UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ x ] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 2000
or
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _______ to _______________
Commission File No. ___________
ORIGIN INVESTMENT GROUP, INC.
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(Exact name of registrant as specified in its charter)
Maryland 36-4286069
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
980 North Michigan Avenue, Suite 1400, Chicago, Illinois 60611
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(Address of principal executive offices) (Zip Code)
(312) 988-4836
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last
report)
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 and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
has been required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [x] No [ ]
The registrant has 4,658,389 shares of common stock outstanding as of
August 21, 2000.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
ORIGIN INVESTMENT GROUP, INC.
(A Development Stage Company)
BALANCE SHEET
<TABLE>
<CAPTION>
ASSETS
June 30, 2000 DECEMBER 31, 1999
(Unaudited) (Audited)
<S> <C> <C>
Current Assets:
Cash and Cash Equivalents................................... $ 2,936 $ 908
Advances to Officer for business expenses................... $ - $ 12,103
Miscellaneous receivable.................................... $ - $ 4,250
Prepaid Expense............................................. $ - $ 25,000
Other....................................................... $ - $ 8,550
--------------- ---------------
Total Current Assets $ 2,936 $ 50,811
Property and Equipment:
Office Equipment............................................ $ 4,211 $ 4,211
Less: accumulated depreciation.............................. 1,189 389
--------------- ---------------
Remaining Balance:..................................... $ 3,022 $ 3,882
Other Assets
Other Long Term Assets...................................... $ 676 $ -
--------------- --------------
Total Other Assets 676 -
Total Assets: $ 6,634 $ 54,633
--------------- ---------------
--------------- ---------------
LIABILITIES
Current Liabilities:
Accounts Payable............................................ $ 53,000 $ 58,062
Total Current Liabilities $ 53,000 $ 58,062
--------------- ---------------
STOCKHOLDERS' EQUITY
Common Stock
$.001 par value, 50,000,000 shares
authorized, 4,658,389 issued and outstanding................ $ 4,658 $ 4,000
Paid in capital.................................................. $ 1,020,590 $ 396,000
Less: Subscription receivable................................... (198,000) $ (198,000)
Deficit accumulated during development stage..................... (873,615) $ (205,429)
Total Stockholders' Equity $ ( 46,366) $ (3,429)
--------------- ---------------
Total Liabilities and Stockholders' Equity $ 6,634 $ 54,633
--------------- ---------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE>
ORIGIN INVESTMENT GROUP, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS AND (DEFICIT)
(Unaudited)
<TABLE>
<CAPTION>
CUMULATIVE
AMOUNTS
FROM DATE OF
INCEPTION
(APRIL 6,1999) THREE MONTHS
THROUGH ENDED
June 30, 2000 June 30, 2000
--------------- ---------------
<S> <C> <C>
Operating Expenses
Professional Fees.......................................... $ 155,415 $ 53,757
Travel and Entertainment................................... $ 153,648 $ 54,739
Office Expenses............................................ $ 45,895 $ 21,605
Payments to Officers/Directors............................. $ 61,780 $ 8,349
Other...................................................... $ 51,605 $ 8,049
--------------- ---------------
TOTAL OPERATING EXPENSES $ 468,343 $ 146,499
OTHER INCOME
Interest Income............................................ $ 156 $ 45
Other Income/Expense....................................... $ 200,000 $ -
NET INCOME (loss) $ (668,186) $ (146,454)
--------------- ---------------
--------------- ---------------
Net (LOSS) per common share- BASIC AND DILUTED $ (.16) $ (.03)
Weighted Average Common Shares Outstanding $ 4,228,127 $ 4,228,127
--------------- ---------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>
ORIGIN INVESTMENT GROUP, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY / DEFICIENCY
For the Period Ending June 30, 2000
<TABLE>
Accompanying Deficit
Warrants Accumulated
Common Stock Issued During the
-------------------- ------------ Paid-In Development Subscription
Shares Amount Capital Stage Receivable Total
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<S> <C> <C> <C> <C> <C> <C> <C>
Issuance of Shares of
Common Stock
Issued On:
05/5/99-12/3/99 4,000,000 $4,000 - $396,000 - (198,000) $202,000
01/18/00 100,000 $ 100 - $ 99,900 - - $100,000
02/12/00 21,390 $ 21 - $ 99,977 - - $ 99,998
04/14/00 50,000 $ 50 - $ 49,950 - - $ 50,000
05/08/00 142,000 $ 142 142,000 $106,358 - - $106,500
05/30/00 324,999 $ 325 324,999 $243,425 - - $243,750
06/12/00 20,000 $ 20 - $ 24,980 - - $ 25,000
Net Loss - - - - (873,615) - (873,615)
---------------------------------------------------------------------------------------------------------------------------------
Balance, at June 30, 2000 4,658,389 $4,658 466,999 $1,020,590 (873,615) (198,000) ( 46,367)
See accompanying notes to financial statements
</TABLE>
F-6
<PAGE>
ORIGIN INVESTMENT GROUP, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
CUMULATIVE
AMOUNTS
FROM DATE OF
INCEPTION
(APRIL 6,1999) THREE MONTHS
THROUGH ENDED
June 30, 2000 June 30, 2000
--------------- ---------------
<S> <C> <C>
Cash provided (applied):
Operating activities:
Net loss................................................... $ (873,615) $ (146,454)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation.......................................... $ 1,190 $ 400
Decrease in miscellaneous receivable.................. -- --
Decrease in advances to officer....................... -- --
Decrease in prepaid expenses.......................... 2,000 --
Increase (Decrease) in accounts payable............... 53,000 (45,703)
TOTAL FROM OPERATING ACTIVITIES $ (817,425) $ (191,757)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of office equipment............................... $ (4,211) $ -
Purchase of Investment Securities.......................... $ (676) (676)
--------------- ---------------
Net Cash (used in) investing activities.................... $ (4,887) (676)
Financing activities
Proceeds from Common Stock Issuances $ 825,248 $ 181,500
Proceeds from Class 2 Series A Conversion to Common Stock $ - $ 243,750
Reduction of amounts due investors $ - $ (882,513)
--------------- ---------------
Net cash provided by (used in) financing activities........ $ 825,248 $ (457,263)
--------------- ---------------
Increase (decrease) in cash..................................... $ 2,936 $ (649,696)
Cash balance, beginning of period............................. $ - $ 652,631
Cash balance, end of period................................... $ 2,936 $ 2,936
--------------- ---------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
</TABLE>
F-7
<PAGE>
ORIGIN INVESTMENT GROUP, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1. Origin Investment Group, Inc. ("the Company") was incorporated on
April 6, 1999 and is in the business of venture capital, which is
providing growth capital to emerging companies. The Company has
elected to be regulated as a business development company under the
Investment Company Act of 1940 and will operate as a nondiversified
company. Since its inception, the Company's efforts have been devoted
to raising capital and seeking out companies to invest in.
Accordingly, through the date of these financial statements, the
Company is considered to be in the development stage and the
accompanying financial statements represent those of a development
stage enterprise.
The Company has experienced losses since inception and has negative
cash flows from operations and has a stockholders' equity deficiency.
For the quarter ended June 30, 2000, the Company experienced a net
loss of 146,454.
The Company's ability to continue as a going concern is contingent
upon its ability to raise additional capital. In addition, the
Company's ability to continue as a going concern must be considered in
light of the problems, expenses and complications frequently
encountered by entrance into established markets and the competitive
environment in which the Company operates.
Management is pursuing various sources to raise capital and has
purchase agreements in place to acquire certain companies, contingent
on due diligence and the ability to raise capital when needed or
obtain such on terms satisfactory to the Company, if at all. Failure
to raise capital may result in the Company depleting its available
funds and not being able to fund its investment pursuits.
NOTE 2. The accompanying financial statements for the three months ended
June 30, 2000 have been prepared, without audit, pursuant to the rules
and regulations of the Securities ad Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. The
condensed financial statements and these notes should be read in
conjunction with the financial statements of the Company included in
the Company's Annual Report of Form 10-K for the period from inception
(April 6, 1999) through December 31, 1999. The balance sheet at
December 31, 1999 has been derived from the audited financial
statements at that date and condensed.
NOTE 3. The information furnished herein reflects all adjustments
(consisting only of normal recurring accruals) which are, in the
opinion of management, necessary for a fair presentation of the
results of operations for the interim period. Results of operations
for the three months ended June 30, 2000 are not necessarily
indicative of results to be expected for the entire year.
NOTE 4. RETURN OF FUNDS HELD IN ESCROW RE ENCORE/SIGMA TRANSACTION
On June 23, 2000, the Company returned to its Class 1 Series A
Convertible Preferred Stockholders an aggregate of $638,762.50 plus
interest accrued from the date the escrow was established to the date
of the disbursements. These funds, previously classified as
"restricted cash" were returned to the Class 1 Preferred stockholders
in connection with the escrow agreement, which indicated that in the
event that the purchase of Encore Investments, Inc. and Sigma
Solutions, Inc was not consummated, all funds deposited within the
escrow account, plus interest accrued, would be returned to all Class
1 Preferred Stockholders.
NOTE 5. EQUITY TRANSACTIONS DURING SECOND QUARTER
The Company sold 50,000 shares of common stock on April 14, 2000 to an
investor personally known to Origin officers. These shares are
restricted from resale pursuant to Rule 144 of the Securities Act of
1933.
On May 8, 2000 the Company sold 142,000 Units to eleven accredited
investors for an aggregate of $156,500 or $0.75 per Unit. Each Unit
was comprised of one share of common stock and one Class A common
stock purchase warrant. Each Class A common stock purchase warrant is
redeemable for one restricted common stock upon a payment of $.75 per
warrant. The price of the Unit was equal to the closing bid price of
the Company's common stock on the date of sale. The Unit sales were
conducted according to the requirements of Regulation E, exempting the
common stock portion of the Unit from registration under the
Securities Act of 1933. The Class A warrants nor the underlying common
stock were registered or filed for exemption pursuant to Regulation E.
On May 30, 2000 the Company converted each Class 2 Series A
Convertible Preferred Stock and restricted stock award issued in
connection therewith into 383.33 Units. Each Class 2 Series A
Convertible Preferred shareholder agreed to the conversion. Each Unit
offered to the Class 2 Series A shareholder was comprised of one
common stock and one Class B Common Stock Purchase Warrant where each
Class B Common Stock Purchase Warrant is redeemable for one common
stock upon the payment of $1.50 to the Company by the warrant holder.
As a result of this conversion, the Company issued 324,999 shares of
common stock to the Class 2 Series A Convertible Preferred
Stockholders.
On June 12, 2000 the Company sold 20,000 shares of its restricted
common stock to two accredited investors for $25,000 or $1.25 per
share. This sale was conducted in accordance to Section 4(6) of the
Securities Act of 1933 as a private placement transaction.
ORIGIN INVESTMENT GROUP, INC.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Except for historical information, the following discussion of our
financial condition and results of operations contains forward looking
statements based on current expectations that involve certain risks and
uncertainties. Our actual results could differ materially from those set forth
in these forward-looking statements as a result of a number of factors. Unless
specified otherwise, the terms, "we", "us", "our", "the company", and "Origin"
refer to Origin Investment Group, Inc.
Overview
We are a business development company incorporated in the State of Maryland
on April 6, 1999. We are in the start up stage and we have not had any revenues
to date and we have not made any investments. Since inception our operations
have been limited to identifying, investigating and conducting due diligence
upon private companies involved within the Information Technology industry for
the purpose of investing in such companies. Our strategy is to identify several
profitable IT service businesses, invest in such companies, consolidate their
operations and technologies to create a profitable e-business solutions company.
Our financial statements are presented on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities in the
normal course of business.
We have experienced a loss since inception and have negative cash flows
from operations and have a stockholder's equity deficiency. For the period ended
June 30, 2000, we experienced a net loss of $146,454.
Our ability to continue as a going concern is contingent upon our ability
to raise additional capital. In addition, the ability to continue as a going
concern must be considered in light of the problems, expenses and complications
frequently encountered by entrance into established markets and the competitive
environment in which we operate.
The report of the Company's Independent Certified Public Accountants'
includes an explanatory paragraph expressing substantial doubt about the our
ability to continue as a going concern. The financial statements do not include
any adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities that
may result from our possible inability to continue as a going concern. This
quarterly report has not been reviewed by our Independent Certified Public
Accountants.
Liquidity and Capital Resources
Since our inception, we have funded our operations solely through payments
received from the sale of our equity securities. Our current liquidity and
capital resources are contingent on our ability to continue to fund our
operations through the sale of our equity securities. If we are unsuccessful in
continuing to raise capital through the sale of our securities, we will have
difficulty in meeting our short term obligations and may cease to continue as a
going concern. Our ability to sell our equity securities to fund operations and
to make investments within identified eligible portfolio companies, in large
part, is contingent upon the depth and liquidity of our secondary market of our
common stock. Any failure to raise sufficient capital pursuant to the current or
future Origin offerings could require us to substantially curtail our
portfolio-investment acquisition efforts in general, and could require us to
cease operations.
Our cash flow requirements have continuously exceeded our capital resources
during the quarter, requiring us to issue additional equity securities for sale
to meet our short term obligations. We anticipate operating at such a deficit
for the next several months until we are able to secure additional working
capital. The return of funds received from our Class 1 Series A Preferred
Stockholders has significantly decreased our liquidity and capital resources.
$5,000,000 EQUITY LINE OF CREDIT
On June 14, 2000 we entered into an agreement ("FFC Agreement") with First
Fidelity Capital, Inc. ("FFC") an investment advisor to the Alpha Group of
Funds, ("Alpha Funds"), whereby the Alpha Funds have committed to purchase five
million dollars ($5,000,000) of our common stock (the "Put" or "Put Right") from
time to time during a period of twelve months and subject to our satisfaction of
certain conditions as described in a subscription agreement with the Alpha Funds
("Equity Funding Line of Credit"). The Equity Funding Line of Credit is subject
to, among other things, the completion of a Regulation E Common Stock Private
Equity Line Subscription Agreement ("Subscription Agreement") and obtaining
third party approvals and opinions. Our ability to draw on this Equity Funding
Line of Credit is directly tied to the trading activity within our common stock
on the over-the-counter market. Our Put Right is limited to a maximum of
$500,000 and a minimum of $100,000 but is subject always to a limit of two (2)
times the "Trading Volume" on the trading day immediately preceding delivery of
the draw notice by us to the Alpha Funds. Trading Volume is defined in the FFC
Agreement as the dollar amount of the average close bid price and average daily
trading volume over the twenty (20) trading days preceding the put date. We are
allowed to exercise our Put Rights every 15 trading days following the preceding
exercise of a Put Right. This Equity Funding Line of Credit, subject to our
ability to favorably market our company and thereby generate Trading Volume
within our common stock, will have a significantly favorable effect on our
ability to meet our short term obligations as well as provide us with additional
capital to make investments within one or more eligible portfolio companies.
INITIATION OF PUBLIC AND INVESTOR RELATIONS CAMPAIGN
Management is confident that further amounts of equity capital in the form
of additional equity lines of credit as well as private placement and secondary
offerings will be available to the Company after the Company successfully
commences a public and investor relations campaign to bring awareness to the
Company's business plan and to the businesses in which Origin will invest. Such
a campaign of public and investor relations has not yet commenced since
management has held the position from inception that such a campaign should only
commence once one or more eligible portfolio companies have been successfully
identified and agreements to invest in such companies are in place. As of the
date of filing this quarterly report, the Company had begun due diligence
investigations of several public relations and investor relations firms.
Results of Operations
Our operations have been limited to obtaining additional capital through
the sale of our equity securities and negotiating with additional potential
eligible portfolio companies for possible investment. To date we have had
negative cash flows and anticipate continuing to do so in the near future. We
anticipate that upon completion of an investment within an eligible portfolio
company, our operational costs will increase substanially in light of the need
to hire additional personnel, including a Chief Financial Officer and additional
support staff.
During the current quarter our management team has vigorously been
eliminating and rectifying ongoing operational and administrative matters to
more effectively continue with its ongoing efforts to strengthen and ultimately
bring profitability to the Company and its shareholders. Specifically, we have
now incorporated the use of a robust accounting system, Platinum for Windows(tm)
which will allow us to more effectively prepare our financial statements for
timely incorporation within our interim reports.
Our strategy and plan for the remainder of this fiscal year is to raise
additional capital through the sale of our stock and purchase controlling
interests within one or more profitable private businesses involved in the
Internet infrasturcture and services sector of the IT industry. Our investment
strategy is to acquire controlling interests within two or more "core"
profitable IT businesses involved in ASP, Systems Integration and Internet
Services to create, on consolidation of such entities, a profitable e-business
solutions company that provides its customers with web/e-commerce applications,
IT consulting and solutions and other value added services and which utilizes
ASP delivery and co-location hosting strategies on a cost effective basis to end
users. We intend on creating such an eligible portfolio company by consolidating
one or more systems integrators, value added resellers and a cutting edge
e-business solutions companies that we have identified and may identify over the
next several months. Our initial investments will be within these "core"
businesses that have built and have executed profitable business models and
therafter combine such core businesses with technology resources found within
development stage Internet web design and e-commerce integration companies.
ENCORE/SIGMA TRANSACTION
On June 5, 2000 we determined that it was not advisable to further pursue
any investment opportunity with Encore Investments, Inc. and Sigma Solutions,
Inc., ("Encore/Sigma") on account of Encore/Sigma's poor financial performance
during the first two quarters of fiscal year 2000. Although we had invested a
significant amount of time and capital into the acquisition of Encore/Sigma, it
was determined by our Board and management that an all cash purchase of
Encore/Sigma capital stock was not advisable in lieu of Encore/Sigma's less than
expected performance this fiscal year. Although a future possible investment
within Encore/Sigma has not been ruled out, we have commenced discussions and
investigations with several other profitable "core" portfolio companies.
RECENT DEVELOPMENTS- TRANSITION 1 / MANAGEMENT ACCOUNTING SYSTEMS, INC.
As of the date of filing of this quarterly report, we have identified and
have commenced negotiations with a profitable potential eligible portfolio
company which meets and exceeds our investment criteria. This company,
Transition 1/Management Accounting Systems, Inc. ("T1/MAS") based in California,
historically has operated as a profitable value added reseller of Epicor(tm)
(NASDAQ:EPIC) business software including popular middle market accounting
software Platinum(tm) and Platinum for Windows(tm). T1/MAS has embarked recently
on an aggressive campaign to become a preeminent accounting software solutions
provider over the internet by launching its new subsidiary company and
accompanying website, www.iacctg.com iAcctg.com is an Application Service
Provider (ASP) leader delivering Enterprise Management Systems to progressive
corporations that help them achieve competitive advantages through the strategic
integration of technology, people, and processes. iAcctg.com allows clients to
access to the award winning Epicor Suite of business software, including one of
today's premier accounting solutions, Platinum for Windows(tm), as well as
choose from a number of other integrated application(s) to fit their business
needs and pay one low, monthly cost. iAcctg.com offers ECommerce, accounting,
customer relationship management (CRM), sales force automation, knowledge
management, human resources, payroll, office productivity, fixed assets,
collection management and more. IAcctg.com's Enterprise Resource Planning (ERP)
solutions integrate seamlessly, front office to back office, so clients do not
have to duplicate their work. iAcctg.com's applications are managed in a secure
data center, providing the client with 24 x 7 access to their applications over
the Internet. iAcctg.com's rapid implementation plan can have a company up and
running in days (rather than weeks, months or years). Clients typically sign up
for renewable three year contracts that contain multiple levels of support for
their applications.
SPECIAL NOTICE REGARDING FORWARD LOOKING STATEMENTS
This Form 10-Q, the quarterly report, and certain information provided
periodically in writing or orally by the Company's Officers or its agents
contains statements which constitute "forward-looking statements" within the
meaning of Section 27A of the Securities Act, as amended and Section 21E of the
Securities Exchange Act of 1934. The words "expect," "believe," "plan,"
"intend," "estimate", "anticipate", "strategy", "goal" and similar expressions
and variations thereof if used are intended to specifically identify
forward-looking statements. Those statements may appear in a number of places in
this Form 10-Q and in other places, particularly, "Management's Discussion and
Analysis of Financial Condition and Results of Operations", and include
statements regarding the intent, belief or current expectations of the Company,
its directors or its officers with respect to, among other things:
(i) the successful completion of investment(s) within one or more eligible
portfolio companies that we have identified, (ii) our liquidity and capital
resources; and (iii) our future performance and operating results.
Investors and prospective investors are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, and that actual results may differ materially from
those projected in the forward-looking statements as a result of various
factors. The factors that might cause such differences include, among others,
the following:
(i) any adverse effect or limitations caused by any governmental
regulations or actions; (ii) any increased competition in our business of
providing venture capital to eligible portfolio companies; (iii) successfully
identifying, negotiating, structuring and making investments within one or more
eligible portfolio companies; (iv) our ability to raise necessary investment
capital within the time frame agreed to between us and the principals of an
eligible portfolio company in order to successfully invest in such eligible
portfolio company; (v) the continued relationship with and success of the
management and owners of an eligible portfolio company after our investment; and
(vi) the continued performance of our eligible portfolio companies with
respect to their operations, including, but not limited to:
a. continued employment of key personnel, hiring of qualified additional
personnel;
b. the eligible portfolio company's mitigation of excessive and
extraordinary costs, and achieving projected profits and additional
customers for their growth.
c. Any other factors which would otherwise impede our eligible portfolio
company in achieving its performance goals upon which we based a
favorable return on our investment.
We undertake no obligation to publicly update or revise the forward looking
statements made in this Form 10-Q or annual report to reflect events or
circumstances after the date of this Form 10-Q and annual report or to reflect
the occurrence of unanticipated events.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We have no securities that are subject to interest rate fluctuations,
foreign currency risk, commodity price or any other relevant market risks during
the period covered by this Quarterly Report. We have not entered into any
hedging transactions or acquired any derivative instruments during the period
covered by this Quarterly Report.
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds.
On May 30, 2000 we provided each investor who originally invested funds
pursuant to the Class 2 Series A Convertible Preferred Offering the opportunity
to receive, in exchange for their every Series A Convertible Preferred shares
and additional restricted shares awarded pursuant to that offering, 383.33
Units. Each Unit was comprised of one common stock and one Class A common stock
purchase warrant. Each Class A common stock purchase warrant is redeemable for
one common stock upon the payment of $1.50 redemption price per warrant. All
Class 2 Series A Convertible Preferred shareholders agreed to the conversion
proposed, which resulted in the issuance of 324,999 Units. This conversion
resulted in the removal of all Series A Convertible Preferred shares that had
been previously issued. At the present time, we do not have any class of
Preferred Shares issued and outstanding.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered
Securities
On April 14, 2000 we sold directly to a known accredited investor 50,000
shares of common stock, restricted pursuant to Rule 144, for $50,000 or $1.00
per share. This transaction was conducted privately in reliance on Sections 4(2)
and/or 4(6) of the Securities Act of 1933.
On May 8, 2000 we sold 142,000 Units to eleven accredited investors for an
aggregate of $106,500 or $.75 per Unit. Each Unit sold was comprised of one
common stock and one Class A common stock purchase warrant. Each Class A common
stock purchase warrant is redeemable for one share of common stock upon payment
of $.75 by the warrant holder to the Company (redemption price). The common
stock portion of the Unit was registered pursuant to Rule 606 of Regulation E.
However, the Class A common stock purchase warrants and the underlying common
stock to such warrants have not been regsitered and are restricted pursuant to
Rule 144 of the Securities Act of 1933. We relied on Rule 606 of Regulation E
and Sections 4(2) and/or 4(6) of the Securities Act of 1933 with respect to
these transactions.
On June 12, 2000 the Company sold 20,000 shares of its restricted common
stock to two accredited investors for $25,000 or $1.25 per share. This sale was
conducted in accordance to Section 4(6) of the Securities Act of 1933 as a
private placement transaction.
The Company has revoked its previous offering of 16,000 of its Series A
Convertible Preferred Shares for an aggregate of $4,600,000 originally filed on
February 29, 2000, pursuant to Regulation E. This offering was not completed and
no Series A Convertible Preferred shares were issued. The Series A Convertible
Preferred Shares were offered at $287.50 each to two classes of investors, Class
1 and Class 2. Class 1 investors were provided with an escrow within which their
investment was deposited and structured where no funds were to be released to
Origin unless an aggregate of $2,650,000 was deposited within this escrow
account by May 16, 2000. (The purpose of the funds to be raised pursuant to this
offering was to assist Origin in making an investment in the common stock of
Encore Investments, Inc. and Sigma Solutions, Inc., two identified eligible
portfolio companies.) An aggregate of $638,000 was raised from Class 1 Series A
Convertible Preferred Investors. Class 2 Series A Convertible Preferred
Investors were offered an additional share of common stock ("Incentive Stock")
for every $10 invested as an additional incentive to putting their funds at risk
to be used by the Company immediately upon receipt. An aggregate of $243,750 was
raised from three Class 2 Series A investors. Each of these three Class 2 Series
A investors have agreed to exchange their interest in the Series A Convertible
Preferred Stock and the accompanying Incentive Stock for Units from the Company.
Each Unit offered to the Class 2 Series A Convertible Preferred investors is
comprised of one common stock and one Class A Common Stock Purchase Warrant
which is redeemable into one common stock upon the additional payment of $1.50
per Class A Common Stock Purchase Warrant to the Company. The Units were priced
at $0.75 per Unit to reflect the reduction in the fair market value of the
Company's common stock on the date of issuance (May 30, 2000). Hence, no Series
A Convertible Preferred Shares have been issued and all funds held in escrow on
behalf of the Class 1 shareholders have been returned to them at the date of
filing the notice of withdrawal of this offering.
Item 5. Other Items
On June 4, 2000, the Company entered into an agreement with International
Investor Relations Group, Inc. ("IIRG") to provide investor relations services
to Origin which include:
(a) organizing and co-attending a 28 city road show throughout the United
States which will reach between 600-750 brokers, fund managers, and
financial advisors;
(b) Three Media Placements - Opportunist Magazine, Stockbrokers Magazine, and
Buyside Magazine;
(c) Six Media Placements in Stock/Card deck reaching 600,000 + investors-
Standard stockdeck/broker deck mailers directly mailed to the Readers of
Money World, Bull & Bear, Louis Rukerser, WS Insiders Guide, Growth Stocm
Report Investors Daily Newswire
(d) Twenty four Newsreleases, includes broadcast fax to all interested parties-
News releases by Business Newswire and picked up by Bloomberg, Dow Jones
News Service, Reuters, etc.
(e) Research Report 6-8 page full color (f) Due Diligence Request fulfillment
for one year (g) Broker Card- 2 sided full color (5000 printed).
The above services will commence within the next several weeks and is
contingent upon payment for the above mentioned services to IIRG by Company.
Origin anticipates commences the investor and public relations campaign with
IIRG upon the successful closing of its initial investment transaction.
We have begun investigating the prospect of relocating our headquarters
from Chicago to the Los Angeles area. We anticipate that this relocation will
not materially impact our operations.
Item 6. Exhibits and Reports on Form 8-K.
1. Exhibits
Exhibit Description
3.1 Articles of Incorporation of Origin filed on April 6, 1999
(incorporated by reference to Exhibit 3(i) to Form 10 filed by Origin
on August 16, 1999)
3.2 Bylaws of Origin. (Incorporated by reference to Exhibit 3(ii) to Form
10 filed by Origin on August 16, 1999)
4.1 Offering Circular for Series A Convertible Preferred Stock Offering
dated February 14, 2000. (Incorporated by reference to Exhibit A(1) to
Form 1-E filed by Origin on February 15, 2000)
27 Financial Data Schedule.
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 on August 21,
2000 by the undersigned thereunto duly authorized.
ORIGIN INVESTMENT GROUP, INC.
/s/ OMAR A. RIZVI
---------------------------------
Omar A. Rizvi
President, Chairman of the Board of Directors
