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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, 1997
_ 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) (IRS 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 ___
As of November 1, 1997, 890,000 shares of Common Stock were issued and
outstanding.
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<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
ORION ACQUISITION CORP. II
(a corporation in the development stage)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
October 19, 1995
Three Months Nine Months (inception)
Ended Ended through
September 30, September September
30, 30,
<S> <C> <C> <C> <C>
1997 1996 1997 1996
---- ---- ---- ----
Interest income .............. $ 118,756 $100,77 $ 54,749 $ 102,584
Interest expense ............. -- -- -- (57,694)
Operating expense ............ (103,224) (35,913) (240,237) (35,913)
Income before income taxes ... 15,532 64,857 114,512 8,977
Provision for income taxes ... 4,264 2,500 44,417 2,500
Net income ................... $ 11,268 $62,357 $ 70,095 $ 6,477
Earnings per share ........... $ 0.01 $ 0.08 $ 0.08 $ 0.02
Weighted average common shares
outstanding .................. 890,000 827,779 890,000 276,600
</TABLE>
See notes to accompanying unaudited financial statements
2
<PAGE>
ORION ACQUISITION CORP. II
(a corporation in the development stage)
BALANCE SHEETS
(Unaudited)
September 30, December 31,
1997 1996
ASSETS
Cash $ 423,485 $ 628,865
Restricted cash 447,798 9,362
US Treasury bills - restricted 7,999,895 7,998,644
Accrued investment interest receivable 98,182 202,582
Prepaids and other 3,840 -
---------- ---------
Total Assets $8,973,200 $ 8,839,453
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accrued expenses $ 119,049 $ 55,397
Common stock, subject to possible conversion
160,000 shares at redemption value 1,709,175 1,642,118
Stockholders' equity:
Convertible preferred stock, $.01 par
value, 1,000,000 shares authorized:
110 shares issued and outstanding 1 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 8,900
Additional paid-in capital 7,132,504 7,132,504
Earnings accumulated during development
Stage 3,571 533
----- ---
Total stockholders' equity 7,144,976 7,141,938
------------ ---------
Total liabilities and stockholders' equity $8,973,200 $8,839,453
========== ==========
See notes to accompanying unaudited financial statements.
3
<PAGE>
ORION ACQUISITION CORP. II
(a corporation in the development stage)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
Nine October 19,
Months 1995
Three Months Ended Ended (inception)
September 30, September through
30, September 30,
<S> <C> <C> <C> <C>
1997 1996 1997 1996
---- ---- ---- ----
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income ................... $ 11,268 $ 62,357 $ 70,095 $ 6,477
Adjustments to reconcile net
income to net
cash provided by operating
activities:
Note discount amortization ... -- 34,816 -- 37,500
Changes in working capital:
Decrease (increase) in
accrued investment
receivables ............... (93,034) (90,980) 104,400 (90,980)
Decrease (increase) in ...... (1,596) -- (3,840) -
prepaids and other
Decrease (increase) in other
current assets .............. -- 74,016 -- --
Increase (decrease) in
accrued expenses ........... 22,535 (118,384) 63,652 23,328
------ -------- ------ ------
Cash provided by operating
activities: ................. (60,827) (38,175) 234,307 (23,675)
------------ ------------ ------------ ------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of U.S. Treasury bill (7,999,895) (7,998,643) (11,995,792) (7,998,643)
Sale of U.S. Treasury bill ... -- -- 11,994,541 --
Decrease (increase) in
restricted cash .............. 7,979,804 (9,325) (438,436) (9,325)
--------- ------ -------- ------
Cash used by investing
activities .................. (20,091) (8,007,968) (439,687) (8,007,968)
------- ---------- -------- ----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issue of units and redeemable
Class B purchase warrants, net -- 8,677,905 -- 8,677,905
Issuance of unsecured ........ -- -- -- 100,000
promissory notes
Repayment of unsecured
promissory notes ............. -- -- -- (100,000)
Issuance of founders' shares . -- -- -- 7,500
Issuance of private placement
shares ....................... -- -- -- 7,500
Issuance of convertible
preferred stock .............. -- 11,000 -- 11,000
----- ------ ----- ------
Cash provided by financing
activities .................... -- 8,688,905 -- 8,703,905
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH (80,918) 642,762 (205,380) 672,262
Cash at beginning of period . 504,403 29,500 628,865 --
------------ ------------ ------------ ------------
Cash at end of period ....... $ 423,485 $ 672,262 $ 423,485 $ 672,262
============ ============ ============ ============
</TABLE>
See notes to accompanying unaudited financial statements.
4
<PAGE>
ORION ACQUISITION CORP. II
(a corporation in the development stage)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with instructions to Form 10-QSB 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 the financial statements and
related notes included on Form 10-KSB for the year ended December 31, 1996 and
period October 19, 1995 (Date of inception) to December 31, 1996.
NOTE 2. INVESTMENTS
On June 26, 1997 U.S. Treasury Bills with a cost basis of $7,995,016
matured. The proceeds of $8,279,000 are included under restricted cash on the
balance sheet and are held in an escrow account with a bank. On July 11, 1997
U.S. Treasury Bills having maturities in January of 1998 were purchased at a
cost of $7,999,895 and a maturity value of $8,210,000.
The ultimate use of these funds is restricted and subject to release at
the earlier of (i) consummation of its first business combination, or (ii)
liquidation of the Company.
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 three-month and nine-month
periods through September 30, 1997 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
5
<PAGE>
ITEM 4: Submission of Matters to a Vote of Security Holders
None
ITEM 5: Other Information:
Report of Sales of Securities and Use of Proceeds Therefrom:
(a) The following information amends and updates the previously filed
Form SR dated April 2, 1997 which details the use of proceeds
following the company's initial public offering on July 9, 1996. The
commission has eliminated the requirement to file Form SR, but
instead, now requires use of proceeds to be reported in the
company's Securities Exchange Act periodic reports.
The period covered below is for the period April 3, 1997 to
September 30, 1997 and shows the cumulative use of proceeds to date.
1. The amount of expenses incurred for the issuer's account in
connection with the issuance and distribution of the securities
registered for each category listed below:
<TABLE>
Direct or indirect payments to directors, Direct or indirect
officers, general partners of the issuer or payments to others
their associates; to persons owning ten
percent or more of any class of equity
securities of the issuer;
and to affiliates of the issuer
<S> <C> <C> <C>
(A) (B)
(01) Underwriting discounts and
commissions $ $ 681,431
(02) Finders' Fees - -
(03) Expenses paid to
underwriters - 270,851
(04) Other Expenses 62,180 282,242
------ -------
(05) Total Expenses $ 62,180 $1,234,524
====== =========
</TABLE>
2. The net offering proceeds to the issuer after the total expenses in
Item 1 above was:
$8,717,609
==========
6
<PAGE>
3. The amount of net offering proceeds to the issuer used for each of the
purposes listed below:
<TABLE>
Direct or indirect payments to directors, Direct or indirect
officers, general partners of the issuer or payments to others
their associates; to persons owning ten
percent or more of any class of equity
securities of the issuer; and to affiliates
of the issuer
<S> <C> <C> <C>
(A) (B)
(01) Construction of plant building $ $ -
and facilities - -
(02) Purchase and installation of -
machinery and
equipment
(03) Purchase of real estate - -
(04) Acquisition of other business(es) - 74,448
(05) Repayment of indebtedness - 103,533
(06) Working Capital - -
(07) United States Bill - 8,000,000
(08) Vista Treasury Funds - 301,786
(09) Professional Fees 30,713 53,317
(10) Rent and Office Fees 36,773 -
(11) Taxes - 92,946
(12) Other - 24,093
------ --------
Total $67,486 $8,650,123
======= ==========
</TABLE>
4. The use of proceeds in Item 3 does not represent a material change in
the use of proceeds described in the prospectus.
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.
7
<PAGE>
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 14,1997 By: /s/William L. Remley
William L. Remley
President & Treasurer
8
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 871,283
<SECURITIES> 7,999,895
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 102,022
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 8,973,200
<CURRENT-LIABILITIES> 119,050
<BONDS> 0
<COMMON> 8,900
0
1
<OTHER-SE> 8,845,249
<TOTAL-LIABILITY-AND-EQUITY> 8,973,200
<SALES> 0
<TOTAL-REVENUES> 354,749
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 240,237
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 114,512
<INCOME-TAX> 44,417
<INCOME-CONTINUING> 70,095
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 70,095
<EPS-PRIMARY> 0.08
<EPS-DILUTED> 0.08
</TABLE>
