U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
Commission File Number 0-20837
Orion Acquisition Corp. II
(Name of Small Business Issuer in Its Charter)
Delaware 13-3863260
- - ------------------------------- ---------------------------
(State of Incorporation) (Small Business Issuer
I.R.S. Employer I.D. Number)
401 Wilshire Boulevard - Ste. 1020
Santa Monica, California 90401
- - ------------------------------------------- -------------
(Address of principal executive offices) (Zip Code)
(310) 526-5000
-----------------------------------------
(Issuer's Telephone Number Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value per share
Redeemable Class A Common Stock Purchase Warrants
Redeemable Class B Unit Purchase Warrants
Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirement for the past 90 days. Yes X No__
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. Yes X No___
Issuer's revenues for the fiscal year ended December 31, 1999 were $255,344.
As of March 15, 2000, the aggregate market value of the common stock held by
non-affiliates of the Registrant was approximately $693,492.
As of March 15, 2000, there were 890,000 shares of Common Stock, $.01 par value
per share, outstanding.
Transitional Small Business Disclosure Format (check one): Yes ___ No X
Documents Incorporation by Reference: None.
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
General
Orion Acquisition Corp. II was organized on October 19, 1995 to acquire by
purchase, merger, combination or otherwise an operating business. There is no
restriction on the means of acquisition or the industry in which the target
business operates.
Since its inception, Orion has not engaged in any substantive commercial
business. Its sole activities have been to evaluate and select a suitable target
business and to structure, negotiate and consummate a business combination with
a target business.
Organizational Background of Orion.
Orion was originally organized as a Specialized Merger and Acquisition
Allocated Risk Transaction(R) company. These companies have certain shareholder
protections not ordinarily found in public corporate entities . The protections
included the following features.
- A portion of the proceeds of the original public offering was placed
in an escrow account for the benefit of the holders of common stock,
excluding the 90,000 shares sold prior to going public whose holders
waived their rights to participate in the benefits of the escrow fund.
- Any business combination had to result in a fair market value equal to
at least 80% of the net assets of Orion at the time of such
acquisition. The purpose of this requirement was to ensure that a
Business Combination will constitute a significant acquisition.
- Two-thirds of the shares common stock were required to approve the
proposed business combination.
- Stockholders up to 20% of those entitled to participate in the escrow
fund were able to have their shares redeemed at the time of the
business combination, at their election, without the business
combination being terminated.
- The 90,000 shares issued prior to the initial public offering were
(and still are) held in escrow until the first business combination of
Orion. This prevents these holders who had acquired their shares for a
nominal sum, selling their shares and realizing a profit prior to a
business combination.
- If Orion did not consummate a business combination within two years of
the initial public offering (July 2, 1996), the funds held in escrow
were to be distributed to those entitled to the funds.
The above restrictions, other than the escrow of the 90,000 shares of
common stock issued before the public offering, have been terminated. See 1999
developments below.
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1999 Developments
Orion did not effect a business combination by July 2, 1998, the two year
anniversary of its initial public offering. At that time Orion was obligated to
terminate the escrow fund that had been set up with a portion of the proceeds of
the initial public offering consummated on July 2, 1996. In late 1998, Orion
prepared a proxy statement and submitted for stockholder consideration a
proposal to terminate the operations and liquidate the company under Delaware
law. The proposal for liquidation would have resulted in a distribution to the
holders of the common stock sold in the initial public offering, representing
800,000 shares of common stock, the amounts held in the escrow account, less any
expenses of Orion that were outstanding and unpaid. The meeting was held on
January 12, 1999, at which no quorum was present. Although the meeting was
adjourned, a quorum was never achieved. Therefore, the proposal for liquidation
was never adopted.
Beginning in January 1999 and continuing through April 1999, a group of
stockholders consisting of MDB Capital Group LLC and its members and officers
and ultimately 14 other persons, acquired approximately 51% of the outstanding
common stock of Orion. This amount represented control of Orion. These persons
were considered a group and filed a Schedule 13D which set forth their
securities holdings and purpose in being a group. Their declared purpose was to
cause a change in the then current directors and officers of Orion, to cause a
termination of the escrow account where substantially all of the assets were
then located and a distribution of a significant portion of those funds to those
stockholders entitled thereto, and to cause a change in the certificate of
incorporation, to eliminate the requirement that two-thirds of the stockholders
of Orion were required to approve a business combination.
On April 30, 1999, by consent action, this group elected a new board of
directors and thereafter the new directors elected new officers. The directors
and officers are the current persons in those capacities set forth in this
report. These persons were members of the group. At that time there was a
complete change in control of the Company and in the management of the firm.
On October 22, 1999, a special meeting of the stockholders was held, and
pursuant to a solicitation of proxies, the stockholders approved a change in the
certificate of incorporation to eliminate the requirement that a business
combination be approved by not less than two-thirds of the outstanding common
stock and a proposal to terminate the escrow fund and distribute the amounts
therein to the company.
On July 26, 1999 a distribution from the escrow fund was made to the
stockholders of Orion holding shares sold in the initial public offering. The
distribution was in the amount of $9.00 per share to holders of record as of
July 22, 1999. The distribution represented a return of capital and dividend
income. Then, on November 3, 1999, after the stockholder approval of the
termination of the escrow fund, the remaining amount held in escrow was
distributed to the company. Those funds have been used to pay accumulated and
unpaid taxes and other obligations of Orion. The remaining funds will be used to
fund the ongoing operating expenses of Orion and a portion of any expenses of a
business combination.
Business Objective
The management of Orion intends to identify a target business and effect a
business combination with a target business. It is anticipated that any business
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combination will be by negotiation rather than hostile takeover. At this time,
Orion does not have a schedule of when it will be able to initiate or consummate
a specific business combination.
Management has substantial flexibility in identifying and selecting a
prospective target business. In evaluating a prospective target business,
management will consider, among other factors, the following:
(i) the costs associated with effecting the business combination;
(ii) the amount of the equity interest it will be able to acquire in the
business and opportunity for obtain control;
(iii) the growth potential of the target business;
(iv) the experience and skill of the management of the target business and
availability of additional personnel for the target business;
(v) the current and anticipated capital requirements of the target
business;
(vi) the competitive position of the target business in its industry;
(vii) the stage of business development of the target business;
(viii) the degree of current or the potential market acceptance of the
products or services of the target business,
(ix) the existence of any proprietary features or intellectual property of
the target business;
(x) the overall financial condition of the target business; and
(xi) the regulatory environment in which the target business operates.
In connection with its search for an acquisition opportunity, Orion may
engage investment banking firms to help it identify and approach target
businesses. Moreover, in evaluating any target business, management will
consider retaining an independent investment banking firm which is a member in
good standing of the NASD to assist the Company in appraising, structuring and
negotiating a potential business combination. In connection with its evaluation
of a prospective target business, management will conduct a due diligence review
which will encompass, among other things, meeting with incumbent management,
inspecting the facilities, and reviewing the financial, legal and other
information which will be made available to Orion.
The time and costs required to select and evaluate a target business
(including conducting a due diligence review) and to structure and consummate
the business combination (including negotiating relevant agreements and
preparing requisite documents for filing pursuant to applicable securities laws
and state "blue sky" and corporation laws) will not be ascertainable with any
degree of certainty until consummation of the business combination. Any costs
incurred in connection with the identification and evaluation of a prospective
target business with which a business combination is not ultimately consummated
will result in an expense to Orion.
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Orion will use its current working capital and capital resources to
consummate a business combination. In addition, because the resources of the
company are not sufficient to fund a business combination, it will have to raise
additional capital. The capital may be in the form of equity or debt, and will
likely be based solely on the business operation and financial condition of the
target business. Therefore, it is not possible at this time to determine the
amount of capital that will be needed or available for a business combination
There currently are no limitations on Orion's ability to borrow funds for a
business combination. Nonetheless, Orion's limited resources and lack of
operating history may make it difficult to obtain funds. The amount and nature
of any funding will depend on numerous considerations, including Orion's capital
requirements, potential lenders' evaluation of Orion's ability to meet debt
service on borrowings and the then prevailing conditions in the financial
markets, as well as general economic conditions. Orion does not have any
arrangements with any bank or financial institution to secure additional
financing, and there can be no assurance that such arrangements if required will
be obtainable or otherwise in the best interests of Orion. The inability of
Orion to obtain the funds required to effect a business combination, or to
provide funds for an additional infusion of capital into a target business, may
have material adverse effects on Orion's business prospects, including the
ability to effect a business combination.
Employees
Orion does not have any employees.
ITEM 2. DESCRIPTION OF PROPERTIES
The Company's executive office is located at 401 Wilshire Boulevard, Suite
1020, Santa Monica, California 90401, and its telephone number is (310)
526-5004.
Pursuant to an oral agreement, MDB Capital Group, LLC., a limited liability
company controlled by Christopher A. Marlett, Anthony DiGiandomenico and James
D. Bowyer, each a stockholder, officer and director of Orion, has agreed that it
will make office space and services available to Orion, as may be required at
this time and in the near future. Orion does not pay any amount for these
services.
The Company believes that this facility is adequate to meet its needs in
the foreseeable future pending the consummation of a business combination.
ITEM 3. 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 provide for the issuance of additional
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 does not
meet the specified targets of a $7,000,000 net worth immediately after the
transaction and a minimum common stock price of $5.75 for ten days during the
two year period following the transaction, subject to certain adjustment, terms
and conditions. The record date of the proposed exchange offer has not be
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<PAGE>
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 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On October 22, 1999, Orion held a special meeting of stockholders at its
offices in Santa Monica, California. The purpose of the meeting was to approve
two proposals. The first was an amendment to the certificate of incorporation to
eliminate the requirement that two-thirds of the shares of common stock approve
a business combination. The second was to liquidate and terminate the escrow
account which held proceeds of the initial public offering and distribute the
funds to Orion for working capital purposes. At the special meeting 890,000
shares were eligible to vote on the matters. There were no abstentions or broker
non-votes on either matter.
Tabulation of Votes
-------------------
Proposal Votes in Favor Votes Against
--------- -------------- -------------
Amendment to Certificate of
Incorporation 739,650 50,100
Termination of Escrow Fund 734,650 55,100
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
The common stock, Class A Warrants and Class B Warrants are traded in the
over-the- counter market and quoted on the OTC Bulletin Board under the symbols
MTMR, MTMRW, and MTMRZ.
The following table sets forth the range of high and low closing trading
prices for the common stock, Class A Warrants, and Class B Warrants for the last
two fiscal years. The OTC Bulletin Board is an inter-dealer automated quotation
system sponsored and operated by the NASD for equity securities not included in
the Nasdaq System. The over-the-counter market quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not necessarily
reflect actual transactions.
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<TABLE>
Class A Class B
Common Stock Warrants Warrant
---------------- -------------- -----------------
High Low High Low High Low
---- --- ---- --- ---- ---
<S> <C> <C> <C> <C> <C> <C>
Year Ended December 31, 1998:
First Quarter ............................ 9.125 8.75 1.00 .375 5.875 4.875
Second Quarter......................... 9.45 9.031 .625 .25 4.25 1.50
Third Quarter.......................... 9.875 9.188 .75 .50 4.50 1.00
Fourth Quarter......................... 10.125 9.125 .625 .063 .50 .063
Year Ended December 31, 1999:
First Quarter............................. 10.125 8.00 N/A N/A .03125 .21875
Second Quarter............................ 11.00 8.50 N/A N/A .15625 .15625
Third Quarter............................. 7.00 1.00 N/A N/A N/A N/A
Fourth Quarter............................ 1.375 1.0625 N/A N/A N/A N/A
</TABLE>
Holders
As of March 15, 2000, there were 29 holders of record of the common stock
and one holder of record of each of the Class A Warrants and the Class B
Warrants. Since the majority of the securities are held in street name, Orion
believes that there is a substantial number of beneficial holders of the
securities.
Dividends
Orion has paid no dividends on its shares of common stock since its
organization. Orion does not expect to pay any dividends prior to the
consummation of a business combination, and thereafter anticipates that for the
foreseeable future any earnings will be retained for use in its business.
Accordingly, it does not anticipate the payment of cash dividends.
On July 26, 1999 the Company completed a distribution of $9.00 per share to
holders of stock purchased in the Company's initial public offering dated July
2, 1996.
Sales of Unregistered Securities
During the fiscal year ended December 31, 1999, Orion did not sell any
unregistered securities.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Forward Looking Statements
When used in this Form 10-KSB and in future filings by Orion with the
Securities and Exchange Commission, the words or phrases "will likely result,"
"management expects," or "the company expects," "will continue," "is
anticipated," "estimated" or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance
on any such forward-looking statements, each of which speak only as of the date
made. Such statements are subject to certain risks and uncertainties, some of
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which are described below, that could cause actual results to differ materially
from historical earnings and those presently anticipated or projected. Orion has
no obligation to publicly release the result of any revisions which may be made
to any forward-looking statements to reflect anticipated events or circumstances
occurring after the date of such statements.
The selected financial information for the years ended December 31, 1999,
1998, l997 and the period from inception (October 19, 1995) through December 31,
1999 are derived from the financial statements of Orion which have been audited
by BDO Seidman, LLP, Orion's independent auditors. This information should be
read in conjunction with the financial statements and related notes and other
financial information included herein.
<TABLE>
Period from
Inception (10/19/95)
Statement of Operations Data 1999 1998 1997 through 12/31/98
---------------------------- ---- ---- ---- ----------------
<S> <C> <C> <C> <C>
Interest Income............................ 255,344 436,292 475,112 1,389,192
General and administrative expenses....... (85,281) (192,622) (294,447) (654,522)
Stock based compensation expense........... - - (100,000) (100,000)
Interest expense........................... -- - - (57,694)
Provision for taxes........................ (74,303) (103,153) (76,399) (293,782)
Net Income................................. 95,760 140,517 4,266 283,194
Weighted average common shares
outstanding.......................... 890,000 890,000 890,000
Balance Sheet Data:
Total Assets............................... 2,045,862 9,100,524 8,981,286
Total liabilities.......................... 121,263 71,685 92,964
(Deficit) earnings accumulated during
development stage.................. 7,553 (30,290) (85,323)
Common stock subject to possible
redemption at conversion value.... - 1,817,724 1,732,240
Stockholders' equity....................... 1,924,599 7,211,115 7,156,082
</TABLE>
Orion is a development stage company, and to date its efforts have been
limited to organizational activities, consummating an initial public offering
and seeking a business combination. Orion has not yet consummated a business
combination. Accordingly, Orion will not achieve any operating revenues (other
than investment income) until, at the earliest, the consummation of a business
combination.
Between January and April of 1999, a group of stockholders acquired
approximately 51% of the outstanding common stock of Orion. On April 30, 1999,
by consent action, this group of stockholders elected a new board of directors
and officers of Orion effecting a complete change in control of Orion and in the
management of the firm.
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On October 22, 1999 a special meeting of the stockholders was held, and
pursuant to a solicitation of proxies, the stockholders approved a change in the
certificate of incorporation to eliminate the requirement that a business
combination be approved by not less than two-thirds of the outstanding common
stock and a proposal to terminate the escrow fund and distribute the amounts
therein to Orion.
On November 3, 1999, after the stockholder approval of the termination of
the escrow fund, the funds then held in escrow of $2,137,243 was distributed to
Orion. Those funds have been used to pay accumulated and unpaid taxes and other
obligations of Orion. The remaining funds will be used to fund the ongoing
operating expenses of Orion, expected to include professional fees, due
diligence and research on potential acquisition targets.
Orion currently has its executive office at the location of MDB Capital
Group LLC whose principals are members of the board of directors of Orion. MDB
Capital Group has agreed to make office space and services available to Orion,
as may be required at this time and in the near future. Orion does not pay any
amount for these services.
At December 31, 1999, Orion had $2,028,802 in cash and short term U.S.
Treasury Bills. Orion will continue to invest it's assets in U.S. Treasury bills
and cash until such time as assets are needed for a business combination or
acquisition.
Orion has not incurred any debt in connection with its organizational
activities. No cash compensation is currently or will be paid to any officer
director until after the consummation of a business combination. Since the role
of present management after a business combination is uncertain, Orion has no
ability to determine what remuneration, if any, will be paid to such persons
after a business combination.
Orion believes it has more than adequate capital to fund its operations
pending a business combination.
Orion will use its current working capital and capital resources to
consummate a business combination. In addition, because the resources of Orion
are not sufficient to fund a business combination, it will have to raise
additional capital. The capital may be in the form of equity or debt, and will
likely be based solely on the business operation and financial condition of the
target business. Therefore, it is not possible at this time to determine the
amount of capital that will be needed or available for a business combination
There currently are no limitations on Orion's ability to borrow funds for a
business combination. Nonetheless, Orion's limited resources and lack of
operating history may make it difficult to obtain funds. The amount and nature
of any funding will depend on numerous considerations, including Orion's capital
requirements, potential lenders' evaluation of Orion's ability to meet debt
service on borrowings and the then prevailing conditions in the financial
markets, as well as general economic conditions. Orion does not have any
arrangements with any bank or financial institution to secure additional
financing, and there can be no assurance that such arrangements if required will
be obtainable or otherwise in the best interests of Orion. The inability of
Orion to obtain the funds required to effect a business combination, or to
provide funds for an additional infusion of capital into a target business, may
have material adverse effects on Orion's business prospects, including the
ability to effect a business combination.
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Year 2000
Y2K issues concern the inability of information systems, primarily computer
software programs, to properly recognize and process date sensitive information
relating to the year 2000 and beyond. Many of the world's computer systems
recorded years in a two-digit format. Computer systems configured this way may
be unable to property interpret dates beyond the year 1999. Orion has not
experienced any problems resulting from the change of dates at the beginning of
the year 2000. Because Orion does not have any operations, it does not
anticipate that it will experience any Y2K issues in the future. However, no
assurances can be given that a Y2K issue will not develop in the future that may
adversely affect Orion.
ITEM 7. FINANCIAL STATEMENTS
ORION ACQUISITION CORP. II
(A CORPORATION IN THE DEVELOPMENT STAGE)
CONTENTS
PAGE
Report of independent certified public accountants.......................11
Financial statements:
Balance sheets........................................................12
Statements of operations..............................................13
Statements of stockholders' equity and common stock
subject to possible redemption......................................14
Statements of cash flows..............................................15
Notes to financial statements.........................................16
10
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
to the Board of Directors and Stockholders
of Orion Acquisition Corp. II
We have audited the accompanying balance sheets of Orion Acquisition Corp.
II (a corporation in the development stage) as of December 31, 1999 and 1998 and
the related statements of operations, stockholders' equity and common stock
subject to redemption, and cash flows for the years ended December 31, 1999,
1998 and 1997 and for the period from October 19, 1995 (Date of Inception) to
December 31, 1999. These financial statements are the responsibility of Orion's
management. Our responsibility is to express an opinion on these financial
statements 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 financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principals used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Orion Acquisition Corp. II
at December 31, 1999 and 1998, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1999 and for
the period from October 19, 1995 (Date of Inception) to December 31, 1999 in
conformity with generally accepted accounting principals.
/S/ BDO Seidman, LLP
BDO SEIDMAN, LLP
Los Angeles, California
February 10, 2000
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ORION ACQUISITION CORP II
(a corporation in the development stage)
BALANCE SHEETS
December 31,
1999 1998
--------- ----------
ASSETS
Cash $ 522,187 $ 11,902
Restricted cash - 190,383
US Treasury bills - restricted - 8,898,239
US Treasury bills 1,506,615 -
Other assets 17,060 -
--------- ----------
Total assets 2,045,862 9,100,524
--------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Accrued expenses 121,263 71,685
Common stock, subject to possible conversion of - 1,817,724
160,000 shares at redemption value (Note 6)
Stockholders' equity:
Convertible preferred stock, $.01 par value 1 1
1,000,000 shares authorized 110 shares issued
and outstanding
Common stock, $0.01 par value 10,000,000 shares 8,900 8,900
authorized; 890,000 shares issued and outstanding
Additional paid-in capital 1,908,145 7,232,504
(Deficit) earnings accumulated during development 7,553 (30,290)
stage
--------- ----------
Total stockholders' equity 1,924,599 7,211,115
--------- ----------
Total liabilities and stockholders' equity $ 2,045,862 $ 9,100,524
--------- ----------
See accompanying notes to the financial statements.
12
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ORION ACQUISITION CORP II
(a corporation in the development stage)
STATEMENT OF OPERATIONS
<TABLE>
October 15, 1995
(date of incorporation)
to December 31,
Years ended December 31, 1999
1999 1998 1997
--------- --------- -------- -----------
<S> <C> <C> <C> <C>
Interest income $ 255,344 $ 436,292 $ 475,112 $ 1,389,192
General and administrative expenses (85,281) (192,622) (294,447) (654,522)
Stock based compensation expense - - (100,000) (100,000)
Interest expense - - - (57,694)
--------- --------- -------- ----------
Net income before income taxes 170,063 243,670 80,665 576,976
Provision for income taxes (74,303) (103,153) (76,399) (293,782)
--------- --------- -------- ----------
Net income $ 95,760 $ 140,517 $ 4,266 $ 283,194
========= ========= ========= ==========
Earnings per share, basic and diluted: $ 0.11 $ 0.16 $ -
Weighted average common shares
outstanding basic and diluted 890,000 890,000 890,000
</TABLE>
See accompanying notes to the financial statements.
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ORION ACQUISITION CORP II
(a corporation in the development stage)
STATEMENT OF
STOCKHOLDERS' EQUITY AND COMMON STOCK
SUBJECT TO POSSIBLE REDEMPTION
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, 1997, 1996, AND 1995 AND
FOR THE PERIOD FROM OCTOBER 19, 1995 (INCEPTION) THROUGH DECEMBER 31, 1999
<TABLE>
Accumulated
Common Stock Earnings (Deficit)
subject to Additional During the
Preferred Stock Common Stock Possible redemption Paid-in Development
Shares Amount Shares Amount Shares Amount Capital stage
------- ------- ------ ------ ------ ------ ------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT OCTOBER 19, 1995 - $ - - $ - - $ - $ - $ -
Issuance of Founders Shares - - 16,500 165 - - 1,485 -
BALANCE AT DECEMBER 31, 1995 - - 16,500 165 - - 1,485 -
Issuance of Founders Shares - - 58,500 585 - - 5,265 -
Sale of private placement shares - - 15,000 150 - - 7,350 -
Sale of convertible preferred
stock 110 1 - - - - 10,999 -
Sale of 800,000 shares, net of
underwriting discounts
and offering costs - - 640,000 8,000 160,000 1,600,000 7,107,405 -
Net income - - - - - - - 42,651
Accretion to redemption
value of stock - - - - - 42,118 - (42,118)
BALANCE AT DECEMBER 31, 1996 110 1 730,000 8,900 160,000 1,642,118 7,132,504 533
Issuance of options - - - - - - 100,000 -
Net income - - - - - - - 4,266
Accretion to redemption
value of common stock - - - - - 90,122 - (90,122)
BALANCE AT DECEMBER 31, 1997 110 1 730,000 8,900 160,000 1,732,240 7,232,504 (85,323)
Net income - - - - - - - 140,517
Accretion to redemption
value of common stock - - - - - 85,484 - (85,484)
BALANCE AT DECEMBER 31, 1998 110 1 730,000 8,900 160,000 1,817,724 7,232,504 (30,290)
Net income - - - - - - - 95,760
Elimination of redemptive common
stock provision (Note 6) - - 160,000 - (160,000) (1,600,000) 1,600,000 -
Reversal of accretion to redemptive
value of common stock (Note 6) - - - - - (217,724) - 217,724
Dividend (Note 6) - - - - - - - (275,641)
Liquidating dividend (Note 6) - - - - - - (6,924,359) -
BALANCE AT DECEMBER 31, 1999 110 $ 1 890,000 $ 8,900 - $ - $1,908,145 $ 7,553
- - ---------------------------------=========--=========--=========--=========--=========--==========--===========-===============
</TABLE>
See accompanying notes to the financial statements.
14
<PAGE>
ORION ACQUISITION CORP II
(a corporation in the development stage)
STATEMENT OF CASH FLOWS
<TABLE>
October 19, 1995
(date of inception)
to December 31
Year ended December 1999
Increase (decrease) in cash
CASH FLOWS FROM OPERATING ACTIVITIES: 1999 1998 1997
--------- -------- -------- ----------
<S> <C> <C> <C> <C>
Net income $95,760 $140,517 $4,266 $283,194
Adjustments to reconcile net income to net cash
provided by operating activities:
Note discount amortization 37,500
Stock based compensation expense - - 100,000 100,000
Changes in working capital: - - - -
Increase in other assets (17,060) - - (17,060)
Decrease (increase) in accrued investment
receivables 208,100 (5,518) -
Increase (decrease) in accrued expenses 49,578 (21,279) 37,567 121,263
--------- -------- -------- ----------
Cash provided by operating activities 128,278 327,338 136,315 524,897
--------- -------- -------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale (purchase) of U.S. Treasury bills and other
(increases) decreases in restricted cash 9,088,622 (635,518) (445,098) -
Purchase of U.S. Treasury bills (1,506,615) - - (1,506,615)
Decrease (increase) in deferred acquisition costs - 8,072 (8,072) -
--------- -------- -------- ----------
Cash provided by (used) in investing activities 7,582,007 (627,446) (453,170) (1,506,615)
--------- -------- -------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividend (Note 6) (7,200,000) - - (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 - - 35,000
Repayment of related party note (35,000) - - (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 (used in) financing activities (7,200,000) - - 1,503,905
--------- -------- -------- ----------
NET (DECREASE) INCREASE IN CASH 510,285 (300,108) (316,855) 522,187
Cash, beginning of period 11,902 312,010 628,865 -
--------- -------- -------- ----------
Cash, end of period $ 522,187 $ 11,902 $ 312,010 $ 522,187
--------- -------- -------- ----------
</TABLE>
See accompanying notes to the financial statements.
15
<PAGE>
ORION ACQUISITION CORP II
(a corporation in the development stage)
NOTES TO 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. 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 (as defined below).
The registration statement for the Company's Initial Public Offering (the
"Offering") became effective on July 2, 1996. The Company consummated the
Offering raising net proceeds of approximately $8,700,000 (See Note 2). The
Company's management has broad discretion with respect to the specified
application of the net proceeds of the Offering, although substantially all of
the net proceeds of the offering were intended to be generally applied toward
consummating a business combination with an operating business ("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 - 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
Warrants"). Subsequently, on August 5, 1996, the underwriters exercised their
overallotment option to purchase 38,100 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 Warrants"). 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 $0.05 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.
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
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
16
<PAGE>
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 years December 31, 1999, 1998 and
1997 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, restricted
cash, U.S. Treasury bills, accrued investment interest receivable and accrued
expenses approximate fair value at December 31, 1999 and 1998.
(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.
17
<PAGE>
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 December 31, 1999 and 1998 totaled approximately
$1,506,615 and $9,080,622. No unrealized holding gains or losses have been
realized.
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-, $7,000 and
$61,000 for the years ended December 31, 1999, 1998 and 1997.
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 - STOCKHOLDER'S EQUITY
(a) Private Placement
In January 1996, 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. In addition, as part of this
private placement, the Company also issued to the private placement investors
15,000 shares of common stock for $7,500. The notes were repaid as a result of
the consummation of the Company's Offering together with accrued interest
totaling $3,533. 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 stockholders. 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.
18
<PAGE>
(c) Options
On July 9, 1996, the Company 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.
Effective January 10, 1997 an investment bank engaged to assist the
Company, was granted an option to purchase 10,000 shares of Common Stock, par
value $.01 per share, owned by Cranbrooke at a purchase price of $.10 per share.
The Company recorded a non-cash charge of $100,000 that represents the fair
value of the option at the date of grant as calculated using the Black-Scholes
option pricing model.
(d) Warrants
In connection with the Offering, the Company issued warrants to the
underwriters for 80,000 units at an exercise price of $11.00 per unit and 32,000
Class B Warrants at an exercise price of $6.1875 per unit. These warrants are
initially exercisable for a period of four years commencing on July 2, 1997. The
underwriter's warrants contain anti-dilution provisions providing for adjustment
of the number of warrants and exercise price under certain circumstances. The
underwriter's warrants grant to the holders thereof certain rights of
registration of the Units and Class B warrants issuable upon exercise of the
underwriter's warrants.
(e) Dividend
On July 26, 1999 the Company returned an aggregate of $7,200,000, or $9.00
per share, to the owners of shares sold in the Offering. On November 3, 1999
with shareholder approval, the funds remaining in the escrow accounts were
distributed to the Company to be used for general corporate purposes. Of the
$7,200,000 returned to shareholders, $275,641 represents accumulated earnings
and $6,924,359 represents additional paid in capital.
(f) Elimination of Redemptive Common Stock Provision
On October 22, 1999, a special meeting of the stockholders was held, and
pursuant to a solicitation of proxies, the stockholders approved a change in the
certificate of incorporation to eliminate the requirement that a business
combination be approved by not less than two-thirds of the outstanding common
stock and a proposal to terminate the escrow fund and distribute the amounts
therein to the stockholders.
The elimination of the requirement that a business combination be approved
by not less than two-thirds of the outstanding common stock of the Company
removed the event that would give rise to the possible redemption of the
Company's common stock. As such, the Company eliminated the redemptive common
stock provision for the number of potentially redemptive common shares at their
initial per share price and reversed the related cumulative accretion of
earnings on those potentially redemptive funds.
19
<PAGE>
NOTE 7 - SUPPLEMENTAL CASH FLOW INFORMATION
During the year ended December 31, 1999 and 1998 the Company paid
approximately $61,000 and $60,000 in taxes.
NOTE 8 - INCOME TAXES
Federal and state income tax provisions are as follows:
Current: 1999 1998 1997
---- ---- ----
Federal $37,749 $ 63,323 $ 33,916
State and Local 36,554 39,830 42,483
-------- --------- ---------
Total $74,303 $103,153 $ 76,399
======= ======== =========
The effective tax rate for the years ending 1999, 1998 and 1997 differ from
the statutory federal income tax rate due to state taxes and certain
non-deductible expenses.
NOTE 9 - SUBSEQUENT EVENT
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 provide for the issuance of
additional 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 does not meet the specified targets of a $7,000,000 net worth
immediately after the transaction and a minimum common stock price of $5.75 for
ten days during the two year period following the transaction, subject to
certain adjustment, 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.
20
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
The current directors and officers of Orion are as follows:
Director
Name Age Since Position
Christopher A. Marlett 35 1999 Chairman of the Board, Chief
Executive Officer and Director
Anthony DiGiandomenico 33 1999 Chief Financial Officer and
Director
Dyana Williams Marlett 33 1999 Chief Operating Officer,
Secretary, Treasurer and Director
James D. Bowyer 60 1999 Director
William C. Fioretti 48 1999 Director
Christopher A. Marlett is a co-founder and member of MDB Capital Group LLC,
an investment banking firm formed in December 1996. MDB is an NASD member
broker-dealer which specializes in working with growth oriented companies. Prior
to forming MDB, Mr. Marlett was employed as a Managing Director by Laidlaw
Equities from May of 1995 to December of 1996 where he was in charge of
Laidlaw's West Coast investment banking activities. From March of 1991 to May of
1995 Mr. Marlett was affiliated with Drake Capital Securities where he formed a
division called Marlett/Mazzarella and directed all investment banking
activities of the division. Mr. Marlett holds a degree in Business
Administration from the University of Southern California. Mr. Marlett is the
Chairman and interim President of Lipid Sciences Inc. a company engaged in
medical research.
Anthony DiGiandomenico is a co-founder and member of MDB, an investment
banking firm formed in December 1996. Mr. DiGiandomenico served as President and
CEO of the Digian Company from 1988 through 1996, a real estate development
company and holds a Bachelors of Science Degree in Finance from the University
of Colorado and a Masters in Business Administration from the Haas Business
School at the University of California, Berkeley.
Dyana Williams Marlett is a co-founder of MDB and acts as its Chief
Operating Officer. From March of 1995 to December of 1996, Ms. Marlett was
employed by Laidlaw Equities as a Vice President handling investment banking and
syndicate activities for the West Coast. From October of 1990 through March of
1995, Ms. Marlett was employed at Drake Capital Securities where she acted as
Syndicate Manager. Ms. Marlett holds several licenses with the National
Association of Securities Dealers. Ms. Marlett is the wife of Mr. Christopher
Marlett.
21
<PAGE>
James D. Bowyer is a co-founder and member of MDB, an investment banking
firm formed in December 1996. Mr. Bowyer was employed at Laidlaw Equities from
August of 1995 to December of 1996. Mr. Bowyer's career has spanned over thirty
years in the securities industry focused on financing and investing in growth
companies. In 1976 Mr. Bowyer formed MacDonald, Krieger & Bowyer a full service
broker-dealer based in Beverly Hills, California, which was subsequently sold in
1982. Mr. Bowyer then founded his own investment firm, J.D. Bowyer & Co. which
he operated from 1983 to 1995.
William C. Fioretti is the founder of Agritech Labs, and has served as its
president and a director since 1992. Agritech Labs is a research and development
company which concentrates on veterinary bio-pharmaceuticals. Mr. Fioretti is
also a founder of Mannatech Incorporated (NASDAQ:MTEX) a publicly traded direct
marketing company specializing in consumer health products. Mr. Fioretti served
Mannatech as the Chief Executive Officer from 1993 through 1996, as Chief
Scientific Officer from 1996 through 1997 and a director from inception until
his retirement from Mannatech in November of 1997. Mr. Fioretti completed his
undergraduate education at Appalachian State University from 1970-1974 receiving
a Bachelor of Science Biology, completed his graduate training in biochemistry
at the Medical University of South Carolina from 1974-1978 and did post graduate
training at the University of Florida from 1978-1980.
Members of the board of directors generally are elected annually by the
stockholders and may be removed as provided in the General Corporation Law of
the State of Delaware and the articles of incorporation and by-laws. Officers
are appointed by the board of directors and serve at their pleasure. The board
of directors does not have any committees at this time.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the officers, directors and persons who beneficially own more than ten percent
of a registered class of the equity securities of Orion ("ten percent
stockholders") to file reports of ownership and changes in ownership with the
Securities and Exchange Commission and the National Association of Securities
Dealers, Inc. Officers, directors and ten percent stockholders are charged by
SEC regulation to furnish Orion with copies of all Section 16(a) forms they
file. Based solely upon its review of the copies of such forms received by it,
or written representations from certain reporting persons that no Forms 5 were
required for those persons, Orion believes that, during the fiscal year ended
December 31, 1999, all filing requirements applicable to its executive officers,
directors and ten percent stockholders were fulfilled.
ITEM 10. EXECUTIVE COMPENSATION
Executive Compensation
Orion does not currently compensate any of the officers or other employees.
Orion does not intend to provide any remuneration to officers or employees until
after a business combination, if any, of an operating business.
Compensation of Directors
Directors of Orion receive no cash compensation for serving on the board of
directors, but they receive reimbursement of reasonable expenses incurred in
attending meetings.
22
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth information as of March 15, 2000 based on
information obtained from the persons named below. It states the beneficial
ownership of shares of the common stock by (i) each person known to be the owner
of more than 5% of the outstanding shares of common stock, (ii) each director
and (iii) all executive officers and directors as a group.
Amount and Nature Percent
of Beneficial of Class
Name of Beneficial Owner (1) Ownership (2)
Christopher A. Marlett 126,000 14.2%
Anthony DiGiandomenico 54,225(3) 6.1%
Dyana Williams Marlett 68,000 7.6%
James D. Bowyer 56,400(4) 6.3%
William C. Fioretti 70,000 7.9%
All directors and executive officers 374,625(5) 42.1%
as a group (five persons)
(1) The person's address is care of the Company at 401 Wilshire Boulevard -
Suite 1020, Santa Monica, California 90401.
(2) Percentage includes all outstanding shares of Common Stock plus any shares
of common stock that the person has the right to acquire within 60 days
pursuant to options, warrants, conversion privileges or other rights.
(3) Includes 3,000 shares held in an individual retirement account.
(4) Includes 3,000 shares held in custodian accounts and excludes 3,000 shares
of Common Stock issuable on exercise of Class A Warrants not yet
exercisable.
(5) See Notes 2 and 3 above.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company uses the services and some of the employees of MDB Capital
Group LLC and has its executive offices at the offices of MDB Capital Group LLC.
The Company does not pay any amount to or for the employees of MDB Capital Group
LLC or any rent for these offices. The Company reimburses MDB Capital Group LLC
for documented out of pocket expenses incurred on its behalf.
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.
23
<PAGE>
ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Amended and Restated Certificate of Incorporation of the
Registrant (Exhibit 3.1)(1)
3.2* Amendment dated October 22, 1999 to Amended and Restated
Certificate of Incorporation
3.3 By-laws of the Registrant (Exhibit 3.2)(1)
4.1 Warrant Agency Agreement between American Stock Transfer &
Company and the Registrant (Exhibit 4.2)(1)
4.2 Form of Representative's Warrant Agreement of Registrant
(Exhibit 4.5)(1)
4.3 Form of Common Stock Certificate of Registrant (Exhibit 4.1)
(1)
4.4 Form of Class B Unit Purchase Agreement of the Registrant
(Exhibit 4.4)(1)
4.5 Form of Class A Common Stock Purchase Warrant Certificate of
the Registrant (Exhibit 4.3)(1)
10.1 Underwriting Agreement (Exhibit 1.1)(1)
10.2 License Agreement, dated August 25,1995, between Bright
Capital, Ltd. and the Company (Exhibit 10.3)(1)
10.3 Management Unit Purchase Option Plan (Exhibit 10.4)(1)
27.1* Financial Data Schedule
* Filed herewith.
(1) Incorporated by referenced from Registration Statement
33-03252
(b) Reports on Form 8-K
None
24
<PAGE>
SIGNATURES
Pursuant to the requirements of the Section 13 or 15 or 15(d) 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 on the
23rd day of March, 2000.
ORION ACQUISITION CORP. II
/s/ Christopher A. Marlett
---------------------------
Christopher A. Marlett
Chairman of the Board and
Chief Executive Officer
In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ Christopher A. Marlett Chairman of the Board March 23, 2000
- - ---------------------------- and Chief Executive Officer
Christopher A. Marlett (Principal Executive Officer)
/s/ Anthony DiGiandomenico Chief Financial Officer March 23, 2000
- - --------------------------- and Director
Anthony DiGiandomenico (Chief Accounting Officer and
Principal Accounting Officer)
/s/ Dyana Williams Marlett Chief Operating Officer, March 23, 2000
- - -------------------------- Secretary, Treasurer and
Dyana Williams Marlett Director
/s/ James D. Bowyer Director March 23, 2000
- - --------------------------
James D. Bowyer
/s/ William C. Fioretti Director March 24, 2000
- - --------------------------
William C. Fioretti
</TABLE>
25
EXHIBIT 3.2
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
ORION ACQUISITION CORP. II
Pursuant to the General Corporation Law of the State of Delaware ("GCL"),
it is hereby certified that:
1. The name of the corporation (hereinafter called the "corporation") is
Orion Acquisition Corp. II. The date of filing the original certificate of
incorporation of the corporation with the Secretary of State of the State of
Delaware was October 19, 1995.
2. The certificate of incorporation of the corporation is hereby amended by
deleting Article Eight in its entirety. The remaining Articles Nine through
Eleven shall be renumbered as Eight through Ten, respectively.
3. Except as otherwise amended hereby, the provisions of the certificate of
incorporation of the corporation are in full force and effect.
4. The amendment to the certificate of incorporation has been duly adopted
in accordance with the provisions of Section 242 of the GCL, by resolution of
the Board of Directors of the corporation and by affirmative vote of the holders
of two-thirds of the outstanding stock entitled to vote thereon at a meeting of
stockholders.
IN WITNESS WHEREOF, the undersigned have signed this Certificate of
Amendment on this 22nd day of October, 1999.
/s/ Christopher A. Marlett
------------------------------------------------
Christopher A. Marlett, Chief Executive Officer
ATTEST:
/s/ Dyana Williams Marlett
__________________________________
Dyana Williams Marlett, Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 522,187
<SECURITIES> 1,506,615
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,045,862
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,045,862
<CURRENT-LIABILITIES> 121,263
<BONDS> 0
<COMMON> 8,900
0
0
<OTHER-SE> 1,924,599
<TOTAL-LIABILITY-AND-EQUITY> 2,045,862
<SALES> 0
<TOTAL-REVENUES> 255,344
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 85,281
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 170,063
<INCOME-TAX> 74,303
<INCOME-CONTINUING> 95,760
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 95,750
<EPS-BASIC> .11
<EPS-DILUTED> .11
</TABLE>
