U.S. 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 June 30, 1997

                                       OR

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES  EXCHANGE ACT
     OF 1934
For the transition period from                  to                 .
                               ----------------    ----------------
 Commission file Number: 0-11043


                              ORION FINANCIAL, LTD.
                  --------------------------------------------
                 (Name of small business issuer in its charter)

           Colorado                                       84-0858679
 ------------------------------              ----------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

           80 North Hoyt Street
             Denver, Colorado                                    80226
  --------------------------------------                        --------
 (Address of principal executive offices)                      (Zip Code)

 Issuer's telephone number: (303) 238-0937

 Securities registered under Section 12(b) of the Exchange Act:  NONE

 Securities registered under Section 12(g) of the Exchange Act:

                            No Par Value Common Stock
                            -------------------------
                                (Title of Class)

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. ES [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  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.  [ ]

     The issuer had no revenues for the fiscal year ended June 30, 1997.

     As of October 2, 1997,  the aggregate  market value of the issuer's  voting
stock held by nonaffiliates was $70,811.76.

     As of October 2, 1997, the issuer had 4,641,522  shares of its no par value
common stock issued and outstanding.

     Transitional Small Business Format. YES  [ ]  NO [X]

<PAGE>
                              ORION FINANCIAL, LTD.
                         1997 FORM 10-KSB ANNUAL REPORT
                                TABLE OF CONTENTS

PART I                                                               PAGE NUMBER
------                                                               -----------
Item 1.    Description of Business                                             3

Item 2.    Description of Property                                             3

Item 3.    Legal Proceedings                                                   3

Item 4.    Submission of Matters to Vote of Security Holders                   3

PART II
-------
Item 5.    Market for Common Equity and Related Stockholder Matters            3

Item 6.    Management's Discussion and Analysis or Plan of Operation           4

Item 7.    Financial Statements                                                4

Item 8.    Changes in and Disagreements With Accountants on
           Accounting and Financial Disclosure                                 4

PART III

Item 9.    Directors, Executive Officers, Promoters and Control
           Persons; Compliance With Section 16(a) of the Exchange Act          5

Item 10.   Executive Compensation                                              6

Item 11.   Security Ownership of Certain Beneficial Owners and Management      8

Item 12.   Certain Relationships and Related Transactions                      9

Item 13.   Exhibits and Reports on Form 8-K                                    9

Signatures                                                                    10



                                       2
<PAGE>

                                     PART I

ITEM 1.    DESCRIPTION OF BUSINESS

     (a)(b) BUSINESS  DEVELOPMENT AND BUSINESS OF THE ISSUER.  Orion  Financial,
Ltd. (the  "Company,"  formerly  known as Orion  Broadcast  Group,  Inc.),  is a
Colorado  corporation  formed on October 7, 1981.  The Company no longer has any
operations.  The  Company is seeking to enter into a business  combination  that
would  provide the Company  with  operations.  Although the Company is currently
investigating  business  combinations,  the  Company  has not  agreed  upon  any
specific business combination.

     The Company  recently  planned to enter the business of  manufacturing  and
selling children's shoes through the acquisition of the assets of a shoe company
that is no longer in  business.  The Company  loaned the  acquisition  candidate
$10,000 and paid $60,000 as a standby letter of credit fee. The  transaction has
not  been  consummated   because  certain  financing   pre-conditions  were  not
satisfied.  The Company  believes  that it will recover the $60,000 fee but will
not recover the $10,000 loan.

     The Company  currently has one part-time  employee,  Dean H. Boedeker,  the
Company's President.

ITEM 2.    DESCRIPTION OF PROPERTY

     The Company has no properties.

ITEM 3.    LEGAL PROCEEDINGS

     The Company is a party to no legal proceedings.

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

     No matter was submitted to a vote of the Company's  security holders during
the Company's fiscal quarter ended June 30, 1997.

                                     PART II

ITEM 5.    MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
           MATTERS

     (a)  MARKET  INFORMATION.  The  Company's  common  stock is  traded  in the
over-the- counter market. The following table shows the closing high and low bid
quotations for the common stock, for the periods  indicated,  as reported by the
National Quotation Bureau, Inc. These quotations  represent  inter-dealer prices



                                       3

<PAGE>

without  adjustment  for retail  markup,  mark down, or  commission  and may not
necessarily represent actual transactions.

                                                        Common Stock
                                                   ----------------------
     Fiscal Quarter Ended                          High               Low
     --------------------                          ----               ---

     September 1995 ..........................     .005              .005
     December 1995 ...........................     .005              .005
     March 1996 ..............................     .005              .005
     June 1996 ...............................     .005              .005
     September 1996 ..........................     .005              .005
     December 1996 ...........................     .005              .005
     March 1997 ..............................     .005              .005
     June 1997 ...............................     .005              .005

     (b) HOLDERS.  As of October 2, 1997,  the Company had  approximately  1,025
holders of record of its no par value common stock.

     (c)  DIVIDENDS.  The Company has not declared cash  dividends on its common
stock  since its  inception  and the  Company  does not  anticipate  paying  any
dividends in the foreseeable future.

     (d)  RECENT  SALES  OF  UNREGISTERED  SECURITIES.  No  unregistered  equity
securities were sold by the Company between July 1, 1996 and June 30, 1997.

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

     The Company has working capital of approximately $203,041,  which should be
sufficient  for the  Company  to fund its  obligations  for the  next 12  months
provided the Company does not enter into a business  combination  that  provides
the Company with business operations. The Company's minimal cash position limits
the  Company in its  future  direction  because it does not have the  ability to
raise additional funds through  borrowings or equity offerings given its lack of
business  operations.  The long term  survivability  of the  Company  depends on
whether or not the  Company is able to enter  into a business  combination  that
would provide the Company with successful business operations.

     The Company has no material commitments for capital expenditures.

ITEM 7.    FINANCIAL STATEMENTS

     The financial statements are attached following the signature page.

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

     There were no changes in accountants or  disagreements of the type required
to be  reported  under  this  item  between  the  Company  and  its  independent
accountants during the fiscal years ended June 30, 1997 and 1996.

                                       4

<PAGE>

                                    PART III

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

     (a) IDENTIFY DIRECTORS AND EXECUTIVE OFFICERS

     The present term of office of each  director will expire at the next annual
meeting  of  shareholders.  The name,  position  with the  Company,  age of each
director, and the period during which each director has served are as follows:

      Name and Position in the Company    Age   Director Since
      --------------------------------    ---   --------------
      Dean H. Boedeker ................    62        1981
      President, Chief Executive
      Officer and Director

      Donald W. Diones ................    65        1981
      Secretary and Director

      William J. White ................    59        1995
      Director

     There was no arrangement or understanding between any director or any other
person pursuant to which any director was selected as such.

     Each executive officer will hold office until his successor duly is elected
and qualified,  until his resignation or until he shall be removed in the manner
provided by the Company's Bylaws. The Company's executive officers,  their ages,
positions with the Company, and periods during which they served are as follows:

      Name of Executive Officer and   
      Position in Company                 Age    Officer Since
      -----------------------------       ---    -------------

      Dean H. Boedeker ................    62
      Chairman of the Board                          1991
      President and Chief 
      Executive Officer                              1993

      Donald W. Diones ................    65
      Secretary                                      1993

     There was no arrangement or understanding between any executive officer and
any other  person  pursuant  to which any person was  selected  as an  executive
officer.

     BACKGROUND.  The  following is a brief  account of the business  experience
during  the past  five  years of each  director  and  executive  officer  of the
Company:


                                       5

<PAGE>


Name Of Director
or Officer          Principal Occupation During The Last Five Years
----------------    -----------------------------------------------
Dean H. Boedeker    Director of the Company since 1981; Chairman of the Board of
                    Directors  of the  Company  since July 1991;  President  and
                    Chief Executive Officer of the Company since September 1993;
                    Senior Vice  President or Vice  President of R A F Financial
                    Corporation, an investment banking firm, since March 1992.

Donald W. Diones    Director of the Company since 1981; Senior Vice President of
                    Bigelow & Company,  an investment  banking  firm,  since May
                    1995;  Senior Vice  President of Dougherty  Dawkins Strand &
                    Bigelow,  Incorporated,  an investment  banking  firm,  from
                    October  1992 to May 1995;  Senior Vice  President  of R A F
                    Financial  Corporation,  an investment  banking  firm,  from
                    March 1992 to October 1992.

William J. White    Director  of the Company  since 1995;  Chairman of Bigelow &
                    Company,   an  investment  banking  firm,  since  May  1995;
                    President and owner of First Denver Financial Corporation, a
                    private investment firm, since April 1992.

     DIRECTORSHIPS.

     No  director  of the  Company  is a  director  of an  entity  that  has its
securities  registered  pursuant to Section 12 of the Securities Exchange Act of
1934.

     (b) IDENTIFY SIGNIFICANT EMPLOYEES.

         Not applicable.

     (c) FAMILY RELATIONSHIPS.

         Not applicable.

     (d) INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS.

     No event  required to be reported  hereunder  has occurred  during the past
five years.

     (e) PROMOTERS AND CONTROL PERSONS.

     No event  required to be reported  hereunder  has occurred  during the past
five years.

     (f) SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.

     Based  solely  upon  a  review  of  Forms  3 and 4 and  amendments  thereto
furnished to the  registrant  under Rule 16a-3(d)  during its most recent fiscal
year and Form 5 and amendments  thereto furnished to the registrant with respect
to its most recent  fiscal  year,  no  director,  officer,  or greater  than 10%
shareholder failed to timely file a Form 3, Form 4, or Form 5.

ITEM  10.      EXECUTIVE COMPENSATION

     The  following  table  provides  certain  information   pertaining  to  the
compensation  paid by the  Company to Dean H.  Boedeker,  the  President  of the
Company,  for services rendered during the Company's fiscal years ended June 30,
1997, 1996, and 1995. No executive officer of the Company was paid over $100,000



                                       6

<PAGE>

in compensation from the Company during the Company's fiscal year ended June 30,
1997.

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                                                    Long Term
                                                                  Compensation
                                     Annual Compensation             Awards
                                --------------------------------  ------------
                                                       Other
                      Year                             Annual      Securities    All Other
Name and             Ended                             Compen-     Underlying    Compensa-
Principal Position  June 30,    Salary($)    Bonus($)  sation($)   Options(#)      tion($)
------------------  -------     --------     -------   --------    ----------    ---------

<S>                   <C>       <C>          <C>        <C>          <C>           <C>
Dean H. Boedeker      1997      12,000(1)      --         --           --            --
 President and        1996      12,000(1)      --         --           --            --
 Chief Executive      1995      14,000(1)      --         --           --            --
 Officer 
-----------------------
 </TABLE>

     (1) Mr.  Boedeker  is  entitled  to $1,000  per month  for  serving  as the
President and Chief Executive Officer of the Company.

                        OPTION GRANTS IN LAST FISCAL YEAR

     No options  were  granted by the  Company  to Dean H.  Boedeker  during the
Company's fiscal year ended June 30, 1997.

                          FISCAL YEAR END OPTION VALUES

     The following table sets forth  information with respect to the unexercised
options held by Dean H. Boedeker as of June 30, 1997.

<TABLE>
<CAPTION>
                                Number of Securities
                               Underlying Unexercised             Value of In-the-Money
                                     Options at                         Options at
                                  June 30, 1997(#)                 June 30, 1997($)(1)
                             -------------------------         --------------------------
Name                         Exercisable/ Unexercisable        Exercisable/ Unexercisable
----                         -----------  -------------        -----------  -------------

<S>                           <C>           <C>                  <C>           <C>
Dean H. Boedeker ...........  400,000        - 0 -                - 0 -         - 0 -
-------------------
</TABLE>

     (1) The value of  unexercised  in-the-money  options is the market price of
the underlying  shares of common stock at June 30, 1997, less the exercise price
of the options.

     Mr. Boedeker did not exercise any options during the Company's  fiscal year
ended June 30, 1997.

     COMPENSATION OF DIRECTORS--STANDARD ARRANGEMENT.

     Directors of the Company who are not employees or officers  receive $500.00
plus  expense  reimbursement  for each  Board of  Directors  meeting  which they


                                       7

<PAGE>

attend.  The Chairman of the Board and President receives $1,000 per month, as a
stipend for the services he performs.

     EMPLOYMENT  CONTRACTS AND  TERMINATION OF EMPLOYMENT AND  CHANGE-IN-CONTROL
ARRANGEMENTS.

     There is no employment contract between the Company and Dean H. Boedeker or
any compensatory plan or arrangement between the Company and Dean H. Boedeker.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     (a)(b) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The following  table sets forth as of October 2, 1997, the number of shares
of the  Company's  outstanding  common stock  beneficially  owned by each of the
Company's current directors and officers, sets forth the number of shares of the
Company's  common  stock  beneficially  owned  by all of the  Company's  current
directors  and  officers  as a group and sets  forth the number of shares of the
Company's common stock owned by each person who owned of record, or was known to
own  beneficially,  more than 5% of the Company's  outstanding  shares of common
stock:

                                            Amount and Nature of        Percent
     Name of Beneficial Owner              Beneficial Ownership(1)      of Class
     ------------------------              -----------------------      --------
     Dean H. Boedeker ...................           573,072(2)           11.4%
     Donald W. Diones ...................           531,572(3)           10.5%
     William J. White ...................           472,250(4)            9.4%
     All officers and directors
     as a group (3 Persons) .............         1,576,894(5)           27.0%
     Thomas J. Bonomo ...................           582,929(6)           11.6%
     Thomas A. Breen ....................           434,375(7)            8.6%
     Edward O. Byrne ....................           400,938(8)            8.0%

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

     (1) Each  person has the sole voting and  investment  power over the shares
indicated.

     (2) Includes 400,000 shares  underlying a stock option.  Dean H. Boedeker's
address is 80 North Hoyt Street, Denver, Colorado 80226.

     (3) Includes  400,000 shares  underlying a stock option.  Donald W. Diones'
address is 1401 Seventeenth Street, Suite 1300, Denver, Colorado 80202.

     (4) Includes 400,000 shares  underlying a stock option.  William J. White's
address is 1401 Seventeenth Street, Suite 1300, Denver, Colorado 80202.

     (5) Includes shares underlying the stock options held by Messrs.  Boedeker,
Diones and White.

     (6) Includes 400,000 shares  underlying a stock option.  Thomas J. Bonomo's
address is 388 Market Street, No. 900, San Francisco, California 94111.

     (7) Includes  400,000 shares  underlying a stock option.  Thomas A. Breen's
address is 225 South Lake Avenue, 11th Floor, Pasadena, California 91101.

     (8) Includes  400,00 shares  underlying a stock  option.  Edward O. Byrne's
address is 303 East Seventeenth Avenue, Suite 700, Denver, Colorado 80203.


                                       8

<PAGE>

     (c) CHANGES IN CONTROL.

     There are presently no  arrangements  of any kind which may at a subsequent
date result in a change in control of the Company.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     (a)(b)  TRANSACTIONS  WITH  MANAGEMENT  AND  OTHERS  AND  CERTAIN  BUSINESS
RELATIONSHIPS.

     In  September  1996,  the Board of  Directors  of the Company  extended the
expiration dates of options relating to 2,000,000 shares of the Company's common
stock that are  exercisable  at $.03 per share from April 27, 1998, to September
16, 2001.  Included in the persons for whom the options were  extended were Dean
H. Boedeker and Donald W. Diones,  directors of the Company, and Thomas A. Breen
and Thomas J. Bonomo, former directors of the Company who currently beneficially
own more than 5% of the Company's outstanding shares of common stock.

     In  September  1996,  the Board of Directors of the Company also granted an
option to purchase  400,000  shares of the Company's  common stock to William J.
White, a director of the Company.  Mr. White's option is exercisable at $.03 per
share until September 16, 2001.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

     (a) EXHIBITS.

Exhibit 3(A)        Articles  of  Incorporation  of Orion  Financial,  Ltd.,  as
                    amended  (incorporated by reference to Exhibit 3(A) to Orion
                    Financial,  Ltd.'s Annual Report on Form 10-K for the fiscal
                    years ended June 30, 1993 and 1992).

Exhibit 3(B)        Bylaws  of  Orion   Broadcast   Group,   Inc.,   as  amended
                    (incorporated   by   reference  to  Exhibit  3(B)  to  Orion
                    Financial,  Ltd.'s Annual Report on Form 10-K for the fiscal
                    years ended June 30, 1993 and 1992).

Exhibit 10(A)       Orion Financial,  Ltd. 1991 Non-Qualified  Stock Option Plan
                    (incorporated   by  reference  to  Exhibit  10(A)  to  Orion
                    Financial,  Ltd.'s Annual Report on Form 10-K for the fiscal
                    years ended June 30, 1993 and 1992).

Exhibit 10(B)       Form of Option Agreement dated April 27, 1993  (incorporated
                    by reference  to Exhibit  10(B) to Orion  Financial,  Ltd.'s
                    Annual  Report on Form 10-K for the fiscal  years ended June
                    30, 1993 and 1992).

Exhibit 10(C)       Form of Amendment to Option  Agreement  dated  September 27,
                    1993  (incorporated  by reference to Exhibit  10(C) to Orion
                    Financial,  Ltd.'s Annual Report on Form 10-K for the fiscal
                    years ended June 30, 1993 and 1992).

Exhibit 10(D)       Form of Amendment No. 2 to Option Agreement (incorporated by
                    reference to Exhibit 10(D) to Orion Financial, Ltd.'s Annual
                    Report  on Form  10-K for the  fiscal  year  ended  June 30,
                    1996).

Exhibit 10(E)       Form  of  Option  Agreement  effective  September  16,  1996
                    between   Orion   Financial,   Ltd.  and  William  J.  White
                    (incorporated   by  reference  to  Exhibit  10(E)  to  Orion
                    Financial,  Ltd.'s Annual Report on Form 10-K for the fiscal
                    year ended June 30, 1996).

     (b) CURRENT REPORTS ON FORM 8-K:

     No Current  Reports on Form 8-K were filed during the fiscal  quarter ended
June 30, 1997.


                                       9
<PAGE>



                                   SIGNATURES

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

                                      ORION FINANCIAL, LTD.,
                                      a Colorado corporation



                                      By:/s/Dean H. Boedeker
                                         ---------------------------------------
                                         Dean H. Boedeker,
                                         President, Principal Executive Officer,
                                         Chief Financial Officer, and
                                         Principal Accounting Officer

                                         Dated:  October 13, 1997

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

Date                      Name and Title            Signature
----                      --------------            ---------

October 13, 1997          Dean H. Boedeker
                          Director                  /s/Dean H. Boedeker
                                                    ----------------------------

October 13, 1997          Donald W. Diones
                          Director                  /s/Donald W. Diones
                                                    ----------------------------

October 13, 1997          William J. White
                          Director                  /s/William J. White
                                                    ----------------------------





                                       10
<PAGE>









                              Orion Financial, Ltd.

                               Report on Audit of
                              Financial Statements
                               For the Years Ended
                             June 30, 1997 and 1996






<PAGE>

                              ORION FINANCIAL, LTD.



                          INDEX TO FINANCIAL STATEMENTS



                                                                            Page
                                                                            ----

Independent Auditor's Report................................................ F-2

Balance Sheet - June 30, 1997............................................... F-3

Statements of Operations - For the Years Ended June 30, 1997 and 1996....... F-4

Statement of Changes in Stockholders' Equity - For the Period from 
     July 1, 1995 through June 30, 1997......................................F-5

Statements of Cash Flows - For the Years Ended June 30, 1997 and 1996....... F-6

Notes to Financial Statements............................................... F-7









                                       F-1

<PAGE>




                          INDEPENDENT AUDITOR'S REPORT





Board of Directors
Orion Financial, Ltd.
Denver, Colorado


We have audited the accompanying  balance sheet of Orion  Financial,  Ltd. as of
June 30, 1997 and 1996, and the related statements of operations,  stockholders'
equity  and cash  flows  for the  years  ended  June 30,  1997 and  1996.  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  generally   accepted  auditing
standards.  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 Orion Financial,  Ltd., as of
June 30,  1997,  and the  results of its  operations  and its cash flows for the
years  ended June 30,  1997 and 1996,  in  conformity  with  generally  accepted
accounting principles.



/s/ Hein + Associates LLP
HEIN + ASSOCIATES LLP


Denver, Colorado
September 9, 1997


                                       F-2

<PAGE>

<TABLE>
<CAPTION>
                              ORION FINANCIAL, LTD.

                                  BALANCE SHEET



                                                                                 JUNE 30,
                                                                                   1997
                                                                                 --------
                                     ASSETS
                                     ------

<S>                                                                             <C>        
CURRENT ASSETS -
      Cash and cash equivalents .............................................   $   203,041
                                                                                 ----------
TOTAL CURRENT ASSETS ........................................................   $   203,041
                                                                                 ==========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------
CURRENT LIABILITIES -
      Accounts payable and accrued expenses .................................   $     8,923

STOCKHOLDERS' EQUITY:
      Preferred stock, no par value; 200,000,000 shares authorized;
            no shares issued or outstanding .................................          --
      Common stock, stated value of $.08 a share; 200,000,000 shares
            authorized; 4,641,522 shares issued and outstanding .............       371,322
      Additional paid-in capital ............................................     4,639,182
      Accumulated deficit ...................................................    (4,816,386)
                                                                                 ----------
                  Total stockholders' equity ................................       194,118
                                                                                 ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..................................   $   203,041
                                                                                 ==========

</TABLE>




              See accompanying notes to these financial statements.

                                       F-3

<PAGE>

<TABLE>
<CAPTION>
                              ORION FINANCIAL, LTD.

                            STATEMENTS OF OPERATIONS



                                                                  For the Years Ended June 30,
                                                                  ----------------------------
                                                                       1997           1996
                                                                       ----           ----

<S>                                                             <C>             <C> 
REVENUE ......................................................  $       --      $      --

GENERAL AND ADMINISTRATIVE EXPENSES ..........................        38,579         37,774

OTHER INCOME (EXPENSE) -
    Interest income ..........................................        10,797         13,200
                                                                 -----------    -----------

NET LOSS .....................................................   $   (27,782)   $   (24,574)
                                                                 ===========    ===========

NET LOSS PER COMMON SHARE ....................................   $      (.01)   $      (.01)
                                                                 ===========    ===========

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING .........     4,641,522      4,641,522
                                                                 ===========    ===========

</TABLE>













              See accompanying notes to these financial statements.

                                       F-4

<PAGE>

<TABLE>
<CAPTION>

                                                        ORION FINANCIAL, LTD.

                                            STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                       FOR THE PERIOD FROM JULY 1, 1995 THROUGH JUNE 30, 1997

                                                     COMMON STOCK                  ADDITIONAL                              TOTAL
                                              --------------------------            PAID-IN          ACCUMULATED       STOCKHOLDERS'
                                              SHARES              AMOUNT            CAPITAL            DEFICIT            EQUITY
                                              ------              ------           ----------        -----------       -------------

<S>                                          <C>              <C>                <C>                <C>                <C> 
BALANCES, July 1, 1995 ............          4,641,522        $   371,322        $ 4,639,182        $(4,764,030)       $   246,474

    Net loss ......................               --                 --                 --              (24,574)           (24,574)
                                           -----------        -----------        -----------        -----------        -----------

BALANCES, June 30, 1996 ...........          4,641,522            371,322          4,639,182         (4,788,604)           221,900

    Net loss ......................               --                 --                 --              (27,782)           (27,782)
                                           -----------        -----------        -----------        -----------        -----------

BALANCES, June 30, 1997 ...........          4,641,522        $   371,322        $ 4,639,182        $(4,816,386)       $   194,118
                                           ===========        ===========        ===========        ===========        ===========
</TABLE>






              See accompanying notes to these financial statements.

                                       F-5

<PAGE>

<TABLE>
<CAPTION>

                              ORION FINANCIAL, LTD.

                            STATEMENTS OF CASH FLOWS



                                                                                        FOR THE YEARS ENDED JUNE 30,
                                                                                        ----------------------------
                                                                                         1997                  1996
                                                                                         ----                  ----

<S>                                                                                   <C>                  <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
       Net income (loss) .......................................................      $ (27,782)           $ (24,574)
       Adjustments to reconcile to net cash from operating activities:
            Increase (decrease) in -
                 Accounts payable and accrued expenses .........................          8,747              (19,065)
                                                                                      ---------            ---------
            Net cash used in operating activities ..............................        (19,035)             (43,639)

CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchase of marketable securities .......................................           --               (394,661)
       Proceeds from sale of marketable securities .............................        194,888              447,045
                                                                                      ---------            ---------
            Net cash provided by investing activities ..........................        194,888               52,384
                                                                                      ---------            ---------

NET INCREASE IN CASH AND EQUIVALENTS ...........................................        175,853                8,745

CASH AND CASH EQUIVALENTS, beginning of year ...................................         27,188               18,443
                                                                                      ---------            ---------

CASH AND CASH EQUIVALENTS, end of year .........................................      $ 203,041            $  27,188
                                                                                      =========            =========

SUPPLEMENTAL DISCLOSURES:
       Cash paid for interest ..................................................      $    --              $    --
                                                                                      =========            =========

                                                                                      ---------            ---------
       Cash paid for taxes .....................................................      $    --              $    --
                                                                                      =========            =========

</TABLE>







              See accompanying notes to these financial statements.

                                       F-6

<PAGE>

                              ORION FINANCIAL, LTD.

                          NOTES TO FINANCIAL STATEMENTS



1.       ORGANIZATION AND NATURE OF OPERATIONS:

         Orion  Financial,  Ltd. (the Company) was  incorporated  in Colorado in
         1981. Through June 25, 1993, the Company had the following wholly-owned
         subsidiaries:   Orion  Services  Company   (formerly  Vehicle  Resource
         Corporation  or  VRC),   Orion  Broadcast  of  Rockford,   Inc.  (Orion
         Rockford),  and  United  Leasing  Company  (inactive).  In 1987,  Orion
         Rockford formed Orion Financial Services Corporation (Orion Financial),
         a  94%  owned  subsidiary,  to  enter  into  the  acquisition  of  FNRS
         Acquisition  Corporation (FNRS Acquisition).  FNRS Acquisition acquired
         FN  Realty  Services,  Inc.  (FN  Realty)  and  formed  FNRS  Financial
         Corporation   (FNRS)  in  fiscal  1988.  The  operations  of  VRC  were
         discontinued  in fiscal 1990,  while the  operations  of FN Realty were
         discontinued during fiscal 1991.

         On July 13, 1992,  all of the Company's  active  subsidiaries  declared
         bankruptcy under Chapter 11 of the bankruptcy code.  Effective June 25,
         1993, the Company sold its entire interest in VRC and Orion Rockford to
         the former  president  of the Company.  At present,  the Company has no
         operations.


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

         Cash Equivalents - Cash  equivalents are generally  comprised of highly
         liquid  instruments  with original  maturities of three months or less,
         such as money funds and certificates of deposit.  These investments are
         stated at cost which approximates market value.

         Net  Income  (Loss)  Per Share - Net  income  (loss) per share has been
         computed  based on the weighted  average  number of shares  outstanding
         during  the  period.   Stock   options  have  been  excluded  from  the
         computation because their effect would be anti-dilutive.

         Income Taxes - The Company  accounts for income taxes on the  liability
         method,   which  requires   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 tax assets and liabilities are determined  based
         on the  difference  between the financial  statements  and tax bases of
         assets and  liabilities  using enacted tax rates in effect for the year
         in which the differences are expected to reverse.

         Use  of  Estimates  -  The  preparation  of  the  Company's   financial
         statements in conformity with generally accepted accounting  principles
         requires the  Company's  management to make  estimates and  assumptions
         that affect the  amounts  reported in these  financial  statements  and
         accompanying notes. Actual results could differ from those estimates.

         Accounting for  Stock-Based  Compensation - In fiscal 1997, the Company
         adopted the provisions of Statement of Financial  Accounting  Standards
         No. 123,  "Accounting for Stock-Based  Compensation" (FAS 123). FAS 123
         encourages,  but does not require,  companies to recognize compensation
         expense  for  grants  of  stock,   stock  options,   and  other  equity
         instruments  to employees  based on fair value.  Companies  that do not
         adopt the fair  value  accounting  rules  must  disclose  the impact of


                                       F-7

<PAGE>

                              ORION FINANCIAL, LTD.

                          NOTES TO FINANCIAL STATEMENTS


         adopting  the  new  method  in the notes to the  financial  statements.
         Transactions in equity  instruments   with  non-employees  for goods or
         services must  be accounted  for on the fair value method.  The Company
         has elected not to adopt  the fair value accounting  prescribed by SFAS
         123  for  its  employees,  and  is   subject  only  to  the  disclosure
         requirements.  The adoption of SFAS  123 had no effect on the Company's
         financial statements.


3.       STOCKHOLDERS' EQUITY:

         The Company  adopted an incentive  stock option plan in 1984  reserving
         312,500  shares of common stock for certain  employees,  officers,  and
         directors.  The  exercise  price was  required  to be at least the fair
         market  value of the  stock on the date of the  grant,  and the term of
         each option granted was not to be for more than ten years from the date
         of the grant. The plan expired in February 1994.

         If options  were  granted to  individuals  owning more than ten percent
         (10%) of the outstanding  common stock, the exercise price had to be at
         least one hundred ten  percent  (110%) of the fair market  value of the
         stock on the date of the  grant  and the term for each  option  granted
         would not be for more than five years from the date of the grant.

         On July 13, 1987, the Board of Directors of the Company granted a stock
         option  under the 1984  stock  option  plan for  187,500  shares of the
         Company's  common stock to a director  and officer of the Company.  The
         option was  exercisable at $.72 per share with 62,500 options  expiring
         in July 1992,  1993,  and 1994. No options were exercised and they have
         all expired.  In June 1991,  the Board granted a stock option under the
         1984 plan to an officer of the Company for 30,000 shares exercisable at
         $.47 per share through 2001. None of these options have been exercised.

         On November 8, 1991,  the Company  adopted a 1991  Non-Qualified  Stock
         Option Plan for the  directors,  officers and employees of the Company.
         Two  million  shares are  reserved  under this plan.  The terms of each
         option  granted will not be for more than ten years from date of grant,
         and no options can be granted under the plan after November 8, 2001.

         In April 1993,  the Board of  Directors  of the Company  granted  stock
         options  covering  2,000,000  shares  of the  Company's  common  stock,
         400,000  shares  each to four  directors  of the  Company  at that time
         (including  the  president of the  Company),  and 400,000  shares to an
         individual   from  the  Company's   legal  counsel.   The  options  are
         exercisable  at $.03  per  share.  In  September  1996,  the  Board  of
         Directors  extended the  expiration  date of these options to September
         2001. None have been exercised to date.

         In  September  1996,  the  Board of  Directors  granted  stock  options
         covering  400,000  shares to a director,  exercisable at $.03 per share
         through September 2001.

         The market price of the Company's  common stock was $.005 per share. If
         compensation  cost had been  recognized  using the fair value  approach
         prescribed by SFAS 123 rather than the intrinsic value method under APB
         25, there would have been no change to the Company's reported net loss.

                                       F-8

<PAGE>

                              ORION FINANCIAL, LTD.

                          NOTES TO FINANCIAL STATEMENTS



         The Company has authorized, but unissued,  preferred stock which may be
         issued in series with such  preferences  as determined by the Company's
         Board of Directors.


4.       INCOME TAXES:

         The amounts  which give rise to the net deferred tax asset  (liability)
         as of June 30, 1997, are as follows:


               Net operating loss carryforward                     $ 444,000
               Valuation allowance                                  (444,000)
                                                                    --------

               Net deferred tax asset                              $    --
                                                                    ========


         At  June  30,  1997,  the  Company  had  net  operating   losses  (NOL)
         carryforwards for income tax purposes of approximately  $1,200,000 that
         will  expire  between  1997 and  2012.  Upon the sale of the  Company's
         subsidiaries   in  June  1993,  a   substantial   portion  of  the  NOL
         carryforwards  were  lost  for use by the  Company,  as they  had  been
         incurred at the subsidiary level.


5.       SUBSEQUENT EVENTS:

         Subsequent to June 30, 1997, the Company advanced approximately $60,000
         for a standby  letter of credit fee  related to a proposed  acquisition
         candidate. In addition, the Company loaned  $10,000  to the acquisition
         candidate.  Certain  preconditions to the acquisition have not occurred
         and it is currently  unlikely that the acquisition will be consummated.
         The  Company's  advance for the  standby  letter of credit fee is being
         held by a law firm in Hong Kong,  China and the Company  has  requested
         its  return.  The  $10,000  loan will be  recorded as a bad debt in the
         first quarter of fiscal 1998.



                                       F-9

<PAGE>

                                 EXHIBIT INDEX

Exhibit     Description                                                 Page No.
-------     -----------                                                 --------

3(A)        Articles  of  Incorporation  of Orion  Financial,  Ltd.,  as   N/A
            amended  (incorporated by reference to Exhibit 3(A) to Orion
            Financial,  Ltd.'s Annual Report on Form 10-K for the fiscal
            years ended June 30, 1993 and 1992).

3(B)        Bylaws  of  Orion   Broadcast   Group,   Inc.,   as  amended   N/A
            (incorporated   by   reference  to  Exhibit  3(B)  to  Orion
            Financial,  Ltd.'s Annual Report on Form 10-K for the fiscal
            years ended June 30, 1993 and 1992).

10(A)       Orion Financial,  Ltd. 1991 Non-Qualified  Stock Option Plan   N/A
            (incorporated   by  reference  to  Exhibit  10(A)  to  Orion
            Financial,  Ltd.'s Annual Report on Form 10-K for the fiscal
            years ended June 30, 1993 and 1992).

10(B)       Form of Option Agreement dated April 27, 1993  (incorporated   N/A
            by reference  to Exhibit  10(B) to Orion  Financial,  Ltd.'s
            Annual  Report on Form 10-K for the fiscal  years ended June
            30, 1993 and 1992).

10(C)       Form of Amendment to Option  Agreement  dated  September 27,   N/A
            1993  (incorporated  by reference to Exhibit  10(C) to Orion
            Financial,  Ltd.'s Annual Report on Form 10-K for the fiscal
            years ended June 30, 1993 and 1992).

10(D)       Form of Amendment No. 2 to Option Agreement (incorporated by   N/A
            reference to Exhibit 10(D) to Orion Financial, Ltd.'s Annual
            Report  on Form  10-K for the  fiscal  year  ended  June 30,
            1996).

10(E)       Form  of  Option  Agreement  effective  September  16,  1996   N/A
            between   Orion   Financial,   Ltd.  and  William  J.  White
            (incorporated   by  reference  to  Exhibit  10(E)  to  Orion
            Financial,  Ltd.'s Annual Report on Form 10-K for the fiscal
            year ended June 30, 1996).