U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
[X[ ANNUAL REPORT PURSUANT TO SECTION 13
OF THE SECURITIES EXCHANGE ACT
For the Fiscal Year Ended December 31, 1999
Commission File No.
ORION RESEARCH GROUP, INC.
(Name of Small Business Issuer as specified in its Charter)
Nevada 504 Mueller Lane, Minden, NV 89423 88-0372579
(State or Other (Address of Principal Executive Office, (IRS Employer
Jurisdiction of including Zip Code) Identification No.)
incorporation )
(775) 782-4003
(Registrant's telephone number, including area code)
Securities Registered under Section 12(b) of the Exchange Act:
Title of each Class Name of Each Exchange on which Registered
------------------- -----------------------------------------
None None
Securities registered Under Section 12(g) of the Exchange Act: Common Stock,
$0.00001 Par Value
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 requirements 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 contained in this form, and no disclosure will be contained, to
the best of management's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this form 10-K. [X]
State issuer's revenues for its most recent fiscal year: $-0-.
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days: $-0- (stock is not quoted).
As of March 29, 2000 the issuer had 250,000 shares of common stock issued and
outstanding.
<PAGE>
PART I
Item 1. Description of Business.
General
Orion Research Group, Inc. ("Company") was incorporated on December 5, 1996
under the laws of the State of Nevada. In December 1996, pursuant to
Subscription agreements, the Company sold 250,000 shares of its common stock to
25 investors for $2,500.00 cash. Orion had not yet engaged in any business
operations. The business purpose of the Company was, and remains, to seek out
and obtain an acquisition, merger or outright sale transaction, whereby its
shareholders would benefit.
Proposed Business
The Company intends to locate and combine with an existing, privately
held company, which is profitable, or, in management's view, has growth
potential, irrespective of the industry in which it is engaged. At this time,
the Company is not engaged in any discussion with potential combination partners
regarding a possible business combination. However, the Company does not intend
to combine with a private company that may be deemed to be an investment company
subject to the Investment Company Act of 1940. A combination may be structured
as a merger, consolidation, exchange of the Company's common stock for stock or
assets or any other form that will result in the combined enterprise's becoming
a publicly held corporation.
Pending negotiation and consummation of a combination, the Company
anticipates that it will have, aside from carrying on its search for a
combination partner, no business activities, and, thus, will have no source of
revenue. Should the Company incur any significant liabilities prior to a
combination with a private company, it may not be able to satisfy such
liabilities as they are incurred.
If the Company's management pursues one or more combination
opportunities beyond the preliminary negotiations stage and those negotiations
are subsequently terminated, it is foreseeable that such efforts will exhaust
the Company's ability to continue to seek such combination opportunities before
any successful combination can be consummated. Due to the Company's limited
resources and lack of revenue in the event such initial efforts to consummate a
business combination fail, the company may not be able to seek additional
combination partners. An extensive search for a suitable combination partner may
incur substantial expenses, which the Company is unable to fulfill. A limited
search shall be more appropriate due to the aforementioned limited resources and
revenue. Only slight efforts may take place and once these efforts are
exhausted, the financial constraints of the Company may result in an inability
to seek future partners and thus end the search therein. In that event, the
Company's common stock will become worthless and holders of the Company's common
stock will receive a nominal distribution, if any, upon the Company's
liquidation and dissolution.
Combination Suitability Standards
In its pursuit for a combination partner, the Company's management
intends to consider only combination candidates, which are profitable, or, in
management's view, have growth potential. The Company's management does not
intend to pursue any combination proposal beyond the preliminary negotiation
stage with any combination candidate that does not furnish the Company with
audited financial statements for at least its most recent fiscal year and
unaudited financial statements for interim periods subsequent to the date of
such audited financial statements, or is in a position to provide such financial
statements in a timely manner. In the event such a combination candidate is
2
<PAGE>
engaged in a high technology business, the Company may obtain reports from
independent organizations of recognized standing covering the technology being
developed and/or used by the candidate. The Company's limited financial
resources may make the acquisition of such reports difficult or even impossible
to obtain and, thus, there can be no assurance that the Company will have
sufficient funds to obtain such reports when considering combination proposals
or candidates. To the extent the Company is unable to obtain the advice or
reports from experts, the risks of any combined enterprise's being unsuccessful
will be enhanced. Furthermore, to the knowledge of the Company's officers and
directors, neither the candidate nor any of its directors, executive officers,
principal shareholders or general partners:
(1) will have been convicted of securities fraud, mail fraud, tax fraud,
embezzlement, bribery, or a similar criminal offense involving
misappropriation or theft of funds, or be the subject of a pending
investigation or indictment involving any of those offenses;
(2) will have been subject to a temporary or permanent injunction or
restraining order arising from unlawful transactions in securities,
whether as issuer, underwriter, broker, dealer, or investment advisor,
may be the subject of any pending investigation or a defendant in a
pending lawsuit arising from or based upon allegations of unlawful
transactions in securities; or
(3) will have been a defendant in a civi1 action which resulted in a final
judgement against it or him awarding damages or rescission based upon
unlawful practices or sales of securities.
The Company's officers and directors will make these determinations by
asking pertinent questions of the management of prospective combination
candidates. Such persons will also ask pertinent questions of others who may be
involved in the combination proceedings. However, the officers and directors of
the Company will not generally take other steps to verify independently
information obtained in this manner which is favorable. Unless something comes
to their attention that puts them on notice of a possible disqualification which
is being concealed from them, such persons will rely on information received
from the management of the prospective combination candidate and from others who
may be involved in the combination proceedings.
Item 2. Description of Property.
As of December 31, 1999, the Company has no properties.
Item 3. Legal Proceedings.
The Company is not a party to any material pending litigation nor is it
aware of any threatened legal proceeding.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to securities holders during the year ended
December 31, 1998.
3
<PAGE>
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
Market Information
The stock does not trade on any exchange or the OTC market. There is no
known public market for this security. As of March 29, 2000, there were 25
holders on record of the Company's common stock, holding a total of 250,000
shares.
Dividend Policy
The Company has never paid any dividends on its common stock and does
not have any current plan to pay any dividends in the foreseeable future.
Item 6. Management's Discussion and Analysis of Financial Condition and Plan of
Operation.
Discussion of Financial Condition
The Company currently has no revenues, no operations and owns no
assets. The Company will remain illiquid until such time as a business
combination transaction occurs. No prediction of the future financial condition
of the Company can be made.
Due to the lack of sustaining operations from inception, the
Company is considered in the development stage and, as such, has generated no
significant operating revenues and has incurred cumulative operating losses of
approximately $2,700. Accordingly, the Company is dependent upon its current
management and/or significant stockholders to provide sufficient working capital
to preserve the integrity of the corporation during this phase.
Plan of Business
General.
While the Company conducts its search to locate and combine with an
existing privately held company, it will depend on the continued financial
support of Herman G. Herbig, the President, Secretary and Sole Director of the
Company.
The Company's independent auditors have raised substantial doubt about
the Company's ability to continue as a going concern since the Company has no
current source of revenue. Mr. Herbig has verbally indicated that he will, for a
minimum of the next twelve months, continue to fund the Company's immediate
needs for legal and accounting purposes and devote as much time as is need to
pursue a business combination until fruition.
The process for seeking a combination partner involves a strategic
initiative with several components in order to find the partner which best suits
the Company's interests. A detailed financial analysis of the partner is
conducted on any potential combination partner. Analysis on the company's
assets, liabilities, revenues, potential litigation, dividends, goodwill and
business reputation in the community shall occur in order to solidify all the
criteria sought after by the Company in a combination partner. The partners may
be referred to the Company from other sources, found through research of the
Company's officers, directors or management.
4
<PAGE>
Pending negotiation and consummation of a combination, the Company
anticipates that it will have, aside from carrying on its search for a
combination partner, no business activities, and, thus, will have no source of
revenue. Should the Company incur any significant liabilities prior to a
combination with a private company, it may not be able to satisfy such
liabilities as they are incurred.
If the Company's management pursues one or more combination
opportunities beyond the preliminary negotiations stage and those negotiations
are subsequently terminated, it is foreseeable that such efforts will exhaust
the Company's ability to continue to seek such combination opportunities before
any successful combination can be consummated. In that event, the Company's
common stock will become worthless and holders of the Company's common stock
will receive a nominal distribution, if any, upon the Company's liquidation and
dissolution.
Combination Suitability Standards. In its pursuit for a combination
partner, the Company's management intends to consider only combination
candidates which are profitable or, in management's view, have growth potential.
The Company's management does not intend to pursue any combination proposal
beyond the preliminary negotiation stage with any combination candidate which
does not furnish the Company with audited financial statements for at least its
most recent fiscal year and unaudited financial statements for interim periods
subsequent to the date of such audited financial statements, or is in a position
to provide such financial statements in a timely manner. In the event such a
combination candidate is engaged in a high technology business, the Company may
obtain reports from independent organizations of recognized standing covering
the technology being developed and/or used by the candidate. The Company's
limited financial resources may make the acquisition of such reports difficult
or even impossible to obtain and, thus, there can be no assurance that the
Company will have sufficient funds to obtain such reports when considering
combination proposals or candidates. To the extent the Company is unable to
obtain the advice or reports from experts, the risks of any combined
enterprise's being unsuccessful will be enhanced. Furthermore, to the knowledge
of the Company's officers and directors, neither the candidate nor any of its
directors, executive officers, principal shareholders or general partners:
(1) will have been convicted of securities fraud, mail fraud, tax
fraud, embezzlement, bribery, or a similar criminal offense
involving misappropriation or theft of funds, or be the subject of
a pending investigation or indictment involving any of those
offenses;
(2) will have been subject to a temporary or permanent injunction or
restraining order arising from unlawful transactions in
securities, whether as issuer, underwriter, broker, dealer, or
investment advisor, may be the subject of any pending
investigation or a defendant in a pending lawsuit arising from or
based upon allegations of unlawful transactions in securities; or
(3) will have been a defendant in a civil action which resulted in a
final judgement against it or him awarding damages or rescission
based upon unlawful practices or sales of securities.
The Company's officers and directors will make these determinations by
asking pertinent questions of the management of prospective combination
candidates. Such persons will also ask pertinent questions of others who may be
involved in the combination proceedings. However, the officers and directors of
the Company will not generally take other steps to verify independently
information obtained in this manner which is favorable. Unless something comes
to their attention which puts them on notice of a possible disqualification
which is being concealed from them, such persons will rely on information
received from the management of the prospective combination candidate and from
others who may be involved in the combination proceedings.
5
<PAGE>
Item 7. Financial Statements.
Page
----
Report of Independent Certified Public Accountants F-1
Financial Statements
Balance Sheets as of December 31, 1999, 1998 and 1997 F-2
Statements of Operations and Comprehensive Income F-4
for the years ended December 31, 1999, 1998 and 1997
and for the period December 5, 1996 (date of inception)
to December 31, 1999
Statement of Changes in Shareholder's Equity F-5
for the years ended December 31, 1999, 1998 and 1997
Statements of Cash Flows F-6
for the years ended December 31, 1999, 1998 and 1997
and for the period December 5, 1996 (date of inception)
to December 31, 1999
Notes to Financial Statement F-7
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures.
None
6
<PAGE>
PART III
Item 9. Directors. Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act.
The only officer and director of the Company since its formation in
December 1996 is Herman G. Herbig, age 45, who is its Secretary and sole
Director Set forth below is a description of the background of the only officer
and director of the Company.
Mr. Herbig has been a licensed and practicing attorney in Minden and
Las Vegas, Nevada, specializing in estate planning, taxation, corporate law and
probate law since 1988. He is also an accountant. From 1991 until 1995, he was
the Public Administrator for Douglas County, Nevada, an elected public official
responsible for the administration of decedents' estates on behalf of the
county.
Item 10. Executive Compensation.
The Company's management is not currently compensated for services
provided to the Company, and no compensation has been accrued and none is
expected to be accrued in the future.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table set forth the names and addresses of each of the
persons known by the Company to own beneficially 5% or more of the common stock
of the Company, as well as the common stock ownership of each of the officers
and directors of the Company as of March 29, 2000.
Name and Address Number of Shares Percentage of Ownership
The Business Advantage, Inc. 225,000(1) 90%
504 Muller Lane
Minden, NV 89423
Herman G. Herbig 1,750 1%
504 Muller Lane
Minden, NV 89423
All officers and directors as
a group (one person) 226,750(1) 91%
- --------------------------------------------------------------------------------
1) The Business Advantage, Inc. is owned by Herman G. Herbig and the shares
owned by that corporation are included in the total indicated for all directors
and officers as a group. Both that corporation and Mr. Herbig are affiliates of
the Company. Mr. Herbig is the sole shareholder of The Business Advantage, Inc.
Item 12. Certain Relationships and Related Transactions.
None
Item 13. Exhibits and Reports on Form 8-K.
Exhibits: None
Reports on Form 8-K : None
7
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: March 29,1999
ORION RESEARCH GROUP, INC.
By: /s/ Herman G. Herbig
--------------------
Herman G. Herbig
President, Secretary and sole Director
8
<PAGE>
Orion Research Group, Inc.
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1999
December 31, 1998
December 31, 1997
<PAGE>
TABLE OF CONTENTS
PAGE #
INDEPENDENT AUDITORS REPORT F-1
-----------------------------------------------------------------------
ASSETS F-2
-----------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY F-3
-----------------------------------------------------------------------
STATEMENT OF OPERATIONS F-4
-----------------------------------------------------------------------
STATEMENT OF STOCKHOLDERS' EQUITY F-5
-----------------------------------------------------------------------
STATEMENT OF CASH FLOWS F-6
-----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS F-7-11
-----------------------------------------------------------------------
9
<PAGE>
BARRY L. FRIEDMAN, P.C.
Certified Public Accountant
INDEPENDENT AUDITORS' REPORT
Board of Directors March 24, 2000
Orion Research Group, Inc.
Las Vegas, Nevada
I have audited the accompanying Balance Sheets of Orion Research Group,
Inc. (A Development Stage Company), as of December 31, 1999, December 31, 1998,
and December 31, 1997, and the related statement of stockholder's equity for
December 31, 1999, December 31, 1998, and December 31, 1997 and the statements
of operations and cash flows for the three years ended December 31, 1999,
December 31, 1998, and December 31, 1997 and the period December 5, 1996
(inception) to December 31, 1999. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit 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 principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Orion Research
Group, Inc. (A Development Stage Company), as of December 31, 1999, December 31,
1998, and December 31, 1997, and the related statement of stockholder's equity
for December 31, 1999, December 31, 1998, and December 31, 1997 and the
statements of operations and cash flows for the three years ended December 31,
1999, December 31, 1998, and December 31, 1997 and the period December 5, 1996
(inception) to December 31, 1999, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note #5 to the
financial statements, the Company has suffered recurring losses from operations
and has no established source of revenue. This raises substantial doubt about
its ability to continue as a going concern. Management's plan in regard to these
matters is described in Note #5. These financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Barry L. Friedman
- ---------------------------
Barry L. Friedman
Certified Public Accountant
1582 Tulita Drive
Las Vegas, NV 89123
Phone: (702) 361-8414
F-1
<PAGE>
<TABLE>
<CAPTION>
Orion Research Group, Inc.
(A Development Stage Company)
BALANCE SHEET
ASSETS
December December December
31, 1999 31, 1998 31, 1997
---------------- --------------- ----------------
<S> <C> <C> <C>
CURRENT ASSETS
CASH $ 0 $ 45 $ 330
---------------- --------------- ----------------
TOTAL CURRENT ASSETS $ 0 $ 45 $ 330
---------------- --------------- ----------------
OTHER ASSETS
Organization Costs (Net) $ 0 $ 1,021 $ 1,371
---------------- --------------- ----------------
TOTAL OTHER ASSETS $ 0 $ 1,021 $ 1,371
---------------- --------------- ----------------
TOTAL ASSETS $ 0 $ 1,066 $ 1,701
---------------- --------------- ----------------
</TABLE>
The accompanying notes are an integral part of these financial statements
F-2
<PAGE>
<TABLE>
<CAPTION>
Orion Research Group, Inc.
(A Development Stage Company)
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
December December December
31, 1999 31, 1998 31, 1997
---------------- --------------- ----------------
<S> <C> <C> <C>
CURRENT LIABILITIES
Officer's Advances (Note #5) $ 1,600 $ 0 $ 0
---------------- --------------- ----------------
TOTAL CURRENT LIABILITIES $ 1,600 $ 0 $ 0
---------------- --------------- ----------------
STOCKHOLDERS' EQUITY (Note #4)
Common stock
Par value $0.01
Authorized 2,500,000 shares
Issued and outstanding at
December 31, 1997 -
250,000 shares $ 2,500
December 31, 1998 -
250,000 shares $ 2,500
December 31, 1999 -
250,000 shares $ 2,500
Additional Paid-In Capital 0 0 0
Deficit accumulated during
The development stage -4,100 -1,434 -799
---------------- --------------- ----------------
TOTAL STOCKHOLDERS' EQUITY $ -1,600 $ 1,066 $ 1,701
---------------- --------------- ----------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 0 $ 1,066 $ 1,701
---------------- --------------- ----------------
</TABLE>
The accompanying notes are an integral part of these financial statements
F-3
<PAGE>
<TABLE>
<CAPTION>
Orion Research Group, Inc.
(A Development Stage Company)
STATEMENT OF OPERATIONS
Year Year Year Dec. 5, 1996
Ended Ended Ended (Inception)
Dec. 31, Dec. 31, Dec. 31, to Dec. 31,
1999 1998 1997 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
INCOME
Revenue $ 0 $ 0 $ 0 $ 0
--------------- ---------------- --------------- ----------------
EXPENSES
General, Selling and
Administrative $ 1,645 $ 285 $ 420 $ 2,350
Amortization 1,021 350 350 1,750
--------------- ---------------- --------------- ----------------
TOTAL EXPENSES $ 2,666 $ 635 $ 770 $ 4,100
--------------- ---------------- --------------- ----------------
NET PROFIT/LOSS (-) $ -2,666 $ -635 $ -770 $ -4,100
--------------- ---------------- --------------- ----------------
Net Profit/Loss(-)
per weighted share
(Note #1) $ -.0107 $ -.0025 $ -.0031 $ -.0164
--------------- ---------------- --------------- ----------------
Weighted average
Number of common
shares outstanding 250,000 250,000 250,000 250,000
--------------- ---------------- --------------- ----------------
</TABLE>
The accompanying notes are an integral part of these financial statements
F-4
<PAGE>
<TABLE>
<CAPTION>
Orion Research Group, Inc.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Additional Accumu-
Common Stock paid-in lated
Shares Amount Capital Deficit
--------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Balance,
December 31, 1996 250,000 $ 2,500 $ 0 $ -29
Net loss year ended
December 31, 1997 -770
--------------- ---------------- --------------- ----------------
Balance,
December 31, 1997 250,000 $ 2,500 $ 0 $ -799
Net loss year ended
December 31, 1998 -635
--------------- ---------------- --------------- ----------------
Balance,
December 31, 1998 250,000 $ 2,500 $ 0 $ -1,434
Net loss year ended
December 31, 1999 -2,666
--------------- ---------------- --------------- ----------------
Balance,
December 31, 1999 250,000 $ 2,500 $ 0 $ -4,100
--------------- --------------- -------------- ---------------
</TABLE>
The accompanying notes are an integral part of these financial statements
F-5
<PAGE>
<TABLE>
<CAPTION>
Orion Research Group, Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Year Year Year Dec. 5, 1996
Ended Ended Ended (Inception)
Dec. 31, Dec. 31, Dec. 31, to Dec. 31,
1999 1998 1997 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Cash Flows from
Operating Activities
Net Loss $ -2,666 $ -635 $ -770 $ -4,100
Adjustment to
Reconcile net loss
To net cash provided
by operating
Activities
Amortization +1,021 +350 +350 +1,750
Changes in assets and
Liabilities
Organization Costs 0 0 0 -1,750
Increase in current
Liabilities
Officer's Advances +1,600 0 0 +1,600
--------------- ---------------- --------------- ----------------
Net cash used in
Operating activities $ -45 $ -285 $ -420 $ +2,500
Cash Flows from
Investing Activities 0 0 0 0
Cash Flows from
Financing Activities
Issuance of Common
Stock for Cash 0 0 0 -2,500
--------------- ---------------- --------------- ----------------
Net Increase (decrease) $ -45 $ -285 $ -420 $ 0
Cash,
Beginning of period 45 330 750 0
--------------- ---------------- --------------- ----------------
Cash, End of period $ 0 $ 45 $ 330 $ 0
--------------- ---------------- --------------- ----------------
</TABLE>
The accompanying notes are an integral part of these financial statements
F-6
<PAGE>
Orion Research Group, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999, December 31, 1998 and December 31, 1997
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized December 5, 1996, under the laws of the State
of Nevada as Orion Research Group, Inc. The Company currently has no
operations and in accordance with SFAS #7, is considered a development
company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ
from those estimates.
Cash and equivalents
The Company maintains a cash balance in a non-interest-bearing bank
that currently does not exceed federally insured limits. For the
purpose of the statements of cash flows, all highly liquid investments
with the maturity of three months or less are considered to be cash
equivalents. There are no cash equivalents as of December 31, 1999.
F-7
<PAGE>
Orion Research Group, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999, December 31, 1998 and December 31, 1997
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
Income taxes are provided for using the liability method of accounting
in accordance with Statement of Financial Accounting Standards No. 109
(SFAS #109) "Accounting for Income Taxes". A deferred tax asset or
liability is recorded for all temporary difference between financial
and tax reporting. Deferred tax expense (benefit) results from the net
change during the year of deferred tax assets and liabilities.
Reporting on costs of start-up activities
In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-5 ("SOP 98-5"), "Reporting on the Costs
of Start-Up Activities" which provides guidance on the financial
reporting of start-up costs and organization costs. It requires costs
of start-up activities and organization costs to be expensed as
incurred. SOP 98-5 is effective for fiscal years beginning after
December 15, 1998 with initial adoption reported as the cumulative
effect of a change in accounting principle.
Loss Per Share
Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS #128) "Earnings Per
Share". Basic loss per share is computed by dividing losses available
to common stockholders by the weighted average number of common shares
outstanding during the period. Diluted loss per share reflects per
share amounts that would have resulted if dilative common stock
equivalents had been converted to common stock. As of September 30,
1999, the Company had no dilative common stock equivalents such as
stock options.
Year End
The Company has selected December 31st as its year-end.
F-8
<PAGE>
Orion Research Group, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999, December 31, 1998 and December 31, 1997
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Year 2000 Disclosure
The year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year.
Computer programs that have time sensitive software may recognize a
date using "00" as the year 1900 rather than the year 2000. This could
result in a system failure or miscalculations causing disruption of
normal business activities. Since the Company currently has no
operating business and does not use any computers, and since it has no
customers, suppliers or other constituents, there are no material Year
2000 concerns.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended December
31, 1999, due to the net loss and no state income tax in Nevada, the
state of the Company's domicile and operations. The Company's total
deferred tax asset as of December 31, 1999, is as follows:
Net operation loss carry forward $ 4,100
Valuation allowance $ 4,100
Net deferred tax asset $ 0
The federal net operating loss carry forward will expire in various
amounts from 2016 to 2019.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
F-9
<PAGE>
Orion Research Group, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999, December 31, 1998 and December 31, 1997
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of Orion Research Group, Inc. consists of
2,500,000 shares with a par value of $0.01 per share.
Preferred Stock
Orion Research Group, Inc. has no preferred stock.
On December 27, 1996, the Company issued 250,000 shares of its $0.01
par value common stock in consideration of $ 2,500.00 in cash.
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. However, the Company does not have
significant cash or other material assets, nor does it have an
established source of revenues sufficient to cover its operating costs
and to allow it to continue as a going concern. It is the intent of the
Company to seek a merger with an existing, operating company. Until
that time, the stockholders/officers and or directors have committed to
advancing the operating costs of the Company interest free.
F-10
<PAGE>
Orion Research Group, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999, December 31, 1998 and December 31, 1997
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An
officer of the corporation provides office services without charge.
Such costs are immaterial to the financial statements and accordingly,
have not been reflected therein. The officers and directors of the
Company are involved in other business activities and may, in the
future, become involved in other business opportunities. If a specific
business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their other business
interests. The Company has not formulated a policy for the resolution
of such conflicts.
NOTE 7 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock.
F-11
<PAGE>
To Whom It May Concern: March 24, 2000
The firm of Barry L. Friedman, P.C., Certified Public Accountant
consents to the inclusion of their report of March 24, 2000, on the Financial
Statements of Orion Research Group, Inc., as of December 31, 1999, in any
filings that are necessary now or in the near future with the U.S. Securities
and Exchange Commission.
Very truly yours,
/s/ Barry L. Friedman
- ---------------------------
Barry L. Friedman
Certified Public Accountant
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