U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) FOR THE FISCAL YEAR
ENDED APRIL 30, 1998
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 (NO FEE REQUIRED)
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) (Zip Code)
(631) 425-6161
(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
----------------------------
(Title of Class)
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 registration was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
YES | | NO |X|
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B 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.
|-|
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.
$18,474.
ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS
Check whether the issuer 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
State 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
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE>
PART I
ITEM 1. BUSINESS
(a) Business Development
Historical
The Registrant was incorporated in New Jersey in 1959. Until 1986, the
Registrant was engaged in the marketing and sale of a line of approximately
2,500 electronic semiconductors, principally transistors, diodes and rectifiers
and, to a lesser extent, other ancillary related electronic products. Because of
sustained operating loses, 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.
On September 19, 1990, and as required by the Plan, the Registrant prepared and
forwarded to all stockholders of record, a notice advising stockholders as to
the applicable terms of the Plan (the "Notice"). The operative provisions of the
Notice were as follows:
1. All theretofore issued and outstanding shares of the Registrant's Common
Stock, $.01 par value per share, which were restricted securities were cancelled
and would not be reissued.
2. All non-legend stock (free-trading) was also cancelled but was reissued at a
reverse-split ratio of three new shares for every seven "old" shares turned in.
Each "new" share was accompanied by two Common Stock Purchase Warrants; a Class
A Warrant exercisable within fifteen months and entitling the holder to purchase
one additional "new" share of the Registrant's Common Stock at $2.50; and a
Class B Warrant exercisable at any time within thirty months and entitling the
holder to purchase one additional "new" share of the Registrant's Common Stock
at $3.50 a share. A unit consists of one Common Stock certificate and two
Warrant certificates. Stockholders will be required to pay a transfer fee to the
transfer agent.
The condition of the above-mentioned re-issuance was that all shares in the
stockholder's possession, or in the possession of the shareholder's broker, be
returned to the Registrant's then transfer agent, Liberty Transfer Co., by the
cut-off date which was set at November 15, 1990, 5:00 p.m. Eastern Standard
Time. Failure to comply with this provision would result in the cancellation of
any shares theretofore owned by stockholders.
On November 12, 1990, the Registrant prepared and forwarded to all stockholders
of record a notice advising the stockholders that the expiration date to
surrender and exchange their Common Stock certificates had been extended to 5:00
p.m. on Monday, December 31, 1990. On January 20, 1992, due to the bankruptcy
proceedings and the Registrant's slow restart-up, the Board of Directors
extended the Class A warrants another six months to June 30, 1993.
As part of the Registrant's Plan of Reorganization, as confirmed by the United
States Bankruptcy Court for the Eastern District of New York on April 30, 1990
and consummated on June 2, 1992, the Registrant issued an aggregate of 905,262
Series A Common Stock Purchase Warrants (the "Series A Warrants") and an
aggregate of 905,262 Series B Common Stock Purchase Warrants (the "Series B
Warrants"). The Series A Warrants were exercisable at $2.50 per share within
fifteen (15) months from June 2, 1992, the payment date under the Plan, or such
further extension as the Registrant may grant. The Series B Warrants were
exercisable at $3.50 per share within thirty months from the payment date under
the Plan, or such further extension as the Registrant may grant.
<PAGE>
The jurisdiction of the Bankruptcy Court over the affairs of the Registrant
ended on June 2, 1992 when the Bankruptcy Court entered the order of
consummation. Due principally to the longer than anticipated commencement date
of operations and with a view towards granting to stockholders the benefit
intended in the Plan, management determined that the six months extension for
the warrants would be inadequate. Accordingly, the Board of Directors, on
several occasions, has extended the warrants to December 31, 2000.
On February 25, 1993, the Company entered an agreement with Michaels Associates,
a non-affiliated business entity, and acquired an 85.81% equity interest in
Netherland Gardens Owners, Inc. (NGO), a New York corporation. NGO was the
record and beneficial owner of a 59-unit co-op residential dwelling in White
Plains, New York (the "Co-op").
On January 11, 1996, the Company entered a divestiture agreement with Michaels
Associates. In accordance with the agreement, the Company received back 450,000
shares that it had issued for the acquisition of NGO and returned the shares of
NGO and the Co-op to Michaels Associates.
From 1996 to present, the Company has been investigating the opportunities for a
business combination with a profitable privately owned entity. The Company
believes its status as a public firm provides incentives for a merger to private
companies that seek access to capital markets.
ITEM 2. DESCRIPTION OF PROPERTY
(a)(1) Rental Premises. Because the Company has been dormant since 1997, it has
used its Chairman`s office address to receive mail. The Company had no activity
and did not pay any rent in the year ended April 30, 1998.
(a)(2) Inventory. In 1997, management determined that the inventory was obsolete
and worthless and decided to abandon it.
ITEM 3. LEGAL PROCEEDINGS
Since the consummation of the Plan of Reorganization on June 2, 1992, no
material legal proceeding was pending or threatened against, or settled by, the
Registrant.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Neither during the fourth quarter of the fiscal year ended April 30, 1998 nor at
any time since August 15, 1994, did the Registrant conduct an Annual Meeting of
its stockholders pursuant to definitive proxy materials under Regulation 14 A
under the Act, or otherwise.
<PAGE>
PART II
ITEM 5. MARKET FOR COMMON STOCK EQUITY AND RELATED STOCKHOLDER MATTERS.
(a) Market Information.
The principal market for the Registrant's Common Stock, its only class of equity
securities, is the over-the-counter market.
The following table indicates the quarterly high and low price ranges of the
Registrant's Common stock representing actual trades in the over-the-counter
market during the fiscal years ended April 30, 1997 and April 30, 1998, as
reported by the Trading and Market Service of the Nasdaq Stock Market, Inc.
HIGH LOW
Fiscal 1997:
-----------
FIRST QUARTER
May 1st thru
July 31, 1996 2.50 .75
SECOND QUARTER
August 1st thru
October 31, 1996 3.00 .50
THIRD QUARTER
November 1st thru
January 31, 1997 1.50 .50
FOURTH QUARTER
February 1st thru
April 30, 1997 1.25 .25
Fiscal 1998:
FIRST QUARTER
May 1st thru
July 31, 1997 Unpriced
SECOND QUARTER
August 1st thru
October 31, 1997 Unpriced
THIRD QUARTER
November 1st thru
January 31, 1998 Unpriced
FOURTH QUARTER
February 1st thru
April 30, 1998 Unpriced
Fiscal 1999
FIRST QUARTER
May 1st thru
July 31, 1998 Unpriced
(b) Holders.
As of August 23, 2000, the approximate number of holders of record of shares of
the Registrant's Common Stock,$.01 par value per share and Series A and Series B
Warrants, the Registrant's only class of trading securities, was believed by
management to be as follows:
<PAGE>
Title of Class Number of Record Holders
Common Stock, $.01 par 325
Series A Warrant 285
Series B Warrant 286
Management believes there are many shareholders and warrant holders whose
securities are held in street name with various brokerage houses. The exact
number of shareholders is unknown to the Registrant.
(c) Dividends.
The Registrant has paid no dividends during the fiscal years ended April 30,
1997 and April 30, 1998. Other than the requirements of the New Jersey Business
Corporation Act that dividends be paid out of capital surplus only and that the
declaration and payment of a dividend not render The Registrant insolvent, there
are no restrictions on the Registrant's present or future ability to pay
dividends.
The payment by the Registrant of dividends, if any, in the future rests within
the discretion of its Board of Directors and will depend, among other things,
upon the Registrant's earnings, its capital requirements, and its financial
conditions, as well as other relevant factors.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
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
In the fiscal years ended April 30, 1998 and 1997, the Company had discontinued
all operations and did not earn any revenues.
In 1998 and 1997, the Company's general and administrative expenses 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 fiscal years ended April 30, 1998 and 1997. The
Company is not currently conducting any research and development or selling and
marketing activities.
During the fiscal years ended April 30, 1998, the Company recognized a net
income of $32,784. The net income was principally the net result of a reduction
of prior years payroll tax expense of $137,465 and the write-off of $104,101 of
obsolete inventory. The amount of general and administrative expenses in 1998
was only $580. Because of collection time-limitations provided in the federal
tax laws, prior periods payroll taxes are no longer a liability of the Company.
In 1997, the Company had a net loss of $150, due to payment of general and
administrative expenses. The Company does not anticipate sales of any products
or service for the foreseeable future other than those of a potential merger
partner.
<PAGE>
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: (1) Mr. Petito's continued funding,
assumption of the Company's expenses, providing the Company with rent-free
premises, and allowing the use of office equipment and (2) Orion's merger with a
profitable operating company.
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.
Financial Condition
In 1997, the Company changed its direction from investment in real estate to
finding a merger partner.
The Company did not have any cash, as of April 30, 1998 and 1997. The Company's
current assets decreased from $104,101 to $0, from April 30, 1997 to April 30,
1998. The reduction in current assets was because of the write off of obsolete
inventory. The current liabilities decreased by $137,465 (50%) from $266,327 on
April 30, 1997 to $129,412 on April 30, 1998. The reason for the decrease was
the expiration of the payroll tax liabilities. The liability of $123,862 to the
Company's shareholder and officer accounted for approximately 96% of the current
liabilities of the Company on April 30, 1998 and 1997.
The Company is authorized to issue up to 10,000,000 shares of its Common Stock.
As of April 30, 1998 and 1997, 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 did not have any material commitments for capital expenditures at
April 30, 1998 and 1997.
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 financial
position or operating results.
ITEM 7. FINANCIAL STATEMENTS
Financial statements meeting the requirements of Item 310 of regulation S-B, for
the fiscal year ending April 30, 1997 and 1996 were audited by Meyer Zimmerman,
CPA.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Due to the death of Meyer Zimmerman, former Certified Public Accountant, the
Company has retained Bloom and Company, CPA's as their independent auditor.
<PAGE>
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT
(a) Identify Directors and Executive Officers.
The following table sets forth: (1) names and ages of all persons who presently
are and who have been selected as directors of the Registrant; (2) all positions
and offices with the Registrant held by each such person; (3) the term or office
of each person named as a director; and 4) any period during which he or she has
served a such:
<TABLE>
<S> <C> <C> <C>
Duration and
Expiration Position & Age and
Date of Office with Director
Name Present Term Registrant Since
Joseph Petito Next Annual President, 80, March,1983
Meeting Chief Executive
Officer and Chief
Financial Officer
Irwin Lampert Next Annual Vice President, 62, January,1995
Meeting Secretary
and Director (1)
</TABLE>
(1) Irwin Lampert was elected to the Registrant's Board of Directors on January
2, 1995 upon the resignation of Donald Epstein, to serve until the next annual
meeting of the Board of Directors. On the same day, Mr. Lampert was elected
Secretary of the Registrant, upon Mr. Epstein's resignation from that office.
There is no understanding or arrangement between any directors or any other
person or persons pursuant to which such individual was, or is to be, selected
as a director or nominee of the Registrant.
(4) Business Experience
The following is a brief account of the experience of each director and
executive officers of the Registrant:
JOSEPH PETITO, Mr. Petito has been continually employed by the Registrant since
1986. From 1983 to 1986, Mr. Petito was the Registrant's Chairman of the Board
of Directors and since 1986 has served as its President and Chief Executive
Officer. Simultaneously therewith, Mr. Petito had been the President, and a
principal shareholder of Aardvark Sanitation Co., Inc., an independent
industrial waste removal hauler located in Islip, New York, since that company's
inception in 1973. Simultaneously, and since its inception in 1979, Mr. Petito
had served as Secretary, Treasurer, Director and principal shareholder of Island
Salvage Haulers, Inc., an independent industrial waste removal concern in Garden
City, New York. During the past ten years, Mr. Petito has also acted as an
independent management consultant specializing in the design, installation and
operation of solid, liquid and hazardous waste removal systems for commercial
and industrial application. During the past ten years, Mr. Petito has also had
other executive and directorial affiliations.
<PAGE>
IRWIN LAMPERT, since April 1995 has been a self employed electrical engineering
and defense contracting consultant in Brooklyn, New York. Prior thereto since
1986, Mr. Lampert was an executive officer, director and principal stockholder
of American Finishing & Spray, Inc., a privately owned New Jersey corporation
engaged in the distribution and sale of coating technology for industrial and
military application in Newark, New Jersey. Prior thereto since 1975, Mr.
Lampert was employed by E-TRON Corp., a publicly owned corporation based in
Edison, Jersey and engaged in the manufacture of electromechanical components
for the United States military. Mr. Lampert received a Bachelor of Science
degree in Electrical Engineering from the City University of the State of New
York in 1959 and a Master of Science degree in Electrical Engineering from
Polytechnic Institute of New York in 1961. Mr. Lampert received a Juris Doctor
degree from Brooklyn Law School in 1965.
(5) Directorship
Each Director of the Registrant has indicated to the Registrant that he or she
is not a director in any other Registrant with a class of securities registered
pursuant to Section 12 of the 34 Act or subject to the requirements of Section
15(d) of such act or any investment Registrant registered under the Investment
Registrant Act of 1940.
(b) Identification of Certain Significant Employees
The Registrant does not presently employ any person as a significant employee
who is not an executive officer but who makes or is expected to make a
significant contribution to the business of the Registrant.
(c) Family Relationships
No family relationship exists between any director or executive officers of the
Registrant.
(d) Involvement in Certain Legal Proceedings
No event listed in Sub-paragraphs (1) through (4) of Subparagraph (d) of Item
401 of Regulation S-B, has occurred with respect to any present executive
officer or director of the Registrant or any nominee for director during the
past five years which is material to an evaluation of the ability or integrity
of such director or officer.
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION.
(a) General
(1) through (7) All Compensation Covered. During the fiscal year ended April 30,
1998, no compensation was paid to, accrued or set aside for any executive
officer or director of the Registrant.
(b) Summary Compensation Table.
<TABLE>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
Restricted Securities
Stock Underlying LTI
Name Year Salary Bonus Other Award(s) Options pay
---- ---- ------ ----- ----- -------- ------- ---
<S> <C> <C> <C> <C> <C> <C>
Joseph Petito 1996 $-0-(1) None None None None None
Joseph Petito 1997 -0-(1) None None None None None
Joseph Petito 1998 -0-(1) None None None None None
</TABLE>
(1) On July 30, 1997,the Registrant received a written statement from Joseph
Petito wherein and whereby he irrevocably waived any and all claims that he may
have to receive compensation from the Registrant for the four fiscal years ended
April 30, 1997 in the sum of $312,000 plus any and all accrued interest. Mr.
Petito also waived any right that he may have under and with respect to the
October 1, 1992 verbal agreement with the Board of Directors granting him the
right and option to convert the Registrant's debt and obligation to him into two
shares of the Registrant's Common Stock, at $.01 par value, for every $1.00 of
debt.
(c) Option/SAR Grant Table. During the fiscal year ended April 30, 1998, the
Registrant made no grants of stock options or freestanding SAR's.
(d) Aggregate Option/SAR Exercises and Fiscal Year-End Option/SAR Value Table.
No stock options or freestanding SAR's are issued or outstanding. Accordingly,
and during the fiscal year ended April 30, 1998, no stock options or
freestanding SAR's were exercised. Notwithstanding the foregoing, an aggregate
of 1,000,000 shares of the Registrant's Common Stock, $.01 par value per share
are reserved for issuance pursuant to the Registrant's long-term incentive plan
adopted by the Registrant's Board of Directors in August, 1990, but not yet
ratified and approved by the Registrant's stockholders.
(e) Long-Term Incentive Plan ("LTIP") Awards Table. During the fiscal year ended
April 30, 1998, the Registrant made no LTIP awards.
(f) Compensation of Directors. (1) and (2). During the fiscal year ended April
30, 1998, no director of the Registrant received any compensation, whether
pursuant to any standard or other arrangement or otherwise.
(g) Employment Contracts and Termination of Employment, and Change-in Control
Arrangements. (1) and (2). No executive officer, director or employee of the
Registrant is serving pursuant to the terms of a written employment or other
compensation agreement, understanding or arrangement with the Registrant; and no
such agreement was entered into during the fiscal year ended April 30, 1998.
(h) Report on Repricing of Options/SAR's. No stock options or freestanding SAR's
are issued or outstanding. Accordingly, and during the fiscal year ended April
30, 1998, no stock options or freestanding SAR's were repriced.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owner. The information is furnished
as of April 30, 1998, as to the number of shares of the Registrant's Common
Stock, $.01 par value per share owned beneficially, or known by the Registrant
to own beneficially, more than 5% of any class of such security:
<PAGE>
<TABLE>
Name and Address Amount and Nature
of Beneficial of Beneficial
Owner Ownership Percentage of Class
<S> <C> <C>
Adaer Berkeley Colletone, Inc. 150,000 8.1%
659 Old Willets Path
Hauppauge, NY 11788 (1)
Anita E. Petito 180,500 9.8%
659 Old Willets Path
Hauppauge, NY 11788 (2)
</TABLE>
(1) A New York corporation controlled by and under common control of Joseph
Petito, the Registrants' President and Chief Executive Officer and hereinafter
referred to as "ABC". See Item 11(b).
(2) Wife of Joseph Petito. See Item 11(b).
(b) Security Ownership of Management. The information is furnished as of August
28, 2000, as to the number of shares of the Registrant's Common Stock, $.01 par
value per share owned beneficially by each executive officer and director of the
Registrant and by all executive officers and directors as a group:
Name and Address Amount and Nature
of Beneficial of Beneficial
Owner Ownership Percentage of Class
<TABLE>
<S> <C> <C>
Joseph Petito 1,024,084 (1)(2)(3) 54.90%
659 Old Willets Path
Hauppauge, NY 11788
Irwin Lampert 15,000(4) 0.82%
1707 East 55th Street
Brooklyn, NY 11234
All Officers
And 55.72%
Directors as a Group
</TABLE>
--------------------------
(1) Does not include an aggregate of 563,400 Series A Common Stock Purchase
Warrants or an aggregate of 563,400 Series B Common Stock Purchase Warrants
owned by Mr. Petito and granted to him as a Class II and a Class IV creditor and
pursuant to Article III (Class V) of the Plan. In the event that all publicly
owned Class A and Class B Warrants are exercised and Mr. Petito exercises his
Class A and Class B Warrants, there will be an aggregate of 3,656,421 shares of
the Registrant's Common Stock issued and outstanding.
(2) Includes an aggregate of 180,500 shares of the Registrant's Common stock
owned of record by Anita E. Petito, wife of Joseph Petito and an aggregate of
150,000 shares of the Registrant's Common Stock owned of record by ABC.
(3) Does not include an aggregate of 101,500 shares of the Registrant's Common
Stock owned of record by Anita M. Petito, the adult daughter of Joseph Petito or
27,400 shares owned by her husband, neither of whom reside in the same household
as Joseph Petito.
(4) Includes an aggregate of 5,000 shares of the Registrant's Common Stock owned
of record by Philip T. Lampert, the son of Irwin Lampert, who resides in same
household as Irwin Lampert.
(c) Changes in Control. As of the date of this Report, the Registrant has not
entered into any agreements, the operation of which may at a subsequent date
result in a change of control of the Registrant.
<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a)(b) On July 30, 1997, the Registrant received a written statement from Joseph
Petito wherein and whereby he irrevocably waived any and all claims that he may
have to receive compensation from the Registrant for the four fiscal years ended
April 30, 1997 in the sum of $312,000 plus any and all accrued interest. Mr.
Petito also waived any right that he may have under and with respect to the
October 1, 1992 verbal agreement with the Board of Directors granting him the
right and option to convert the Registrant's debt and obligation to him into two
shares of the Registrant's Common Stock, at $.01 par value, for every $1.00 of
debt.
Except for the foregoing and during the fiscal year ended April 30, 1998 and
April 30, 1997, no officer, director or relative or spouse of the foregoing
persons or any relative of such person who has the same home as such person, or
is a director or other officer of any parent or subsidiary of the Registrant or
any shareholder known by the Registrant to own of record or beneficially more
than five(5%) percent of the Registrant's Common Stock, had a direct or indirect
material interest in any transaction or presently proposed transaction to which
the Registrant or any of its parents or subsidiaries was or is a party.
(c) Parents. The following individuals and entities may be deemed to be parents
of the Registrant: (i) Joseph Petito, the record and beneficial owner of an
aggregate of 1,014,084 shares of the Registrant's Common Stock; (ii) Anita E.
Petito, the record and beneficial owner of an aggregate of 180,500 shares of the
Registrant's Common Stock; and ABC, the record and beneficial owner of an
aggregate of 150,000 shares of the Registrant's Common Stock, which are included
in the aggregate amount shown for Joseph Petito; (iii) Irwin Lampert, the record
and beneficial owner of an aggregate of 15,000 shares.
(d) Transactions with Promoters. Inapplicable.
ITEM 13. Exhibits and Reports on Form 8-K
No Form 8-K was filed in the fiscal year ended April 30, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 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, in the City of Huntington
Station, State of New York, on August 31, 2000.
ORION DIVERSIFIED TECHNOLOGIES, INC.
BY:
__________________________________
JOSEPH PETITO,
President and Chief Executive Officer,
Treasurer and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, the
following persons on behalf of the Registrant and in their capacities and on the
dates indicated have signed this report below.
______________________
JOSEPH PETITO, Director
Dated: August 31, 2000
Huntington Station, New York
----------------------
IRWIN LAMPERT, Director
Dated: August 31, 2000
Huntington Station, New York
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
Orion Diversified Technologies, Inc.
Garden City, New York
We have audited the accompanying balance sheet of Orion Diversified
Technologies, Inc. as of April 30, 1998 and the related statements of
operations, changes in stockholders' equity and cash flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit. The financial statements of Orion Diversified
Technologies, Inc. as of April 30, 1997, were audited by other auditors whose
report dated September 25, 1997 expressed an unqualified opinion on those
statements.
We conducted our audit in accordance with generally accepted auditing standards.
These 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.
We believe that our audit provides 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 Diversified Technologies,
Inc. as of April 30, 1998 and the results of its operation, changes in
stockholders' equity and its cash flows for the year then ended, in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in Note 7 to the
financial statements, the Company has incurred losses for several years that
raises substantial doubt about its ability to continue as a going concern.
Management's plans with regard to these matters are also described in Note 7.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
Bloom and Company
Hempstead, New York
August 31, 2000
<PAGE>
ORION DIVERSIFIED TECHNOLOGIES, INC.
BALANCE SHEET
<TABLE>
April 30,
1998
<S> <C>
Assets
Current Assets:
Inventory $ --
-------
Total Current Assets --
-------
Total Assets $ --
=======
Liabilities & Stockholders Equity
Current Liabilities:
Accounts Payable and Accrued Expenses 5,550
Due to Officers 123,862
Payroll Taxes Payable - Chapter XI --
-------
Total Liabilities 129,412
-------
Stockholders Equity:
Common Stock, par value $.01 per share,
authorized 10,000,000 shares, issued
and outstanding 1,847,397 shares 18,469
Paid-in Capital 3,737
Deficit (151,618)
-------
Total Stockholders Equity (129,412)
-------
Total Liabilities & Stockholders Equity $ --
=======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ORION DIVERSIFIED TECHNOLOGIES, INC.
STATEMENT OF OPERATIONS
THE YEAR ENDED APRIL 30, 1998 AND 1997
1998 1997
---- ----
<TABLE>
<S> <C> <C>
INCOME
Revenues $ -- $ --
Costs & Expenses:
General & Administrative 580 150
Expiration of liability for
Payroll taxes (137,465) --
Write-off abandoned inventory 104,101 --
------- -----
Total costs and expenses (Income) ( 32,784) 150
------- -----
Total Costs & Expenses 32,784 150
------- ----
Income (Loss) 32,784 ( 150)
Income taxes:
Current ( 4,831) --
Tax benefit 4,831 --
------ -----
Net Income (loss) $ 32,784 $ ( 150)
====== =====
Earnings per share:
Net income (loss)
Basic $ .02 N/A
=== ===
Diluted $ .02 N/A
=== ===
Weighted Average Number of
Common Shares 1,847,397 1,844,397
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ORION DIVERSIFIED TECHNOLOGIES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
THE YEARS ENDED APRIL 30, 1998 AND 1997
<TABLE>
Additional
Common Stock Warrants Paid In Accumulated
------------ --------
Shares Amount Type Number Capital Deficit Total
<S> <C> <C> <C> <C> <C> <C> <C>
Balance 5/1/96 1,844,397 $18,439 A 903,762 $ 3,737 $(184,252) $(162,076)
Net loss B 905,262 ( 150) ( 150)
--------- ------ - ------- ----- -------- -------
Balance 4/30/97 1,844,397 18,439 A 903,762 3,737 (184,402) (162,226)
B 905,262
Shares issued for
Professional
services 3,000 30 30
Net income 32,784 32,784
--------- ------- - -------- ----- -------- -------
A 903,762
Balance 4/30/98 1,847,397 $18,469 B 905,262 $3,737 $(151,618) $(129,412)
========= ====== = ======= ===== ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ORION DIVERSIFIED TECHNOLOGIES, INC.
STATEMENT OF CASH FLOWS FOR
THE YEAR ENDED APRIL 30, 1998 AND 1997
1998 1997
---- ----
<TABLE>
<S> <C> <C>
Cash Flow from Operating Activities
Net Income (Loss) $ 32,784 $ (150)
Adjustments to Reconcile Net Loss
To Net Cash Provided by (Used For)
Operating Activities
Changes in assets and liabilities:
Shares issued for professional services 30 --
Write off of inventories 104,101 --
Payroll Taxes (137,465) 150
Accounts payable and accrued expenses 550 --
-------- -----
Net Cash Provided By (Used In) Operations -- --
-------- -----
Net Increase/Decrease in Cash -- --
-------- -----
Cash - Beginning -- --
-------- -----
Cash - Ending $ -- $ --
======== =====
</TABLE>
The accompanying notes are an integral part of these financial statements.
<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 loses, 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
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 of
abandoned inventory.
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 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 the related tax
effects, are disclosed.
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.
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)
New Accounting Standards
In April 1998, the FASB issued SOP 98-5, "Reporting on the Costs of Start-up
Activities," which will become effective for the Company in fiscal 2000. It
requires costs of start-up activities and organization costs to be expressed as
incurred. The Company currently follows this approach and such costs have been
minimal in the past.
In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures About
Pensions and Other Post-retirement Benefits," which became effective for the
fiscal years beginning after December 15, 1997. The statement standardizes the
disclosure requirements for pension plans and other post retirement benefits. To
the extent practicable, the statement requires additional information on changes
in the benefit obligations and fair value of plan assets. The Company adopted
the SFAS 132. The adoption of SFAS No. 132 did not have material impact on the
Company's consolidated financial statements, the results of operations, or the
notes thereto.
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 4 - 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, 903,762 Class A and 905,262 Class B Warrants were
outstanding.
NOTE 5 - 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 are being utilized on a
rent-free basis.
<PAGE>
ORION DIVERSIFIED TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 5 - RELATED PARTY TRANSACTIONS (Continued)
Transactions with Management
2. Compensation and Other Costs
The Company has had no sales or other income since the relocation of its
offices. As a result, Mr. Petito has 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 April 30, 1998, 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>
NOTE 6. INCOME TAXES
The Company's net operating loss carryforwards and their expiration dates are as
follows:
<TABLE>
Year loss Expiration Loss Estimated
incurred Date Amount Tax Asset
<S> <C> <C> <C>
1996 2015 $ 38,056 $ 5,708
1997 2016 150 30
------ -----
Total 38,206 5,738
Less: Valuation allowance (5,738)
====== -----
$ --
=====
</TABLE>
<PAGE>
ORION DIVERSIFIED TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 6. INCOME TAXES (Continued)
Management believes that there is a risk that certain of these NOLs may expire
unused and, accordingly, has established a valuation allowance against them.
The valuation allowance of $10,562 as of April 30, 1997 was reduced by $4,831 as
a consequence of recognizing tax benefit of loss carryforward, in 1998.
Income tax expense differed from the amount computed by applying the statutory
U.S. Federal Income Tax rates of 15% to the taxable incomes before taxes of
1998:
<TABLE>
<S> <C> <C>
1998 Rate
Computed "expected"
income tax expense $(4,831) (15)%
Tax benefit of loss carryforward 4,831 15
----- --
Total income tax expense $ -- --
===== ==
</TABLE>
NOTE 7. GOING CONCERN BASIS AND FUTURE PLANS
The accompanying consolidated financial statements have been prepared on a going
concern basis which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business.
Orion has not realized any material revenues for the three years ended April 30,
1997, and the consolidated results of operations for the year ended April 30,
1998 reflect a loss of $151,618. The Company also is entirely supported by its
majority shareholder. These factors raise substantial doubt about the Company's
ability to continue as a going concern.
Management's long-standing plans to remedy these conditions involve a business
combination with a profitable private company in a reverse merger transaction.
The Company further anticipates an eventual improvement in liquidity through the
exercise of the Company's Class A and B Warrants.
