-----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, BL1IeB71qIVI/VLT7lNtRRSP9GsrtwBEhz0RWzUsL+0kqr2t/fJq9QAT0pgz9AAD JNTfvMGqHOt3FW1IPXa5BQ== 0001094891-00-000341.txt : 20000516 0001094891-00-000341.hdr.sgml : 20000516 ACCESSION NUMBER: 0001094891-00-000341 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ORION ACQUISITION CORP II CENTRAL INDEX KEY: 0001011835 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 133863260 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-20837 FILM NUMBER: 634461 BUSINESS ADDRESS: STREET 1: 100 WILSHIRE BOULEVARD SUITE 1750 STREET 2: 13TH FL CITY: SANTA MONICA STATE: CA ZIP: 90401 BUSINESS PHONE: 2123911392 MAIL ADDRESS: STREET 1: 100 WILSHIRE BOULEVARD SUITE 1750 CITY: SANTA MONICA STATE: CA ZIP: 90401 10QSB 1 QUARTERLY REPORT ON FORM 10-QSB UNITED STATES 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: March 31, 2000 _ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-20837 Orion Acquisition Corp. II (Exact name of registrant as specified in its charter) Delaware 13-3863260 (State of Incorporation) (IRS Employer Identification No.) 401 Wilshire Boulevard - Suite 1020 Santa Monica, CA 90401 (Address of principal executive office) (Zip code) Registrant's telephone number, including area code: (310) 526-5000 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 ___ --- As of May 1, 2000, 890,000 shares of Common Stock were issued and outstanding. PART I. FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS ORION ACQUISITION CORP. II (a corporation in the development stage) BALANCE SHEETS March 31, December 31, 2000 1999 ---- ---- (Unaudited) ASSETS - ------ Cash $ 416,124 $522,187 US Treasury bills 1,519,763 1,506,615 Other assets 29,628 17,060 --------- --------- Total Assets $1,965,515 $2,045,862 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Accrued expenses $ 45,224 $121,263 Stockholders' equity: Convertible preferred stock, $.01 par value, 1,000,000 shares authorized; 1 1 110 shares issued and outstanding Common stock, $.01 par value 10,000,000 shares authorized; 890,000 shares issued and outstanding 8,900 8,900 Additional paid-in capital 1,908,145 1,908,145 Earnings accumulated during development stage 3,245 7,553 --------- --------- Total stockholders' equity 1,920,292 1,924,599 --------- --------- Total liabilities and stockholders' equity 1,965,515 $2,045,862 ========= ========== See notes to accompanying unaudited financial statements. 2 ORION ACQUISITION CORP. II (a corporation in the development stage) STATEMENTS OF OPERATIONS (Unaudited) Three Months October 19, Ended 1995 (inception) March 31, through 2000 1999 March 31, 2000 ---- ---- ---- Interest income $ 14,085 $ 91,050 $ 1,403,277 General and administrative expense (18,393) (15,611) (672,915) Stock based compensation expense - - (100,000) Interest expense - - (57,694) --------- ---------- ------------- Income (Loss) before income taxes (4,308) 75,439 572,668 Provision for income taxes - (35,591) (293,782) --------- ----------- -------------- Net (loss) income $ (4,308) $ 39,848 $ 278,886 ========== ============ =========== Earnings per share: Basic (0.00) $ 0.04 ========== =========== Diluted $ (0.00) $ 0.04 ========== =========== Weighted average common shares outstanding: Basic 890,000 890,000 ========== ========== Diluted 890,000 890,000 ========== ==========
See notes to accompanying unaudited financial statements. 3 ORION ACQUISITION CORP. II (a corporation in the development stage) STATEMENTS OF CASH FLOWS (Unaudited) October 19, 1995 (inception) through Three Months Ended March 31, March 31, 2000 1999 2000 ---- ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income ($ 4,308) $ 39,848 $ 278,886 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Note discount amortization - - 37,500 Stock based compensation expense - - 100,000 Changes in working capital: Increase in other assets (12,568) - (29,628) Increase (Decrease) in accrued expenses (76,039) 45,151 45,224 --------- ------------ ---------- Cash provided by (used in) operating activities: (92,915) 84,999 231,181 --------- ------------ ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of U.S. Treasury bills and other increases in restricted cash (13,148) (90,950) (1,519,763) --------- ----------- ---------- Cash provided by (used in)investing activities (13,148) (90,950) (1,519,763) --------- ------------ ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Dividend - - (7,200,000) Issue of units and redeemable Class B Purchase warrants, net of public offering expenses - - 8,677,905 Issuance of unsecured promissory notes - - 100,000 Repayment of unsecured promissory notes - - (100,000) Proceeds from related party note - - 35,000 Repayment of related party note - - (35,000) Issuance of founders' shares - - 7,500 Issuance of private placement shares - - 7,500 Issuance of convertible preferred stock - - 11,000 --------- ------------ ------------- Cash provided by financing activities - - 1,503,985 --------- ------------ ----------- NET (DECREASE) INCREASE IN CASH (106,063) (5,951) 416,124 Cash at beginning of period 552,187 11,902 - --------- ------------ ------------- Cash at end of period $ 416,124 $ 5,951 $ 416,124 =========== ============= =============
See notes to accompanying unaudited financial statements. 4 ORION ACQUISITION CORP. II (a corporation in the development stage) NOTES TO UNAUDITED FINANCIAL STATEMENTS NOTE 1 - 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 ("Business Combination"). All activity to date relates to the Company's formation and fund raising. To date, the Company, as a development stage company, has not effected a Business Combination. All shares of the common stock outstanding immediately prior to the date of the Offering have been placed in escrow until the occurrence of the first Business Combination. NOTE 2 - PRESENTATION OF INTERIM INFORMATION The amounts included in this report are unaudited; however, in the opinion of management, all adjustments necessary for a fair statement of results for the stated periods have been included. These adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these financial statements be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Form 10-KSB under the Securities Act of 1934 as filed with the Securities and Exchange Commission. The results of operations for the three months ended March 31, 2000 are not necessarily indicative of operating results for the entire year. NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Net Earnings Per Common Share In 1997, the Financial Accounting Standards Boards issued Statement of Financial Accounting Standards No. 128, Earnings Per Share ("SFAS 128"). SFAS 128 replaced the previously reported primary and fully diluted earnings per 5 share with basic and diluted earnings per share. Unlike primary earnings per share, basic earnings per share exclude any dilutive effects of options, warrants, and convertible securities. Diluted earnings per share is very similar to the previously reported fully diluted earnings per share. All earnings share amounts for all periods have been presented, and where necessary, restated to conform to the SFAS 128 requirements. Net earnings per common share for the quarters ending March 31, 1999 and 2000 are computed by dividing net earnings by the weighted average common shares outstanding during the year. The assumed exercise of common stock equivalents was not utilized due to their exercise being predicated on the consummation of a Business Combination. (b) Income Taxes The Company follows the Statement of Financial Accounting Standards No. 109. This statement requires that deferred income taxes based on the consequences of temporary differences between the financial carrying amounts and tax bases of existing assets and liabilities be recorded based on the asset and liability method of accounting which is adjusted periodically when statutory income tax rates change. Deferred taxes are not material. (c) Use of Estimates In preparing financial statements in conformity with generally accepted accounting principals, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates. (d) Fair Value of Financial Instruments The carrying values of financial instruments including cash and U.S. Treasury bills, approximate fair value at March 31, 1999 and 2000. (e) Stock Options In October 1995, the FASB issued SFAS No. 123 "Accounting for Stock-Based Compensation ("SFAS 123"). SFAS 123 allows companies to choose whether to account for stock-based compensation on the fair value method or to continue to account for stock-based compensation under the current intrinsic value method as prescribed by APB Opinion No. 25, "Accounting for Stock Issued to Employees." The Company adopted the disclosure alternative under SFAS 123 during 1996 and will continue to follow the provisions of APB Opinion No. 25. (f) Comprehensive Income Statement of Financial Accounting Standard No. 130. "Reporting Comprehensive Income", ("SFAS 130") issued by the FASB is effective for financial statements with fiscal years beginning after December 15, 1997. Earlier application is permitted. SFAS 130 establishes standards for reporting and display or comprehensive income and its components in a full set of general purpose financial statements. The Company adopted SFAS 130 and it did not have any effect on its financial position or results of operations. NOTE 4 - INVESTMENTS A substantial portion of the assets of the Company are invested in U.S. Treasury Bills having various maturities of less than 6 months. The Company classifies these securities as held to maturity. Aggregate cost basis and market value of these securities as of March 31, 2000 totaled approximately $1,519,762.50. No unrealized holding gains or losses have been realized. 6 NOTE 5 - RELATED PARTIES Richard C. Hoffman was secretary and a director of the Company until April 30, 1999 and during that time acted as general counsel to the Company. The Company utilized Richard C. Hoffman, P.C., a law firm of which Mr. Hoffman is sole shareholder, for legal services in connection with Company activities. Fees paid by the Company for these services totaled approximately $-0- for the year ended December 31, 1999. On May 5, 1999 and July 20, 1999, MDB Capital Group LLC lent to the Company an aggregate of $35,000. This loan was represented by unsecured promissory notes due on demand, bearing no interest. The proceeds of these loans were used for working capital. The principal on these loans was repaid on December 8, 1999. Each of Christopher A. Marlett, Anthony DiGiandomenico, James D. Bowyer and Dyana Williams Marlett are officers and/or directors of the Company and principals and/or employees of MDB Capital Group LLC. NOTE 6 - LEGAL PROCEEDINGS On July 1, 1999, a Class B Warrantholder of the Company brought suit against the Company, its former directors and certain others. On January 31, 2000, the plaintiff filed a notice dismissing the action without prejudice. On January 28, 2000 the court ordered the notice of dismissal. The Company and the plaintiff agreed that the Company will make an exchange offer to all holders of the Class B Warrants. Upon payment of an exercise price of $0.125 per Class B Warrant, each Class B Warrant will be exchanged for one share of Common Stock, one Class A Warrant and one Right. The Right will be convertible into shares of common stock based on a formula in the event that the Company makes an acquisition or consummates a merger and the post-transaction company results in a $7,000,000 increase in the net worth of the Company immediately after the transaction and the common stock does not meet a minimum price of $5.75 for ten days during the two year period following the transaction, subject to certain adjustments, terms and conditions. The record date of the proposed exchange offer has not been determined. The exchange offer will be made by means of a registration statement filed with the Securities and Exchange Commission. The Company anticipates that the offering will be made before June 30, 2000. The former directors of Orion Acquisition Corp. II who were named as defendants in the suit, have made demand upon the company for reimbursement of attorney's fees incurred in defense of the suit prior to its voluntary dismissal. The former directors contend they are entitled to reimbursement of attorneys' fees under a provision of Delaware corporate law. The Company is considering the reimbursement request. No accrual has been made for any potential reimbursement in the accompanying financial statements. ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION Results for the three-month period ending March 31, 2000, consisted of investment income earned from Treasury bills less expenses associated with general and administrative overheads and litigation expenses. Results for the three months ended March 31, 1999 consisted of investment income earned from Treasury bils held in escrow less expenses associated with general and administrative overheads. The Company continues to search for a suitable company to complete a business combination or merger. There remains adequate cash on hand to bear the costs of due diligence or legal fees necessary to locate and evaluate potential candidates for a business combination. If a candidate is found the company may need to raise additional funds to complete the acquisition. 7 PART II. OTHER INFORMATION ITEM 1: Legal Proceedings On July 1, 1999, a Class B Warrantholder of Orion brought suit against Orion, its former directors and certain others in the United States District Court for the Southern District of New York (99 CIV. 4782). On January 31, 2000, the plaintiff filed a notice dismissing the action without prejudice. On January 28, 2000 the court ordered the notice of dismissal. Orion and the plaintiff agreed that Orion will make an exchange offer to all holders of the Class B Warrants. Upon payment of an exercise price of $0.125 per Class B Warrant, each Class B Warrant will be exchanged for one share of common stock, one Class A Warrant and one Right. The Right will be convertible into shares of common stock based on a formula in the event that Orion makes an acquisition or consummates a merger and the post transaction company results in a $7,000,000 increase in the net worth of the company immediately after the transaction and the common stock does not meet a minimum price of $5.75 for ten days during the two year period following the transaction, subject to certain adjustments, terms and conditions. The record date of the proposed exchange offer has not be determined. The exchange offer will be made by means of a registration statement filed with the Securities and Exchange Commission. Orion anticipates that the offering will be made before June 30, 2000. The former directors of Orion who were named as defendants in the suit, have made demand upon Orion for reimbursement of attorney's fees incurred in defense of the suit prior to its voluntary dismissal. The former directors contend they are entitled to reimbursement of attorneys' fees under a provision of Delaware corporate law. Orion is considering the reimbursement request. 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-QSB (b) Reports on Form 8-K: None. 8 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: May 15, 2000 By: /s/ Christopher A. Marlett ------------------------------- Christopher A. Marlett Chairman, President, and CEO 9 EXHIBIT INDEX Exhibit Number Description 27 Financial Data Schedule (3/31/00) EX-27 2 FINANCIAL DATA SCHEDULE
5 3-mos DEC-31-2000 MAR-31-2000 416,124 1,519,763 0 0 0 29,628 0 0 1,965,515 45,224 0 8,900 0 1 1,908,145 1,965,515 0 14,086 0 0 18,393 0 0 (4,308) 0 (4,308) 0 0 0 (4,308) .00 .00
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