SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB

/X/      Annual Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934

                  For the fiscal year ended: December 31, 2002

/  /     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 0-20837

                           Orion Acquisition Corp. II
                 (Name of Small Business Issuer in Its Charter)

              Delaware                                 13-3863260
      (State of Incorporation)                   (Small Business Issuer
                                               I.R.S. Employer I.D. Number)

      401 Wilshire Boulevard - Ste. 1020                             90401
               Santa Monica, CA                                    (zip code)
   (Address of principal executive offices)

                                 (310) 526-5000
                (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 per share
                    Redeemable Class B Unit Purchase Warrants

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 registrant was required to file such reports), and (2)
has been subject to such filing requirement for the past 90 days. Yes X  No
                                                                     ---   ---

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is 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. |____|

Issuer's revenues for the fiscal year ended December 31, 2002 were $23,828.

As of March 15, 2003, the aggregate market value of the common stock held by
non-affiliates of the Registrant was approximately $360,573.

As of March 15, 2003, there were 1,030,907 shares of Common Stock, $.01 par
value per share, outstanding.

Transitional Small Business Disclosure Format (check one): Yes      No  X
                                                               ---     ---

Documents Incorporated by Reference: None.


<PAGE>

                                     PART I
ITEM 1. DESCRIPTION OF BUSINESS

General

Orion Acquisition Corp. II ("the Company" or "Orion") was organized on October
19, 1995 to acquire an operating business by purchase, merger, combination or
otherwise. There is no restriction on the means of acquisition or the industry
in which the target business operates.

Since its inception, Orion has not engaged in any substantive commercial
business. Its sole activities have been to evaluate and select a suitable target
business, to structure, negotiate and consummate a business combination with a
target business and to maintain its assets.

Business Objective

The management of Orion intends to identify a target business and effect a
business combination with a target business. It is anticipated that any business
combination will be by negotiation rather than hostile takeover. At this time,
Orion does not have a schedule of when it will be able to initiate or consummate
a specific business combination.

Management has substantial flexibility in identifying and selecting a
prospective target business. In evaluating a prospective target business,
management will consider, among other factors, the following:

(i)    the costs associated with effecting the business combination;

(ii)   the  amount  of the  equity  interest  it will be  able to  acquire  in
       the business and opportunity to obtain control;

(iii)  the growth potential of the target business;

(iv)   the experience and skill of the  management  of the target  business  and
       availability of additional personnel for the target business;

(v)    the current and anticipated capital requirements of the target business;

(vi)   the competitive position of the target business in its industry;

(vii)  the stage of business development of the target business;

(viii) the degree of current or the potential market  acceptance of the products
       or services of the target business;

(ix)   the existence of any proprietary  features or intellectual  property of
       the target business;

(x)    the overall financial condition of the target business; and

(xi)   the regulatory environment in which the target business operates.

In connection with its search for an acquisition opportunity, Orion may engage
investment banking firms to help it identify and approach target businesses.
Moreover, in evaluating any target business, management will consider retaining
an independent investment banking firm which is a member in good standing of the
NASD to assist the Company in appraising, structuring and negotiating a
potential business combination. In connection with its evaluation of a
prospective target business, management will conduct a due diligence review
which will encompass, among other things, meeting with incumbent management,
inspecting the facilities, and reviewing the financial, legal and other
information which will be made available to Orion.

The time and costs required to select and evaluate a target business (including
conducting a due diligence review) and to structure and consummate the business
combination (including negotiating relevant agreements and preparing requisite
documents for filing pursuant to applicable securities laws and state "blue sky"

                                       1
<PAGE>

and corporation laws) will not be ascertainable with any degree of certainty
until consummation of the business combination. Any costs incurred in connection
with the identification and evaluation of a prospective target business with
which a business combination is not ultimately consummated will result in an
expense to Orion.

Orion will use its current working capital and capital resources to consummate a
business combination. In addition, because the resources of Orion are not
sufficient to fund a business combination, it will have to raise additional
capital. The capital may be in the form of equity or debt, and will likely be
based solely on the business operation and financial condition of the target
business. Therefore, it is not possible at this time to determine the amount of
capital that will be needed or available for a business combination. There
currently are no limitations on Orion's ability to privately obtain funds for a
business combination. Nonetheless, Orion's limited resources and lack of
operating history may make it difficult to obtain funds. Because of certain SEC
interpretations and related rules, Orion does not believe it can publicly raise
funds prior to a business combination with an operating company, unless it has
in excess of $5,000,000 in assets.

The amount and nature of any funding will depend on numerous considerations,
including Orion's capital requirements, potential lenders' evaluation of Orion's
ability to meet debt service on borrowings and the then prevailing conditions in
the financial markets, as well as general economic conditions. Orion does not
have any arrangements with any bank or financial institution to secure
additional financing, and there can be no assurance that such arrangements if
required will be obtainable or otherwise in the best interests of Orion. The
inability of Orion to obtain the funds required to effect a business
combination, or to provide funds for an additional infusion of capital into a
target business, may have material adverse effects on Orion's business
prospects, including the ability to effect a business combination.

Employees

Orion does not have any employees.


ITEM 2. DESCRIPTION OF PROPERTY

Orion's executive office is located at 401 Wilshire Boulevard, Suite 1020, Santa
Monica, California 90401, and its telephone number is (310) 526-5004.

Pursuant to an oral agreement, MDB Capital Group, LLC., a limited liability
company controlled by Christopher A. Marlett, Anthony DiGiandomenico, Dyana
Williams Marlett and James D. Bowyer, each a stockholder, officer and director
of Orion, has agreed that it will make office space and services available to
Orion, as may be required at this time and in the near future. Orion does not
pay any amount for the office space or services.

Orion believes that this facility is adequate to meet its needs in the
foreseeable future pending the consummation of a business combination.


ITEM 3. LEGAL PROCEEDINGS

On July 1, 1999, a Class B Warrantholder of Orion brought an action ("July
Action") against Orion, its former directors and certain others. On January 31,
2000, the plaintiff filed a notice dismissing the July Action without prejudice.
On January 28, 2000 the court ordered the notice of dismissal. The Company and
the plaintiff agreed that Orion will make an exchange offer to all holders of
the Class B Warrants. The exchange offer must be made after Orion completes its
first business combination of a target company that results in the acquisition
of one or more companies with operating businesses and results in Orion having
assets in excess of $5,000,000. The terms of the exchange offer will require
each holder to pay the $.125 exercise price of the Class B Warrant and surrender
the warrant for one share of common stock, one Class A Warrant and one Right.
The Right will provide for the issuance of additional shares of common stock
based on a formula in the event that Orion makes an acquisition or consummates a
merger and the post transaction company does not meet the specified targets of a
$7,000,000 net worth immediately after the transaction and a minimum common
stock price of $5.75 for ten days during the two year period following the
transaction, subject to certain adjustment, terms and conditions.

                                       2
<PAGE>

On October 31, 2000, Orion filed with the Supreme Court of the State of New
York, County of New York, a summons and complaint in an action entitled Orion
Acquisition Corp. II v. Mentmore Holdings Corporation, Mentmore Holdings, Inc.,
Richard L. Kramer, William L. Remley, Richard C. Hoffman, Robert D. Frankel, J.
Thomas Chase, and Michael D. Schenker. Messrs. Karmer, Remley, Hoffman, Frankel
and Chess were former directors and/or officers of Orion. Messrs. Remley and
Kramer are or were officers and/or directors of one or more of the Mentmore
defendants. Mr. Hoffman is or was an officer of one or more of the Mentmore
defendants. In the complaint, Orion alleged a series of causes of action,
including a claim against the former Orion directors for breach of fiduciary
duty in connection with the diversion of a corporate opportunity, and against
other defendants for aiding and abetting the claimed breach of fiduciary duty
and duty of loyalty.

On March 28, 2002, the terms of a settlement were reached between the Company
and the Mentmore defendants and was signed on May 15, 2002. Under the settlement
certain of the defendants surrendered 71,250 shares of Orion's common stock
which were owned by those defendants which the Company will cancel, certain of
the defendants surrendered a warrant to purchase 100,000 shares of the Company's
stock which the Company cancelled, and the former directors withdrew their
claim for reimbursement by the Company of their defense costs.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.












                                       3
<PAGE>



                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

The common stock, and Class B Warrants are traded in the over-the- counter
market and quoted on the OTC Bulletin Board under the symbols MTMR and MTMRZ.

The following table sets forth the range of high and low closing bid prices for
the common stock and Class B Warrants for the last two fiscal years. The OTC
Bulletin Board is an inter-dealer automated quotation system sponsored and
operated by the NASD for equity securities not included in the Nasdaq System.
The over-the-counter market quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not necessarily reflect actual
transactions.

                                                                     Class B
                                                                     -------
                                        Common Stock                 Warrants
                                      ---------------            ---------------
                                      High        Low            High        Low
                                      ----        ---            ----        ---
   Year Ended
   December 31, 2002:
        First Quarter..........       1.11        .55             .75        .35
        Second Quarter.........       1.01        .68             .75        .30
        Third Quarter..........        .70        .52             .55        .30
        Fourth Quarter.........        .75        .55             .75        .20

   Year Ended
   December 31, 2001:
        First Quarter..........       .875       .875            .125       .125
        Second Quarter.........       1.26       1.26            1.00       1.00
        Third Quarter..........       1.40       1.01            1.01       1.00
        Fourth Quarter.........       1.30       1.30             .35        .35

Holders

As of March 15, 2003, there were 30 holders of record of the common stock and
one holder of record of the Class B Warrants. Since many of the securities are
held in street name, Orion believes that there is a substantial number of
beneficial holders of the securities.

Dividends

Orion does not expect to pay any dividends prior to the consummation of a
business combination, and thereafter anticipates that for the foreseeable future
any earnings will be retained for use in its business.


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Forward Looking Statements

When used in this Form 10-KSB and in future filings by Orion with the Securities
and Exchange Commission, the words or phrases "will likely result, "management
expects," or "the company expects," "will continue," "is anticipated,"
"estimated" or similar expressions are intended to identify "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Readers are cautioned not to place undue reliance on any such
forward-looking statements, each of which speak only as of the date made. Such
statements are subject to certain risks and uncertainties, some of which are
described below, that could cause actual results to differ materially from
historical earnings and those presently anticipated or projected. Orion has no
obligation to publicly release the result of any revisions which may be made to
any forward-looking statements to reflect anticipated events or circumstances
occurring after the date of such statements.

                                       4
<PAGE>

The selected financial information for the years ended December 31, 2001 and
2002, is derived from the financial statements of Orion which have been audited
by Singer Lewak Greenbaum & Goldstein LLP, Orion's independent auditors. This
information should be read in conjunction with the financial statements and
related notes and other financial information included herein.

                                                         2002          2001
                                                         ----          ----
  Statement of Operations Data:

       General and administrative expenses.........     (135,877)     (158,112)
       Interest income.............................       23,828        77,197
       Provision for (benefit from) taxes..........           --         1,338
       Net Income (loss)...........................     (112,049)      (80,070)
       Weighted average common shares outstanding..    1,044,004     1,102,157

  Balance Sheet Data:

       Total Assets................................    2,032,931     2,154,742
       Total liabilities...........................       31,134        40,896
       (Deficit) earnings accumulated during
          development stage........................     (212,209)     (100,220)
       Stockholders' equity........................    2,001,797     2,113,846


Orion is a development stage company, and to date its efforts have been limited
to organizational activities, consummating an initial public offering, seeking a
business combination and maintaining its assets. Orion has not yet consummated a
business combination. Accordingly, Orion will not achieve any revenues (other
than investment income) until, at the earliest, the consummation of a business
combination.

Orion currently has its executive office at the location of MDB Capital Group
LLC whose principals are members of the board of directors of Orion. MDB Capital
Group has agreed to make office space and services available to Orion, as may be
required at this time and in the near future. Orion does not pay any amount for
these services.

At December 31, 2002, Orion had $2,032,710 in cash. Orion will invest its assets
in U.S. Treasury bills and/or cash until such time as assets are needed for a
business combination or acquisition.

Orion has not incurred any debt in connection with its organizational
activities. No cash compensation is currently or will be paid to any officer
director until after the consummation of a business combination. Since the role
of present management after a business combination is uncertain, Orion has no
ability to determine what remuneration, if any, will be paid to such persons
after a business combination.

Orion believes it has more than adequate capital to fund its operations pending
a business combination.

Orion will use its current working capital and capital resources to consummate a
business combination. In addition, because the resources of Orion are not
sufficient to fund a business combination, it will have to raise additional
capital. The capital may be in the form of equity or debt, and will likely be
based solely on the business operations and financial condition of the target
business. Therefore, it is not possible at this time to determine the amount of
capital that will be needed or available for a business combination. There
currently are no limitations on Orion's ability to privately obtain funds for a
business combination. Because of certain SEC interpretations and related rules,
Orion does not believe it can publicly raise funds prior to a business
combination with an operating company unless it has in excess of $5,000,000 in
assets.

Orion's limited resources and lack of operating history may make it difficult to
obtain funds. The amount and nature of any funding will depend on numerous
considerations, including Orion's capital requirements, potential lenders'
evaluation of Orion's ability to meet debt service on borrowings and the then
prevailing conditions in the financial markets, as well as general economic
conditions. Orion does not have any arrangements with any bank or financial
institution to secure additional financing, and there can be no assurance that
such arrangements if required will be obtainable or otherwise in the best
interests of Orion. The inability of Orion to obtain the funds required to

                                       5
<PAGE>

effect a business combination, or to provide funds for an additional infusion of
capital into a target business, may have material adverse effects on Orion's
business prospects, including the ability to effect a business combination.


























                                       6
<PAGE>

                                               ORION ACQUISITION CORP. II
                                            (A DEVELOPMENT STAGE COMPANY)
                                                                 CONTENTS
                                                        December 31, 2002

--------------------------------------------------------------------------------


                                                                         Page

INDEPENDENT AUDITOR'S REPORT                                              F-2

FINANCIAL STATEMENTS

     Balance Sheet                                                        F-3

     Statements of Operations                                             F-4

     Statements of Shareholders' Equity                                F-5 - F-6

     Statements of Cash Flows                                          F-7 - F-8

     Notes to Financial Statements                                    F-9 - F-18


























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

                                      F-1

<PAGE>




                          INDEPENDENT AUDITOR'S REPORT


                       Board of Directors and Shareholders
                           Orion Acquisition Corp. II

We have audited the accompanying balance sheet of Orion Acquisition Corp. II (a
development stage company) as of December 31, 2002, and the related statements
of operations, shareholders' equity, and cash flows for each of the two years in
the period ended December 31, 2002. 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. We have not audited
the balance sheets and the statements of operations, shareholders' equity, and
cash flows for the periods from October 19, 1995 (inception) to December 31,
1999, which constituted retained earnings aggregating to $7,553. These periods
have been audited by other auditors.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those 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 Acquisition Corp. II as
of December 31, 2002, and the results of its operations and its cash flows for
each of the two years in the period ended December 31, 2002 in conformity with
accounting principles generally accepted in the United States of America.



SINGER LEWAK GREENBAUM & GOLDSTEIN LLP

Los Angeles, California
February 5, 2003

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

                                      F-2

<PAGE>

                                               ORION ACQUISITION CORP. II
                                            (A DEVELOPMENT STAGE COMPANY)
                                                            BALANCE SHEET
                                                        December 31, 2002

--------------------------------------------------------------------------------


                                     ASSETS

Assets
     Cash                                                       $     2,032,710
     Deferred tax assets                                                    221
                                                                ---------------

                  Total assets                                  $     2,032,931
                                                                ===============


                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
     Accounts payable and accrued expenses                      $        31,134
                                                                ---------------

         Total current liabilities                                       31,134
                                                                ---------------

Contingencies

Shareholders' equity
     Preferred stock, $0.01 par value
         1,000,000 shares authorized
         110 shares issued and outstanding                                    1
     Common stock, $0.01 par value
         10,000,000 shares authorized
         1,102,157 shares issued, 1,030,907 shares outstanding           11,022
     Additional paid-in capital                                       2,203,756
     Deficit accumulated during the development stage                  (212,269)
     Treasury stock, at cost                                               (713)
                                                                ---------------

              Total shareholders' equity                              2,001,797
                                                                ---------------

                  Total liabilities and shareholders' equity    $     2,032,931
                                                                ===============




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

                                      F-3

<PAGE>

                                               ORION ACQUISITION CORP. II
                                            (A DEVELOPMENT STAGE COMPANY)
                                                 STATEMENTS OF OPERATIONS
                       For the Years Ended December 31, 2002 and 2001 and
    for the Period from October 19, 1995 (Inception) to December 31, 2002

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                                                        For the
                                                                                                      Period from
                                                                                                      October 19,
                                                                      For the Year Ended                 1995
                                                                          December 31,               (Inception) to
                                                                ---------------------------------     December 31,
                                                                      2002              2001             2002
                                                                ----------------  ---------------  ----------------
<S>                                                             <C>               <C>              <C>
Operating expenses
   General and administrative expenses                          $        135,877  $       158,112  $      1,097,355
   Stock-based compensation expense                                            -                -           100,000
                                                                ----------------  ---------------  ----------------

     Total operating expenses                                            135,877          158,112         1,197,355
                                                                ----------------  ---------------  ----------------

Loss from operations                                                    (135,877)        (158,112)       (1,197,355)
                                                                ----------------  ---------------  ----------------

Other income (expense)
   Other income                                                                -            2,183             2,183
   Interest income                                                        23,828           77,197         1,584,705
   Interest expense                                                            -                -           (57,694)
                                                                ----------------  ---------------  ----------------

     Total other income (expense)                                         23,828           79,380         1,529,194
                                                                ----------------  ---------------  ----------------

Income (loss) before provision for
   income taxes                                                         (112,049)         (78,732)          331,839

Provision for income taxes                                                     -            1,338           268,467
                                                                ----------------  ---------------  ----------------

Net income (loss)                                               $       (112,049) $       (80,070) $         63,372
                                                                ================  ===============  ================

Basic and diluted
   Loss per share                                               $          (0.11) $         (0.07)
                                                                ================  ===============

   Weighted-average common shares
     outstanding                                                       1,044,004        1,102,157
                                                                ================  ===============

</TABLE>

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

                                      F-4

<PAGE>

                                              ORION ACQUISITION CORP. II
                                           (A DEVELOPMENT STAGE COMPANY)
                                      STATEMENTS OF SHAREHOLDERS' EQUITY
   For the Period from October 19, 1995 (Inception) to December 31, 2002

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>




                                                                                                                        Deficit
                                                                               Common Stock Subject                   Accumulated
                             Preferred Stock             Common Stock         to Possible Redemption    Additional    during the
                         ------------------------  ------------------------  ------------------------     Paid-in     Development
                             Shares      Amount        Shares      Amount        Shares      Amount       Capital        Stage
                         -----------  -----------  -----------  -----------  -----------  -----------   -----------  -------------
<S>                      <C>          <C>          <C>          <C>          <C>          <C>           <C>          <C>
Balance, October 19,
   1995 (inception)                -  $         -            -  $         -            -  $         -   $         -  $         -
Issuance of founders'
   shares                                               16,500          165                                   1,485
                         -----------  -----------  -----------  -----------  -----------  -----------   -----------  -----------

Balance, December 31,
   1995                            -            -       16,500          165            -            -         1,485            -
Issuance of founders'
   shares                                               58,500          585                                   5,265
Sale of private placement
   shares                                               15,000          150                                   7,350
Sale of convertible
   preferred stock               110            1                                                            10,999
Sale of 800,000 shares,
   net of underwriting
   discounts and
   offering costs                                      640,000        8,000      160,000    1,600,000     7,107,405
Accretion to redemption
   value of stock                                                                      -       42,118                    (42,118)
Net income                                                                                                                42,651
                         -----------  -----------  -----------  -----------  -----------  -----------   -----------  -----------

Balance, December 31,
   1996                          110            1      730,000        8,900      160,000    1,642,118     7,132,504          533
Issuance of options                                                                                         100,000
Accretion to redemption
   value of common
   stock                                                                               -       90,122                    (90,122)
Net income                                                                                                                 4,266
                         -----------  -----------  -----------  -----------  -----------  -----------   -----------  -----------

Balance, December 31,
   1997                          110            1      730,000        8,900      160,000    1,732,240     7,232,504      (85,323)
Accretion to redemption
   value of common
   stock                                                                                       85,484                    (85,484)
Net income                                                                                                               140,517
                         -----------  -----------  -----------  -----------  -----------  -----------   -----------  -----------

</TABLE>

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

                                      F-5(1)
<PAGE>

                                              ORION ACQUISITION CORP. II
                                           (A DEVELOPMENT STAGE COMPANY)
                                      STATEMENTS OF SHAREHOLDERS' EQUITY
   For the Period from October 19, 1995 (Inception) to December 31, 2002
                                                                (Cont'd)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                    Treasury Stock
                                                -------------------------
                                                  Shares          Amount          Total
                                                ----------       --------      -----------
<S>                                             <C>              <C>           <C>
Balance, October 19,
   1995 (inception)                                      -       $      -      $         -
Issuance of founders'
   shares                                                                            1,650
                                                ----------       --------      -----------

Balance, December 31,
   1995                                                  -              -            1,650
Issuance of founders'
   shares                                                                            5,850
Sale of private placement
   shares                                                                            7,500
Sale of convertible
   preferred stock                                                                  11,000
Sale of 800,000 shares,
   net of underwriting
   discounts and
   offering costs                                                                8,715,405
Accretion to redemption
   value of stock                                                                        -
   Net income                                                                       42,651
                                                ----------       --------      -----------

Balance, December 31,
   1996                                                  -              -        8,784,056
Issuance of options                                                                100,000
Accretion to redemption
   value of common
   stock                                                                                 -
Net income                                                                           4,266
                                                ----------       --------      -----------

Balance, December 31,
   1997                                                  -              -        8,888,322
Accretion to redemption
   value of common
   stock                                                                                 -
Net income                                                                         140,517
                                                ----------       --------      -----------

</TABLE>

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

                                      F-5(2)

<PAGE>

                                              ORION ACQUISITION CORP. II
                                           (A DEVELOPMENT STAGE COMPANY)
                                      STATEMENTS OF SHAREHOLDERS' EQUITY
   For the Period from October 19, 1995 (Inception) to December 31, 2002

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>



                                                                                                                        Deficit
                                                                               Common Stock Subject                   Accumulated
                             Preferred Stock             Common Stock         to Possible Redemption    Additional    during the
                         ------------------------  ------------------------  ------------------------     Paid-in     Development
                             Shares      Amount        Shares      Amount        Shares      Amount       Capital        Stage
                         -----------  -----------  -----------  -----------  -----------  -----------   -----------  -------------
<S>                      <C>          <C>          <C>          <C>          <C>          <C>           <C>          <C>
Balance, December 31,
   1998                          110  $         1      730,000  $     8,900      160,000  $ 1,817,724   $ 7,232,504  $   (30,290)
Elimination of redemptive
   common stock
   provision                                           160,000            -     (160,000)  (1,600,000)    1,600,000
Reversal of accretion
   to redemptive value
   of common stock                                                                     -     (217,724)                   217,724
Dividend                                                                                                                (275,641)
Liquidating dividend                                                                                     (6,924,359)
Net income                                                                                                                95,760
                         -----------  -----------  -----------  -----------  -----------  -----------   -----------  -----------

Balance, December 31,
   1999                          110            1      890,000        8,900            -            -     1,908,145        7,553
Sale of private placement
   shares                                              212,157        2,122                                 294,898
Net loss                                                                                                                 (27,203)
                         -----------  -----------  -----------  -----------  -----------  -----------   -----------  -----------
Balance, December 31,
   2000                          110            1    1,102,157       11,022            -            -     2,203,043      (20,150)
Net los                                                                                                                  (80,070)
                         -----------  -----------  -----------  -----------  -----------  -----------   -----------  -----------

Balance, December 31,
   2001                          110            1    1,102,157       11,022            -            -     2,203,043     (100,220)
Acquisition of treasury
   stock in conjunction
   with settlement
   agreement                                                                                                    713
Net loss                                                                                                                (112,049)
                         -----------  -----------  -----------  -----------  -----------  -----------   -----------  -----------


Balance, December 31,
   2002                          110  $         1    1,102,157  $    11,022            -  $         -   $ 2,203,756  $  (212,269)
                         ===========  ===========  ===========  ===========  ===========  ===========   ===========  ===========



</TABLE>

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

                                      F-6(1)



<PAGE>



                                              ORION ACQUISITION CORP. II
                                           (A DEVELOPMENT STAGE COMPANY)
                                      STATEMENTS OF SHAREHOLDERS' EQUITY
   For the Period from October 19, 1995 (Inception) to December 31, 2002
                                                                (Cont'd)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                    Treasury Stock
                                                -------------------------
                                                  Shares          Amount          Total
                                                ----------       --------      -----------
<S>                                             <C>              <C>           <C>
Balance, December 31,
   1998                                         $        -       $      -      $ 9,028,839
Elimination of redemptive
   common stock
   provision                                                                             -
Reversal of accretion
   to redemptive value
   of common stock                                                                       -
Dividend                                                                          (275,641)
Liquidating dividend                                                            (6,924,359)
Net income                                                                          95,760
                                                ----------       --------      -----------


Balance, December 31,
   1999                                                  -              -        1,924,599
Sale of private placement
   shares                                                                          297,020
Net loss                                                                           (27,703)
                                                ----------       --------      -----------

Balance, December 31,
   2000                                                  -              -        2,193,916
Net loss                                                                           (80,070)
                                                ----------       --------      -----------

Balance, December 31,
   2001                                                  -              -        2,113,846
Acquisition of treasury
   stock in conjunction
   with settlement
   agreement                                       (71,250)          (713)               -
Net loss                                                                          (112,049)
                                                ----------       --------      -----------

Balance, December 31,
   2002                                         $  (71,250)      $   (713)     $ 2,001,797
                                                ==========       ========      ===========



</TABLE>

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

                                      F-6(2)





<PAGE>

                                              ORION ACQUISITION CORP. II
                                           (A DEVELOPMENT STAGE COMPANY)
                                                STATEMENTS OF CASH FLOWS
                      For the Years Ended December 31, 2002 and 2001 and
   for the Period from October 19, 1995 (Inception) to December 31, 2002

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                       For the
                                                                                                     Period from
                                                                                                     October 19,
                                                                      For the Year Ended                 1995
                                                                         December 31,               (Inception) to
                                                                ---------------------------------     December 31,
                                                                      2002              2001             2002
                                                                ----------------  ---------------  ----------------
<S>                                                             <C>               <C>              <C>
Cash flows from operating activities
   Net income (loss)                                            $       (112,049) $       (80,070) $         63,372
   Adjustments to reconcile net income (loss) to net
     cash provided by (used in) operating activities
       Note discount amortization                                              -                -            37,500
       Stock-based compensation expense                                        -                -           100,000
       (Increase) decrease in
         Income taxes receivable                                          24,842              538            (1,852)
         Deferred tax assets                                                   -                -              (221)
         Prepaid assets                                                   12,568                -            (3,212)
         Other assets                                                      5,064           13,848             5,064
       Increase (decrease) in
         Accounts payable and accrued expenses                            (9,762)              48            31,134
                                                                ----------------  ---------------   ---------------

Net cash provided by (used in) operating activities                      (79,337)         (65,636)          231,785
                                                                ----------------  ---------------  ----------------

Cash flows from investing activities
   Purchase of United States Treasury bills                                    -                -        (1,506,615)
   Sales or maturities of investments                                          -        1,592,203         1,506,615
                                                                ----------------  ---------------  ----------------

Net cash provided by investing activities                                      -        1,592,203                 -
                                                                ----------------  ---------------  ----------------

Cash flows from financing activities
   Dividend                                                                    -                -        (7,200,000)
   Issuance of units and redeemable Class B
     purchase warrants, net of offering costs                                  -                -         8,677,905
   Issuance of unsecured promissory notes                                      -                -           100,000
   Repayment of unsecured promissory notes                                     -                -          (100,000)
   Proceeds from related party note                                            -                -            35,000
   Repayment of related party note                                             -                -           (35,000)
   Issuance of founders' shares                                                -                -             7,500
   Issuance of private placement shares                                        -                -           304,520
   Issuance of convertible preferred stock                                     -                -            11,000
                                                                ----------------  ---------------  ----------------

New cash provided by financing activities                                      -                -         1,800,925
                                                                ----------------  ---------------  ----------------

</TABLE>

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

                                      F-7

<PAGE>

                                              ORION ACQUISITION CORP. II
                                           (A DEVELOPMENT STAGE COMPANY)
                                                STATEMENTS OF CASH FLOWS
                      For the Years Ended December 31, 2002 and 2001 and
   for the Period from October 19, 1995 (Inception) to December 31, 2002

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                                       For the
                                                                                                     Period from
                                                                                                     October 19,
                                                                      For the Year Ended                 1995
                                                                         December 31,               (Inception) to
                                                                ---------------------------------     December 31,
                                                                      2002              2001             2002
                                                                ----------------  ---------------  ----------------
<S>                                                             <C>               <C>              <C>
Net increase (decrease) in cash                                 $        (79,337) $     1,526,567  $      2,032,710

Cash, beginning of period                                              2,112,047          585,480                 -
                                                                ----------------  ---------------  ----------------

Cash, end of period                                             $      2,032,710  $     2,112,047  $      2,032,710
                                                                ================  ===============  ================


Supplemental disclosures of cash flow
information

   Income taxes paid                                            $              -  $             -  $         61,000
                                                                ================  ===============  ================


</TABLE>






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

                                      F-8

<PAGE>


NOTE 1 - ORGANIZATION AND LINE OF BUSINESS

         Orion Acquisition Corp. II (the "Company") was incorporated in Delaware
         on October 19, 1995 for the purpose of raising capital to fund the
         acquisition of an unspecified operating business. All activity to date
         relates to the Company's formation and fundraising. To date, the
         Company, as a development stage company, has not effected a Business
         Combination (as defined below).

         The Company's management has broad discretion with respect to the
         specified application of the assets of the Company, although
         substantially all of the assets are currently intended to be generally
         applied toward consummating a business combination with an operating
         business ("Business Combination").


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Development Stage Enterprise
         ----------------------------
         The Company is a development stage company as defined in Statement of
         Financial Accounting Standards ("SFAS") No. 7, "Accounting and
         Reporting by Development Stage Enterprises." The Company is devoting
         all of its present efforts to its formation and to fundraising, and its
         planned principal operations have not yet commenced. All losses
         accumulated since inception have been considered as part of the
         Company's development stage activities.

         Comprehensive Income
         --------------------
         The Company presents comprehensive income in accordance with SFAS No.
         130, "Reporting Comprehensive Income." This statement establishes
         standards for reporting comprehensive income and its components in a
         financial statement. Comprehensive income as defined includes all
         changes in equity (net assets) during a period from non-owner sources.
         Examples of items to be included in comprehensive income, which are
         excluded from net income, include foreign currency translation
         adjustments and unrealized gains and losses on available-for-sale
         securities. Comprehensive income is not presented in the Company's
         financial statements since the Company did not have any of the items of
         comprehensive income in any period presented.

         Fair Value of Financial Instruments
         -----------------------------------
         For certain of the Company's financial instruments, including cash,
         deferred tax assets, and accounts payable and accrued expenses, the
         carrying amounts approximate fair value due to their short maturities.

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

                                      F-9

<PAGE>


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Accounting for Stock-Based Compensation
         ---------------------------------------
         The Company accounts for its stock-based compensation plans in
         accordance with the provisions of Accounting Principles Board ("APB")
         Opinion No. 25, "Accounting for Stock Issued to Employees," and related
         interpretations. As such, compensation expense is recorded on the date
         of grant only if the current market price of the underlying stock
         exceeds the exercise price. The Company adopted the disclosure
         requirements of SFAS No. 123, "Accounting for Stock-Based
         Compensation." Under SFAS No. 123, the Company must disclose certain
         pro forma information related to employee stock option grants as if the
         fair value-based method defined in SFAS No. 123 had been applied.

         Income Taxes
         ------------
         The Company accounts for income taxes in accordance with SFAS No. 109,
         "Accounting for Income Taxes," which requires the recognition of
         deferred tax assets and liabilities for the expected future tax
         consequences of events that have been included in the financial
         statements or tax returns. Under this method, deferred income taxes are
         recognized for the tax consequences in future years of differences
         between the tax bases of assets and liabilities and their financial
         reporting amounts at each year-end based on enacted tax laws and
         statutory tax rates applicable to the periods in which the differences
         are expected to affect taxable income. Valuation allowances are
         established, when necessary, to reduce deferred tax assets to the
         amount expected to be realized. The provision for income taxes
         represents the tax payable for the period and the change during the
         period in deferred tax assets and liabilities.

         Loss per Share
         --------------
         The Company calculates loss per share in accordance with SFAS No. 128,
         "Earnings per Share." Basic loss per share is computed by dividing the
         loss available to common shareholders by the weighted-average number of
         common shares outstanding. Diluted loss per share is computed similar
         to basic loss per share except that the denominator is increased to
         include the number of additional common shares that would have been
         outstanding if the potential common shares had been issued and if the
         additional common shares were dilutive. Because the Company has
         incurred net losses, basic and diluted loss per share are the same.

         The following potential common shares have been excluded from the
         computation of diluted net loss per share for the years ended December
         31, 2002 and 2001 because they are not exercisable until after a
         Business Combination:

                                                        2002           2001
                                                        ----           ----

             Class B Warrants.......................   358,000        358,000
             Series A convertible preferred stock...   110,000        110,000
             Stock option...........................    10,000         10,000
             Option to purchase Class A Warrants....        --        100,000

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

                                      F-10
<PAGE>


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Estimates
         ---------
         The preparation of financial statements 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
         revenue and expenses during the reporting period. Actual results could
         differ from those estimates.

         Recently Issued Accounting Pronouncements
         -----------------------------------------
         In April 2002,  the  Financial  Accounting  Standards  Board  ("FASB")
         issued SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64,
         Amendment of FASB Statement No. 13, and Technical  Corrections."  SFAS
         No.  145  updates,   clarifies,  and  simplifies  existing  accounting
         pronouncements. This statement rescinds SFAS No. 4, which required all
         gains and losses from  extinguishment of debt to be aggregated and, if
         material,  classified as an extraordinary  item, net of related income
         tax effect. As a result,  the criteria in Accounting  Principles Board
         No. 30 will now be used to classify  those gains and losses.  SFAS No.
         64  amended  SFAS No. 4 and is no longer  necessary  as SFAS No. 4 has
         been  rescinded.  SFAS No.  44 has been  rescinded  as it is no longer
         necessary.  SFAS No. 145 amends  SFAS No. 13 to require  that  certain
         lease   modifications   that  have   economic   effects   similar   to
         sale-leaseback  transactions  be  accounted  for in the same manner as
         sale-lease   transactions.   This  statement   also  makes   technical
         corrections to existing  pronouncements.  While those  corrections are
         not  substantive  in  nature,  in  some  instances,  they  may  change
         accounting practice.  The Company does not expect adoption of SFAS No.
         145 to have a material  impact,  if any, on its financial  position or
         results of operations.

         In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
         Associated with Exit or Disposal Activities." This statement addresses
         financial accounting and reporting for costs associated with exit or
         disposal activities and nullifies Emerging Issues Task Force ("EITF")
         Issue No. 94-3, "Liability Recognition for Certain Employee Termination
         Benefits and Other Costs to Exit an Activity (including Certain Costs
         Incurred in a Restructuring)." This statement requires that a liability
         for a cost associated with an exit or disposal activity be recognized
         when the liability is incurred. Under EITF Issue 94-3, a liability for
         an exit cost, as defined, was recognized at the date of an entity's
         commitment to an exit plan. The provisions of this statement are
         effective for exit or disposal activities that are initiated after
         December 31, 2002 with earlier application encouraged. The Company does
         not expect adoption of SFAS No. 146 to have a material impact, if any,
         on its financial position or results of operations.


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

                                      F-11
<PAGE>


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Recently Issued Accounting Pronouncements (Continued)
         -----------------------------------------
         In October  2002,  the FASB  issued  SFAS No.  147,  "Acquisitions  of
         Certain Financial  Institutions." SFAS No. 147 removes the requirement
         in SFAS No. 72 and Interpretation 9 thereto, to recognize and amortize
         any  excess of the fair  value of  liabilities  assumed  over the fair
         value of tangible and  identifiable  intangible  assets acquired as an
         unidentifiable  intangible asset.  This statement  requires that those
         transactions  be  accounted  for in  accordance  with  SFAS  No.  141,
         "Business  Combinations,"  and  SFAS  No.  142,  "Goodwill  and  Other
         Intangible  Assets." In addition,  this statement amends SFAS No. 144,
         "Accounting  for the Impairment or Disposal of Long-Lived  Assets," to
         include certain financial  institution-related  intangible assets. The
         Company  does not expect  adoption  of SFAS No. 147 to have a material
         impact, if any, on its financial position or results of operations.

         In December 2002, the FASB issued SFAS No. 148, "Accounting for
         Stock-Based Compensation - Transition Disclosure," an amendment of SFAS
         No. 123. SFAS No. 148 provides alternative methods of transition for a
         voluntary change to the fair value based method of accounting for
         stock-based employee compensation. In addition, SFAS No. 148 amends the
         disclosure requirements of SFAS No. 123 to require more prominent and
         more frequent disclosures in financial statements about the effects of
         stock-based compensation. This statement is effective for financial
         statements for fiscal years ending after December 15, 2002. SFAS No.
         148 will not have any impact on the Company's financial statements as
         management does not have any intention to change to the fair value
         method.


NOTE 3 - CASH

         The Company maintains cash deposits at one financial institution.
         Deposits at the financial institution are insured by the Federal
         Deposit Insurance Corporation up to $100,000. As of December 31, 2002,
         the uninsured portions amounted to $321,655. The Company has not
         experienced any losses in such accounts and believes it is not exposed
         to any significant credit risk on cash.

         The Company also maintains cash deposits at one investment brokerage.
         Deposits at the investment brokerage are insured by the Securities
         Investment Protection Corporation ("SIPC") up to $500,000 with an
         additional non-SIPC insurance coverage up to $900,000. As of December
         31, 2002, the uninsured portions amounted to $270,535. The Company has
         not experienced any losses in such accounts and believes it is not
         exposed to any significant credit risk on cash.


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

                                      F-12
<PAGE>


NOTE 4 - CONTINGENCIES

         Litigation
         ----------
         On July 1, 1999, a Class B Warrant holder of the Company brought suit
         against the Company, its former directors, and certain other third
         parties. On January 31, 2000, the plaintiff filed a notice dismissing
         the action without prejudice. On January 28, 2000, the court ordered
         the notice of dismissal. The Company and the plaintiff agreed that the
         Company will make an exchange offer to all holders of the Class B
         Warrants. The exchange offer must be made after the Company completes
         its first Business Combination with a target company that results in
         the acquisition of one or more companies with operating businesses and
         results in the Company having assets in excess of $5,000,000.

         Upon payment of an exercise price of $0.125 per Class B Warrant, each
         Class B Warrant will be exchanged for one share of common stock and one
         Right. The Right will provide for the issuance of additional shares of
         common stock based on a formula in the event that (a) the Company makes
         an acquisition or consummates a merger and (b) the post-transaction
         company does not meet the specified targets of a $7,000,000 net worth
         immediately after the transaction and a minimum common stock price of
         $5.75 for 10 days during the two-year period following the transaction,
         subject to certain adjustment, terms, and conditions.

         The former directors of the Company who were named as defendants in the
         suit demanded the Company reimburse attorneys' fees incurred in defense
         of the suit prior to its voluntary dismissal. The former directors
         contended that they were entitled to reimbursement of attorneys' fees
         under a provision of Delaware corporate law. As part of the Mentmore
         settlement, this claim was withdrawn and no amount was paid.

         On October 31, 2000, the Company filed with the Supreme Court of the
         State of New York, County of New York, a summons and complaint in an
         action entitled Orion Acquisition Corp. II v. Mentmore Holdings
         Corporation, Mentmore Holdings, Inc., Richard L. Kramer, William L.
         Remley, Richard C. Hoffman, Robert D. Frankel, J. Thomas Chess, and
         Michael Schenker. Messrs. Kramer, Remley, Hoffman, Frankel, and Chess
         were former directors of the Company. Messrs. Remley and Kramer were
         officers and/or directors of one or more of the Mentmore defendants.
         Mr. Hoffman is or was an officer of one or more of the Mentmore
         defendants.

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

                                      F-13
<PAGE>


NOTE 4 - CONTINGENCIES (Continued)

         Litigation (Continued)
         -----------
         In the complaint, the Company alleged a series of causes of action,
         including a claim against the Company's former directors for breach of
         fiduciary duty in connection with the diversion of a corporate
         opportunity, and against other defendants for aiding and abetting the
         claimed breach of fiduciary duty and duty of loyalty. On May 15, 2002,
         a settlement agreement was signed between the Company and the Mentmore
         defendants. The settlement required certain of the defendants to
         surrender 71,250 shares of the Company's common stock that were owned
         by those defendants. These shares will be cancelled and returned to
         the status of authorized and unissued capital stock. In addition,
         certain of the defendants surrendered a warrant to purchase 100,000
         shares of the Company's common stock, which the Company has canceled.


NOTE 5 - SHAREHOLDERS' EQUITY

         Private Placements
         ------------------
         In January 1996, the Company completed a private offering to a limited
         group of investors which consisted, in the aggregate, of $100,000 in
         unsecured promissory notes bearing interest at 8% per annum. In
         addition, as part of this private placement, the Company also issued to
         the private placement investors 15,000 shares of common stock for
         $7,500. The notes were repaid as a result of the consummation of the
         Company's offering, together with accrued interest totaling $3,533. The
         notes were discounted $37,500 for financial statement reporting
         purposes as a result of the fair value attributed to the common stock
         issued to the private placement shareholders. The effective interest
         rate on the notes was 45%.

         During June 2000, the Company issued 212,157 shares of common stock in
         exchange for proceeds of $297,020. Of the shares issued, 149,300 valued
         at $209,020 were issued to related parties.

         Public Offering
         ---------------
         On July 9, 1996, the Company sold 800,000 units ("Units") in the
         offering and 320,000 Class B redeemable common stock purchase warrants
         ("Class B Warrants"). Subsequently, on August 5, 1996, the underwriters
         exercised their over-allotment option to purchase 38,100 Class B
         Warrants. Each Unit consisted of one share of the Company's common
         stock and one Class A redeemable common stock purchase warrant ("Class
         A Warrants").

         Each Class A Warrant entitled the holder to purchase from the Company
         one share of common stock at an exercise price of $9, commencing on the
         date of a Business Combination and expiring on the fifth anniversary of
         the issuance of the Class A Warrant, and each Class B Warrant entitles
         the holder to purchase one Unit at an exercise price of $0.125,
         commencing on the date of a Business Combination and expiring on the
         first anniversary from such date.

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

                                      F-14
<PAGE>


NOTE 5 - SHAREHOLDERS' EQUITY (Continued)

         The Class A Warrants were and Class B Warrants are redeemable, each as
         a class, in whole and not in part, at a price of $0.05 per warrant upon
         30 days' notice at any time, provided that the Company has consummated
         a Business Combination and that the last sale price of the common stock
         on all 10 trading days ending on the day immediately prior to the day
         on which the Company gives notice of redemption has been $11 or higher.

         The Class A Warrants expired on July 1, 2001.

         Convertible Preferred Stock
         ---------------------------
         The Company is authorized to issue 1,000,000 shares of preferred stock
         with such designations, voting, and other rights and preferences as may
         be determined from time to time by the Board of Directors.

         The Company has outstanding 110 shares of Series A preferred stock,
         which is owned by an indirect affiliate. The purchase price for such
         shares was $11,000 in the aggregate, which was paid simultaneously with
         the consummation of the offering. The Series A preferred stock is
         non-voting, and each share is convertible into 1,000 shares of common
         stock for a period of one year following the consummation of a Business
         Combination.

         Options
         -------
         On July 9, 1996, the Company granted an option to purchase 100,000
         Units to a Delaware corporation which was affiliated with two officers
         of the Company. The option is exercisable for a period of three years
         from the date of a Business Combination at an exercise price of $12.50
         per Unit. The option was fully vested; however, the option would have
         been canceled if these officers cease to serve as directors or
         executive officers of the Company prior to the Business Combination.
         The shares to have been issued upon exercise of the option, and
         underlying warrants could not be sold or otherwise transferred for 120
         days subsequent to the first Business Combination. The option was
         canceled as part of a settlement agreement dated May 15, 2002.

         Effective January 10, 1997, an investment bank engaged to assist the
         Company was granted an option to purchase 10,000 shares of common
         stock, par value $0.01 per share, owned by the above affiliated company
         at a purchase price of $0.10 per share. The Company recorded a non-cash
         charge of $100,000 that represents the fair value of the option at the
         date of grant as calculated using the Black-Scholes option pricing
         model.

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

                                      F-15
<PAGE>


NOTE 5 - SHAREHOLDERS' EQUITY (Continued)

         Warrants
         --------
         In connection with the initial public offering, the Company issued
         warrants to the underwriters for 80,000 Units at an exercise price of
         $11 per Unit and 32,000 Class B Warrants at an exercise price of
         $6.1875 per Unit. These warrants were initially exercisable for a
         period of four years commencing on July 2, 1997. The underwriter's
         warrants contained anti-dilution provisions providing for adjustment of
         the number of warrants and exercise price under certain circumstances.
         The underwriter's warrants provided to the holders thereof certain
         rights of registration of the Units and Class B Warrants which may be
         issued upon exercise of the underwriter's warrants.

         These warrants expired July 2, 2002.

         Dividend
         --------
         On July 26, 1999, the Company returned an aggregate of $7,200,000, or
         $9 per share, to the owners of shares sold in the offering. On November
         3, 1999, with shareholder approval, the funds remaining in the escrow
         accounts were distributed to the Company to be used for general
         corporate purposes. Of the $7,200,000 returned to shareholders,
         $275,641 represents accumulated earnings and $6,924,359 represents
         additional paid-in capital.

         Elimination of Redemptive Common Stock Provision
         ------------------------------------------------
         On October 22, 1999, a special meeting of the shareholders was held,
         and pursuant to a solicitation of proxies, the shareholders approved a
         change in the Certificate of Incorporation to eliminate the requirement
         that a Business Combination be approved by not less than two-thirds of
         the outstanding common shareholders and a proposal to terminate the
         escrow fund and distribute the amounts therein to the shareholders. The
         funds in the escrow account were distributed prior to December 31,
         1999.

         The elimination of the requirement that a Business Combination be
         approved by not less than two-thirds of the outstanding common
         shareholders of the Company removed the event that would give rise to
         the possible redemption of the Company's common stock. As such, the
         Company eliminated the redemptive common stock provision for the number
         of potentially redemptive common shares at their initial per share
         price and reversed the related cumulative accretion of earnings on
         those potentially redemptive funds.

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

                                      F-16
<PAGE>


NOTE 6 - INCOME TAXES

         The tax effects of temporary differences which give rise to the
         deferred tax provision at December 31, 2002 consisted of the following:

                  Deferred tax assets
                      Net operating loss carryforward         $         77,399
                  Less valuation allowance                              77,178
                                                              ----------------

                           Net deferred tax assets            $            221
                                                              ================

         The following table presents the current and deferred income tax
         provision for federal and state income taxes for the years ended
         December 31, 2002 and 2001:

                                                       2002           2001
                                                  ------------    -----------
                  Current
                      Federal                     $          -    $       538
                      State                                  -            800
                                                  ------------    -----------

                                                             -          1,338
                                                  ------------    -----------

                  Deferred
                      Federal                                -              -
                      State                                  -              -
                                                  ------------    -----------

                                                             -              -
                                                  ------------    -----------

                        Provision for
                         income taxes             $          -    $     1,338
                                                  ============    ===========

         The provision for income taxes differs from the amount that would
         result from applying the federal statutory rate for the years ended
         December 31, 2002 and 2001 as follows:

                                                         2002          2001
                                                       --------      --------

                  Statutory regular federal
                     income benefit rate                 (34.0)%       (34.0)%
                  State taxes                             (4.3)         (6.0)
                  Prior year adjustments                 (25.2)         11.1
                  Change in valuation allowance           59.3          33.5
                  Other                                    4.2           1.5
                                                       --------      --------

                      Total                                -   %          6.1%
                                                       ========      ========

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

                                      F-17
<PAGE>


NOTE 6 - INCOME TAXES (Continued)

         The valuation allowance increased by $54,223 and $22,955 during the
         years ended December 31, 2002 and 2001, respectively. The deferred
         income tax benefit of the loss carryforward is the only significant
         deferred income tax asset or liability of the Company and has been
         offset by a valuation allowance since management does not believe the
         recoverability of this deferred tax asset during the next fiscal year
         is more likely than not. Accordingly, a deferred income tax benefit for
         the year ended December 31, 2002 has not been recognized in these
         financial statements.

         As of December 31, 2002, the Company had net operating loss
         carryforwards for federal and state income tax purposes of
         approximately $219,000 and $202,000, respectively. The net operating
         loss carryforwards begin expiring in 2021 and 2011, respectively.


NOTE 7 - RELATED PARTY TRANSACTIONS

         The Company uses the services and some of the employees of an
         affiliated company and has its executive offices at the offices of the
         affiliate. The Company does not pay any amount to or for the employees
         of the affiliate or any rent for these offices. The Company reimburses
         the affiliate for documented out-of-pocket expenses incurred on its
         behalf.

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

                                      F-18
<PAGE>


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL CHANGES.

         None.

                                   PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

The current directors and officers of Orion are as follows:

                                         Director
Name                           Age         Since                 Position
----                           ---       --------                --------
Christopher A. Marlett          38         1999      Chairman of the Board,
                                                       Chief Executive Officer,
                                                       President and Director
Anthony DiGiandomenico          36         1999      Chief Financial Officer and
                                                       Director
Dyana Williams Marlett          36         1999      Chief Operating Officer,
                                                       Secretary, Treasurer and
                                                       Director
James D. Bowyer                 64         1999      Director
William C. Fioretti             51         1999      Director

Christopher A. Marlett is a co-founder and member of MDB Capital Group LLC, an
investment banking firm formed in December 1996. MDB is an NASD member
broker-dealer which specializes in working with growth oriented companies. Prior
to forming MDB, Mr. Marlett was employed as a Managing Director by Laidlaw
Equities from May of 1995 to December of 1996 where he was in charge of
Laidlaw's West Coast investment banking activities. From March of 1991 to May of
1995 Mr. Marlett was affiliated with Drake Capital Securities where he formed a
division called Marlett/Mazzarella and directed all investment banking
activities of the division. Mr. Marlett holds a degree in Business
Administration from the University of Southern California.

Anthony DiGiandomenico is a co-founder and member of MDB, an investment banking
firm formed in December 1996. Mr. DiGiandomenico served as President and CEO of
the Digian Company from 1988 through 1996, a real estate development company and
holds a Bachelors of Science Degree in Finance from the University of Colorado
and a Masters in Business Administration from the Haas Business School at the
University of California, Berkeley.

Dyana Williams Marlett is a co-founder of MDB and acts as its Chief Operating
Officer. From March of 1995 to December of 1996, Ms. Marlett was employed by
Laidlaw Equities as a Vice President handling investment banking and syndicate
activities for the West Coast. From October of 1990 through March of 1995, Ms.
Marlett was employed at Drake Capital Securities where she acted as Syndicate
Manager. Ms. Marlett holds several licenses with the National Association of
Securities Dealers.

James D. Bowyer is a co-founder and member of MDB, an investment banking firm
formed in December 1996. Mr. Bowyer was employed at Laidlaw Equities from August
of 1995 to December of 1996. Mr. Bowyer's career has spanned over thirty years

                                     III-1
<PAGE>

in the securities industry focused on financing and investing in growth
companies. In 1976 Mr. Bowyer formed MacDonald, Krieger & Bowyer a full service
broker-dealer based in Beverly Hills, California, which was subsequently sold in
1982. Mr. Bowyer then founded his own investment firm, J.D. Bowyer & Co. which
he operated from 1983 to 1995.

William C. Fioretti is the founder of Agritech Labs, and has served as its
president and a director since 1992. Agritech Labs is a research and development
company which concentrates on veterinary bio-pharmaceuticals. Mr. Fioretti also
founded of Mannatech Incorporated, a publicly traded direct marketing company
specializing in consumer health products. Mr. Fioretti served Mannatech as the
Chief Executive Officer from 1993 through 1996, as Chief Scientific Officer from
1996 through 1997 and a director from inception until his retirement from
Mannatech in November of 1997. Mr. Fioretti completed his undergraduate
education at Appalachian State University from 1970-1974 receiving a Bachelor of
Science Biology, completed his graduate training in biochemistry at the Medical
University of South Carolina from 1974-1978 and did post graduate training at
the University of Florida from 1978-1980.

Members of the board of directors generally are elected annually by the
stockholders and may be removed as provided in the General Corporation Law of
the State of Delaware and the articles of incorporation and by-laws. Officers
are appointed by the board of directors and serve at their pleasure. The board
of directors does not have any committees at this time.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
officers, directors and persons who beneficially own more than ten percent of a
registered class of the equity securities of Orion ("ten percent stockholders")
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission and the National Association of Securities Dealers, Inc.
Officers, directors and ten percent stockholders are charged by SEC regulation
to furnish Orion with copies of all Section 16(a) forms they file. Based solely
upon its review of the copies of such forms received by it, or written
representations from certain reporting persons that no Forms 5 were required for
those persons, Orion believes that, during the fiscal year ended December 31,
2002, all filing requirements applicable to its executive officers, directors
and ten percent stockholders were fulfilled.

ITEM 10. EXECUTIVE COMPENSATION

Executive Compensation

Orion does not currently compensate any of the officers or other employees.
Orion does not intend to provide any remuneration to officers or employees until
after a business combination, if any, of an operating business.

                                     III-2

<PAGE>


Compensation of Directors

Directors of Orion receive no cash compensation for serving on the board of
directors, but they receive reimbursement of reasonable expenses incurred in
attending meetings.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as of March 15, 2003 based on
information obtained from the persons named below. It states the beneficial
ownership of shares of the common stock by (i) each person known to be the owner
of more than 5% of the outstanding shares of common stock, (ii) each director
and (iii) all executive officers and directors as a group.

                                              Amount and Nature        Percent
Name of Beneficial Owner(1)                of Beneficial Ownership   of Class(2)
---------------------------                -----------------------   ----------

Christopher A. Marlett                                  246,000          22.9%
Anthony DiGiandomenico                                   81,025(3)        7.6%
Dyana Williams Marlett                                   38,000(4)        3.7%
James D. Bowyer                                          26,700           2.6%
William C. Fioretti                                     105,000          10.2%
All directors and executive
  oficers as a group (five persons)                     496,725(5)       48.2%

     (1)  Each person's address is care of the Company at 401 Wilshire Boulevard
          - Suite 1020, Santa Monica, California 90401.
     (2)  Percentage  includes all  outstanding  shares of Common Stock plus any
          shares of common stock that the person has the right to acquire within
          60 days pursuant to options, warrants,  conversion privileges or other
          rights.
     (3)  Includes 3,000 shares held in an individual retirement account.
     (4)  Includes 3,000 shares held in custodian accounts.
     (5)  See Notes 3 and 4 above.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Orion uses the services and some of the employees of MDB Capital Group LLC and
has its executive offices at the offices of MDB Capital Group LLC. Orion does
not pay any amount to or for the employees of MDB Capital Group LLC or any rent
for these offices. Orion reimburses MDB Capital Group LLC for documented out of
pocket expenses incurred on its behalf.

On May 5, 1999 and July 20, 1999, MDB Capital Group LLC lent to Orion an
aggregate of $35,000. This loan was represented by unsecured promissory notes
due on demand, bearing no interest. The proceeds of these loans were used for
working capital. The principal on these loans was repaid on December 8, 1999.
Each of Christopher A. Marlett, Anthony DiGiandomenico, James D. Bowyer and
Dyana Williams Marlett are officers and/or directors of the Company and
principals MDB Capital Group LLC.

                                     III-3
<PAGE>

ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K


        (a)      Exhibits

    3.1      Amended and Restated Certificate of Incorporation of the Registrant
             (Exhibit 3.1)(1)

    3.2      Amendment dated October 22, 1999 to Amended and Restated
             Certificate of Incorporation (Exhibit 3.2)(2)

    3.3      By-laws of the Registrant (Exhibit 3.2)(1)

    4.1      Warrant Agency Agreement between American Stock Transfer & Company
             and the Registrant (Exhibit 4.2)(1)

    4.2      Form of Common Stock Certificate of Registrant (Exhibit 4.1)(1)

    4.3      Form of Class B Unit Purchase Agreement of the Registrant
             (Exhibit 4.4)(1)

    4.4      Form of Class A Common Stock Purchase Warrant Certificate of the
             Registrant (Exhibit 4.3)(1)

    10.1     License Agreement, dated August 25,1995, between Bright Capital,
             Ltd. and the Company (Exhibit 10.3)(1)

    10.2     Management Unit Purchase Option Plan (Exhibit 10.4)(1)

    16.1     Letter from BDO Seidman, LLP dated December 7, 2000
             (Exhibit 16.1) (3)

    99.1     Form of Certification Pursuant to Rule 13a-14 and 15d-14 under the
             Securities and Exchange Act of 1934, as Amended.

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

    ------------------------

     (1)  Incorporated by referenced from Registration Statement 33-03252

     (2)  Registrant's  Annual Report on Form 10-KSB for the year ended December
          31, 1999

     (3)  Registrant's Report on Form 8-K/A filed on December 8, 2000

                                     III-4



<PAGE>


        (b) Reports on Form 8-K

        None.

ITEM 14.  CONTROLS AND PROCEDURES

Within the 90-day period prior to the filing of this report, an evaluation of
the effectiveness of our disclosure controls and procedures was made under the
supervision and with the participation of our chief executive officer and chief
financial officer. Based on that evaluation, they concluded that our disclosure
controls and procedures are effective to ensure that information required to be
disclosed by us in reports that we file or submit under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported within the time
periods specified in Securities and Exchange Commission rules and forms.
Subsequent to the date of his evaluation, there were no significant changes in
our internal controls or in other factors that could significantly affect these
controls, including any corrective actions with regard to significance
deficiencies and material weaknesses.















                                     III-5
<PAGE>



                                   SIGNATURES

Pursuant to the requirements of the Section 13 or 15 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 on the 29th day of
March 2003.

                           ORION ACQUISITION CORP. II


                      By:  /s/ Christopher A. Marlett
                           ----------------------------------
                           Christopher A. Marlett
                           Chairman of the Board and
                           Chief Executive Officer

In accordance with the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

Name                                          Title                    Date
----                                          -----                    ----

/s/ Christopher A. Marlett     Chairman of the Board, President   April 14, 2003
--------------------------     and Chief Executive Officer
Christopher A. Marlett         (Principal Executive Officer)



/s/ Anthony DiGiandomenico     Chief Financial Officer and        April 14, 2003
--------------------------     Director (Chief Accounting
Anthony DiGiandomenico         Officer and Principal Account
                               Officer)


/s/ Dyana Williams Marlett     Chief Operating Officer,           April 14, 2003
--------------------------     Secretary, Treasurer and
Dyana Williams Marlett         Director


/s/ James D. Bowyer            Director                           April 14, 2003
--------------------------
James D. Bowyer


/s/ William C. Fioretti        Director                           April 14, 2003
--------------------------
William C. Fioretti



<PAGE>



                              FORM OF CERTIFICATION
                       PURSUANT TO RULE 13a-14 AND 15d-14
              UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                                 CERTIFICATIONS

I, Christopher A. Marlett, certify that:

1.   I have reviewed this annual report on Form 10-KSB of Orion Acquisition Corp
II;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
statement of material  fact or omit to state a material  fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.   The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     (a)  designed  such  disclosure  controls  and  procedures  to ensure  that
     material information relating to the registrant, including its consolidated
     subsidiaries,  is  made  known  to  us by  others  within  those  entities,
     particularly  during  the  period  in which  this  annual  report  is being
     prepared;

     (b)  evaluated the  effectiveness of the registrant's  disclosure  controls
     and  procedures  as of a date  within  90 days of the  filing  date of this
     annual report (the "Evaluation Date"); and

     (c)  presented   in  this   annual   report  our   conclusions   about  the
     effectiveness  of the  disclosure  controls  and  procedures  based  on our
     evaluation as of the Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
our most recent evaluation, to the registrant's auditors and the audit committee
of the  registrant's  board of directors (or persons  performing  the equivalent
functions):

     (a)  all  significant  deficiencies  in the design or operation of internal
     controls which could adversely affect the  registrant's  ability to record,
     process,  summarize,  and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and

     (b)  any fraud, whether or not material,  that involves management or other
     employees  who  have  a  significant  role  in  the  registrant's  internal
     controls; and

6.   The  registrant's  other  certifying  officer and I have  indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date: April 14, 2003               /s/ Christopher A. Marlett
      --------------               --------------------------
                                   Name:  Christopher A. Marlett
                                   Title: President and Chief Executive Officer
<PAGE>

                              FORM OF CERTIFICATION
                       PURSUANT TO RULE 13a-14 AND 15d-14
              UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                                 CERTIFICATIONS

I, Anthony DiGiandomenico, certify that:

1.   I have reviewed this annual report on Form 10-KSB of Orion Acquisition Corp
II;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
statement of material  fact or omit to state a material  fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.   The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     (a)  designed  such  disclosure  controls  and  procedures  to ensure  that
     material information relating to the registrant, including its consolidated
     subsidiaries,  is  made  known  to  us by  others  within  those  entities,
     particularly  during  the  period  in which  this  annual  report  is being
     prepared;

     (b)  evaluated the  effectiveness of the registrant's  disclosure  controls
     and  procedures  as of a date  within  90 days of the  filing  date of this
     annual report (the "Evaluation Date"); and

     (c)  presented   in  this   annual   report  our   conclusions   about  the
     effectiveness  of the  disclosure  controls  and  procedures  based  on our
     evaluation as of the Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
our most recent evaluation, to the registrant's auditors and the audit committee
of the  registrant's  board of directors (or persons  performing  the equivalent
functions):

     (a)  all  significant  deficiencies  in the design or operation of internal
     controls which could adversely affect the  registrant's  ability to record,
     process,  summarize,  and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and

     (b)  any fraud, whether or not material,  that involves management or other
     employees  who  have  a  significant  role  in  the  registrant's  internal
     controls; and

6.   The  registrant's  other  certifying  officer and I have  indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.



Date: April 14, 2003                      /s/ Anthony DiGiandomenico
      --------------                      ------------------------------
                                          Name:    Anthony DiGiandomenco
                                          Title:   Chief Financial Officer