monthly sum of $3,500 to Ladenburg as a retainer for these services through the life of this agreement which expires on January 8, 1998. ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The Company has commenced activities associated with performing due diligence and structuring activities on potential acquisition target companies. However, the Company has been unsuccessful thus far in locating a viable transaction for shareholder approval. Results for the period to September 30, 1996, consisted of investment income earned from Treasury bonds held in escrow less expenses associated with general and administrative overheads and due diligence activities. PART II - 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 Information None ITEM 6: Exhibits and Reports on Form 8-K (a) Exhibits: Exhibit 27: Financial Data Schedule for the Quarterly Form 10-Q (b) Reports on Form 8-K: Referenced to filing of Form 8-K dated as of July 12, 1996 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ORION ACQUISITION CORP. II Dated: November 14, 1996 By: /s/William L. Remley William L. Remley President & Treasurer EX-27 2
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