10KSB 1 r10ksb0204rev.htm

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-KSB

ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2003

Commission File No.: 0-10854

ORS AUTOMATION, INC.
(Exact name of registrant as specified in its charter)

DELAWARE
I.R.S. Employer Identification
(State or other jurisdiction of
No. 13-27956-75
incorporation or organization)

152 Mockingbird Ct., Three Bridges, New Jersey
(Address of principal executive offices)

08887 (908)782-9665
(Zip Code) (Registrant's Telephone Number)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class: None
Name of each exchange on which registered: None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock ($.01 par value per share)

Check whether the issuer (1) has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes /X/ No

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 registrants 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. /X/

State issuer's revenues for its most recent fiscal year: None

As of February 1, 2004, there was no bid or asked price quoted on any stock exchange,
resulting in the aggregate value of the voting common stock held by non-affiliates of the
registrant to be $0.00 .

Check whether the issuer has filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court. Yes /X/ No

As of December 31, 2003, 8,758,443 shares of the registrant's Common Stock and
12,000,000 shares of Class A Common Stock were outstanding.

Transitional Small Business Disclosure Format: Yes No /X/

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PART 1

Item 1. Description of Business

(a) State of Incorporation; Offices and Facilities

ORS Automation, Inc. ("ORS"), the registrant, was incorporated under the laws of the
State of Delaware in 1968 and commenced operations in 1972. The Company closed its
production facilities on December 28, 2001. Effective January 1, 2002, ORS no longer
conducted operations and maintains its administrative office to 152 Mockingbird CT., Three
Bridges, New Jersey 08887.

(b) Nature of Business

From inception through the fiscal year ended December 31, 2001, ORS was primarily
engaged in the production and sale of computer-based vision products for automatic part
alignment, machine guidance, identification, inspection, control of industrial processes
and visual sensing systems for use with industrial automation equipment. These products
and control systems were sold to machine manufacturers who then incorporated them into
machines sold to an end user. The end users were typically automated, high volume
electronic circuit and component manufacturers globally located.

Due to the nature of its business, which required close working relationships with its
customers, ORS had always depended on a few major customers that could be supported by its
engineering department. A principal customer of ORS, which accounted for 69% of sales in
1999 and 73% of sales in the first three quarters of 2000 decided to manufacture in-house
the products it was purchasing from ORS, and canceled substantially all outstanding
purchase orders with ORS. In the third quarter of 2001, ORS was advised by its remaining
major customer and principal shareholder, Affiliated Manufacturers, Inc. ("AMI"),
accounting for 21% of sales in 2000, that it did not anticipate making purchases for the
remainder of 2001 and extending through 2002. Due to the current world-wide economic slump
and in particular, the major decline in electronics manufacturing activity, ORS was not
able to replace this lost business.

Based upon these conditions, and after paying employee costs through the fourth quarter
of 2001, ORS did not have sufficient cash to continue in operation after December 31,
2001. Thus, effective January 1, 2002 ORS management decided to terminate all operations.
Although ORS maintains an administrative office, its principal function on and after
January 1, 2002 is to look for opportunities to maximize the value of ORS tangible and
intangible assets.

On October 3, 2002, J.R.S. Holdings, L.L.C., a limited liability company organized
under the State of New Jersey, acquired 12,000,000 shares of Class A stock, representing
100% of that class; 1,000 shares of Series A Preferred, representing 100% of that class:
and 576,250 shares of Common stock, representing 6.6% of that class, from Affiliated
Manufacturers, Inc., a New Jersey corporation. The Class A Common Stock and the Series A
Preferred Stock have the same rights and preferences as the Common stock resulting in
J.R.S. Holdings L.L.C. now owning 62.4% of the total outstanding stock of the Company.

On December 31, 2003, J.R.S. and Somerset International Group, Inc. (Somerset) signed a
Stock Purchase Agreement whereby J.R.S. will sell 526,250 shares of Common Stock,
12,000,000 shares of Class A Common Stock and 1,000,000 shares of Series A Preferred Stock
of the Company. This transaction closed in escrow on January 22, 2004, with the condition
to closing that J.R.S. file this Form 10KSB for the fiscal year ending December 31, 2003.
J.R.S. will retain 50,000 Common Shares, representing .2 percent of the outstanding common
shares and Somerset will become the controlling shareholder of the Company, owning
approximately 60 percent of the outstanding shares of the Company.

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(d) Disposal of Operating Assets

During the fiscal year ended December 31, 2001, ORS sold or otherwise disposed of all
of its operating assets, including inventory, fixtures and equipment. Most of these
transactions involved the exchange of its assets for certain liabilities. In the third
Quarter of 2001, AMI, the principal shareholder and principal customer of the Company,
indicated that it did not anticipate making any purchases of the Company's products and
services for the remainder of 2001 and 2002, and that rather than paying the Company
$489,995 owed to the Company, it would offset those accounts receivable against notes and
accrued interest, which the Company owes to AMI. As of December 31, 2001, the two
companies agreed to offset the payables and receivables in the amount of $489,995.with
Affiliated Manufacturer's, Inc.

(e) 2003 Sales

ORS had no product sales in fiscal 2003.

(f) Patents and Trademarks

ORS retained its patents and other intellectual property, which is carried at a zero
basis.

ORS holds United States Patent No. 3,877,019, titled "Photo-measuring Materials Device
for Computer Storage of Photographic and Other Materials", granted April 8, 1975; No.
3,908,078, titled "Method and Apparatus for Digital Recognition of Objects Particularly
Biological Materials", granted September 23, 1975; No. 4,613,269, titled "Robotic
Acquisition of Objects By Means Including Histogram Techniques", granted September 23,
1986 and No. 4,642,813, titled "Electro-Optical Quality Control Inspection of Elements on
a Product", granted February 10, 1987. Although ORS relied primarily on its technological
know-how and expertise in the field of machine vision, some products were nevertheless
based, in part, on the technology underlying these patents. No assurance can be given as
to the validity and scope of the protection provided by these patents.

ORS holds and used several registered trademarks. "ORS" was used as a general
identifying symbol in respect of its Products. "i-bot" was used in conjunction with
systems when adapted for use with industrial robots and the related electronic grippers.
"FLEXVISION" identified a flexible image computer. The alignment products were identified
by "i-lign" and circuit board inspection systems were identified by "i-flex". ORS has also
copyrighted critical software.

(j) Employees

As a result of ORS ceasing its operations as of December 31, 2001, all ORS employees
were terminated. Effective January 1, 2002, to present, ORS has no employees.

Item 2. Description of Property

As a result of ORS ceasing its operations, December 31, 2001, ORS relinquished 7,695
square feet of leased office and engineering space at 402 Wall Street, Princeton, New
Jersey 08540. ORS records are temporarily being stored in a segregated area made
available by J. R. S. Holdings, L.L.C. at no cost to the Company. ORS administrative
functions are being conducted at 152 Mockingbird Ct., Three Bridges, New Jersey, 08887.

Item 3. Legal Proceedings

There are no known legal actions in which ORS is a party.

Item 4. Submission of Matters to a Vote of Security Holders
None

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PART II

Item 5. Market for Common Equity and Related Stockholder Matters

On October 15, 1986, ORS' common stock was delisted from NASDAQ for failure to meet the
minimum capital and surplus requirements of the NASD By-Laws. Since there are no market
makers for ORS' stock, trading, if any, has been sporadic. There have been no public stock
transactions during 2003 and 2002. As of December 31, 2003 there were 552 holders of
record of ORS' common stock.

ORS has neither declared nor paid any dividends on its shares of Common Stock or
Preferred Stock since its inception. Any decision as to the future payment of dividends
will depend on the earnings and financial position of ORS and such other factors as the
Board of Directors deems relevant.

Item 6. Management's Discussion and Analysis or Plan of Operation

FORWARD-LOOKING STATEMENTS

All statements in this report that are not historical are forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act as amended, including
statements regarding ORS statements regarding future sales and its efforts to attract new
customers for its products and develop new products. Such statements are subject to risks
and uncertainties that could cause actual results to differ materially from those
projected, including, but not limited to, uncertainties relating to technologies, product
development, our ability to generate sufficient cash from operations or from investors or
lenders to fund product development and sales and marketing efforts needed to attract new
customers, operations, manufacturing, market acceptance, cost and price of ORS products,
ability to attract new customers, regulatory approvals, competition, intellectual property
of others, and patent protection and litigation. ORS expressly disclaims any obligation
or undertaking to release publicly any updated or revisions to any forward-looking
statements contained herein to reflect any change in its expectations with regard thereto
or any change in events, conditions, or circumstances on which any such statements are
based.

The table below presents selected financial data for ORS for the past two years.

Results of Operations
For The Year Ended December 31, 2003 2002
-------------------------------- ---- ----
Sales $ 0 $ 0

Loss From Operations (932) (38,471)

Net Loss (932) (38,471)

Basic Loss per Common Share $ (0.00) $ (0.00)

Financial Position at
December 31, 2003 2002
---- ----

Total Assets $ 5,698 $ 20,582

Total Liabilities 2,400 16,352

Shareholder's Equity $ 3,298 $ 4,230

Although ORS maintains an administrative office, its principal function on and after
January 1, 2002 is to look for opportunities to maximize the value of ORS' tangible and
intangible assets.
-4-

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Results of Operations

Since ORS ceased operations on December 31, 2001, there were no sales for the fourth
quarter and fiscal years ended December 31, 2002 and 2003. The expenses incurred for the
fourth quarter of 2001 and fiscal years ended December 31, 2002 and 2003 related primarily
to accounting, audit, legal and administrative expenses needed to continue ORS existence
while ORS attempted to seek opportunities to maximize the value of its intangible assets.
These expenses also reflected payments required to meet contractual employee severance
obligations to provide healthcare insurance coverage, which was satisfied as of December
31, 2002.

At December 31, 2003 and December 31, 2002 there were $355,642 state and $1,100,613
federal net operating loss carryforwards. Net loss for 2003 was $932 as compared to a net
loss of $38,371 for 2002. There was no provision for federal income taxes as a result of
ORS' net loss in 2002 and 2003. The net loss for 2003 as compared to 2002 was
substantially lower as the result of the Company changing their estimate in the amount of
$ 16,352 relating to their accrued rent liability.

Liquidity and Capital Resources

As of December 31, 2003, the Company's sole asset consisted of cash in the amount of
$5,698, and along with accrued liabilities totaling $2,400 which resulted in shareholders
equity of $ 3,298.

Due to the fact the company ceased operations and has limited cash on hand, the Company
auditors have issued a going concern opinion as of December 31, 2003, which states that
there is substantial doubt about the Company's ability to continue as a going concern.

We had no off balance sheet arrangments as of December 31, 2003.

Item 7. Financial Statements and Supplementary Data

Financial Statements and schedules filed herewith are listed in the table of contents
to the financial statements on page F-2.

Item 8. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure

None

Item 8A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our Management, with the participation of the Chief Executive Officer, who is our
Principal Executive Officer, and our Chief Financial Officer, evaluated the effectiveness
of our disclosure controls and procedures as of December 31, 2003. Based on that
evaluation, our Chief Executive Officer and Chief Executive Officer have concluded that
our disclosure controls and procedures were effective as of the end of the period covered
by this report.

Changes in internal control over financial reporting

During the year ended December 31, 2003, there have been no changes in our internal
control over financial reporting that have materially affected, or that are reasonably
likely to affect, our internal control over financial reporting.

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Part III

Item 9. Directors and Executive Officers of the Registrant

On October 3, 2002 two directors of the Company, James R. Solakian and Conrad R. Huss,
were appointed as directors of the Company. Also, on October 3, 2002, Edward Kornstein,
the President and sole director of the Company, tendered his resignation from both
positions. In the submission, Mr. Kornsteins' resignation did not state any disagreements
with the Company on any matter relating to the Company's operations, policies or
practices.

The directors and executive officers of the Company are:

Name Positions with registrant Has served as
and age as of February 1, 2004 director since
------- ------------------------------ --------------

James R. Solakian Chairman of the Board October, 2002
Chief Executive Officer
Secretary and Treasurer, 61

Conrad R. Huss Director, 55 October, 2002

James R. Solakian, Chairman of the Board, Chief Executive Officer, Secretary, and
Treasurer has served ORS since October 3, 2002, at which time J.R. S. Holdings, L.L.C., a
limited liability company 100% owned by Mr. Solakian purchased the majority of the
controlling stock held by Affiliated Manufacturers, Inc. J.R.S. Holdings L.L.C. is
deemed the Controlling Shareholder of the Company. From 1986 until present, Mr. Solakian
serves as the Chief Executive Officer of Solakian Associates, Inc., a financial management
company.

Conrad R. Huss is an investment banker and registered financial advisor, Mr. Huss has held
executive and management positions with a number of emerging growth and technology
companies.

Item 10. Executive Compensation

The following summary compensation table sets forth all compensation paid by ORS during
the fiscal years ended December 31, 2003, 2002 and 2001 in all capacities for the accounts
of the Chief Executive Officer (CEO) and President.

Name and Principal Annual Restricted
Position Year Compensation Stock Awards
------------------ ---- ------------ ------------

Edward Kornstein (1), 2003 --- 0
2002 $9,750 0
2001 $40,181 0

James R. Solakian, CEO 2003 --- 0
2002 --- 0

(1) Edward Kornstein resigned as Principal Officer and Director on October 3, 2002.

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Directors do not receive any monetary remuneration for their services as such. The
Company does not have a pension plan.

Mr. Solakian is not compensated for his services and is only reimbursed for certain
expenses incurred in the administration of the companies affairs.

Stock Options

Under the terms of the Reorganization Plan confirmed in 1991, all options and warrants
then outstanding were canceled. Since then, no options or warrants have been granted.

Item 11. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth the number and percentage of the shares of ORS' voting
stock owned as of December 31, 2003 by all persons known to ORS who own more than 5% of
the outstanding number of such shares, by all directors of ORS, and by all officers and
directors of ORS as a group. Unless otherwise indicated, each of the stockholders has
sole voting and investment power with respect to the shares beneficially owned. See Item
12 for subsequent stock transaction.

Title Number of Shares Percent
of Class Name Beneficially Owned of Class
-------- ---- ------------------ --------
Common J.R.S. Holdings, L.L.C.(1) 576,250 6.6%
152 Mockingbird Ct.
Three Bridges,
New Jersey 08887

Class A J.R. S. Holdings, L.L.C.(1) 12,000,000 100.0%
Common 152 Mockingbird Ct.
Three Bridges,
New Jersey 08887

Series A J.R. S. Holdings, L.L.C (1) 1,000,000 100.0%
Preferred 152 Mockingbird Ct.
Three Bridges,
New Jersey 08887

62.4%
Voting All Directors and
Officers as a group (1)

(1) J.R.S. Holdings. L.L.C. includes 576,250 shares of Common Stock, $0.01 par value, and
12,000,000 shares of Class A Common Stock, $0.0035 par value. The ORS Class A Common Stock
has the same rights and preferences as the ORS' Common Stock, $0.01 par value. Each share
of Series A Preferred Stock, $0.01 par value, has the same rights and preferences as the
Company's Common Stock, $0.01 par value.

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Item 12. Certain Relationships and Related Transactions

J.R.S. Holdings, L.L.C.

J.R.S. Holdings, L.L.C. (J.R.S.) purchased 13,576,250 shares of stock held by
Affiliated Manufacturer's Inc. (AMI). AMI retained 500,000 common stock shares for
investment purposes. James R. Solakian is the President and Chief Executive Officer of
the Company and sole shareholder of J.R.S.

PART IV

Item 13. Exhibits List and Reports on Form 8-K

None.

(b) Exhibits

Method of Filing Exhibit No. Exhibits
---------------- ----------- --------

Incorporated by reference 2(a) Plan of Reorganization under
to Form 8-K, dated Chapter 11 of the United
April 29, 1991. States Bankruptcy Code, dated
April 8, 1991

Incorporated by reference 2(b) Order Closing Case and Issuing
to Exhibit 2(b) to Form Final Decree Pursuant to 11
10KSB, for the year ended U.S.C. Section 350(a) and
December 31, 1992. Bankruptcy Rules 3022 and
5009, dated September 1, 1992

Incorporated by reference 3(a) Certificate of Incorporation
to Exhibit 3(a) to Form of ORS Automation, Inc. as
S-1, File No. 2-70609. amended through December 29, 1980.

Incorporated by reference 3(b) By-Laws of ORS Automation, Inc.
to Exhibit 3(b) to Form
S-1, File No. 2-70609.

Incorporated by reference 3(c) Certificate of Amendment of
to Exhibit 3 to Form 10-Q Certificate of Incorporation
for the Quarter ended of ORS Automation, Inc. filed
June 30, 1983. with the Secretary of State of
Delaware on May 27, 1983.

Incorporated by reference 3(d) Certificate of Amendment of
to Exhibit 3(d) to Form Certificate of Incorporation
10-K, for the Year ended of ORS Automation, Inc. filed
December 31, 1991. with the Secretary of State of
Delaware on May 30, 1985.

Incorporated by reference 3(e) Certificate of Designations of
to Exhibit 3(e) to Form The Preferred Stock of
10-K, for the Year ended ORS Automation, Inc. filed
December 31, 1991. with the Secretary of State
of Delaware on December 30, 1986.

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Incorporated by reference 3(f) Certificate of Reorganization
to Exhibit 3(f) to Form and Amendment Pending
10-K, for the Year ended Confirmation of Plan of
December 31, 1991. Reorganization of ORS
Automation, Inc. filed with
the Secretary of State of
Delaware on December 30, 1986.

Incorporated by reference 10(a) Lease by and between ORS
to Exhibit 10(a) to Form Automation, Inc. and SLM II,
10-K, for the Year ended dated June 28, 1991.
December 31, 1991.

Incorporated by reference 10(b) Amendment "B" to Lease by and
to Exhibit 10(b) to Form between ORS Automation, Inc.
10KSB, for the year ended and SLM II dated May 22, 1992.
December 31, 1992

Incorporated by reference 10(c) Amendment "F" to Lease by and
To Exhibit 10(c) to Form between ORS Automation, Inc.
10KSB, for the year ended and SLM II dated July 7,2000.
December 31, 2000

Incorporated by reference 10 (d) Schedule 13D by and between
To Exhibit 10 (d) to Form ORS Automation, Inc. and
13 D, for the year ended J.R.S. Holdings, Inc. dated
December 31, 2002 October 31, 2002

Exhibit filed with Form 10 KSB 10 (e) Stock Purchase Agreement
For the year ended dated December 31, 2003
December 31, 2003 between J.R.S. Holdings, LLC
and Somerset International Group

99.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18
U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.2 Certification of Chief Executive Officer pursuant to 13a-14(a)15d-14(a) of the
Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.

99.3 Certification of Chief Fianacial Officer pursuant to 13a-14(a)15d-14(a) of the
Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.

Item 14 Principal Accountant Fees and Services

2003 2002
---- ----

Audit Fees $5,800 $8,250

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SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

ORS AUTOMATION, INC.
(Registrant)

By: /s/ James R. Solakian Dated: February 18, 2004
James R. Solakian,
Chairman,President

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 Date Position with Registrant
-------------------- ----- ------------------------

/s/ James R. Solakian 2/18/04 Chairman, CEO, Treasurer
Secretary,(Chief Financial Officer)

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ORS AUTOMATION, INC.
CONTENTS TO FINANCIAL STATEMENTS
DECEMBER 31, 2003

Page

Independent Auditors' Report F-3

Balance Sheet
December 31, 2003 F-4

Statements of Operations
For the Years Ended December 31, 2003 and 2002 F-5

Statements of Stockholders' Equity
For the Years Ended December 31, 2003 and 2002 F-6

Statements of Cash Flows
For the Years Ended December 31, 2003 and 2002 F-7

Notes to Financial Statements F-8 - F-11

F-2

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WithumSmith+Brown
A Professional Corporation
Certified Public Accountants & Consultants
81 Park Avenue
Flemington, NJ 08822

INDEPENDENT AUDITORS' REPORT

To the Board of Directors,
ORS Automation, Inc.:

We have audited the accompanying balance sheet of ORS Automation, Inc. as
of December 31, 2003, and the related statements of operations,
stockholders' equity and cash flows for the years ended December 31, 2003
and 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 audits.

We conducted our audits 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 audits provide 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 ORS Automation, Inc. as
of December 31, 2003, and the results of its operations and its cash flows
for the years ended December 31, 2003 and 2002 in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As further discussed in Note 1B
to the financial statements, the Company, as of December 31, 2001, ceased
business operations. This factor raises substantial doubt about the
Company's ability to continue as a going concern. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

WithumSmith+Brown P.C.
Flemington, NJ
February 2, 2004

F-3

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ORS AUTOMATION, INC.
BALANCE SHEET
DECEMBER 31, 2003

ASSETS

Current Assets:
Cash $ 5,698
-------

TOTAL ASSETS $ 5,698
=======

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
$ 2,400
Accounts payable and accrued expenses

Stockholders' Equity:
10,000
Preferred stock
129,584
Common stock
24,914,163
Capital in excess of par value
(25,050,449)
Accumulated deficit -------------
Total Stockholders' Equity
3,298
-----
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$ 5,698
=======

The Notes to Financial Statements are an integral part of this statement.

F-4

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ORS AUTOMATION, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

2003 2002
---- ----

Sales, Net $ --- $ ---

Cost of Goods Sold --- ---
--------- --------
Gross Profit --- ---

Administrative, Marketing and General
Expenses 1,013 39,127
--------- ---------

Loss From Operations (1,013) (39,127)

Other Income (Expense):

Interest income 81 656
------- -------

Total Other Income (Expense), Net 81 656
------- -------

Net Loss $ (932) $ (38,471)
====== =========

Basic Loss Per Common Share $ (0.00) $ (0.00)
====== =========

Common Shares Used in Computing Basic
Loss Per Common Share 20,758,443 20,758,443
========== ==========

The Notes to Financial Statements are an integral part of these statements.
F-5

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ORS AUTOMATION, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

CLASS-A TOTAL
PREFERRED STOCK COMMON STOCK COMMON STOCK CAPITAL IN ACCUMULATED STOCKHOLDERS'
SHARES PAR VALUE SHARES PAR VALUE SHARES PAR VALUE EXCESS OF PAR DEFICIT EQUITY

Balance at
December 31,2001 1,000,000 $ 10,000 8,758,443 $ 87,584 12,000,000 $ 42,000 $ 24,914,163 $(25,011,046) $ 42,701

Net Loss (38,471) (38,471)

Balance at
December 31,2002 1,000,000 $ 10,000 8,758,443 87,584 12,000,000 42,000 24,914,163 (25,049,517) 4,230

Net Loss (932) (932)

Balance at
December 31,2003 1,000,000 $ 10,000 8,758,443 $ 87,584 12,000,000 $ 42,000 $ 24,914,163 $(25,050,449) $ 3,298

The Notes to Financial Statements are an integral part of these statements. F-6

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ORS AUTOMATION, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

2003 2002
----- -----

Cash Flows From Operating Activities:
Net loss $ (932) $ (38,471)
Adjustments to reconcile net loss
to net cash used in
operating activities:
Prepaid expenses --- 1,106
Accounts payable and accrued expenses (13,952) (11,959)
-------- --------
Net Cash Used in Operating Activities (14,884) (49,324)

Cash at the Beginning of the Year 20,582 69,906
-------- --------

Cash at the End of the Year $ 5,698 $ 20,582
======== ========

The Notes to Financial Statements are an integral part of these statements.
F-7

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ORS AUTOMATION, INC.
NOTES TO FINANCIAL STATEMENTS

Note 1 - Summary of Significant Accounting Policies:
A. Nature of the Business
ORS Automation, Inc. no longer conducts operations and its principal
function is to look for opportunities to maximize the value of its
tangible and intangible assets.

The Company ceased operations as of December 31, 2001.

B. Basis of Presentation
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplate
continuation of the Company as a going concern. However, the Company
ceased operations as of December 31, 2001. This factor raises
substantial doubt about the Company's ability to continue as a going
concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

C. Concentration of Credit Risk
The Company maintains its cash and cash equivalents in bank deposit
accounts at high credit quality financial institutions. The balances,
at times, may exceed federally insured limits. As part of its cash
management process, the Company periodically reviews the relative
credit standing of these banks.

D. Estimates
The preparation of financial statements in conformity with United
States generally accepted accounting principles requires management to
make estimates and assumptions that affect certain reported amounts
and disclosures. Accordingly, actual results could differ from those
estimates. Management has estimated that accrued rent is no longer due
and has changed its estimate of this liability to zero as of December
31, 2003. This benefit from the change in estimate amounted to $16,352
and has been reflected as a reduction of administrative expenses.

E. Income Taxes:
Deferred income tax assets and liabilities are recognized for the
differences between financial and income tax reporting basis of
assets and liabilities based on enacted tax rates and laws. The
deferred income tax provision or benefit generally reflects the net
change in deferred income tax assets and liabilities during the
year. The current income tax provision reflects the tax
consequences of revenues and expenses currently taxable or
deductible on the Company's various income tax returns for the year
reported. The Company's only significant deferred tax items are net
operating loss carryforwards.

F-8

.
ORS AUTOMATION, INC.
NOTES TO FINANCIAL STATEMENTS

Note 1 - Summary of Significant Accounting Policies (Cont'd):

F. Fair Value of Financial Instruments:
The carrying amounts of cash, accounts payable and accrued expenses
approximate fair value because of the short maturity of these
items.

G. Earnings Per Share:
The Company has adopted Statement of Financial Accounting Standard
No. 128, "Earnings Per Share". Basic earnings per common share is
computed using the weighted average number of shares outstanding.
Diluted earnings per common share is computed using the weighted
average number of shares outstanding adjusted for the incremental
shares attributed to other outstanding options, warrants, etc. to
purchase common stock. For the years ended December 31, 2003 and
2002, the Company had no such potential dilutive securities, hence,
only basic loss per share is presented.

Note 2 - Preferred and Common Stock:
The preferred stock of the Company has a par value of $.01 per
share and 1,000,000 shares have been authorized to be issued. All
are issued and outstanding at December 31, 2003 and 2002. No
dividends have been declared by the Board of Directors. This
preferred stock has no liquidating preferences.

The common stock of the Company has a par value of $.01 per share,
10,000,000 shares have been authorized and 8,943,889 have been
issued as of December 31, 2003 and December 31, 2002. As of
December 31, 2003 and 2002, 8,758,443 shares are outstanding.
The difference between issued and outstanding shares represent
shares that have been canceled pursuant to the Company's April 8,
1991 Plan of Reorganization.

The Company also has Class A common stock, which has a par value of
$.0035 per share and 12,000,000 shares have been authorized to be
issued. All are issued and outstanding at December 31, 2003 and
2002.

Both common stock and Class A common stock have the same voting
rights.

Note 3 - Related Party Transactions:
As of December 31, 2001 and until October 3, 2002, Affiliated
Manufactures, Inc. (AMI) controlled approximately 12% of the
outstanding common stock; 100 percent of the outstanding Class A -
common stock, which collectively represents approximately 63% of
the total outstanding common stock, and 100 percent of the
F-9

.
Note 3 - Related Party Transactions (Cont'd):

outstanding preferred stock of the Company. On October 3, 2002, AMI
sold their controlling interest to an unrelated third party.

A. Consulting Agreement
During the years ended December 31, 2003 and 2002, the Company paid
$0 and $9,750 respectively to an officer of the Company for
consulting services.

Note 4 - Income Taxes:
The reconciliation of income tax expense computed at the U.S.
federal statutory rate to the provision for income taxes is as
follows for the year ended December 31.
2003 2002

Tax Benefit at U.S. statutory rate $ (317) $ (13,080)

Change in valuation allowance (317) 13,080

Provision for income taxes $ --- $ ---
========== =============

At December 31, 2003, the Company has federal net operating loss
carryforwards of approximately $1,100,613, which are available to
offset future federal taxable income. These carryforwards expire
between the years 2004 and 2017. Also, at December 31, 2003, the
Company's state net operating loss carryforwards approximated $355,642
and expire in 2008 and 2009.

Deferred income taxes are summarized as follows at December 31, 2003:
Deferred tax asset:
Federal net operating loss carryforwards $ 374,208
State net operating loss carryforward 26,672
Valuation allowance (400,880)
Net deferred tax asset $ --

During the year ended December 31, 2003, the Company's valuation
allowance declined by $ 227,720 due to the expiration of the federal
net operating loss carryforwards. As seen in the above table, any
future tax benefit which may result from utilization of these net
operating loss carryforwards has been fully reserved for.

Future expiration of federal net operating loss carryforwards for the
periods ending after December 31, 2003 are as follows:
2004 $ 263,605
2005 435,836
2009 29,411
2010 16,059
2016 316,299
2017 38,471
2018 932
Total $ 1,100,613
========= F-10

.
Note 5 - Subsequent Event:
On December 31, 2003, J.R.S. Holdings, LLC (JRS) and Somerset
International Group, Inc. (Somerset) signed a STOCK PURCHASE AGREEMENT
whereby JRS agreed to sell 526,250 shares of the Company's Common
Stock, 12,000,000 shares of the Company's Class A Common Stock and
1,000,000 shares of the Company's Series A Preferred Stock. The
transaction closed in escrow on January 22, 2004 with a condition to
closing that JRS file the Company's 10KSB for the fiscal year ended
December 31, 2003. JRS will retain 50,000 Common Shares, representing
2 percent of the outstanding shares and Somerset will become the
Company's controlling shareholder, owning approximately sixty (60%)
percent of the Company's outstanding shares. Mr. Solakian will resign
as the Company's sole officer and director, effective after the filing
of the 10KSB and upon control of the Company, Somerset will appoint
the Company's new officers and directors.

F-11