U. S. Securities and Exchange Commission

                             Washington, D.C. 20549

                                   Form 10-QSB

(Mark One)
[ x ]             QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended......September 30, 1997..........................

[   ]          TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                                  EXCHANGE ACT

For the transition period from .................. to ..................

        Commission file number ............0-19499 ............

        .................Champion Financial Corporation..................
                    (Exact name of small business issuer as
                            specified in its charter)

                           Utah                         88-0169547
           (State or other jurisdiction              (I.R.S. employer
         of incorporation or organization)          identification no.)

                           9495 E. San Salvador Drive
                            Scottsdale, Arizona 85258
                    (Address of principal executive offices)

                      ...........(602) 614-4285 ..........
                           (Issuer's telephone number)

     .......................................................................
              (Former name, former address and former fiscal year,
                         if changed since last report)
     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 requirements for the past 90 days. Yes X  No
                                                                      ---   ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares  outstanding of each of the issuer's  classes of
common equity, as of the last practicable date:  .......Common stock, $0.001 par
value, 5,473,302 outstanding as of October 28, 1997 ....
                                        1
<PAGE>
                         Champion Financial Corporation
                                      Index


<TABLE>
<CAPTION>
Part I:  Financial Information

<S>               <C>                                                                            <C>
         Item 1.  Financial Statements

                  Consolidated Balance Sheets as of September 30, 1997 and March 31, 1997 ........3

                  Consolidated Statements of Operations and Retained Earnings for the Three 
                  Months and Six Months ended September 30, 1997 and 1996 ........................4

                  Consolidated Statements of Cash Flows for the Six Months ended September
                  30, 1997 and 1996 ..............................................................5

                  Notes to Unaudited Consolidated Financial Statements ...........................6


         Item 2.  Management's Discussion and Analysis of Financial Condition and Results
                  of Operations .................................................................10


Part II: Other Information

                  Exhibits - None

                  Signatures  ...................................................................12
</TABLE>
                                       2
<PAGE>
                         CHAMPION FINANCIAL CORPORATION
                                AND SUBSIDIARIES
                          Consolidated Balance Sheets
<TABLE>
<CAPTION>
                                                                                 September 30,     
                                                                                      1997         March 31,
                                                                                  (UNAUDITED)        1997
                                                                                 -------------    ----------
                                     Assets                                                     
                                                                                                
<S>                                                                                <C>            <C>       
Current assets:                                                                                 
  Cash and cash equivalents                                                        $  363,275     $  896,096
  Trade accounts receivable, less allowance for doubtful accounts of $15,000          300,659        250,795
  Other current assets                                                                 16,761         14,415
                                                                                   ----------     ----------
            Total current assets                                                      680,695      1,161,306
                                                                                   ----------     ----------
                                                                                                
Property and equipment, net (note 2)                                                  162,993        158,109
Investment in healthcare technology company(note 3)                                   309,626           --
Other assets, at cost                                                                 104,509         89,795
                                                                                   ----------     ----------
                                                                                   $1,257,823     $1,409,210
                                                                                   ==========     ==========
                                                                                                
                                                                                                
                      Liabilities and Shareholders' Equity                                      
Current liabilities:                                                                            
  Accounts payable                                                                 $  165,774     $  267,351
  Accrued expenses(note 4)                                                             66,950         89,972
  Note payable                                                                           --           24,340
  Deferred revenue                                                                       --           58,909
                                                                                   ----------     ----------
          Total current liabilities                                                   232,724        440,572
                                                                                                
Shareholders' equity:                                                                           
                                                                                                
   Common stock, $.001 par value 100,000,000 shares authorized, 5,473,302 shares                
      issued and outstanding                                                            5,473          5,473
   Additional paid -in- capital                                                       874,897        874,897
   Retained earnings                                                                  144,729         88,268
                                                                                   ----------     ----------
         Total shareholders' equity                                                 1,025,099        968,638
                                                                                                
                                                                                   ----------     ----------
         Total liabilities and shareholders' equity                                $1,257,823     $1,409,210
                                                                                   ==========     ==========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
                                       3
<PAGE>
                         CHAMPION FINANCIAL CORPORATION
                                AND SUBSIDIARIES
          Consolidated Statements of Operations and Retained Earnings
                                  (Unaudited)
<TABLE>
<CAPTION>
                                              Three Months Ended            Six Months Ended
                                                 September 30,                September 30,
                                           -------------------------    -------------------------
                                               1997          1996           1997          1996
                                           -----------   -----------    -----------   -----------
<S>                                        <C>           <C>            <C>           <C>        
Revenue:
   Repricing fees                          $   565,847   $   423,277    $ 1,144,291   $   813,768
   Member fees                                  99,094        66,815        238,070       142,743
   Other fees                                    4,995        10,585           --
                                           -----------   -----------    -----------   -----------
                                               669,936       490,092      1,392,946       956,511
                                           -----------   -----------    -----------   -----------

Costs of service:
   PPO network fees                            155,615       194,385        332,632       355,655
   Commissions                                  82,598        48,530        182,615        85,070
   Billing refunds                               3,824        13,719          7,352        17,341
   Contact lens purchases                        3,108         3,773          5,575         4,829
   Other                                          --            (112)          --
                                           -----------   -----------    -----------   -----------
                                               245,145       260,407        528,062       462,895
                                           -----------   -----------    -----------   -----------

Gross profit from operations                   424,791       229,685        864,884       493,616
                                           -----------   -----------    -----------   -----------

General and administrative expenses:
   Wages and related                           240,113       163,545        468,242       244,745
   Other operating                             144,904       123,117        301,942       219,953
   Depreciation                                 12,800         6,000         24,437         9,000
   Amortization                                  1,901           300          3,802           600
                                           -----------   -----------    -----------   -----------
                                               399,718       292,962        798,423       474,298
                                           -----------   -----------    -----------   -----------

Earnings before income taxes                    25,073       (63,277)        66,461        19,318

Income taxes(note 5)                            10,000
                                           -----------   -----------    -----------   -----------

Net earnings                               $    25,073   $   (63,277)   $    56,461   $    19,318

Retained earnings at beginning of period       119,656       167,496         88,268        84,901
                                           -----------   -----------    -----------   -----------
Retained earnings at end of period             144,729       104,219        144,729       104,219
                                           ===========   ===========    ===========   ===========

Earnings(loss) per share                   $      0.01   $     (0.03)   $      0.01   $      0.01
                                           ===========   ===========    ===========   ===========

Weighted average shares outstanding          5,473,302     2,200,000      5,473,302     2,200,000
                                           ===========   ===========    ===========   ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
                                       4
<PAGE>
                         CHANPION FINANCIAL CORPORATION
                     Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                     Six Months Ended September 30,
                                                                     ------------------------------
                                                                        1997                 1996
                                                                     ---------            ---------
<S>                                                                  <C>                  <C>      
Operating activities:                                                                   
   Net earnings                                                      $  56,461            $  19,318
   Adjustments to reconcile net income to net cash provided by                          
   operating activities:                                                                
   Depreciation                                                         24,437                9,000
   Amortization                                                          3,802                  600
   Changes in operating assets and liabilities:                                         
     Increase in trade accounts receivable                             (49,864)              (3,300)
     Increase in other current assets                                   (2,346)             (31,577)
     Increase(decrease) in accounts payable                           (101,577)               1,254
     Increase(decrease) in accrued expenses                            (23,022)              26,596
     Increase line of credit                                              --                 15,000
     Decrease in deferred revenue                                      (58,909)                --
                                                                     ---------            ---------
         Net cash provided by (used in) operating activities          (151,018)              36,891
                                                                     ---------            ---------
                                                                                        
Investing activities:                                                                   
   Purchases of equipment                                              (29,321)             (29,180)
   Preaquisition cost                                                  (18,516)                --
   Investment in healthcare technology company                        (309,626)                --
                                                                     ---------            ---------
        Net cash provided by (used in) investing activities           (357,463)             (29,180)
                                                                     ---------            ---------
                                                                                        
Financing activities:                                                                   
    Payoff on note payable                                             (24,340)                --
                                                                     ---------            ---------
         Net cash provided by (used in) financing activities           (24,340)                --
                                                                     ---------            ---------
                                                                                        
Net decrease in cash and cash equivalents                             (532,821)               7,711
                                                                                        
Cash and cash equivalents at beginning of year                       $ 896,096            $  34,577
                                                                     ---------            ---------
                                                                                        
Cash and cash equivalents at end of period                           $ 363,275            $  42,288
                                                                     =========            =========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
                                       5
<PAGE>
                 CHAMPION FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Unaudited Consolidated Financial Statements


(1)  Summary of Significant Accounting Policies

     Description of Business

     Champion  Financial   Corporation  is  a  health  care  management  company
     dedicated to controlling the costs, improving the quality and enhancing the
     delivery  of health  care  services.  The  Company  also  provides  related
     products and  services  designed to reduce  health care costs.  The Company
     markets  and  provides  programs  and  services  to  insurance   companies,
     self-insured  businesses  for their  medical  plans and third  parties that
     administer  employee medical plans.  These programs and services assist its
     clients  in  reducing  health  care  costs for group  health  plans and for
     workers' compensation coverage and automobile accident injury claims.

     Use of Estimates

     Management  of the Company has made a number of estimates  and  assumptions
     relating to the reporting of assets and  liabilities  and the disclosure of
     contingent assets and liabilities to prepare these financial  statements in
     conformity  with  generally  accepted  accounting  principles.  Results  of
     operations during interim periods are not necessarily indications of annual
     operating results.

     Principles of Consolidation

     The consolidated  financial  statements include the financial statements of
     the  Company  and  its  two  wholly  owned  subsidiaries.  All  significant
     intercompany   balances   and   transactions   have  been   eliminated   in
     consolidation.  The  excess of  purchase  price  over fair  value of assets
     required is amortized on a straight-line basis over a ten-year period.

     Cash Equivalents

     Cash  equivalents of $363,275 at September 30, 1997 consist of money market
     accounts  with the Company's  primary  financial  institution.  The Company
     considers all highly liquid  instruments with original  maturities of three
     months or less to be cash equivalents.

     Earnings (Loss) per Share

     Earnings  (loss) per share are based upon the  weighted  average  number of
     shares  of  common  stock.  There  are  no  significant   dilutive  factors
     outstanding.
                                       6
<PAGE>
                 CHAMPION FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Unaudited Consolidated Financial Statements


     Fair Value of Financial Instruments

     The  fair  value of a  financial  instrument  is the  amount  at which  the
     instrument  could be exchanged  in a current  transaction  between  willing
     parties.  Management  believes that the recorded  amounts of current assets
     and  current  liabilities  approximate  fair  value  because  of the  short
     maturity of these instruments.

     Business and Credit Concentration

     The Company operates in a very competitive market. Its success is dependent
     upon the  ability  of its  marketing  group to  continue  to  identify  and
     contract with insurance companies and self-funded companies.  The Company's
     customers  are  located  throughout  the  United  States.   Four  customers
     accounted for the majority of the company's revenues.

     Revenue Recognition

     Repricing  fees are derived  from a  negotiated  percentage  of the medical
     savings  generated from customer claims managed by the Company.  These fees
     are  recognized  as revenue  when the  Company  notifies  the  health  care
     provider of their required billing reduction.  PPO network fees are paid to
     regional  providers,  who are not contracted  directly with the company for
     access to their  networks.  Commissions  are paid to external  and internal
     brokers based upon a percentage of fees generated.

     Member fees are derived from companies that purchase annual  memberships in
     the FAVS program.  The membership fees are received at the inception of the
     annual  contract;  revenue is  deferred at that point and  recognized  on a
     straight-line basis over the 12-month period.

     Property and Equipment

     Property and equipment are stated at cost. Depreciation is calculated using
     the  straight-line  method over the  estimated  useful lives of the assets,
     which  approximates  three years for  equipment to five years for furniture
     and fixtures.
                                        7
<PAGE>
                 CHAMPION FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Unaudited Consolidated Financial Statements


     Impairment of Long-Lived Assets

     Management reviews the possible impairment of long-lived assets and certain
     identifiable  intangible assets whenever events or changes in circumstances
     indicate  that the  carrying  amount  of an asset  may not be  recoverable.
     Recoverability of assets to be held and used is measured by a comparison of
     the  carrying  amount of an asset to future net cash flows  expected  to be
     generated by the asset.  If such assets are considered to be impaired,  the
     impairment to be recognized is measured by the amount by which the carrying
     amount of the assets exceeds the fair value of the assets.

(2)  Property and Equipment

     A summary of property and  equipment by major  classification  at September
     30, 1997 follows:

     Furniture and fixtures                      $  90,721
     Equipment                                     137,868
                                                 ---------
                                                   228,589
     Accumulated depreciation                      (65,596)
                                                 ---------

                                                 $ 162,993
                                                 =========

(3)  Investment in Healthcare Technology Company

     In May 1997,  the company  paid  $309,626  to purchase a 12.4%  interest in
     Hayes, Inc. which is involved in the healthcare technology business.  Hayes
     is  involved  in  the  creation  of new  research  technology  methods  for
     hospitals and  physicians.  The  investment in the common stock of Hayes is
     accounted for by the cost method.
                                       8
<PAGE>
                 CHAMPION FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Unaudited Consolidated Financial Statements


(4)  Accrued Expenses

     A summary of accrued expenses at September 30, 1997 follows:


     Commission                                  $16,000
     Audit Fees                                   12,000
     Income taxes                                 25,000
     Paid time off                                10,000
     Other                                         3,950
                                                 -------
                                                 
                                                 $66,950
                                                 =======

(5)  Income Taxes

     At  September  30,  1997,  the Company has  available  net  operating  loss
     carryforwards of approximately  $500,000 and capital loss  carryforwards of
     approximately $1,000,000. There are certain limitations and restrictions on
     the use of these  losses;  however,  management  expects  to  fully  offset
     federal income taxes in the current fiscal year.  State and local taxes are
     recognized as incurred.
                                       9
<PAGE>
Item 2.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations


Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  should be read in  conjunction  with the  financial  statements  and
footnotes for the quarter ended  September 30, 1997 and the year ended March 31,
1997 contained in the Company's Form 10-K filed with the Securities and Exchange
Commission on June 27, 1997.

RESULTS OF OPERATIONS

The company's  consolidated  revenues for the quarter  ended  September 30, 1997
were $669,936  compared to $490,092 for the quarter ended September 30, 1996, an
increase of $179,844 or 37%. Net revenues for the six months ended September 30,
1997 increased  $436,435 or 46% to $1,392,946,  compared to $956,511 for the six
months ended September 30, 1996.

The company had net earnings of $25,073 in the quarter ended  September 30, 1997
compared to a net loss of $63,277 for the quarter  ended  September 30, 1996, an
increase of $88,350 or 352%. Net earnings for the six months ended September 30,
1997 increased $37,143 or 52% to $56,461, compared to $19,318 for the six months
ended September 30, 1996.

COSTS OF SERVICE

The company's costs of service consist primarily of access fees paid to regional
PPO networks for providers not contracted directly with the company, commissions
paid to outside brokers and in-house marketing  personnel and other services and
products  provided  by outside  vendors.  Costs of service  decreased  6% in the
quarter,  to $245,145  compared with $260,407 in the quarter ended September 30,
1996. Costs of service for the six months ended September 30, 1997 increased 14%
to $528,062  compared  with  $462,895 in the quarter  ended  September 30, 1996.
Costs of service as a percentage  of revenue for the six months ended  September
30,  1997,  decreased to 38% from 48% from the six months  ended  September  30,
1996. The improvement is the result of the company's  ongoing effort to contract
directly with the health care facilities and providers, thereby reducing network
provider access fees as a percentage of revenue.
                                       10
<PAGE>
GENERAL AND ADMINISTATIVE EXPENSES

For the quarter ended September 30, 1997,  general and  administrative  expenses
were  $399,718  compared to $292,962 for the quarter  ended  September 30, 1996.
General and administrative  expenses for the six months ended September 30, 1997
were  $798,423  compared  with  $474,298 for the six months ended  September 30,
1996. This increase was due primarily to expenses for additional  management and
administrative  personnel to  accommodate  the increase in business and expected
growth. The company expects general and  administrative  expenses to increase in
future periods.

LIQUIDITY & CAPITAL RESOURCES

The Company has an $80,000  secured line of credit with Norwest Bank of Arizona.
The line of  credit  bears  interest  at  prime  plus 2% and is  secured  by the
Company's accounts receivable and furniture and equipment.

The Company has historically funded its working capital requirements and capital
expenditures primarily from cash flow generated from operations  supplemented by
short-term borrowings under the Company's line of credit.

At  September  30,  1997  working   capital  was  $447,971  which  include  cash
equivalents of $363,275.  During this fiscal year, the company paid $309,626 for
a 12.4% investment in Hayes, Inc.

Although  there can be no  assurances,  management  of the  Company  anticipates
growth  and  expansion  to  accelerate  in  1998  through  the   acquisition  of
complementary   businesses   or  business   lines,   management   personnel  and
infrastructure  additions.  The Company believes additional sources of cash flow
will be  required,  in  addition  to  funds  from  the  operations,  in order to
accomplish its long-term strategies.  There can be no assurance that the Company
will be able to obtain such funds on terms acceptable to the Company.
                                       11
<PAGE>
                         CHAMPION FINANCIAL CORPORATION


Pursuant  to the  requirements  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.

                         Champion Financial Corporation

DATE:  OCTOBER 28, 1997 BY:    BY:/S/ STEPHEN J. CARDER

                               STEPHEN J. CARDER
                               EXECUTIVE VICE PRESIDENT

                               CHIEF FINANCIAL OFFICER
                               AND TREASURER
                                       12