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EX-32.1 - EXHIBIT 32.1 - PHMC, Inc.v390677_ex32-1.htm
EX-3.1 - EXHIBIT 3.1 - PHMC, Inc.v390677_ex3-1.htm
EX-31.1 - EXHIBIT 31.1 - PHMC, Inc.v390677_ex31-1.htm
EX-31.2 - EXHIBIT 31.2 - PHMC, Inc.v390677_ex31-2.htm
EX-32.2 - EXHIBIT 32.2 - PHMC, Inc.v390677_ex32-2.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2014

 

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

 

Commission file number: 333-185146

 

ORION FINANCIAL GROUP, INC.

(Exact name of registrant as specified in its charter)

  

Wyoming (EIN NUMBER)
(State or other jurisdiction of incorporation or organization) I.R.S. Employer Identification Number

 

 

1739 Creekstone Circle
San Jose, CA 95133
95133
(Address of principal executive offices) (Zip Code)

 

408-691-0806

(Registrant's telephone number, including area code)

 

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Act during the preceding 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.

x Yes  o No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

o Yes x No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filler”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer   o Accelerated Filer   o
Non-accelerated filer     o Smaller Reporting Company   x

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

¨ Yes x No

 

State the number of shares of outstanding of each of the issuer’s classes of common equity, as of September 30, 2014: 97,551,804 

  

 
 

 

ORION FINANCIAL GROUP INCORPORATED

TABLE OF CONTENTS

FORM 10-Q REPORT

June 30, 2014

 

    Page 
Number
 
PART I - FINANCIAL INFORMATION      
       
Item 1.   Financial Statements   3  
Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations.   7  
Item 3.   Quantitative and Qualitative Disclosures About Market Risk.   9  
Item 4.   Controls and Procedures.   9  
         
PART II - OTHER INFORMATION      
       
Item 1.   Legal Proceedings.   9  
Item 1A. Risk Factors.   9  
Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds.   9  
Item 3.   Defaults Upon Senior Securities.   9  
Item 4.   Mine Safety Disclosures   9  
Item 5.   Other Information.   9  
Item 6.   Exhibits.   10  
         
SIGNATURES   11  

 

2
 

 

PART I - FINANCIAL INFORMATION

 

Item 1.   Financial Statements.

 

Orion Financial Group, Inc.

Balance Sheets

(Unaudited)

 

   June 30,   December 31, 
   2014   2013 
         
Assets          
Current assets:          
Cash and cash equivalents  $5,042   $40 
           
           
Total assets  $5,042   $40 
           
Liabilities and Stockholders’ Equity (Deficit)          
Current liabilities:          
Accounts payable and accrued expenses   15,000    15,000 
Due to related party   16,417    11,417 
Loan payable to shareholder   26,750    3,750 
Total current liabilities   58,167    30,167 
           
Total liabilities   58,167    30,167 
           
Stockholders’ equity (deficit):          
Common stock, $0.001 par value, 250,000,000 shares authorized          
95,307,804 and 62,128,395 shares outstanding as of June 30, 2014 and December 31, 2013, respectively   95,308    62,128 
Preferred stock, $0.001 par value, 5,000,000 shares authorized          
0 and 0 shares outstanding as of June 30, 2014 and December 31, 2013, respectively   -    - 
Additional paid-in capital   116,199    80,689 
Subscription receivable   (1,000)   - 
Deficit accumulated during development stage   (263,632)   (172,944)
           
Total stockholders’ equity (deficit)   (53,125)   (30,127)
           
Total liabilities and stockholders’ equity (deficit)  $5,042   $40 

 

The accompanying notes are an integral part of these unaudited financial statements.

 

 

3
 

  

Orion Financial Group, Inc.

Statements of Operations

(Unaudited)

 

   For the three months ended   For the six months ended 
   June 30, 2014   June 30, 2013   June 30, 2014   June 30, 2013 
                 
Operating expenses:                    
General and administrative expenses  $60,339   $21,676   $90,688   $41,092 
                     
Net loss  $(60,339)  $(21,676)  $(90,688)  $(41,092)
                     
Basic and diluted loss per share  $(0.00)  $(0.00)  $(0.00)  $(0.00)
                     
Basic and diluted weighted average common shares outstanding   87,642,878    59,538,345    75,078,107    59,538,345 

 

The accompanying notes are an integral part of these unaudited financial statements. 

 

4
 

 

Orion Financial Group, Inc.

Statements of Cash Flows

(Unaudited)

 

   For the six months ended 
   June 30, 2014   June 30, 2013 
         
Cash flows from operating activities:          
Net loss  $(90,688)  $(41,092)
Adjustments to reconcile net loss to net cash used in operating activities:          
Changes in operating assets and liabilities:          
Stock compensation expense   27,590    - 
Stock compensation expense - related party   4,000      
Accounts payable   -    4,475 
Accounts payable- related party   5,000    4,492 
Net cash used in operating activities   (54,098)   (32,125)
           
Cash flows from financing activities:          
Proceeds from stock issuance   36,100    20,000 
Loan from shareholder   23,000    - 
Net cash provided by financing activities   59,100    20,000 
           
Net increase in cash and cash equivalents   5,002    (12,125)
           
Cash and cash equivalents - beginning   40    12,151 
           
Cash and cash equivalents - ending  $5,042   $26 

 

The accompanying notes are an integral part of these unaudited financial statements. 

 

5
 

 

Note 1 - Organization And Nature of Business

 

Orion Financial Group Inc. (the “Company”) was incorporated in the state of Wyoming on March 26, 2012 with an authorized capital of 100,000,000 shares of common stock, par value of $0.001 per share. The authorized capital was increased to 255,000,000, of which 250,000,000 is common stock and 5,000,000 is Preferred Stock  on [x date], 2014. The Company’s principal operations are located in San Jose, CA. The Company is a strategic financial consulting firm providing services to companies requiring cutting-edge advice in the area of corporate growth strategies. The Company provides financing alternatives to experienced executives that seek to purchase (buy-side) divest (sell-side) or recapitalize their public or private company. The Company has selected December 31 as its fiscal year end.

 

On June 10, 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-10Development Stage Entities (Topic 915) – Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, which eliminates the concept of a development stage entity (DSE) in its entirety from current accounting guidance. 

 

Note 2 - BASIS OF PRESENTATION

 

The accompanying unaudited interim financial statements of Orion Financial Group, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto for the period from March 26, 2012 (inception) through December 31, 2013 contained in the Company’s Form 10-K filed with the Securities and Exchange Commission on March 28, 2014. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the interim financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the period from March 26, 2012 (inception) through December 31, 2013 as reported in the Company’s Form 10-K have been omitted.

 

Note 3 – Going Concern

 

The Company’s financial statements are prepared using generally accepted accounting principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company does not have sufficient working capital for its planned activities, which raises substantial doubt about its ability to continue as a going concern. The Company has not established any source of revenue to cover its operating costs. If the Company is unable to obtain revenue producing contracts or financing, or if the revenue or financing it does obtain is insufficient to cover any operating losses it may incur, it may substantially curtail or terminate its operations or seek other business opportunities through strategic alliances, acquisitions or other arrangements that may dilute the interests of existing stockholders.

 

Note 4 – Equity

 

During the six months ended June 30, 2014, the company issued 33,179,409, common shares, of which 1,589,640 shares were issued for proceeds of $36,100, and 31,589,769 were issued as stock compensation of $31,590. Of these shares, 4,000,000 were issued as compensation to an entity controlled by a related party. The shares were valued at par value because the Company is not trading and the shares have a nominal value.

  

Note 5 – Related party transactions

 

During the six months ended June 30, 2014, fees of $36,918 for consulting services were paid to our CEO. As of June 30, 2014, $16,417 was due to related parties for services and expenses paid on behalf of the Company and another $26,750 was due to a shareholder for demand loans of which $23,000 was borrowed in the three months ended June 30, 2014.

 

During the quarter, 4,000,000 shares were issued for services to an entity controlled by a related party. The shares were valued at par value because the Company is not trading and the shares have a nominal value.

 

Note 6 – Subsequent Events

 

In July/August 2014, the Company issued 10,000 shares to investors for $11,000 at a price of $1.10 per share. It issued 970,000 shares for compensation expense.

 

6
 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Result of Operations.

 

The following discussion provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

 

Our Corporate History and Background

 

Orion Financial Group, Inc. (the “Company” or “Orion”) was incorporated in the State of Wyoming on March 26, 2012. Orion intends to provide strategic financial consulting services to companies requiring advice in the area of corporate growth strategies. Additionally, the Company wants to facilitate financing alternatives to executives that seek to purchase (buy-side), divest (sell-side), or recapitalize their public or private company. More specifically, the Company intends to provide consulting services across industry sectors to companies that have revenues between $2.5 million and $100 million.

 

Under the leadership of a seasoned management team, Orion intends to develop its consulting business segment, as well as, identify and evaluate potential acquisitions that will allow the Company to provide better all-around support. Orion has begun to invest time and resources in the development of its services and products, which involves management’s determination as to what sector or client the Company should target with marketing materials in anticipation of providing its consulting services.

 

Financial Services Market

 

Orion will focus on providing consulting services to private and public businesses that are considering or are suitable targets in mergers and acquisitions transactions, are financially distressed, or desire access to capital markets. Orion’s target company will not be industry specific; however, efforts will be directed at client companies with the following attributes:

 

  ¨ Objective to sell, buy, or expand their business;

 

  ¨ Seeking recapitalization;

 

  ¨ Enterprise Value of $2 to $20 million;

 

  ¨ Profitably operational for at least 3 years;

 

  ¨ Cash flow positive through profitability;

 

  ¨ Auditable financials; and

 

  ¨ Strong management team.

  

7
 

 

Services

 

The Company intends to establish business relations throughout various industries that will allow the Company to provide the following services: (1) Corporate Financial Consulting, (2) Mergers and Acquisitions Assistance, and (3) Due Diligence Resources.

 

  ¨

Corporate Financial Consulting – Full-service, extensive corporate financial consulting that focuses on micro-cap and small cap private and public companies. The Company’s services are based on its management’s extensive experience in a variety of sectors.

 

  ¨

Mergers and Acquisitions Advisory Services – Introduction to short and long-term financing options. Utilization of the Company’s extensive professional network to bring together buyers and sellers to execute transactions.

 

  ¨

Due Diligence Resources – Full documentation, due diligence, evaluation, and formation of integrated business plan to facilitate investment interest in the public and private markets.

 

Results of Operations

  

Three Months Ended June 30, 2013 Compared to Three Months Ended June 30, 2014.

 

SG&A Expenses: SG&A Expense for the quarter ended June 30, 2013 and June 30, 2014, respectively, increased from $21,676 to $60,338, which was primarily attributable to stock compensation expense.

 

Total Expenses: Total expenses for the quarter ended June 30, 2013 and June 30, 2014, respectively, increased from $21,676 to $60,668, which was primarily attributable to stock compensation expense.

 

Net Loss: We incurred a net loss for the quarter ended June 30, 2013 and June 30, 2014, respectively, increased from $21,676 to $60,338, which was primarily attributable to stock compensation expense.

 

Six Months Ended June 30, 2013 Compared to Six Months Ended June 30, 2014

 

SG&A Expenses: SG&A Expense for the six months ended June 30, 2013 and June 30, 2014, respectively, increased from $41,092 to $90,688, which was primarily attributable to stock compensation expense.

 

Total Expenses: Total expenses for the six months ended June 30, 2013 and June 30, 2014, respectively, increased from $41,092 to $90,688, which was primarily attributable to stock compensation expense.

 

Net Loss: We incurred a net loss for the six months ended June 30, 2013 and June 30, 2014, respectively, increased from $41,092 to $90,688, which was primarily attributable to stock compensation expense.

  

Capital Resources and Liquidity

 

As of June 30, 2014, we had cash and cash equivalents of approximately $5,042. The following section provides a summary of our net cash flows from operating, investing, and financing activities. We have historically financed our operations primarily through net cash flow from operations and shareholder investment. Management estimates that approximately $100,000 will be required annually to finance the Company's current operations of executing its business plan. The Company may require funds of up to $4,000,000 to finance its plan of operations. Funds required to finance the Company's plan of operations are expected to come from its offering, or from additional debt or equity financings during fiscal 2014 until such time as our revenues exceed expenses. It is expected to take longer than 12 months to reach this break-even position. The Company cannot make any guarantee that it will be successful in obtaining any additional financing or that the terms will be favorable to the Company.

 

Recent Development

 

On July 29, 2013, the Company entered into a reserve equity financing agreement (the “Financing Agreement”) with AGS Capital Group, LLC, (“AGS”). Pursuant to the Financing Agreement, the Company has the right, but not the obligation, to issue $25,000,000 of the Company’s common stock to AGS over the course of 3 years. The Company has full control and discretion over the timing and amount of any shares that they sell to AGS.  For each advance, the Company may issue an amount of stock equal to $250,000. Such advance will not exceed more than 200% of the average daily trading volume for the previous 10 trading days. The purchase price of the shares shall be set at ninety-one percent (91%) of the lowest of the best closing bid prices of the stock during the fifteen consecutive weekday trading days immediately after the date on which the Company provides an advance notice. The Company, at its option, may select a safety net price for any specified advance, below which the Company will not sell shares to AGS under that advance in which case the maximum volume of shares advanced will be reduced pro-rata for any days the stock price trades below such safety net price. The Company shall transfer 200,000 shares of common stock to AGS on the first day that the Company's freely tradable, fully registered and unencumbered common stock becomes publicly traded.

 

Also on July 29, 2013, the Company entered into a registration rights agreement with AGS (the “RRA,” and along with the Financing Agreement, the “Agreements”).  According to the RRA, the Company must file a registration statement on Form S-1, registering the shares of common stock which may be issued to AGS pursuant to the Financing Agreement within thirty (30) days of the date of the RRA (“Registration Statement”). The Registration Statement shall be effective and available for the resale of the shares of common stock issued and sold to AGS in connection with the Financing Agreement.

 

8
 

 

This registration statement gives the Company the opportunity to deliver advances to AGS in exchange for cash. 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

We are a smaller reporting company and are not required to provide the information under this Item.

 

Item 4. Controls and Procedures.

 

(a) Disclosure of controls and procedures.

 

Management has evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) as of the end of the period covered by this report and concluded that our disclosure controls and procedures were not effective to ensure that all material information required to be disclosed in this Quarterly Report on Form 10-Q has been made known to them in a timely fashion. We are in the process of improving our internal control over financial reporting in an effort to remediate these deficiencies through improved supervision and training of our accounting staff. These deficiencies have been disclosed to our Board of Directors. We believe that this effort is sufficient to fully remedy these deficiencies and we are continuing our efforts to improve and strengthen our control processes and procedures. Our Chief Executive Office, Chief Financial Officer and directors will continue to work with our auditors and other outside advisors to ensure that our controls and procedures are adequate and effective.

 

(b) Changes in internal controls

 

There have been no significant changes in our internal controls over financial reporting that occurred during the fiscal quarter covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II-OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

From time to time the Company may be named in claims arising in the ordinary course of business.  Currently, no legal proceedings or claims are pending against or involve the Company that, in the opinion of management, could reasonably be expected to have a material adverse effect on its business and financial condition.

 

Item 1A. Risk Factors.

 

We are a smaller reporting company and are not required to provide the information under this Item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

During the six months ended June 30, 2014, the company issued 33,179,409, common shares, of which 1,589,640 shares were issued for proceeds of $37,100, and 31,589,769 were issued as stock compensation of $31,590. Shares, other than those issued for stock compensation, were issued through a private offering to 4 investors. The securities were issued in reliance upon exemptions from registration to section 4(2) of the Securities Act of 1933, as amended and/or Rule 506 promulgated under the Securities Act. 

 

The above securities were offered and sold to the investors in a private placement transaction made in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act of 1933, as amended (the “Securities Act”) and/or Rule 506 promulgated under the Securities Act. The investors are accredited investors as defined in Rule 501 of Regulation D promulgated under the Securities Act.

 

The Company also issued 31,589,769 shares of common stock to [xx] people for services rendered during the quarter ended June 30, 2014. The Shares were valued at a total value of $31,590.

 

The above securities were issued to the individuals identified in connection with a transaction made in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act of 1933, as amended (the “Securities Act”) and/or Rule 506 promulgated under the Securities Act. The investors are accredited investors as defined in Rule 501 of Regulation D promulgated under the Securities Act.

  

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

9
 

 

Item 6. Exhibits.

 

Exhibit    
Number   Description
     
3.1  

Amendment to the Articles of Incorporation, filed with the States of Wyoming on April 30, 2014 

     
31.1   Certification of the Principal Executive Officer required by Rule 13a - 14(a) or Rule 15d - 14(a)
     
31.2   Certification of the Principal Financial Officer required by Rule 13a - 14(a) or Rule 15d - 14(a)
     
32.1  

Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002

     
32.2  

Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002

  

In accordance with SEC Release 33-8238, Exhibit 32.1 and 32.2 are being furnished and not filed.

 

10
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  ORION FINANCIAL GROUP INCORPORATED  
     
Dated: October 7, 2014 By: /s/ Kenneth Green  
    Kenneth Green  
   

Chief Executive Officer (Duly Authorized Officer and Principal Executive Officer)

 
       
Dated: October 7, 2014 By: /s/ Bob Bates  
    Bob Bates  
   

Chief Financial Officer (Duly Authorized Director and

Principal Financial and Accounting Officer)

 

  

11