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 ......June 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 August 11, 1997 ....
                                       -1-
<PAGE>
                         Champion Financial Corporation
                                      Index

Part I: Financial Information

        Item 1. Financial Statements

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

                Statements of Operations for the three months ended 
                June 30, 1997 and June 30, 1996  . . . . . . . . . . . . . . . 4

                Statements of Cash Flows for the three months ended 
                June 30, 1997 and June 30, 1996 . . . . . . . . . . . . . . . .5

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


        Item 2. Management's Discussion and Analysis of Financial Condition 
                and Results of Operations  . . . . . . . . . . . . . . . . . . 9

Part II: Other Information

                Exhibits - None

                Signatures   . . . . . . . . . . . . . . . . . . . . . . . . .11
                                      -2-
<PAGE>
<TABLE>
<CAPTION>
                         CHAMPION FINANCIAL CORPORATION
                                AND SUBSIDIARIES
                          Consolidated Balance Sheets
                                                                                    June 30,   
                                                                                     1997        March 31,
                                                                                  (UNAUDITED)      1997
                                                                                  -----------   ----------
<S>                                                                               <C>           <C>                           
                                    Assets
                                    ------

Current assets:
  Cash and cash equivalents                                                        $  406,550   $  896,096
  Trade accounts receivable, less allowance for doubtful accounts of $15,000          280,200      250,795
  Other current assets                                                                 20,113       14,415
                                                                                   ----------   ----------
        Total current assets                                                          706,863    1,161,306
                                                                                   ----------   ----------

Property and equipment, net (note 2)                                                  158,072      158,109
Investment in healthcare technology company                                           309,626         --
Other assets, at cost                                                                  95,605       89,795
                                                                                   ----------   ----------
                                                                                   $1,270,166   $1,409,210
                                                                                   ==========   ==========


                     Liabilities and shareholders' equity
Current liabilities:
  Accounts payable                                                                 $  187,203   $  267,351
  Accrued expenses                                                                     72,937       89,972
  Note payable                                                                           --         24,340
  Deferred revenue                                                                     10,000       58,909
                                                                                   ----------   ----------
       Total current liabilities                                                      270,140      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                                                                  119,656       88,268
                                                                                   ----------   ----------
       Total shareholders' equity                                                   1,000,026      968,638

                                                                                   ----------   ----------
       Total Liabilities and shareholders' equity                                  $1,270,166   $1,409,210
                                                                                   ==========   ==========
</TABLE>

See accompanying notes to unaudited consolidated financial statements.
                                      -3-
<PAGE>
<TABLE>
<CAPTION>
                         CHAMPION FINANCIAL CORPORATION
                                AND SUBSIDIARIES
            Consolidated Statements of Earnings and Retained Earnings
               For the Three Months Ended, June 30, 1997 and 1996
                                  (Unaudited)
                                                                     1997           1996
                                                                 -----------    -----------
<S>                                                              <C>            <C> 
Revenues:
   Repricing fees                                                $   578,442    $   390,491
   Member fees                                                       138,976         75,928
   Other fees                                                          5,590           --
                                                                 -----------    -----------
                                                                     723,008        466,419
                                                                 -----------    -----------

Cost of services:
   PPO network fees                                                  177,017        161,270
   Commissions                                                       100,017         36,540
   Billing refunds                                                     3,528          3,622
   Contact lens purchases                                              2,467          1,056
   Other                                                                (112)          --
                                                                 -----------    -----------
                                                                     282,917        202,488
                                                                 -----------    -----------

Gross profit from operations                                         440,091        263,931
                                                                 -----------    -----------

General and administrative expenses:
   Wages and related                                                 228,129         81,200
   Other operating                                                   157,036         96,836
   Depreciation                                                       11,637          3,000
   Amortization                                                        1,901            300
                                                                 -----------    -----------
                                                                     398,703        181,336
                                                                 -----------    -----------

Earnings before income taxes                                          41,388         82,595

Income tax                                                            10,000           --
                                                                 -----------    -----------

Net earnings                                                     $    31,388    $    82,595

Retained earnings(accumulated deficit) at beginning of quarter        88,268         84,901
                                                                 -----------    -----------
Retained earnings at end of quarter                                  119,656        167,496
                                                                 ===========    ===========

Earnings per share                                               $      0.01    $      0.04
                                                                 ===========    ===========

Weighted average shares outstanding                                5,473,302      2,200,000
                                                                 ===========    ===========
</TABLE>

See accompanying notes to unaudited consolidated financial statements.
                                      -4-
<PAGE>
<TABLE>
<CAPTION>
                         CHAMPION FINANCIAL CORPORATION
                            Statements of Cash Flows
               For the Three Months Endedl June 30, 1997 and 1996
                                  (Unaudited)
                                                                    1997         1996
                                                                 ---------    ---------
<S>                                                              <C>          <C> 
Operating activities:
   Net earnings                                                  $  31,388    $  82,595
   Adjustments to reconcile net income to net cash provided by
   operating activities:
   Depreciation                                                     11,637        3,000
   Amortization                                                      1,901          300
   Changes in operating assets and liabilities:
     Increase in trade accounts receivable                         (29,405)     (43,073)
     Increase in other current assets                               (5,698)     (28,792)
     Decrease in accounts payable                                  (80,148)     (52,740)
     Increase(decrease) in accrued expenses                        (17,035)       7,749
     Increase line of credit                                          --         15,000
     Decrease in deferred revenue                                  (48,909)        --
                                                                 ---------    ---------
         Net cash provided by (used in) operating activities      (136,269)     (15,961)
                                                                 ---------    ---------

Investing activities:
   Purchases of equipment                                          (11,600)     (16,686)
   Preaquisition cost                                               (7,711)        --
   Investment in healthcare technology company                    (309,626)
                                                                 ---------    ---------
        Net cash provided by (used in) investing activities       (328,937)     (16,686)
                                                                 ---------    ---------

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                         (489,546)     (32,647)

Cash and cash equivalents at beginning of quarter                $ 896,096    $  34,577
                                                                 ---------    ---------

Cash and cash equivalents at end of quarter                      $ 406,550    $   1,930
                                                                 =========    =========
</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

     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.

     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.

     Investments in Affiliated Companies

     In May 1997,  the company paid  $309,626 to purchase a 12.4%  investment in
     Hayes, Inc. Hayes is involved in the healthcare  technology  business.  The
     investment  in the  common  stock  of Hayes  is  accounted  for by the cost
     method.

     Cash Equivalents

     Cash  equivalents  of  $406,550 at June 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 per Share

     Earnings per share are based upon the weighted  average number of shares of
     common stock. There are no significant dilutive factors outstanding.

     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.
                                      -6-
<PAGE>
                 CHAMPION FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Unaudited Consolidated Financial Statements

     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.

     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.

     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.
                                       -7-
<PAGE>
                 CHAMPION FINANCIAL CORPORATION AND SUBSIDIARIES

              Notes to Unaudited Consolidated Financial Statements

(2)  Property and Equipment

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

     Furniture and fixtures                                 $ 66,710
     Equipment                                               144,158
                                                             -------
                                                             210,868
     Accumulated depreciation                                (52,796)
                                                             -------

                                                           $ 158,072
                                                           =========
 
(3)  Note Payable

     The   Company's   subsidiary,   National   Health   Benefits  and  Casualty
     Corporation,   maintains  an  $80,000  line  of  credit  with  a  financial
     institution.  Borrowings  pursuant to the line of credit  bear  interest at
     prime  plus 2%.  The line is  collateralized  by  accounts  receivable  and
     furniture and  equipment  and is guaranteed by the Company's  shareholders.
     There were no drawings against this line of credit at June 30, 1997.

(4)  Accrued Expenses

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


     Commission                                             $ 22,887
     Audit Fees                                                6,000
     Income taxes                                             25,000
     Paid time off                                            10,000
     Other                                                     9,050
                                                             -------
                
                                                            $ 72,937
                                                            ========
                                      -8-
<PAGE>
Item 2.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations.

This 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 three months ended June 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 June 30, 1997 were
$723,008  compared to $466,419 for the quarter  ended June 30, 1996, an increase
of $256,589 or 55%. The revenue increase is primarily attributable to the growth
in the  company's  managed  health care  programs.  The company  entered  into a
contract with Farmer's  Insurance Group of Companies to provide health care cost
containment  services throughout the United States. This contract is expected to
substantially contribute to the revenue growth in future periods.

The  company  had net  income of  $31,388 in the  quarter  ended  June 30,  1997
compared  to net income of  $82,595 in the  quarter  ended  June 30,  1996.  The
decrease  in net  income is  primarily  the result of the  company's  additional
staffing  and  facilities'  costs  required  to provide  the  infrastructure  to
accommodate the company's anticipated future revenue growth.

COST OF SERVICES

The  company's  cost of  services  consists  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.  Cost of services  increased
40% in the quarter, to $282,917 compared with $202,488 in the quarter ended June
30, 1996. The increase in the company's cost of services is the direct result of
the 55% increase in revenues  for the quarter.  Cost of services as a percentage
of revenue for the quarter, decreased to 39% from 43% from the quarter in fiscal
year 1997.  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.
                                      -9-
<PAGE>
GENERAL AND ADMINISTATIVE EXPENSES

For the quarter ended June 30, 1997,  general and  administrative  expenses were
$398,703 compared to $181,336 for the quarter ended June 30, 1996. This increase
was due  primarily  to expenses for  additional  management  and  administrative
personnel to accommodate the increase in business and future growth. The company
expects general and administrative expenses to increase in the future due to the
costs associated with a publicly traded entity.

LIQUIDITY & CAPITAL RESOURCES

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.

Working  capital was  $436,723  while cash  equivalents  comprised  of $406,550.
During the quarter, the company used $309,626 for a 12.4% investment in Hayes.

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.

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, if at all.
                                      -10-
<PAGE>
                         Champion Financial Corporation

                                    SIGNATURE

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:  AUGUST 11, 1997 BY:     BY:/S/ STEPHEN J. CARDER

                               STEPHEN J. CARDER
                               EXECUTIVE VICE PRESIDENT

                               CHIEF FINANCIAL OFFICER
                               AND TREASURER

                                      -11-