SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 For the quarterly
period ended October 31, 2000
[ ] Transition Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
Commission file number 001-03323
NEW HILARITY, INC.
(Exact name of Small Business Issuer as Specified in its Charter)
Neveda 91-197860
(State or Other Jurisdiction (I.R.S. Employer
Incorporation or Identification
Organization) Number)
161 Bay Street, Suite 2220, Toronto, Ontario M5J 2S1
(Address of Principal Executive Offices)
Issuer's Telephone Number, Including Area Code: 416-304-0694
N/A
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Check whether the issuer (1) 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
State the number of shares outstanding of the issuer's classes of
common equity, as of the latest practicable date: 12,486,246 shares of Common
Stock with par value of $.005 were outstanding as of October 31, 2000.
<PAGE>
INDEX
PAGE
Part I. FINANCIAL INFORMATION 3
Item 1. Financial Statements 3
Balance Sheets as at July 31,2000 and October 31,2000 4
Interim Statement of Changes in
Shareholders' Equity for the period ended October 31,2000 5
Interim Statement of Operations
for the period ended October 31,2000
and cumulative from date of
inception to October 31,2000 6
Interim Statement of Cash Flows
for the period ended October 31,2000
and cumulative from date of
inception to October 31,2000 7
Notes to Interim Financial Statements 8
Item 2. Management's Discussion and
Analysis or Plan of Operation 10
Part II. OTHER INFORMATION 13
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security-Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
NEW HILARITY, INC.
(a development stage company)
INTERIM FINANCIAL STATEMENTS
OCTOBER 31,2000
(Unaudited)
Stated in U.S. Funds
<PAGE>
NEW HILARITY, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
Stated in U.S. Funds
October 31 July 31
2000 2000
================================================================================
(Unaudited)
A S S E T S
CURRENT
Cash $ 250,289 $ 357,178
Sales taxes receivable 101,427 72,208
Prepaid and deposits 106,205 52,361
----------- -----------
$ 457,921 $ 481,747
CAPITAL ASSETS (Note 2) 1,663,247 743,725
----------- -----------
$ 2,121,168 $ 1,225,472
=========== ===========
L I A B I L I T I E S
CURRENT
Accounts payable $ 852,170 $ 674,147
SHARES TO BE ISSUED -- 20,172
----------- -----------
$ 852,170 $ 694,319
----------- -----------
SHAREHOLDERS' EQUITY
SHARE CAPITAL (Note 3) $ 73,034 $ 1,137,609
ADDITIONAL PAID IN CAPITAL 2,286,442 --
DEFICIT ACCUMULATED DURING DEVELOPMENT STAGE (1,095,692) (602,508)
CUMULATIVE TRANSLATION ADJUSTMENT 5,214 (3,948)
----------- -----------
$ 1,268,998 $ 531,153
----------- -----------
$ 2,121,168 $ 1,225,472
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
NEW HILARITY, INC.
(A DEVELOPMENT STAGE COMPANY)
INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
Stated in U.S. Funds
=====================================================================================================================
Deficit
Accumulated
Additional During
Exchangeable Common Paid in Development
Shares Shares Amount Capital Stage
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
FOR THE PERIOD FROM INCEPTION TO JULY 31,2000
Shares issued to founders - 6,000,001 $ 1 $ - $ -
Shares issued for cash consideration - 5,027,401 1,137,608 - -
Shares issued for services rendered - 390,000 195,000 - -
Issue costs - - (195,000) - -
COMPREHENSIVE LOSS
Net Loss - - - - (602,508)
Foreign currency translation adjustments - - - - -
---------------------------------------------------------------------
BALANCE AT JULY 31, 2000 - 11,417,402 1,137,609 - (602,508)
---------------------------------------------------------------------
FOR THE PERIOD FROM AUGUST 1 TO OCTOBER 31,2000
ISSUE OF COMMON SHARES
Warrants exercised August 15,2000 - 371,429 325,000 - -
Recapitalization - - (1,403,665) 1,403,665 -
Exchange of common shares 2,120,497 (2,120,497) - - -
Additional shares on Reverse Take Over - 1,597,912 7,990 55,127 -
Warrants exercised September 20,2000 - 610,000 3,050 530,700 -
Warrants exercised October 20,2000 - 610,000 3,050 530,700 -
Less: Subscriptions receivable (233,750) -
COMPREHENSIVE LOSS
Net loss (493,184)
Foreign currency translation adjustments -
COMPREHENSIVE LOSS
---------------------------------------------------------------------
BALANCE AT OCTOBER 31, 2000 2,120,497 12,486,246 $ 73,034 $2,286,442 $(1,095,692)
=====================================================================
Accumulated
Other
Comprehensive Comprehensive
Income (Loss) Total Loss
-----------------------------------------
<S> <C> <C> <C>
FOR THE PERIOD FROM INCEPTION TO JULY 31,2000
Shares issued to founders $ - $ 1
Shares issued for cash consideration - 1,137,608
Shares issued for services rendered - 195,000
Issue costs - (195,000)
COMPREHENSIVE LOSS
Net Loss - (602,508) $ (602,508)
Foreign currency translation adjustments (3,948) (3,948) (3,948)
------------------------- -----------
$ (606,456)
===========
BALANCE AT JULY 31, 2000 (3,948) 531,153
-------------------------
FOR THE PERIOD FROM AUGUST 1 TO OCTOBER 31,2000
ISSUE OF COMMON SHARES
Warrants exercised August 15,2000 - 325,000
Recapitalization - -
Exchange of common shares - -
Additional shares on Reverse Take Over - 63,117
Warrants exercised September 20,2000 - 533,750
Warrants exercised October 20,2000 - 533,750
Less: Subscriptions receivable - (233,750)
COMPREHENSIVE LOSS
Net Loss - (493,184) $ (493,184)
Foreign currency translation adjustments 9,162 9,162 9,162
-----------
COMPREHENSIVE LOSS $ (484,022)
-------------------------- ===========
BALANCE AT OCTOBER 31, 2000 $ 5,214 $ 1,268,998
=========================
</TABLE>
See accompanying notes.
<PAGE>
NEW HILARITY, INC.
(A DEVELOPMENT STAGE COMPANY)
INTERIM STATEMENT OF OPERATIONS
(Unaudited)
Stated in U.S. Funds
For the Period Ended
October 31 October 31
2000 2000
================================================================================
(3 Months) (Cumulative
to Date)
REVENUE $ -- $ --
------------ ------------
EXPENSES
Advertising and promotion $ 21,532 $ 25,718
Communication 13,164 171,184
General and office 11,060 101,276
Management salaries 178,666 329,957
Professional fees 178,327 261,461
Rent and occupancy costs 2,396 9,883
Travel 26,683 66,993
Amortization 62,105 130,587
------------ ------------
$ 493,933 $ 1,097,059
------------ ------------
LOSS FROM OPERATIONS $ (493,933) $ (1,097,059)
OTHER INCOME
Interest income 749 1,367
------------ ------------
NET LOSS $ (493,184) $ (1,095,692)
============ ============
LOSS PER COMMON SHARE (Note 4) $ (0.04) $ (0.10)
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 11,550,470 11,049,881
============ ============
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
NEW HILARITY, INC.
(A DEVELOPMENT STAGE COMPANY)
INTERIM STATEMENT OF CASH FLOWS
(Unaudited)
Stated in U.S. Funds
For the Period Ended
October 31 October 31
2000 2000
=====================================================================================================
(3 Months) (Cumulative
to Date)
<S> <C> <C>
CASH FROM (USED IN) OPERATIONS
Net loss $ (493,184) $(1,095,692)
Adjustments to reconcile net loss to net cash provided by operating
activities:
Amortization 62,105 130,587
Changes in assets and liabilities relating to operations
Sales tax recoverable (29,219) (101,427)
Accounts payable and accrued liabilities 178,023 852,170
Prepaid and sundry assets (53,844) (106,205)
Effect of exchange rate changes on cash 9,162 5,214
----------- -----------
NET CASH FROM (USED IN) OPERATIONS $ (326,957) $ (315,353)
----------- -----------
CASH USED IN INVESTING ACTIVITIES
Purchase of capital assets $ (981,627) $(1,793,834)
----------- -----------
CASH FROM FINANCING ACTIVITIES
Cash received from capital shares issued $ 1,201,695 $ 2,359,476
----------- -----------
NET INCREASE (DECREASE) IN CASH DURING THE PERIOD $ (106,889) $ 250,289
CASH AND CASH EQUIVALENTS - Beginning of period 357,178 --
----------- -----------
CASH - End of period $ 250,289 $ 250,289
=========== ===========
</TABLE>
See accompanying notes.
<PAGE>
NEW HILARITY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO INTERIM FINANCIAL STATEMENTS
OCTOBER 31,2000
(Unaudited)
Stated in U.S. Funds
================================================================================
The financial information for the period ended October 31,2000 presented in this
Form 10-QSB has been prepared from the accounting records of New Hilarity, Inc.
(the "Company" or "NHI"), a Nevada incorporated company that is an SEC
registrant and that trades on the Over-the-Counter Bulletin Board, without
audit. The information furnished reflects all adjustments which are, in the
opinion of management, necessary for a fair statement of the results of this
interim period. The results of operations for the period ended October 31,2000
are not necessarily indicative of the results to be expected for a full year.
During the period the Company entered into a share exchange agreement with Orbit
Canada Inc. ("Orbit"). The transaction resulted in a reverse takeover whereby
the shareholders of Orbit obtained control of the Company (see Note 3). These
financial statements are a continuation of Orbit.
The financial statements do not include certain information included in the
company's audited financial statements. This report should be read in
conjunction with the financial statements included in the Company's Form 8-K as
filed with the Securities and Exchange Commission.
1. NATURE OF OPERATIONS
Orbit, a development stage company, was incorporated under the laws of the
Province of Ontario, Canada on October 7,1999. Since inception Orbit's
efforts have been devoted to the development of its principal products and
raising capital. They have not yet received any revenues from the sale of
its products or services. Accordingly, through the date of these financial
statements, the company is considered to be in the development stage and the
accompanying financial statements represent those of a development stage
enterprise. The company's development activities consist of the deployment
of Voice Over Internet Protocol (VoIP) network services around the world as
well as developing different communications solutions utilizing its VoIP
technology.
2. CAPITAL ASSETS
<TABLE>
<CAPTION>
ACCUMULATED NET NET
COST AMORTIZATION 2001 2000
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Computer equipment $ 21,675 $ 3,766 $ 17,909 $ 16,949
Furniture and fixtures 1,048 134 914 961
Network communication equipment 1,771,111 126,687 1,644,424 725,815
------------------------------------------------------------------
$ 1,793,834 $ 130,587 $ 1,663,247 $ 743,725
==================================================================
</TABLE>
3. SHARE CAPITAL
Authorized
2,120,497 Non voting retractible exchangeable shares
Unlimited Non voting First Preference shares
20,000,000 Common shares par value $0.005
On August 15, 2000, 371,429 warrants were exercised resulting in 371,429
common shares being issued for cash consideration of $325,000.
<PAGE>
NEW HILARITY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO INTERIM FINANCIAL STATEMENTS
OCTOBER 31,2000
(Unaudited)
Stated in U.S. Funds
================================================================================
3. SHARE CAPITAL (CONTINUED)
During the period Orbit amended its articles of incorporation to create
2,120,497 non-voting exchangeable shares as well as an unlimited number of
first preference shares. The exchangeable shares are entitled to a
preference over the common shares and the preference shares with respect to
the payment of dividends and the distribution of assets. The holders of
exchangeable shares are entitled to receive dividends equivalent to
dividends declared by NHI on its common shares. The holders are entitled at
any time to require Orbit to retract any or all of the exchangeable shares
by delivering one NHI common share for each exchangeable share.
On September 5, 2000, NHI effected a one-for-five reverse stock split (the
"Reverse Stock Split") whereby the number of then outstanding common shares
of NHI was reduced from 7,989,560 to 1,597,912. As a result of the Reverse
Stock Split, the number of authorized common shares was reduced from
100,000,000 shares, par value $0.001 per share, to 20,000,000 shares, par
value $0.005 per share.
Under a share exchange agreement which became effective September 8,2000,
NHI issued 9,668,334 common shares in exchange for the same number of common
shares issued and outstanding of Orbit. Orbit also exchanged its remaining
2,120,497 common shares for the same number of exchangeable shares. Each
exchangeable share can be exchanged into one common share of NHI. This
transaction resulted in a reverse take over, therefore giving the
shareholders of Orbit control of NHI. At the time of exchange of shares, the
existing board of directors of New Hilarity, Inc. resigned and the directors
of Orbit were appointed to the board of NHI.
In addition, the remaining 3,878,571 warrants of Orbit were exchanged for an
equal number of warrants to acquire common shares of NHI. Each warrant
entitles the holder thereof to acquire no later than February 20,2001 one
share of NHI's common stock at an exercise price of $0.875 per share.
On each of September 20,2000 and October 20,2000, 610,000 warrants were
exercised for cash consideration of $533,750 respectively. A portion of the
October 20,2000 exercise price was received subsequent to the period end of
these interim financial statements, resulting in a subscription receivable
amount of $233,750.
4. LOSS PER COMMON SHARE
Loss per common share is calculated as the loss for the period divided by
the weighted average number of the Company's common stock outstanding.
Diluted loss per share does not differ from basic loss per share.
5. INCOME TAXES
The Company has provided a full valuation allowance against deferred tax
assets at October 31,2000, due to uncertainties in the Company's ability to
utilize its net operating losses. The net operating loss carryforwards as of
the most recently completed fiscal year end in the amount of $600,000 expire
in 2007.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
The information contained in this Item 2, Management's Discussion and
Analysis or Plan of Operation, contains "forward looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Actual results may materially differ from
those projected in the forward looking statements as a result of certain
risks and uncertainties set forth in this report. Although management
believes that the assumptions made and expectations reflected in the
forward looking statements are reasonable, there is no assurance that the
underlying assumptions will, in fact, prove to be correct or that actual
future results will not be different from the expectations expressed in
this report.
The following discussion should be read in conjunction with the Financial
Information and Notes thereto included in this report:
Background
New Hilarity, Inc. (the "Company" and "NHI") was incorporated under the
laws of the State of Idaho on February 27, 1930, for the primary purpose
of exploring and the development of mining properties. Prior to 1993, the
Company had owned fifteen unpatented lode mining claims in the Coeur
d'Alene Mining District of Shoshone County, Idaho. Due to the increased
fees from the Bureau of Land Management on unpatented mining claims,
and the depressed prices for silver and lead, the Company decided to
abandon these mining claims in 1993. Accordingly, as of 1993, the
Company became an inactive mining company, and the Company thereupon
decided to explore alternative business opportunities. In April 1999, the
Company reorganized under the laws of the State of Nevada and changed its
name to New Hilarity, Inc.
As of September 8, 2000, and pursuant to an Agreement and Plan of
Reorganization dated as of August 3, 2000 by and between NHI and Orbit
Canada Inc., an Ontario corporation ("Orbit"), NHI acquired Orbit as a
result of which Orbit became a wholly-owned subsidiary of the Company (the
"Orbit Transaction"). The Orbit Transaction resulted in a reverse take
over, therefore, giving the stockholders of Orbit control of NHI. In
connection with the Orbit Transaction, the existing Board of Directors of
the Company resigned and the directors of Orbit were appointed to the Board
of the Company.
Orbit was incorporated on October 7, 1999 in Ontario, Canada. Since
inception the Company's efforts have been devoted to the development of its
principal products and raising capital. The Company has not received any
revenues to date from the sale of its products or services. Accordingly,
through the end of the first quarter of fiscal 2001 (October 31, 2000),
Orbit is considered to be in the development stage. The Company intends to
market an internet based long distance telephone system to Canadian
businesses and individuals. The Company plans to use the latest radio
transmission technologies for wireless, high speed and secure Internet
access.
Orbit intends to provide Canadian businesses and individuals with next
generation Internet services that include high speed fixed wireless
Internet delivery, V.90 Internet access, phone-to-phone Voice over IP
("VoIP"), as well as E-mail, and web site
<PAGE>
hosting services. Orbit's VoIP service, which will be included in a
low monthly flat rate bundle of Internet services, will enable
subscribers to call between points on Orbit's network as well
as to certain destinations internationally at no
additional charge utilizing their own telephones. Orbit intends to market
its services directly to commercial enterprises and to residential markets
as well as indirectly through traditional Internet Service Providers,
prepaid long distance calling card companies and others. No assurance can
be given that Orbit's business will prove to be successful or that it
will be able to operate profitably.
As of November 8, 2000, NHI's Board of Directors approved a change in the
Company's fiscal year end from March 31 to July 31. The change was made to
conform the Company's fiscal year to the fiscal year of Orbit, which, as a
result of the Orbit Transaction effected as of September 8, 2000, became
a wholly-owned subsidiary of the Company and is deemed to be the acquirer
for accounting purposes using reverse-acquisition accounting procedures.
Unless the context otherwise requires, all references herein to the
"Company" refer to New Hilarity, Inc. and its consolidated subsidiary,
Orbit Canada Inc. In addition, unless otherwise noted, all information
herein is given in U.S. dollars.
Comparison of the Period Ended October 31,2000 to the Year Ended July
31,2000.
During the period ended October 31,2000 the Company completed contract
negotiations with its major Network equipment suppliers and took delivery
of hardware equipment. Equipment has been installed to establish gateways
in major Canadian cities. Under terms of certain supplier agreements,
initial deposits of 25% of equipment costs were paid to the supplier, with
a portion of the balance paid during the quarter and the balance due in the
following fiscal quarter. During the most recent completed quarter the
Company established a professional management team, negotiated a
telemarketing contract that enables the Company to commence customer
acquisition and retention, and secured head office space in the city of
Toronto.
Operations
During the quarter ended October 31,2000 the Company had not yet commenced
generating revenues. Expenses for the quarter totaled $493,933 consisting
primarily of management salaries, consulting and professional fees.
Subsequent the fiscal quarter, the company began acquiring customers.
The Company anticipates to generating revenue from its customer base
starting early in calendar year 2001.
During the remainder of the fiscal year the Company will continue to add to
its customer base. The telemarketing campaign and additional marketing
efforts will become evident in the coming quarters. The Company's services
will be offered to more Canadians as additional equipment is acquired and
installed in areas not currently serviced by the Company. Approximately
$982,000 of Capital Assets consisting primarily of network communication
equipment was added during the most recent quarter. The Company will
continue to build its network communication infrastructure. This
infrastructure is designed so as not to require a significant number of
operating personnel, therefore, future staff increases will not be
significant. The Company will continue to employ the efforts of unrelated
third parties to increase its customer base.
<PAGE>
Liquidity and Capital Resources
At present, the primary sources of liquidity for the Company are funds
generated by the issuance of common shares pursuant to a warrant funding
agreement. Additional information on the agreement is described in Note 3
to the Company's Interim Financial Statements set forth in Part I hereto.
Current assets totaled $457,921 at October 31,2000 compared to $481,746 at
July 31,2000. The minor decrease is attributable to a reduction of term
deposits as various start-up costs including certain capital expenditures
and operating expenses were funded, net of additional prepaid Canadian
Goods and Services Taxes refundable to the corporation. At October 31,2000
the Company had cash of $250,289 of which none was held in term deposits.
As operating activities had not yet begun, there was no Account Receivable
on hand at October 31,2000.
As at October 31,2000, current liabilities totaled $852,170 compared to
$674,146 at July 31,2000. The increase is primarily attributable to an
increase in payable to suppliers of network communication equipment.
The Company anticipates that the warrant funding program combined with
initial revenue generation early in the year 2001 will permit the Company
to meet its cash requirements for the next twelve months. The Company is
exploring the opportunity for longer term debt financing for certain
network equipment acquisitions.
Reporting Currency
The Company's operations are carried out in Canadian dollars. The
Company's reporting currency is in United States dollars. As indicated in
the notes to this financial information, any translation adjustment to the
reporting currency would be included in equity.
Forward-Looking Statements
This report contains certain forward-looking statements and information
relating to the Company that are based on the beliefs and assumptions made
by the Company's management as well as information currently available to
the management. When used in this document, the words "anticipate",
"believe", "estimate", and "expect" and similar expressions, are intended
to identify forward-looking statements. Such statements reflect the
current views of the Company with respect to future events and are subject
to certain risks, uncertainties and assumptions. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those described
herein as anticipated, believed, estimated or expected. The Company does
not intend to update these forward-looking statements.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
As of September 8, 2000 (the "Closing"), and pursuant to an Agreement and
Plan of Reorganization (the "Acquisition Agreement") dated as of August 3,
2000 by and between New Hilarity, Inc. (the "Company") and Orbit Canada
Inc., an Ontario corporation ("Orbit"), the Company (i) issued 9,668,334
shares of its common stock, par value $0.005 per share (the "Common Stock")
and (ii) Orbit issued 2,120,497 shares of newly created non-voting shares
(the "Exchangeable Shares") of its capital stock to the holders of 100% of
the outstanding common shares of Orbit, in exchange for all of the
previously issued and outstanding common shares of Orbit, as a result of
which Orbit became a wholly-owned subsidiary of the Company (the "Orbit
Transaction").
In addition, at Closing, and pursuant to the Acquisition Agreement, all
3,878,571 previously issued and outstanding warrants to acquire shares of
capital stock of Orbit were exchanged for 3,878,571 warrants to acquire
shares of the Common Stock of the Company (the "Warrants"). Each
Warrant entitles the holder thereof to acquire no later than February 20,
2001 one share of the Company's Common Stock at an exercise price of $0.875
per share.
Prior to the Closing, and as contemplated by the Acquisition Agreement, the
Company effected as of September 5, 2000 a one-for-five reverse stock split
(the "Reverse Stock Split") whereby the number of then outstanding shares
of Common Stock of the Company was reduced from 7,989,560 to approximately
1,597,912 shares of Common Stock. In addition, and as a result
of the Reverse Stock Split, the number of authorized shares of Common Stock
of the Company was reduced from 100,000,000 shares, par value $0.001 per
share, of Common Stock to 20,000,000 shares, par value $0.005 per share, of
Common Stock.
There are 2,120,497 Exchangeable Shares of Orbit issued and outstanding as
at September 8, 2000. Pursuant to the Exchangeable Share Support Agreement
dated as of September 5, 2000, each Exchangeable Share provides for a
right, exercisable by the holder, at any time, to exchange an Exchangeable
Share for a share of Common Stock of the Company. The Exchangeable
Shares are senior in priority to all other shares of Orbit. Holders of
Exchangeable Shares have the right to dividends and other distributions
equivalent to those of the holders of shares of Common Stock of the
Company.
Assuming the conversion of all 2,120,497 Exchangeable Shares and all
3,878,571 Warrants into shares of Common Stock of the Company, there will
be approximately 17,265,314 shares of Common Stock issued and
<PAGE>
outstanding which the former stockholders and warrant holders of Orbit will
own approximately 91% of the Company's Common Stock. During the quarter
ended October 31, 2000, 1,220,000 Warrants were exercised.
All of the securities of the Company issued in connection with the Orbit
Transaction were issued in reliance upon the exemption from registration
contained in Regulation S promulgated under the Securities Act of 1933, as
amended.
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.
(a) Exhibits.
27 Financial Data Schedule
(b) Reports on Form 8-K.
Listed below are reports on Form 8-K filed during the
fiscal quarter ended July 31, 2000.
Form 8-K (dated September 8, 2000) - Items reported: 1, 2 and 7.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant caused this Report to be signed on its behalf by the undersigned
thereunto duly authorized.
NEW HILARITY, INC.
Registrant)
Dated: December 15, 2000 By: /s/ Daniel N. Argiros
Daniel N. Argiros,
Vice President and Chief
Financial Officer
(Principal Accounting
and Financial Officer)
