U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JULY 31, 1997
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission File No. 0-4006
ORION DIVERSIFIED TECHNOLOGIES, INC.
(Name of Small Business Issuer in its charter)
New Jersey 22-1637978
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
53 West Hills Road, Huntington Station, NY 11746
(Address of Principal Executive Offices)
(631) 425-6161
(Issuer's Telephone Number Including Area Code)
Indicate by check mark whether the Registrant (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 registration was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.
YES | | NO |X|
APPLICABLE ONLY TO ISSUES INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Section 12,13 or 15(d) of the Exchange Act after
the distribution of securities under a plan confirmed by a court.
YES |X| NO |_|
APPLICABLE ONLY TO CORPORATE REGISTRANTS
Indicate the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.
Common Stock, $.01 Par Value, 1,847,397 shares
<PAGE>
ORION DIVERSIFIED TECHNOLOGIES, INC.
Index to financial Statements
PART I FINANCIAL INFORMATION
ITEM 1 Financial Statements
Balance sheet as of and July 31, 1997
Results of operations for the three months ended
July 31, 1997 and 1996
Statements of cash flows for the three months ended
July 31, 1997 and 1996
Notes to financial statements
ITEM 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II OTHER INFORMATION
ITEM 1 Legal Proceedings
ITEM 2 Changes in Securities
ITEM 3 Defaults Upon Senior Securities
ITEM 4 Submission of Matters to a vote of Security-Holders
ITEM 5 Other Information
ITEM 6 Exhibits and Reports on Form 8-K
<PAGE>
ORION DIVERSIFIED TECHNOLOGIES, INC.
BALANCE SHEET
JULY 31, 1997
(Unaudited)
<TABLE>
Assets:
<S> <C>
Current Assets:
Inventory (Note 2) $ --
-------
Total current assets --
-------
Total assets $ --
=======
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued Expenses $ 5,250
Due to officer 123,862
-------
129,112
-------
Stockholders' Equity
Common Stock, par value $.01 per share, 18,469
authorized 10,000,000 shares, issued
and outstanding 1,847,397 shares
Paid-in capital 3,737
Deficit (151,318)
--------
Total stockholders' equity (129,112)
--------
Total liabilities and stockholders' equity $ --
========
</TABLE>
See accompanying notes.
<PAGE>
ORION DIVERSIFIED TECHNOLOGIES, INC.
STATEMENT OF OPERATIONS
THE THREE MONTHS ENDED JULY 31,
(Unaudited)
<TABLE>
1997 1996
---- ----
<S> <C> <C>
Revenues $ -- $ --
Costs and Expenses
General and administrative 280 --
Expiration of liability for
Payroll taxes (137,465) --
Write-off abandoned inventory 104,101 --
------- -------
Total costs and expenses (Income) ( 33,084) --
------- -------
Net income $ 33,084 --
======= =======
Basic and diluted net income per share $ 0.02 --
==== =======
Weighted average number of common shares 1,847,397 1,844,397
========= =========
</TABLE>
See accompanying notes.
<PAGE>
ORION DIVERSIFIED TECHNOLOGIES, INC.
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED JULY 31,
(Unaudited)
<TABLE>
1997 1996
---- ----
Cash flow from operating activities
<S> <C> <C>
Net income $ 33,084 $ --
Adjustments to reconcile net loss
to net cash provided by operating activities
Shares issued for professional services 30 --
Write off of inventories 104,101 --
Expiration of liability for
Payroll taxes (137,465) --
Changes in assets and liabilities
Accounts payable and accrued expenses 250 --
------- ----
Net cash provided by operations -- --
------- ----
Net increase/decrease in cash -- --
------- ----
Cash - beginning of period -- --
------- ----
Cash - end of period $ -- $ --
======= ====
</TABLE>
See accompanying notes.
<PAGE>
ORION DIVERSIFIED TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION, BUSINESS AND BASIS OF PRESENTATION
Orion Diversified Technologies, Inc. (the Company), d/b/a Electronic
Transistors, Corp., was incorporated in New Jersey in 1959. The Company was
initially engaged in the marketing and sale of a line of approximately 2,500
electronic semi-conductors, principally transistors, diodes and rectifiers and,
to a lesser extent, other ancillary related electronics. Because of sustained
operating losses, the Company discontinued this line of operation and filed a
plan of reorganization (under Chapter 11) with the United States Bankruptcy
Court for the Eastern District of New York, on April 30, 1990.
Pursuant to the plan of reorganization, the Company issued 905,262 unrestricted
shares and an equal number of Series A and Series B Common Stock Purchase
Warrants to various creditors. Under the plan, creditors received one share of
common stock, a Series A warrant, and a Series B warrant for every $5.00 of
debt. The Series A and B warrants were exercisable at $2.50 and $3.50 and had
initial expiration dates of 15 and 20 months from June 2, 1992, respectively.
The Company had the option to grant, and has continually granted extensions of
the exercise period of the warrants.
On February 25, 1993, the Company acquired an 85.81% equity interest in
Netherland Gardens Owners, Inc. (a New York corporation) from Michaels
Associates, a non-affiliated business entity. The corporation owned a 59 unit
cooperative residential dwelling in White Plains, New York (the "Co-op"). The
Company exchanged 500,000 shares of restricted stock for all shares held by
Michael Associates and issued 50,000 shares to the finder and broker.
From 1993 to 1996, the Company's investment in the Co-Op resulted in recurring
losses. On January 11, 1996, the Company entered into a new agreement with
Michael Associates. Under the new agreement, Michaels Associates retained
100,000 shares of the Company's stock, cancelled the acquisition contract, and
released the Company from any and all obligations.
Since 1996, the Company has sought a merger partner who will benefit from the
Company's access to capital markets and provide the Company with profitable
operations.
<PAGE>
ORION DIVERSIFIED TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2. - SUMMARY OF SIGNIFICANT ACCOUNT POLICIES
Interim Financial Statements (Unaudited)
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and pursuant to the rules and regulations of the Securities and Exchange
Commission. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of the Company's management, the unaudited
interim financial statements include all adjustments, consisting only of normal
recurring adjustments.
Interim results are not necessarily indicative of the results that may be
expected for the full year. These financial statements should be read in
conjunction with the Company's Annual Report on Form 10-KSB for the year ended
April 30, 1997.
Estimates and Assumptions
The preparation of financial statements, in conformity with the 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 revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash Equivalents
The Company considers all highly liquid investments with maturity of three
months or less, when purchased, to be cash equivalents.
Inventories
The Company's inventory of semi-conductors was composed of unsold obsolete items
with no market value. As of July 31, 1997, the Company wrote off $104,101.
Property and Equipment
Property and equipment are recorded at cost. Depreciation is computed using the
straight-line method over the estimated useful lives of the related assets
ranging from three to five years. Property held under capital leases is
amortized over the lesser of the lease term or their estimated useful lives.
<PAGE>
ORION DIVERSIFIED TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2. - SUMMARY OF SIGNIFICANT ACCOUNT POLICIES (continued)
Long-Lived Assets
The Company follows the provisions of the Statement of Financial Accounting
Standards ("SFAS") No. 121 "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be disposed of". SFAS 121 establishes accounting
standards for the impairment of long-lived assets and certain identifiable
intangibles to be held and used and for long-lived assets and certain
identifiable intangibles to be disposed of.
The Company reviews the carrying values of its long-lived and identifiable
intangible assets for possible impairment whenever events or changes in
circumstances indicate that the carrying amount of the assets may not be
recoverable.
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred
tax assets and liabilities are recognized for future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carry-forwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.
Non-monetary Transactions
The accounting for non-monetary assets is based on the fair values of the assets
involved. Cost of a non-monetary asset acquired in exchange for another
non-monetary asset is recorded at the fair value of the asset surrendered to
obtain it. The difference in the costs of the assets exchanged is recognized as
a gain or loss. The fair value of the asset received is used to measure the cost
if it is more clearly evident than the fair value of the asset surrendered.
<PAGE>
ORION DIVERSIFIED TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2. - SUMMARY OF SIGNIFICANT ACCOUNT POLICIES (continued)
Stock-Based Compensation
The Company has adopted Accounting Principles Board Opinion 25 for its
accounting for stock based compensation. Under this policy:
1. Compensation costs are recognized as an expense over the period of employment
attributable to the employee stock options.
2. Stocks issued in accordance with a plan for past or future services of an
employee are allocated between the expired costs and future costs. Future costs
are charged to the periods in which the services are performed. The pro forma
amounts of the difference between compensation cost, included in net income and
related cost measured by the fair value based method including tax effects, are
disclosed.
New Accounting Standards
In June 1997, the Financial Accounting Standards Board issued SFAS 130,
"Reporting Comprehensive Income". SFAS 130 establishes standards for reporting
and display of comprehensive income and its components (revenues, expenses,
gains, and losses) in a full set of general purpose financial statements.
Specifically, SFAS 130 requires that all items that meet the definition of
components of comprehensive income be reported in a financial statement for the
period in which they are recognized. However, SFAS 130 does not specify when to
recognize, or how to measure, the items that make up comprehensive income. SFAS
130 is effective for fiscal years beginning after December 15, 1997, and early
application is permitted. Management believes the application of SFAS 130 will
not have a material effect on the Company's future financial statements.
In June 1997, the Financial Accounting Standards Board issued SFAS 131,
"Financial Reporting for Segments of Business Enterprise." SFAS 131 supersedes
the "industry segment" concept of SFAS 14 with a "management approach" concept
as the basis for identifying reportable segments. SFAS 131 is effective for
fiscal years beginning after December 15, 1997 and early application is
permitted. Management believes the application of SFAS 131 will not have a
material effect on the Company's future financial statements.
<PAGE>
ORION DIVERSIFIED TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2. - SUMMARY OF SIGNIFICANT ACCOUNT POLICIES (continued)
Earnings per Share
The Company follows the Statement of Financial Accounting Standards No. 128,
Earnings Per Share ("SFAS No. 128"). SFAS No. 128 requires the presentation of
both basic and diluted earnings per share.
NOTE 3 - PAYROLL TAXES
In connection with the Plan of Reorganization, payroll taxes were due within six
years from April 23, 1986, the date of assessment. The Company has not paid the
$137,465 tax liability and the taxing authorities have taken no action to
collect it. Management believes that, under the current federal and state tax
laws, the liability is subject to the statute of limitation and therefore is no
longer due.
NOTE 3 - COMMON STOCK PURCHASE WARRANTS
In accordance with the Plan of Reorganization, 905,262 redeemable Class A and
Class B Purchase Warrants were issued between September 19, 1990, and December
30, 1990. Each warrant entitles the holder to purchase one "new" share of the
Company's stock for each warrant that is exercised. The exercise price of the
Class A and Class B Warrants are $2.50 and $3.50, respectively. The Board of
Directors of the Company extended the expiration dates for both Classes of
Warrants to December 31, 2000.
As of August 15, 2000, 903,761 Class A and 905,262 Class B Warrants were
outstanding.
NOTE 4 - RELATED PARTY TRANSACTIONS
Transactions with Management
The Company has agreed to certain transactions with Joseph Petito, the Company's
President, Chief Operating Officer, Chairman of the Board and majority
shareholder. Such transactions are described below:
1. Facilities
The Company's President has arranged for the Company to conduct its business
affairs on the premises of a company controlled by the President and located in
Ronkonkoma, New York. Said premises and office equipment is being utilized on a
rent-free basis.
<PAGE>
ORION DIVERSIFIED TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - RELATED PARTY TRANSACTIONS (Continued)
Transactions with Management
2. Compensation and Other Costs
The Company has had no sales and no other income since the relocation of its
offices. As a result, Mr. Petito has gratuitously advanced virtually all of the
Company's operating expenses.
On June 2, 1990, the Board of Directors agreed to provide compensation to Mr.
Petito, at the rate of $1,500 per week. On May 2, 1994, Mr. Petito agreed to
forego the $1,500 weekly compensation until the Company shows a significant
upward trend in its results of operations.
3. Due to Officer
As of July 31, 1997, the amounts owed to the officer were as follows
<TABLE>
<S> <C>
Salary $ 78,000
Advances made to the Company 45,862
-------
Total $ 123,862
=======
</TABLE>
<PAGE>
ORION DIVERSIFIED TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
ITEM 2. Management's Discussion and Analysis of Plan of Operations
The Private Securities Litigation Reform Act of 1995 contains "safe
harbor" provisions regarding forward-looking statements. Except for historical
information contained herein, the matters discussed in the Liquidity and Capital
Resources section below contain potential risks and uncertainties, including,
without limitation, risks related to the Company's ability to successfully
identify potential merger partners, retain key employees and settle any
outstanding debts. The Company will need to attract partners in order to execute
its revised business strategy, and there can be no assurance that the Company
will be successful in attracting such partners.
RESULTS OF OPERATIONS
During the three months ended July 31, 1997 and 1996 the Company recognized net
income of $33,084. The net income was the net result of a reduction of prior
years payroll tax expense of $137,465, and write off of $104,101 obsolete
inventory. The payroll tax is no longer a liability of the Company. The Company
does not anticipate sales of any products or service for the foreseeable future.
The net income for the three months ended July 31, 1996 was $0.
The Company's general and administrative expenses of only $280 were due to the
Company's President, Joseph Petito, allowing the Company to operate on a
rent-free basis in the premises of a privately owned entity controlled by Mr.
Petito's family.
The Company did not conduct any research and development or selling and
marketing activities in the three months ended July 31, 1997 or 1996. The
Company is not currently conducting any research and development or selling and
marketing activities.
The drastic reduction in both the Company's gross revenue and general and
administrative expenses was entirely attributable to the Company's January 11,
1996 divestiture of NGO. The divestiture left the Company without material
assets or capital resources. Accordingly, the continued economic viability of
the Company is entirely dependent upon Mr. Petito's continued funding and
assumption of the Company's expenses and providing the Company with rent-free
premises and the use of office equipment.
There can be no assurance whatsoever that management will be successful in
consummating a business combination during the foreseeable future. However, and
in spite of management's recent unsuccessful endeavors in attracting potentially
acceptable business combination partners, management is still reasonably
optimistic that it can reach a preliminary meeting of the minds with a business
combination partner prior to the end of the 2000 calendar year.
<PAGE>
ORION DIVERSIFIED TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
ITEM 2. Management's Discussion and Analysis of Plan of Operations (continued)
The Company is authorized to issue up to 10,000,000 shares of its Common
Stock. As of August 28, 2000, there were 1,847,397 shares of the Company's
Common Stock issued and outstanding. The Company issued 3,000 shares in 1997 in
exchange for professional services rendered.
Capital Expenditures
The Company does not have any material commitments for capital
expenditures at this time.
Effects of Inflation
The Company believes that the relatively moderate rate of inflation
over the past few years has not had a significant impact on the Company's sales
or operating results.
Income Taxes
The Company adopted Statement No. 109 "Accounting for Income Taxes" in 1993 and
its implementation has had no effect on the Company's financial position and
results of operation.
<PAGE>
ORION DIVERSIFIED TECHNOLOGIES, INC.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
------------------
None
ITEM 2. CHANGES IN SECURITIES
---------------------
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
-------------------------------
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------
None
ITEM 5. OTHER INFORMATION
-----------------
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
---------------------------------
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: August 28, 2000
Orion Diversified Technologies, Inc.
By: ____________________________________
Joseph Petito, President, Chief Executive
Officer and Chief Financial Officer
<PAGE>
