UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ x ] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 2001
or
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _______ to _______________
Commission File No. ___________
ORIGIN INVESTMENT GROUP, INC.
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(Exact name of registrant as specified in its charter)
Maryland 36-4286069
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1620 26th Street, Third Floor, Santa Monica, CA 90404
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(Address of principal executive offices) (Zip Code)
(310) 255-8834
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
has been required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [x] No [ ]
The registrant has 10,985,565 shares of common stock outstanding as of
November 16, 2001.
PART I - FINANCIAL INFORMATION
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
ORIGIN INVESTMENT GROUP, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEETS
September 30, 2001 (Unaudited) and December 31, 2000
ASSETS
September 30, 2001 December 31,2000
(Unaudited) (Audited)
-------------------------------------------
Cash and Cash Equivalents $ -- $ 66,458
Advances to Officer for Business Expenses -- 9,791
Prepaid Expenses 77,600 77,600
Marketable Securities 10,500 --
------ ------
Total Current Assets 88,100 153,849
Property and Equipment, net: 13,545 12,033
------- -------
TOTAL ASSETS $101,645 $165,882
======= =======
The accompanying notes are an integral part of these financial statements.
ORIGIN INVESTMENT GROUP, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEETS
September 30, 2001 (Unaudited) and December 31, 2000
LIABILITIES AND STOCKHOLDERS' (DEFICIENCY) EQUITY
September 30, 2001 December 31,2000
(Unaudited) (Audited)
-------------------------------------------
LIABILITIES
Accounts Payable and Accrued Expenses $124,964 $28,549
Loans Payable 47,000 --
------- -------
TOTAL LIABILITIES 171,964 28,549
COMMITMENTS
STOCKHOLDERS' (DEFICIENCY)EQUITY
Common stock, $.001 par value,
50,000,000 shares authorized;
9,485,569 and 5,353,216 issued and
outstanding respectively 9,485 5,353
Paid-in-capital 1,836,577 1,609,770
Less subscription receivable -- (198,000)
Deficit accumulated during
development stage (1,916,381) (1,279,790)
----------- -----------
TOTAL STOCKHOLDERS' (DEFICIENCY)EQUITY (70,319) 137,333
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
(DEFICIENCY) EQUITY $101,645 $165,882
========= =========
The accompanying notes are an integral part of these financial statements.
ORIGIN INVESTMENT GROUP, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three and Nine Months ended September 30, 2001 and 2000 and for the
Period April 6, 1999 (Inception) Through September 30, 2001
For the Period
April 6, 1999
(Inception)
Three Months Ended Nine Months Ended Through
September 30, September 30, September 30,
2001 2000 2001 2000 2001
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OPERATING EXPENSES
Professional fees $ 11,944 $ 8,995 $ 180,522 $164,170 $536,242
Travel and Entertainment 5,318 30,049 31,747 183,697 280,529
Office Expenses 6,450 15,969 64,391 62,104 303,754
Officers and directors compensation 6,629 51,142 296,870 112,921 491,651
Others -- 17,905 -- 69,510 --
------- ------- -------- -------- ---------
TOTAL OPERATING EXPENSES 30,341 124,060 573,530 592,402 1,612,176
OTHER EXPENSES ( INCOME) - - - - -
Interest expense, net 6,925 36,277 64,401 36,121 99,487
Break up fee - - - 200,000
Other expenses 11,997 - (1,341) 200,000 4,718
------- ------- -------- --------- ----------
TOTAL OTHER EXPENSES (INCOME) 18,922 36,277 63,060 236,121 304,205
-------- ------- ------- --------- ----------
NET LOSS $( 49,263) $(160,337) $(636,590) $(828,523) (1,916,381)
========= ======== ======== ======== ==========
NET LOSS PER COMMON SHARE - BASIC AND DILUTED $(0.01) $(0.03) $(0.11) (0.19)
========= ======== ======== =========
WEIGHTED AVERAGE SHARES OUTSTANDING 6,712,217 4,875,460 5,867,206 4,445,868
========= ========== ========= ==========
ORIGIN INVESTMENT GROUP, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Nine Months Ended September 30, 2001 and 2000 and for the period April
6, 1999 (Inception) Through September 30, 2001
For the period
Nine Months Ended April 6, 1999
September 30, (inception) to
2001 2000 September 30, 2001
-------------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(636,590) $(828,523) $(1,916,381)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 2,678 1,200 4,219
Officer and Directors Compensation 207,791 -- 207,791
Amortization of Deferred Financing Costs 60,367 43,125 103,492
Interest Receivable Officer -- -- (9,791)
Stock Based Compensation 6,375 -- 6,375
Changes in assets and liabilities
Miscellaneous receivable -- 4,250
Advances to Officer -- 12,103
Prepaid expenses -- 25,000 (77,600)
Other assets -- (3,113)
Accounts payable and accrued expenses 96,415 3,909 124,965
------- ------- -------
Total Adjustments 373,626 86,474 359,451
------- ------- -------
NET CASH USED IN OPERATING ACTIVITIES (262,964) (742,049) (1,556,930)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Office Equipment (4,190) - (17,764)
Purchase of Investment Securities (10,500) (676) (10,500)
------- ----- ------
NET CASH (USED IN) INVESTING ACTIVITIES (14,690) (676) (28,264)
ORIGIN INVESTMENT GROUP, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS (UNAUDITED), continued
For the Nine Months Ended September 30, 2001 and 2000 and for the period April
6, 1999 (Inception) Through September 30, 2001
For the period
Nine Months Ended April 6, 1999
September 30, (inception) to
2001 2000 September 30, 2001
-------------------- ---------------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
Proceeds from common stock issuance 164,196 725,248 1,538,194
Proceeds from notes payable 87,000 80,992 167,992
Repayment of notes payable (40,000) (30,992) (120,992)
-------- -------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 211,196 775,248 1,585,194
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS $(66,458) $32,523 $ --
CASH AND CASH EQUIVALENTS - Beginning 66,458 908 --
-------- ------- --------
CASH AND CASH EQUIVALENTS - Ending -- 33,431 --
-------- ------- --------
ORIGIN INVESTMENT GROUP, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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NOTE 1 - Description of Business
Origin Investment Group, Inc. (the Company) was incorporated on April 6,
1999 and is in the business of venture capital, which is providing growth
capital to emerging companies. The Company has elected to be regulated as a
business development company under the Investment Company Act of 1940 and will
operate as a non-diversified company. Since its inception, the Company's efforts
have been devoted to raising capital and seeking out companies to invest in.
Accordingly, through the date of these financial statements, the Company is
considered to be in the development stage and the accompanying financial
statements represent those of a development stage enterprise.
The Company has experienced losses since inception and has negative cash
flows from operations and has a stockholders' deficiency. For the nine months
ended September 30, 2001, the Company experienced a net loss of $636,590.
The Company's ability to continue as a going concern is contingent upon its
ability to raise additional capital. In addition, the Company's ability to
continue as a going concern must be considered in light of the problems,
expenses and complications frequently encountered by entrance into established
markets and the competitive environment in which the Company operates.
Management is pursuing changing its initial business objective of acting as
a business development company. As a result, the Board of directors deem it in
the best interest of the Corporation and its shareholders to elect out of
business development company status. This action requires an affirmative vote by
the Company's shareholders for such a change in business objective. This change
in status would allow the Company to act as a vehicle to assist a private
operating company in going public through a merger.
NOTE 2 - Presentation and Significant Accounting Policies
The accompanying balance sheet of the Company as of September 30, 2001, the
related statements of operations for the three and nine months ended September
30, 2001 and 2000 and statements of cash flows for the nine months ended
September 30, 2001 and 2000 have been prepared without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading. The condensed financial statements and these notes
should be read in conjunction with the financial statements of the Company
included in the Company's Annual Report of Form 10-K for the year ended December
31, 2000 as filed with the commission. The information furnished herein reflects
all adjustments consisting only of normal recurring accruals, which are, in the
opinion of management, necessary for a fair presentation of the results of
operations for the interim period. Results of operations for the nine months
NOTE 2 - Presentation and Significant Accounting Policies, continued.
ended September 30, 2001 are not necessarily indicative of results to be
expected for the entire year.
During the period ended March 31, 2001, the Company adopted SFAS No. 133.
SFAS No. 133 establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts (collectively referred to as derivatives), and for hedging activities.
This statement requires that an entity recognize all derivatives as either
assets or liabilities in its balance sheet and measure those instruments at fair
value. The accounting for changes in the fair value of a derivative instrument
depends on its intended use and the resulting designation. Implementation of
SFAS 133 did not have any material impact on the financial statements of the
Company.
In July 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 141 ("SFAS No. 141"), "Business
Combinations". SFAS No. 141 requires the purchase method of accounting for
business combinations initiated after June 30, 2001 and eliminates the
pooling-of-interests method. The Company does not believe that the adoption of
SFAS No. 141 will have a significant impact on its financial statements.
In July 2001, the FASB issued Statement of Financial Accounting Standards
No. 142 ("SFAS No. 142"), "Goodwill and Other Intangible Assets", which is
effective for all fiscal years beginning after December 15, 2001; however, early
adoption is permitted for fiscal years beginning after March 15, 2001. SFAS No.
142 requires, among other things, the discontinuance of goodwill amortization.
In addition, the standard includes provisions for the reclassification of
certain existing recognized intangibles as goodwill, reassessment of the useful
lives of existing recognized intangibles, reclassification of certain
intangibles out of previously reported goodwill and the identification of
reporting units for purposes of assessing potential future impairment of
goodwill. SFAS No. 142 also requires the Company to complete a transitional
goodwill impairment test six months from the date of adoption. The Company is
required to adopt SFAS No. 142 in fiscal 2003. The Company is currently
assessing but has not yet determined the impact of SFAS No. 142 on its financial
position and results of operations.
The Financial Accounting Standards Board ("FASB") has issued statement No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets" in August
2001. Statement No. 144 changes the accounting for Long-Lived assets to be held
and used by eliminating the requirement to allocate goodwill to long-lived
assets to be tested for impairment, by providing a probability weighted cash
flow estimation approach to deal with situations in which alternative courses of
action to recover the carrying amount of possible future cash flows and by
establishing a "primary - asset" approach to determine the cash flow estimation
period for a group of assets and liabilities that represents the unit of
accounting for long-lived assets to be held and used. Statement No. 144 changes
the accounting for long-lived assets to be disposed of other than by sale by
requiring that the depreciable life of a long-lived assets to be abandoned be
revised to reflect a shortened useful life and by requiring that an impairment
loss to be recognized at the date a long-lived asset is exchanged for a similar
productive asset or distributed to owners in spin-off if the carrying amount of
NOTE 2 - Presentation and Significant Accounting Policies, continued.
the assets exceeds its fair value. Statement No. 144 changes the accounting for
long-lived assets to be disposed of by sale by requiring that discontinued
operations no longer be recognized on a net realizable value basis (but at the
lower of carrying amount or fair value less costs to sell), by eliminating the
recognition of future operating losses of discontinued components before they
occur and by broadening the presentation of discontinued operations in the
income statement to include a component of an entity rather than a segment of a
business. A component of an entity comprises operations and cash flows that can
be clearly distinguished, operationally, and for financial reporting purposes,
from the rest of the entity. The effective date for Statement No. 144 is for
fiscal years beginning after December 15, 2001.
The Company expects that the adoption of the new statement will not have a
significant impact on its financial statements. It is not possible to quantify
the impact until the newly issued statement has been studied.
NOTE 3 - Stock purchase agreements
On March 15, 2001, the Company entered into a letter of Intent and
subsequently on April 30, 2001 entered into a share exchange agreement and
investment and conversion agreement whereby the Company would acquire 100% of
the outstanding stock of Vivocom, Inc (Vivocom) The Company had been required to
invest a minimum of $3,250,000 within Vivocom during the first year commencing
from the closing date for development and marketing of which $250,000 would be
paid at closing. As of the date of this filing the period to close on this
transaction has elapsed and the Company at its option terminated this or any
other transactions with Vivocom.
NOTE 4 - Equity Transactions
On March 28, 2001 the Company sold 33,333 units to an investor for an
aggregate of $10,000 or $.30 per share. Each unit is comprised of one share of
common stock and one common stock warrant. Each warrant is redeemable for one
share of common stock upon the payment of $.40, vests immediately and expires on
July 2, 2005
On April 4, 2001 the Company sold 100,000 units to an investor for an
aggregate of $30,000 or $.30 per unit. Each unit is comprised of one share of
common stock and one and one half common stock warrants or 150,000 common stock
warrants. Each common stock warrant is redeemable for one share of common stock
upon the payment of $.40 per warrant.
NOTE 4 - Equity Transactions, continued.
On May 9, 2001 the Company sold 50,000 units to an investor for an
aggregate of $20,000 or $.40 per unit. Each unit is comprised of one share of
common stock and one common stock warrant. Each common stock warrant is
redeemable for one share of common stock upon the payment of $.40 per warrant.
On May 31, 2001 the Company sold 49,019.6 units to an investor for an
aggregate of $25,000 or $.51 per unit. Each unit is comprised of one share of
common stock and six and 1/5 common stock warrant (300,000 warrants). Each
common stock warrant is redeemable for one share of common stock upon the
payment of $.40 per warrant.
On August 20, 2001 the Company offered to sell pursuant to a private
placement offering 5,400,000 shares of its common stock at $0.02 per share for
an aggregate of $108,000. The Company plans to utilize the proceeds from the
sale to pay for the expenses associated with its continual listing on the NASDAQ
OTC:BB exchange and outstanding liabilities.
On August 29, 2001 pursuant to the August 20, 2001 private placement
offering the Company sold 1,500,000 shares of its common stock to an investor
for an aggregate of $30,000 or $.02 per share.
On September 4, 2001 the Company sold 1,875,000 shares of its common stock
to an investor in exchange for 101,834 shares of Telehublink, Inc. (THLC) common
stock, valued at $38,696.
On September 19, 2001 the Company sold 525,000 shares of its common stock
to an investor in exchange for 53,000 shares of Telehublink, Inc. (THLC) common
stock, valued at $10,500.
NOTE 5 - Short Term Bridge Loans
During the nine months ended September 30, 2001, the Company received an
aggregate of $87,000 in the form of short-term bridge loans from investors.
These loans mature from thirty to ninety days after issuance and bear interest
at 12% per annum. In addition the Company granted warrants to purchase 202,500
shares of Common Stock with an exercise price of $0.40 per share. The value of
these warrants have been recorded as deferred financing costs and were amortized
over the original life of these loans. During the nine months ended September
30, 2001 the Company paid off $40,000 of these loans plus accrued interest
totaling $41,697, $3,000 of this payment was in the form of cash and $38,697 was
in the form of 101,834 shares of Telehublink, Inc (THLC) common stock. As of
September 30, 2001 three of these bridge loans are past due and the Company has
accrued interest through September 30, 2001.
NOTE 6 -Forgiveness of Debt
On March 19, 2001 by consent of the Board of Directors and the advisory
directors, all principal and interest in relation to the stock subscription
receivable from the Chairman of the Board and the Chief Executive Officer in the
amount of $207,791 was forgiven. This debt forgiveness was recognized as
compensation expense during nine months ended September 30, 2001.
NOTE 7 - Subsequent Events
Equity Transactions
On October 3, 2001 pursuant to the August 20, 2001 private placement
offering the Company sold 250,000 shares of its common stock to an investor for
an aggregate of $5,000 or $.02 per share.
On October 4, 2001 pursuant to the August 20, 2001 private placement
offering the Company sold 250,000 shares of its common stock to an investor for
an aggregate of $5,000 or $.02 per share.
On October 10, 2001 pursuant to the August 20, 2001 private placement
offering the Company sold 500,000 shares of its common stock to an investor for
an aggregate of $10,000 or $.02 per share.
On October 12, 2001 pursuant to the August 20, 2001 private placement
offering the Company sold 375,000 shares of its common stock to an investor for
an aggregate of $7,500 or $.02 per share.
On October 17, 2001 pursuant to the August 20, 2001 private placement
offering the Company sold 125,000 shares of its common stock to an investor for
an aggregate of $2,500 or $.02 per share.
On October 12, 2001 the Company registered 1,949,298 warrants and the
underlying 1,949,298 shares of the Company's common stock. These warrants were
previously issued pursuant to warrant agreements giving each holder the option
to exercise their warrants within five years from the date of issuance. Warrant
holders representing 1,572,632 of these warrants have agreed to exercise their
warrants and receive the underlying common stock by paying the redemption price
of the warrants, once the five consecutive trading day average closing bid price
of the Company's common stock equals or exceeds 150% of the redemption price of
their warrants. Redemption prices of these warrants range from $0.10 to $1.50
per warrant.
NOTE 7 - Subsequent Events, continued.
Letter of Intent
On October 30, 2001, the Company entered into a letter of intent with
International Wireless, Inc. and its stockholders, whereby, the Company would
purchase one hundred percent (100%) of the issued and outstanding shares of
Capital Stock of International Wireless, Inc. in exchange for nine million seven
hundred twenty one thousand and eighty (9,721,080) shares of the Company's
common stock after the completion of a 9 of 1 reverse stock split of the
Company's common stock. The closing of this acquisition is subject to certain
terms and conditions and will automatically terminate, if not complete, on
January 31, 2002.
ORIGIN INVESTMENT GROUP, INC.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Except for historical information, the following discussion of our
financial condition and results of operations contains forward looking
statements based on current expectations that involve certain risks and
uncertainties. Our actual results could differ materially from those set forth
in these forward-looking statements as a result of a number of factors. Unless
specified otherwise, the terms, "we", "us", "our", "the company", and "Origin"
refer to Origin Investment Group, Inc.
Overview
We are a business development company incorporated in the State of Maryland
on April 6, 1999. We remain in the start up stage and we have not had any
revenues to date and we have not made any investments. Since inception our
operations have been limited to identifying, investigating and conducting due
diligence upon private companies involved within the Information Technology
industry for the purpose of investing in such companies. Our strategy has been
to identify several profitable IT service businesses, invest in such companies,
consolidate their operations and technologies to create a profitable e-business
solutions company. As of the date of this filing, we have not made any such
investments and have experienced substantial losses from our operations. We are
considering realigning our focus and business objectives to effectuate a merger
with a private company and have begun investigating merger opportunities with
several private companies. We have set a meeting of the shareholders on December
7, 2001 in order to determine whether we should elect out of BDC Status and to
effectuate a one-for-nine reverse split of the issued and outstanding stock of
the Company. A proxy statement has been filed by the Company on Form DEF-14A
with the United States Securities and Exchange Commission and all information
contained in such filing is incorporated herein by reference. Should
shareholders holding a majority of the issued and outstanding common stock, or
shareholders voting at the meeting representing greater than sixty seven percent
of all votes cast, agree to allow the Company to elect out of business
development company status, we will no longer be restricted in our business
operations to solely invest in businesses that are classified as eligible
portfolio companies under the Investment Company Act of 1940 and may enter into
a merger with another company.
Our financial statements are presented on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities in the
normal course of business.
We have experienced a loss since inception and have negative cash flows
from operations and have a stockholder's deficiency. For the nine months ended
September 30, 2001, we experienced a net loss of $636,590, as compared to a net
loss of $828,523, for the period ending September 30, 2000.
Our ability to continue as a going concern is contingent upon our ability
to raise additional capital. In addition, the ability to continue as a going
concern must be considered in light of the problems, expenses and complications
frequently encountered by entrance into established markets and the competitive
environment in which we operate.
These matters raise substantial doubt about the our ability to continue as
a going concern. The financial statements do not include any adjustments to
reflect the possible future effects on the recoverability and classification of
assets or the amounts and classification of liabilities that may result from our
possible inability to continue as a going concern.
Liquidity and Capital Resources
Since our inception, we have funded our operations solely through payments
received from the sale of our equity securities and from short term bridge loans
received from certain accredited investors. Our current liquidity and capital
resources are contingent on our ability to continue to fund our operations
through the sale of our equity securities. If we are unsuccessful in continuing
to raise capital through the sale of our securities, we will have difficulty in
meeting our short-term obligations and may cease to continue as a going concern.
Our ability to sell our equity securities to fund operations and to make
investments within identified eligible portfolio companies, in large part, is
contingent upon the depth and liquidity of our secondary market of our common
stock. Any failure to raise sufficient capital pursuant to the current or future
Origin offerings could require us to substantially curtail our
portfolio-investment acquisition efforts in general, and could require us to
cease operations.
Our cash flow requirements have continuously exceeded our capital resources
during the quarter, requiring us to issue additional equity securities for sale
to meet our short-term obligations. We anticipate operating at such a deficit
for the next several months until we are able to secure additional working
capital.
Registration via Exemption of Warrants and Shares Underlying Warrants
On October 12, 2001 the Company filed with the Securities and Exchange
Commission on Form 1-E an offering circular whereby the Company sought to
register via exemption pursuant to Regulation E of the Securities Act of 1933,
warrants to purchase 1,949,298 common shares and the underlying 1,949,298 common
shares held by thirty separate individual warrant holders. These warrants are
redeemable between $.10 and $1.50 per warrant. The offering circular was
rendered effective on October 27, 2001.
Acceleration of Redemption of Warrants
On October 8, 2001 we contacted each of our warrant holders with a proposal
where should they agree to accelerate the redemption of all of their warrants
held in possession, we would agree to exonerate their warrants from any
downward adjustment which may be caused by the Company recapitalizing its issued
and outstanding shares via a split or reverse split or via effectuating a merger
or acquisition transaction where a recapitalization would be likely. The warrant
holders were offered the right to avoid any dilutive adjustment to the
redemption price of their warrants or to an adjustment to the total amount of
warrants they possessed as a result of a recapitalization if they agreed to
redeem the entire amount of warrants they held within 10 business days from the
date we provided them written notice that the five day average closing bid price
equaled to or exceeded 150% of their redemption price for their warrants. Out of
a total of 30 warrant holders holding in aggregate warrants to purchase
1,949,298 shares of the Company's common stock, 26 warrant holders agreed to the
accelerated redemption provisions. The warrant holders choosing to agree to the
accelerated redemption held warrants to purchase in aggregate 1,572,632 out of
the total of 1,949,298 shares issuable pursuant to warrant exercise.
Letter of Intent signed with International Wireless, Inc.
On October 30, 2001 we entered into a binding letter of intent with
International Wireless, Inc. ("IWI"), a Delaware corporation, and its
stockholders to acquire one hundred percent of the issued and outstanding
capital stock of IWI in exchange for nine million seven hundred twenty one
thousand and eighty shares of our common stock. This share exchange is
contingent upon the shareholder approval of a one-for-nine reverse split of our
issued and outstanding common stock. We intend on acquiring IWI with the view to
further expand its business in the wireless technology industry. The letter of
intent will automatically terminate on January 31, 2002 should we not move
towards signing of a definitive share exchange agreement before that date.
Results of Operations
Our operations have been limited to obtaining additional capital through
the sale of our equity securities, obtaining short term bridge loans and
negotiating with additional potential eligible portfolio companies for possible
investment. To date we have had negative cash flows and anticipate continuing to
do so in the near future. We anticipate that upon completion of an investment
within an eligible portfolio company, our operational costs will increase
substantially in light of the need to hire additional personnel, including a
Chief Financial Officer and additional support staff. However, we may consider
exploring other alternatives other than seeking investments within eligible
portfolio companies, as the market value of our common stock has significantly
decreased and has made raising capital extremely difficult to fund our
operations as well as accumulating sufficient capital to invest in one or more
eligible portfolio companies. The Company is current evaluating the possibility
of shifting its business focus and may elect out of the business development
company status of the Company. If such a decision is made by the Company, the
shareholders of the Company will vote on the matter of electing out of business
development company status.
Our strategy and plan for the remainder of this fiscal year is to raise
additional capital for operations through the sale of our stock and purchase
interests within one or more profitable private businesses involved in the
Internet infrastructure and services sector of the IT industry. Our investment
strategy has been to acquire controlling interests within two or more "core"
profitable IT businesses involved in ASP, Systems Integration and Internet
Services to create, on consolidation of such entities, a profitable e-business
Solutions Company that provides its customers with web/e-commerce applications,
IT consulting and solutions and other value added services and which utilizes
ASP delivery and co-location hosting strategies on a cost effective basis to end
users. However, in light of the fact that this industry sector is no longer as
favored by the market as it has been in the past and that the market value of
our stock has decreased significantly, we have begun to explore alternative
investment strategies as well as seeking merger candidates for the Company.
SPECIAL NOTICE REGARDING FORWARD LOOKING STATEMENTS
This Form 10-Q, the quarterly report, and certain information provided
periodically in writing or orally by the Company's Officers or its agents
contains statements which constitute "forward-looking statements" within the
meaning of Section 27A of the Securities Act, as amended and Section 21E of the
Securities Exchange Act of 1934. The words "expect," "believe," "plan,"
"intend," "estimate", "anticipate", "strategy", "goal" and similar expressions
and variations thereof if used are intended to specifically identify
forward-looking statements. Those statements may appear in a number of places in
this Form 10-Q and in other places, particularly, "Management's Discussion and
Analysis of Financial Condition and Results of Operations", and include
statements regarding the intent, belief or current expectations of the Company,
its directors or its officers with respect to, among other things:
(i) the successful completion of investment(s) within one or more eligible
portfolio companies that we have identified, (ii) our liquidity and capital
resources; and (iii) our future performance and operating results.
Investors and prospective investors are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, and that actual results may differ materially from
those projected in the forward-looking statements as a result of various
factors. The factors that might cause such differences include, among others,
the following:
(i) any adverse effect or limitations caused by any governmental
regulations or actions; (ii) any increased competition in our business of
providing venture capital to eligible portfolio companies; (iii) successfully
identifying, negotiating, structuring and making investments within one or more
eligible portfolio companies; (iv) our ability to raise necessary investment
capital within the time frame agreed to between us and the principals of an
eligible portfolio company in order to successfully invest in such eligible
portfolio company; (v) the continued relationship with and success of the
management and owners of an eligible portfolio company after our investment; and
(vi) the continued performance of our eligible portfolio companies with
respect to their operations, including, but not limited to:
a. continued employment of key personnel, hiring of qualified additional
personnel;
b. the eligible portfolio company's mitigation of excessive and
extraordinary costs, and achieving projected profits and additional
customers for their growth.
c. Any other factors which would otherwise impede our eligible portfolio
company in achieving its performance goals upon which we based a
favorable return on our investment.
We undertake no obligation to publicly update or revise the forward looking
statements made in this Form 10-Q or annual report to reflect events or
circumstances after the date of this Form 10-Q and annual report or to reflect
the occurrence of unanticipated events.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We have no securities that are subject to interest rate fluctuations,
foreign currency risk, commodity price or any other relevant market risks during
the period covered by this Quarterly Report. We have not entered into any
hedging transactions or acquired any derivative instruments during the period
covered by this Quarterly Report.
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered
Securities
Equity Transactions
On August 20, 2001 we offered to sell five million four hundred thousand
shares (5,400,000) at a purchase price of $0.02 per share for an aggregate of
$108,000 ("Private Offering"). These shares are sold pursuant to an exemption
under the registration requirements of the Securities Act of 1933 (the
"Securities Act') and are restricted from resale pursuant to Rule 144 of the
Securities Act.
On August 29, 2001 we sold 1,500,000 shares of the Private Offering to an
investor for an aggregate of $30,000.
On September 4, 2001 we sold 1,875,000 shares of the Private Offering to an
investor for an aggregate of $38,696 in the form of 101,834 shares of
Telehublink, Inc. ("THLC") free trading common stock.
On September 19, 2001 we sold 525,500 shares of the Private Offering to an
investor for an aggregate of $10,500 in the form of 53,000 shares of THLC
free trading common stock at a value of $0.198 per share of THLC stock.
On October 3, 2001 we sold 250,000 shares of the Private Offering to an
investor for an aggregate of $5,000.
On October 4, 2001 we sold 250,000 shares of the Private Offering to an
investor for an aggregate of $5,000.
On October 10, 2001 we sold 500,000 shares of the Private Offering to an
investor for an aggregate of $10,000.
On October 12, 2001 we sold 375,000 shares if the Private Offering to an
investor for an aggregate of $7,500.
On October 17, 2001 we sold 125,000 shares of the Private Offering to an
investor for an aggregate of $2,500.
Item 6. Exhibits and Reports on Form 8-K.
1. Exhibits
Exhibit Description
3.1 Articles of Incorporation of Origin filed on April 6, 1999
(incorporated by reference to Exhibit 3(i) to Form 10 filed by Origin
on August 16, 1999)
3.2 Bylaws of Origin. (Incorporated by reference to Exhibit 3(ii) to Form
10 filed by Origin on August 16, 1999)
4.1 Offering Circular of Warrant Offering (Incorporated by reference to
Form 1-E filed on October 11, 2001 in connection with Rule 602
Regulation E Unit Offering.)
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf on November
18, 2001 by the undersigned thereunto duly authorized.
ORIGIN INVESTMENT GROUP, INC.
/s/ Greg H. Laborde
---------------------------------
Greg H. Laborde
Chief Executive Officer