UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 1998.
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number - 000-22813
North Atlantic Acquisition Corp.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
13-3853272
(I.R.S. Employer Identification No.)
5 East 59th Street, 3rd. Floor, New York, New York 10022
(Address of principal executive offices - Zip code)
Registrant's telephone number, including area code: (212) 486-4444
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changes since last
report.
Indicate by checkmark 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 ___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by checkmark whether the registrant has filed all documents and reports
required to be filed by Section 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 ___ No ___
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock, as of the latest practicable
date.
Common stock, par value $.01 per share, 906,000 shares outstanding as of May 31,
1998.
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<CAPTION>
North Atlantic Acquisition Corp.
(formerly Orion Acquisition Corp. I)
(a corporation in the development stage)
Index
=============================================================================================================
<S> <C>
2
Part I - Financial Information
Item 1. Financial Statements:
Balance sheets as of May 31, 1998 and August 31, 1997
3
Statements of operations for the three and nine months ended
May 31, 1998 and 1997 and period September 1, 1995 to May 31,
1998 4
Statements of stockholders' equity for the period September 1,
1995 to May 31, 1998 5
Statements of cash flows for the nine months ended May 31, 1998 6
and period September 1, 1995 to May 31, 1998
Notes to financial statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 8
Part II - Other Information
Item 1. Legal Proceedings 9
Item 2. Changes in Securities 9
Item 3. Defaults Upon Senior Securities 9
Item 4. Submission of Matters to a Vote of Security Holders 9
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-K 9
Signatures 10
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2
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<TABLE>
<CAPTION>
North Atlantic Acquisition Corp.
(formerly Orion Acquisition Corp. I)
(a corporation in the development stage)
Item 1. Financial Statements
Balance Sheets
===========================================================================================
May 31, August 31,
1998 1997
- -------------------------------------------------------------------------------------------
(Unaudited) (Audited)
<S> <C> <C>
Assets
Cash $ 135,726 $ 400,535
Cash held in escrow 324 1,676
Investment in treasury securities held in escrow 8,321,852 7,998,324
- -------------------------------------------------------------------------------------------
$ 8,457,902 $ 8,400,535
===========================================================================================
Liabilities and Stockholders' Equity
Liabilities:
Accrued expenses $ 204,499 $ 182,431
Notes payable -- 100,000
- -------------------------------------------------------------------------------------------
Total liabilities 204,499 282,431
- -------------------------------------------------------------------------------------------
Commitments
Common stock subject to possible conversion, 160,000 shares at
redemption value 1,664,435 1,600,000
- -------------------------------------------------------------------------------------------
Stockholders' equity:
Convertible preferred stock, $.01 par value - shares
authorized 1,000,000; outstanding none; subscribed
94; liquidation value - $9,400 1 1
Subscription receivable (100) (9,400)
Class A common stock, $.01 par value - shares authorized
10,000,000; outstanding 906,000 9,060 9,060
Class B common stock, $.01 par value - shares authorized
250,000; issued and outstanding 150,000 1,500 1,500
Additional paid-in capital 6,586,948 6,586,948
Earnings (deficit) accumulated during the development stage (8,441) (70,005)
- -------------------------------------------------------------------------------------------
Total stockholders' equity 6,588,968 6,518,104
- -------------------------------------------------------------------------------------------
$ 8,457,902 $ 8,400,535
===========================================================================================
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
North Atlantic Acquisition Corp.
(formerly Orion Acquisition Corp. I)
(a corporation in the development stage)
Item 1. Financial Statements
Statements of Operations
(Unaudited)
Period from
Three months ended May 31, Nine months ended May 31, September 1,
---------------------------- ------------------------- 1995 (inception)
1998 1997 1998 1997 to May 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest income $ 110,380 $ -- $ 324,004 $ -- $ 324,004
General and administrative
expenses and debt costs 62,992 1,415 166,005 3,846 236,010
Income taxes 10,000 -- 32,000 -- 32,000
- ------------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ 37,388 $ (1,415) $ 125,999 $ (3,846) $ 55,994
====================================================================================================================================
Net income (loss) per common
share $ .04 $ (.01) $ .14 $ (.04)
====================================================================================================================================
Weighted average common shares
outstanding 906,000 106,000 906,000 106,000
====================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
North Atlantic Acquisition Corp.
(formerly Orion Acquisition Corp. I)
(a corporation in the development stage)
Item 1. Financial Statements
Statements of Stockholders' Equity
====================================================================================================================================
Period from September 1, 1995 to May 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings
(deficit)
Class A Class B accumulated
Preferred stock Common stock Common stock Additional during the Total
--------------- Subscription ---------------- --------------- paid-in development stockholders'
Shares Amount receivable Shares Amount Shares Amount capital stage equity
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of founders'
shares -- $-- $ -- 86,000 $860 -- $ -- $7,740 $ -- $8,600
Sale of common stock -- -- -- 20,000 200 -- -- 44,800 -- 45,000
Subscription receivable 94 1 (9,400) -- -- -- -- 9,399 -- --
Net loss -- -- -- -- -- -- -- -- (31,085) (31,085)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 1996 94 1 (9,400) 106,000 1,060 -- -- 61,939 (31,085) 22,515
Net loss -- -- -- -- -- -- -- -- (38,920) (38,920)
Sale of common stock, -- -- -- 800,000 8,000 150,000 1,500 8,125,009 -- 8,134,509
net
Reclassification to
redeemable common
stock -- -- -- -- -- -- -- (1,600,000) -- (1,600,000)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, August 31,
1997 (audited) 94 1 (9,400) 906,000 9,060 150,000 1,500 6,586,948 (70,005) 6,518,104
Subscription paid -- -- 9,300 -- -- -- -- -- -- 9,300
Net income -- -- -- -- -- -- -- -- 125,999 125,999
Accretion to redemption
value of common
stock -- -- -- -- -- -- -- -- (64,435) (64,435)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, May 31, 1998
(unaudited) 94 $ 1 $(100) 906,000 $9,060 150,000 $1,500 $6,586,948 $(8,441) $6,588,968
====================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
North Atlantic Acquisition Corp.
(formerly Orion Acquisition Corp. I)
(a corporation in the development stage)
Item 1. Financial Statements
Statements of Cash Flows
(Unaudited)
============================================================================================================
Period from
Nine months ended September 1,
May 31, 1995 (inception)
------------------------ to
1998 1997 May 31, 1998
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 125,999 $ (3,846) $ 55,994
Adjustments to reconcile net income (loss) to net
cash used in operating activities:
Amortization of deferred debt costs -- -- 9,800
Amortization of discount on notes payable -- 3,846 35,000
Changes in assets and liabilities:
Accrued expenses 22,068 -- (33,600)
Interest receivable on investments (271,654) -- (123,555)
- ------------------------------------------------------------------------------------------------------------
Net cash used in operating activities (123,587) -- (56,361)
- ------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Purchase of treasury securities in escrow (4,157,874) -- (12,156,198)
Sale of treasury securities in escrow 4,106,000 -- 4,104,324
Decrease in cash held in escrow 1,352 -- 1,352
- ------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (50,522) -- (8,050,522)
- ------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from sale of common stock, net -- -- 8,188,109
Subscription paid 9,300 -- 9,300
Deferred costs:
Registration -- -- 90,000
Debt -- -- (9,800)
Repayment of notes payable (100,000) -- (100,000)
Proceeds from issuance of notes payable -- -- 65,000
- ------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing
activities (90,700) -- 8,242,609
- ------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash (264,809) -- 135,726
Cash, beginning of period 400,535 25,734 --
- ------------------------------------------------------------------------------------------------------------
Cash, end of period $ 135,726 $ 25,734 $ 135,726
============================================================================================================
Supplemental disclosures of cash flow information: Cash paid for:
Interest $ -- $ -- $ --
Taxes -- -- --
============================================================================================================
In fiscal 1996, the Company received a note for subscribed preferred stock
amounting to $9,400, which is a noncash financing activity.
In fiscal 1996, the Company has recorded a $90,000 liability relating to a
license agreement, which is a noncash financing activity.
============================================================================================================
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
North Atlantic Acquisition Corp.
(formerly Orion Acquisition Corp. I)
(a corporation in the development stage)
Item 1. Financial Statements
Notes to Financial Statements
================================================================================
1. Basis of Presentation
The financial statements are presented in accordance with the requirements
of Form 10-Q and Regulation 210 of S-X and consequently do not include all
of the disclosures normally made in an annual Form 10-K filing.
Accordingly, the financial statements included herein should be reviewed in
conjunction with the financial statements and footnotes therein included
within the Company's Annual Report on Form 10-K for the year ended August
31, 1997.
The financial information has been prepared in accordance with the
Company's customary accounting practices and has not been audited. In the
opinion of management, the information presents all adjustments necessary
for a fair statement of interim results. All such adjustments are of a
normal and recurring nature. The foregoing interim results are not
necessarily indicative of the results of operations to be expected for a
full year.
2. Investments
The Company has invested the majority of the proceeds from the initial
public offering in United States Treasury Bills. These treasury bills,
which were purchased at a discount, are presented at their accreted cost,
which approximates its market value.
7
<PAGE>
North Atlantic Acquisition Corp.
(formerly Orion Acquisition Corp. I)
(a corporation in the development stage)
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
================================================================================
North Atlantic Acquisition Corp. (the "Company") is a "blank check" or "blind
pool" company which was formed on August 9, 1995 to serve as a vehicle to effect
a merger, exchange of capital stock, asset acquisition or other business
combination (a "Business Combination") with an operating business (a "Target
Business"). The business objective of the Company is to effect a Business
Combination with a Target Business which the Company believes has significant
growth potential. To date, the Company has not effected a Business Combination.
On August 27, 1997 (the "Closing Date"), 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. On the Closing Date, the Registrant received net proceeds of
$8,100,000 (the "Net Proceeds"), after giving effect to the payment of all
underwriting discounts, the underwriters' nonaccountable expense allowance and
offering expenses. Pursuant to the terms of the Offering, approximately $8
million of the Net Proceeds, representing an amount equal to the gross proceeds
from the sale of the Units, was placed in escrow with the Chase Manhattan Bank,
N.A., subject to release in accordance with the terms of the Offering. These Net
Proceeds have been invested in United States Treasury Bills and a Treasury Note.
8
<PAGE>
North Atlantic Acquisition Corp.
(formerly Orion Acquisition Corp. I)
(a corporation in the development stage)
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
None
9
<PAGE>
North Atlantic Acquisition Corp.
(formerly Orion Acquisition Corp. I)
(a corporation in the development stage)
Part II - Other Information
================================================================================
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this reported to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: July 17, 1998 North Atlantic Acquisition Corp.
------------------------------------------
(Registrant)
By: /s/ David J. Mitchell
------------------------------------------
David J. Mitchell
Chairman of the Board and
Chief Executive Officer
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMTION EXTRACTED FROM THE COMPANY'S FORM 10-Q
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1997
<PERIOD-END> MAY-31-1998
<CASH> 136,050
<SECURITIES> 8,321,852
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8,457,902
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 8,457,902
<CURRENT-LIABILITIES> 204,499
<BONDS> 0
0
1
<COMMON> 10,560
<OTHER-SE> 8,242,842
<TOTAL-LIABILITY-AND-EQUITY> 8,457,902
<SALES> 0
<TOTAL-REVENUES> 324,004
<CGS> 0
<TOTAL-COSTS> 166,005
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 157,999
<INCOME-TAX> 32,000
<INCOME-CONTINUING> 125,999
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 125,999
<EPS-PRIMARY> .14
<EPS-DILUTED> .14
</TABLE>
