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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 27, 1997
North Atlantic Acquisition Corp.
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(Exact name of registrant as specified in its charter)
Delaware 0-22813 13-3853272
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
5 East 59th Street, 3rd Floor, New York, New York 10022
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(Address of principal executive offices) (Zip Code)
(212) 750-5822
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(Registrant's telephone number, including area code)
Orion Acquisition Corp. I 850 Third Avenue, 10th Floor, New York, New York 10022
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(Former name or former address, if changed since last report.)
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Item 5. OTHER EVENTS
The following are the balance sheets of North Atlantic Acquisition Corp.
(formerly Orion Acquisition Corp. I) (the "Company"), at August 31, 1996 and
August 27, 1997, audited by the Company's accountants, BDO Seidman, LLP. The
Company closed its initial public offering of 800,000 Units, consisting of
800,000 shares of Class A Common Stock and 800,000 Redeemable Class A Common
Stock Purchase Warrants, and 150,000 shares of Exchangeable Class B Common
Stock on August 27, 1997.
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
North Atlantic Acquisition Corp.
(formerly Orion Acquisition Corp. I)
New York, New York
We have audited the accompanying balance sheets of North Atlantic Acquisition
Corp. (formerly Orion Acquisition Corp. I) (a corporation in the development
stage) as of August 31, 1996 and August 27, 1997. These balance sheets are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these balance sheets based on 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 balance sheets are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the balance sheets. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the balance sheets referred to above present fairly, in all
material respects, the financial position of North Atlantic Acquisition Corp. as
of August 31, 1996 and August 27, 1997, in conformity with generally accepted
accounting principles.
/s/ BDO Seidman, LLP
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BDO Seidman, LLP
New York, New York
August 28, 1997
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NORTH ATLANTIC ACQUISITION CORP.
(FORMERLY ORION ACQUISITION CORP. I)
(A CORPORATION IN THE DEVELOPMENT STAGE)
BALANCE SHEETS
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<TABLE>
<CAPTION>
August 31, August 27,
1996 1997
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<S> <C> <C>
ASSETS
CURRENT:
Cash $ 25,734 $ 400,535
Cash in escrow (Note 2) - 8,000,000
Deferred registration costs (Note 1) 177,792 -
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$203,526 $8,400,535
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT:
Accrued expenses $ 98,099 $ 124,931
Notes payable, net of discount (Note 5) 82,912 100,000
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TOTAL CURRENT LIABILITIES 181,011 224,931
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COMMITMENTS (NOTE 4)
COMMON STOCK SUBJECT TO POSSIBLE CONVERSION, 160,000 SHARES
AT REDEMPTION VALUE (NOTE 2) - 1,600,000
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STOCKHOLDERS' EQUITY (NOTES 1, 2, 3 AND 5):
Convertible preferred stock, $.01 par value - shares authorized
100 and 1,000,000, respectively; outstanding none;
subscribed 94; liquidation value - $9,400 1 1
Subscription receivable (9,400) (9,400)
Class A common stock, $.01 par value - shares authorized
200,000 and 10,000,000, respectively; outstanding
106,000 and 906,000, respectively 1,060 9,060
Class B common stock, $.01 par value - shares authorized
250,000; issued and outstanding none and 150,000,
respectively - 1,500
Additional paid-in capital 61,939 6,636,948
Deficit accumulated during the development stage (31,085) (62,505)
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TOTAL STOCKHOLDERS' EQUITY 22,515 6,575,604
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$203,526 $8,400,535
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See accompanying notes to balance sheets.
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NORTH ATLANTIC ACQUISITION CORP.
(FORMERLY ORION ACQUISITION CORP. I)
(A CORPORATION IN THE DEVELOPMENT STAGE)
NOTES TO BALANCE SHEETS
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1. SUMMARY OF DEFERRED REGISTRATION COSTS
SIGNIFICANT
ACCOUNTING POLICIES Registration costs primarily represent professional
fees and a license fee relating to the Offering. In
November 1995, the Company entered into a license
agreement with Bright Licensing Corp. for the right
to use certain servicemarks for the sole purpose of
marketing such Offering at a cost of $100,000. As a
result of the consummation of the Offering on
August 27, 1997, all deferred registration costs
were charged to stockholders' equity upon completion
of the Offering.
DEFERRED DEBT COSTS
Net unamortized costs incurred in connection with
the notes payable (Note 5(a)) of $9,800 were
amortized over six months (the estimated term of the
debt) using the straight-line method. Amortization
expense was $9,800 for the period from September 1,
1995 (inception) to August 31, 1996.
INCOME TAXES
The Company follows the Financial Accounting
Standards Board ("FASB") Statement No. 109. This
statement requires that deferred income taxes be
recorded following the liability method of
accounting and be adjusted periodically when income
tax rates change.
As of August 31, 1996, the Company has a net
operating loss carryforward of approximately $31,000
which results in a deferred tax asset of
approximately $12,000, which has been offset by a
valuation allowance.
ESTIMATES
The preparation of balance sheets 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 balance sheets.
Actual results could differ from those estimates.
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NORTH ATLANTIC ACQUISITION CORP.
(FORMERLY ORION ACQUISITION CORP. I)
(A CORPORATION IN THE DEVELOPMENT STAGE)
NOTES TO BALANCE SHEETS
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2. ORGANIZATION AND The Company was incorporated in Delaware on
BUSINESS OPERATIONS August 9, 1995 to acquire an operating business.
Operations did not occur until September;
accordingly, financial statements have been
presented commencing on September 1, 1995. At
August 27, 1997, the Company had not yet commenced
any formal business operations and all activity to
date relates to the Company's formation and proposed
fund raising.
The Registration Statement for the Company's Initial
Public Offering (the "Offering") became effective
August 22, 1997. The Company consummated the
Offering on August 27, 1997 and raised net proceeds
of approximately $8,200,000 (see Note 3). The
Company's management has broad discretion with
respect to the specific application of the net
proceeds of this offering, although substantially
all of the net proceeds of this 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 is being
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) distribution of the Class A stock
(see below). Therefore, the remaining proceeds from
the offering will be used to pay for business, legal
and accounting, due diligence on prospective
acquisitions, costs relating to the public 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
present stockholders, including all directors and
the Company's executive officer, have agreed to vote
their respective shares of Class A stock in
accordance with the vote of the majority of the
shares voted by all other stockholders of the
Company ("nonaffiliated 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 nonaffiliated public stockholders.
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NORTH ATLANTIC ACQUISITION CORP.
(FORMERLY ORION ACQUISITION CORP. I)
(A CORPORATION IN THE DEVELOPMENT STAGE)
NOTES TO BALANCE SHEETS
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At the time the Company seeks stockholder approval
of any potential Business Combination, the Company
will offer ("Redemption Offer") each of the
nonaffiliated public Class A stockholders the right,
for a specified period of time not less than 20
calendar days, to redeem his shares of Class A
stock. The per share redemption price 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 of
Class A stock held by such nonaffiliated public
stockholders. In connection with the Redemption
Offer, if nonaffiliated public stockholders holding
less than 20% of the Class A stock elect to redeem
their shares, the Company may, but will not be
required to, proceed with such Business Combination
and, if the Company elects to so proceed, will
redeem such shares by dividing (a) the greater of
(i) the Company's net worth as reflected in the
Company's financial statements or (ii) the amount of
the proceeds of the Company in the escrow account by
(b) the number of shares of Class A stock held by
nonaffiliated public stockholders ("Liquidation
Value"). In any case, if nonaffiliated public
stockholders holding 20% or more of the Class A
stock elect to redeem their shares, the Company will
not proceed with such potential Business Combination
and will not redeem such shares.
All shares of the escrowed stock outstanding
immediately prior to the date of the Offering will
be 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 of Class A stock, subject to their agreement
to vote their shares in accordance with a vote of a
majority of the shares voted by nonaffiliated public
stockholders with respect to a Business Combination
or liquidation proposal.
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NORTH ATLANTIC ACQUISITION CORP.
(FORMERLY ORION ACQUISITION CORP. I)
(A CORPORATION IN THE DEVELOPMENT STAGE)
NOTES TO BALANCE SHEETS
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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 distribute to the then holders of Class A stock
(issued in the Offering or acquired in the open
market thereafter) in redemption of such shares, the
amounts in the escrow account. Following such
redemption of Class A stock, each outstanding share
of Class B stock will be exchanged for two shares of
Class A stock.
In the event of liquidation, it is likely that the
per share value of the residual assets remaining
available for distribution to the holders of common
stock purchased in the Offering (including escrow
account assets) will approximately equal the initial
public offering price per unit in the Offering.
3. PUBLIC OFFERING On August 27, 1997, the Company sold 800,000 units
("Units") in the Offering and 150,000 shares of
Class B exchangeable common stock. Each Unit
consists of one share of the Company's Class A
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; each Class B Stock entitles the
holder to receive two Units in exchange 90 days
after the date of a Business Combination. The Class
A 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's stockholders have approved a Business
Combination and the last sale price of the common
stock, if the common stock is listed for trading on
all 10 of the trading days prior to the day on which
the Company gives notice of redemption, has been
$11.00 or higher.
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NORTH ATLANTIC ACQUISITION CORP.
(FORMERLY ORION ACQUISITION CORP. I)
(A CORPORATION IN THE DEVELOPMENT STAGE)
NOTES TO BALANCE SHEETS
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Concurrent with the Offering, the Company amended
and restated its certificate of incorporation to
increase its authorized common stock to 10,250,000
shares, of which 10,000,000 shares are designated
Class A stock and 250,000 shares are designated
Class B stock. The Company also increased its
authorized preferred stock to 1,000,000 shares. The
financial statements have been retroactively
adjusted for this change for all periods presented.
4. COMMITMENTS The Company has entered into an oral agreement with
David J. Mitchell, Chairman of the Board and Chief
Executive Officer, to lease office space, as well as
certain office and secretarial services, commencing
upon the closing of this Offering. The Company will
pay $2,500 per month to Mr. Mitchell for their
provision of such services.
5. STOCKHOLDERS' EQUITY (A) PRIVATE PLACEMENT
In November 1995, the Company completed a
private offering to a limited group of
investors which consisted, in the aggregate, of
$100,000 in unsecured promissory notes bearing
interest at 8% per annum. As of August 27,
1997, the notes, together with accrued
interest, were not repaid. In addition, the
Company also issued to the private placement
investors 20,000 shares of common stock for
$10,000. The notes have been discounted $35,000
for financial reporting purposes as a result of
additional fair value attributed to the common
stock issued to the private placement
shareholders. The effective rate on the notes
is approximately 45%.
(B) PREFERRED STOCK
The Company is authorized to issue 1,000,000
shares of "blank check" preferred stock with
such designations, voting and other rights and
preferences as may be determined from time to
time by the Board of Directors.
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NORTH ATLANTIC ACQUISITION CORP.
(FORMERLY ORION ACQUISITION CORP. I)
(A CORPORATION IN THE DEVELOPMENT STAGE)
NOTES TO BALANCE SHEETS
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The Company has outstanding 94 shares of
Series A preferred stock, owned by CDIJ Capital
Partners, L.P., an indirect affiliate of Bright
Licensing Corp. (Note 1). The purchase price
for such shares, $100.00 per share or $9,400 in
the aggregate, is payable to the Company,
without interest, upon the earlier of
November 15, 1996 or the closing of the
Offering. As of August 27, 1997, the $9,400 was
not received by the Company. The Series A
preferred stock is nonvoting, does not bear a
dividend and has a liquidation value of $100.00
per share. Each share of Series A preferred
stock will be convertible into 1,000 shares of
common stock for a period 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
for its liquidation value.
(C) OPTIONS
The Company granted options to purchase 100,000
Units to the founders, in consideration for
their service as directors, and officers of the
Company. The options are exercisable for a
period of three years from the date of a
Business Combination at an exercise price of
$12.50 per Unit. The options are fully vested.
The shares issuable upon exercise of the
options and underlying warrants may not be sold
or otherwise transferred until 120 days after
the first Business Combination.
(D) In October 1996, the Company cancelled the
100,000 options (Note 5(c)) and granted
additional options to purchase 133,333.3 Units
to the Company's two new directors and to a
founder. The options are exercisable for a
period of three (3) years from the date of a
Business Combination at an exercise price of
$12.50 per Unit.
(E) The Company has granted options to purchase
30,000 shares of the Company's Class B Stock to
two directors at an exercise price of $10.00
per share. The options will expire, if not
sooner exercised, upon consummation of a
Business Combination.
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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 hereunto duly authorized.
North Atlantic Acquisition Corp.
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(Registrant)
Dated: September 4, 1997 /s/ David J. Mitchell
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David J. Mitchell
Chairman of the Board and Chief Executive Officer
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