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

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

For the fiscal year ended: December 31, 2003

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

         For the transition period from ______________to ______________

                         Commission File Number 0-20837

                           ORION ACQUISITION CORP. II
                 (Name of Small Business Issuer in Its Charter)

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

        401 WILSHIRE BOULEVARD - STE. 1020                90401
                 SANTA MONICA, CA                       (zip code)
     (Address of principal executive offices)

                                 (310) 526-5000
                (Issuer's Telephone Number, Including Area Code)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
                                      None

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                     Common Stock, $.01 par value per share
                    Redeemable Class B Unit Purchase Warrants

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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. |____|

Issuer's revenues for the fiscal year ended December 31, 2003 were $-0-.

As of March 15, 2004, the aggregate market value of the common stock held by
non-affiliates of the Registrant was approximately $918,239.

As of March 15, 2004, there were 1,030,907 shares of Common Stock, $.01 par
value per share, outstanding.

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

Documents Incorporated by Reference: None.

<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

GENERAL

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

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

BUSINESS OBJECTIVE

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

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

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

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

(iii) the growth potential of the target business;

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

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

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

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

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

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

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

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

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

                                       1
<PAGE>

management, inspecting the facilities, and reviewing the financial, legal and
other information which will be made available to Orion.

The time and costs required to select and evaluate a target business (including
conducting a due diligence review) and to structure and consummate the business
combination (including negotiating relevant agreements and preparing requisite
documents for filing pursuant to applicable securities laws and state "blue sky"
and corporation laws) will not be ascertainable with any degree of certainty
until consummation of the business combination. Any costs incurred in connection
with the identification and evaluation of a prospective target business with
which a business combination is not ultimately consummated will result in an
expense to Orion.

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

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

CITADEL MEDIA, INC.

Orion is evaluating the acquisition of a private company, Citadel Media, Inc.,
engaged in the business of operating a sports-oriented website and print media
publishing network. The evaluation is dependant upon completion of due
diligence, preparation of the target's financial statements to account for a
number of recent acquisitions and conclusion of a satisfactory merger agreement.
The acquisition will be on the basis of a common stock-for-equity security
exchange, with Orion as the surviving corporation.

In connection with the evaluation of Citadel and in anticipation of entering
into negotiations for the merger of Citadel with Orion, on December 9, 2003 and
on March 9, 2004, Orion entered into Promissory Notes and a Security Agreement
with Citadel for loans to Citadel of $500,000 and $250,000, respectively, for an
aggregate of $750,000, all due June 30, 2004. The loans are secured by
substantially all the assets of Citadel and its subsidiaries, bear interest at
10% and are convertible in certain circumstances into preferred stock and
warrants of Citadel.

There is no assurance that Orion will be able to conclude a merger agreement
with Citadel, and any merger will be subject to numerous conditions and other
requirements, including approval by the Citadel stockholders of all classes and
regulatory filings with the Securities and Exchange Commission.

EMPLOYEES

Orion does not have any employees other than its officers and directors.

                                       2
<PAGE>

ITEM 2. DESCRIPTION OF PROPERTY

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

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

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

ITEM 3. LEGAL PROCEEDINGS

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

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

None.

                                       3
<PAGE>

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

The common stock, and Class B Warrants are traded in the over-the- counter
market and quoted on the OTC Bulletin Board under the symbols MTMR and MTMRZ.
The Class B Warrants, by their terms, are exercisable for one year after
consummation of a merger or acquisition with a target company, for one share of
common stock upon payment of $0.12 per share.

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

                                                                   Class B
                                       Common Stock               Warrants
                                       ------------               --------
                                     High         Low         High         Low
                                     ----         ---         ----         ---
     Year Ended
     December 31, 2003:
          First Quarter..........    $.75        $.45         $.51         $ -0-
          Second Quarter.........     .85         .51          .66           .03
          Third Quarter..........     .85         .81          .06           .06
          Fourth Quarter.........    1.01         .81         1.02           .51

     Year Ended
     December 31, 2002:
          First Quarter..........    1.11         .55          .75           .35
          Second Quarter.........    1.01         .68          .75           .30
          Third Quarter..........     .70         .52          .55           .30
          Fourth Quarter.........     .75         .55          .75           .20

HOLDERS

As of March 15, 2004, there were 30 holders of record of the common stock and
one holder of record of the Class B Warrants. Since many of the securities are
held in street name, Orion believes that there is a substantial number of
beneficial holders of the securities.

DIVIDENDS

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

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

FORWARD LOOKING STATEMENTS

When used in this Form 10-KSB and in future filings by Orion with the Securities
and Exchange Commission, the words or phrases "will likely result, "management
expects," or "the company expects," "will continue," "is anticipated,"
"estimated" or similar expressions are intended to identify "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Readers are cautioned not to place undue reliance on any such
forward-looking statements, each of which speak

                                       4
<PAGE>

only as of the date made. Such statements are subject to certain risks and
uncertainties, some of which are described below, that could cause actual
results to differ materially from historical earnings and those presently
anticipated or projected. Orion has no obligation to publicly release the result
of any revisions which may be made to any forward-looking statements to reflect
anticipated events or circumstances occurring after the date of such statements.

The selected financial information for the years ended December 31, 2002 and
2003, is derived from the financial statements of Orion which have been audited
by Singer Lewak Greenbaum & Goldstein LLP, Orion's independent auditors. This
information should be read in conjunction with the financial statements and
related notes and other financial information included herein.

<TABLE>
<CAPTION>
                                                               2003             2002
                                                               ----             ----
     STATEMENT OF OPERATIONS DATA:
<S>                                                        <C>              <C>
          General and administrative expenses .........    $    (48,100)    $   (135,877)
          Interest income .............................          17,593           23,828
          Provision for (benefit from) taxes ..........         (30,897)              --
          Net Income (loss) ...........................             300         (112,049)
          Weighted average common shares outstanding ..       1,030,907        1,044,004

     BALANCE SHEET DATA:

          Total Assets ................................       2,024,839        2,032,931
          Total liabilities ...........................          22,652           31,134
          (Deficit) earnings accumulated during
             development stage ........................        (211,879)        (212,209)
          Stockholders' equity ........................       2,024,839        2,001,797
</TABLE>

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

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

At December 31, 2003, Orion had $1,492,921 in cash. Orion will invest its assets
in U.S. Treasury bills and/or cash until such time as assets are needed for a
business combination or acquisition.

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

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

Orion will use its current working capital and capital resources to consummate a
business combination. In addition, because the resources of Orion are not
sufficient to fund a business combination, it will have to raise additional
capital. The capital may be in the form of equity or debt, and will likely be
based solely on the business operations and financial condition of the target
business. Therefore, it is not possible at this time to determine the amount of
capital that will be needed or available for a business combination.

                                       5
<PAGE>

There currently are no limitations on Orion's ability to privately obtain funds
for a business combination. Because of certain SEC interpretations and related
rules, Orion does not believe it can publicly raise funds prior to a business
combination with an operating company unless it has in excess of $5,000,000 in
assets.

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

                                       6
<PAGE>

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

================================================================================

                                                                      Page

INDEPENDENT AUDITOR'S REPORT                                           F-2

FINANCIAL STATEMENTS

      Balance Sheet                                                    F-3

      Statements of Operations                                         F-4

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

      Statements of Cash Flows                                      F-7 - F-8

      Notes to Financial Statements                                 F-9 - F-18

                                      F-1
<PAGE>

                          INDEPENDENT AUDITOR'S REPORT

                       BOARD OF DIRECTORS AND SHAREHOLDERS
                           ORION ACQUISITION CORP. II

We have audited the accompanying balance sheet of Orion Acquisition Corp. II (a
development stage company) as of December 31, 2003, and the related statements
of operations, shareholders' equity, and cash flows for each of the two years in
the period ended December 31, 2003. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit. We have not audited
the balance sheets and the statements of operations, shareholders' equity, and
cash flows for the periods from October 19, 1995 (inception) to December 31,
1999, which constituted retained earnings aggregating to $7,553. These periods
have been audited by other auditors.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Orion Acquisition Corp. II as
of December 31, 2003, and the results of its operations and its cash flows for
each of the two years in the period ended December 31, 2003 in conformity with
accounting principles generally accepted in the United States of America.

SINGER LEWAK GREENBAUM & GOLDSTEIN LLP

Los Angeles, California
February 20, 2004, except for Note 9,
as to which the date is March 9, 2004

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

                                      F-2
<PAGE>

                                                      ORION ACQUISITION CORP. II
                                                   (A DEVELOPMENT STAGE COMPANY)
                                                                   BALANCE SHEET
                                                               DECEMBER 31, 2003

================================================================================

                                     ASSETS

ASSETS
      Cash                                                         $  1,492,921
      Convertible note receivable                                       500,000
      Other receivable                                                   31,697
      Deferred tax assets                                                   221
                                                                   ------------

                     TOTAL ASSETS                                  $  2,024,839
                                                                   ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
      Accounts payable and accrued expenses                        $     22,652
                                                                   ------------

           Total current liabilities                                     22,652
                                                                   ------------

CONTINGENCIES

SHAREHOLDERS' EQUITY
      Preferred stock, $0.01 par value
           1,000,000 shares authorized
           110 shares issued and outstanding                                  1
      Common stock, $0.01 par value
           10,000,000 shares authorized
           1,030,907 shares issued and outstanding                       10,309
      Additional paid-in capital                                      2,203,756
      Deficit accumulated during the development stage                 (211,879)
                                                                   ------------

                Total shareholders' equity                            2,002,187
                                                                   ------------

                     TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY    $  2,024,839
                                                                   ============

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

                                      F-3
<PAGE>

                                                      ORION ACQUISITION CORP. II
                                                   (A DEVELOPMENT STAGE COMPANY)
                                                        STATEMENTS OF OPERATIONS
                              FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002 AND
           FOR THE PERIOD FROM OCTOBER 19, 1995 (INCEPTION) TO DECEMBER 31, 2003

================================================================================

<TABLE>
<CAPTION>

                                                                                 For the
                                                                               Period from
                                                                               October 19,
                                                  For the Year Ended               1995
                                                      December 31,            (Inception) to
                                             -----------------------------     December 31,
                                                 2003             2002             2003
                                             ------------     ------------     ------------
OPERATING EXPENSES
<S>                                          <C>              <C>              <C>
   General and administrative expenses       $     48,100          135,877     $  1,145,455
   Stock-based compensation expense                    --               --          100,000
                                             ------------     ------------     ------------

      Total operating expenses                     48,100          135,877        1,245,455
                                             ------------     ------------     ------------

LOSS FROM OPERATIONS                              (48,100)        (135,877)      (1,245,455)
                                             ------------     ------------     ------------

OTHER INCOME (EXPENSE)
   Other income                                        --               --            2,183
   Interest income                                 17,593           23,828        1,602,298
   Interest expense                                    --               --          (57,694)
                                             ------------     ------------     ------------

      Total other income (expense)                 17,593           23,828        1,546,787
                                             ------------     ------------     ------------

INCOME (LOSS) BEFORE PROVISION FOR
   (BENEFIT FROM) INCOME TAXES                    (30,507)        (112,049)         301,332

PROVISION FOR (BENEFIT FROM) INCOME TAXES         (30,897)              --          237,570
                                             ------------     ------------     ------------

NET INCOME (LOSS)                            $        390     $   (112,049)    $     63,762
                                             ============     ============     ============

BASIC AND DILUTED
   EARNINGS (LOSS) PER SHARE                 $       0.00     $      (0.11)
                                             ============     ============

   WEIGHTED-AVERAGE COMMON SHARES
      OUTSTANDING                               1,030,907        1,044,004
                                             ============     ============
</TABLE>

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

                                       F-4
<PAGE>

                                                      ORION ACQUISITION CORP. II
                                                   (A DEVELOPMENT STAGE COMPANY)
                                              STATEMENTS OF SHAREHOLDERS' EQUITY
           FOR THE PERIOD FROM OCTOBER 19, 1995 (INCEPTION) TO DECEMBER 31, 2003

================================================================================

<TABLE>
<CAPTION>
                                                                                              Deficit
                                                          Common Stock Subject              Accumulated
                         Preferred Stock  Common Stock  to Possible Redemption  Additional  during the    Treasury Stock
                         --------------- -------------- ----------------------   Paid-in    Development ------------------
                         Shares  Amount  Shares  Amount     Shares    Amount      Capital      Stage     Shares    Amount
                         ------  ------  ------  ------   --------  --------    --------     --------   --------  --------
Total
-----
<S>                      <C>     <C>     <C>     <C>      <C>       <C>         <C>          <C>        <C>       <C>       <C>
BALANCE, OCTOBER 19,
   1995 (INCEPTION)          --  $   --      --  $   --         --  $     --    $     --     $     --         --  $     --  $     --
ISSUANCE OF FOUNDERS'
   SHARES                                16,500     165                            1,485                                       1,650
                         ------  ------  ------  ------   --------  --------    --------     --------   --------  --------  --------
BALANCE, DECEMBER 31,
   1995                      --      --  16,500     165         --        --       1,485           --         --        --     1,650
ISSUANCE OF FOUNDERS'
   SHARES                                58,500     585                            5,265                                       5,850
SALE OF PRIVATE PLACEMENT
   SHARES                                15,000     150                            7,350                                       7,500
SALE OF CONVERTIBLE
   PREFERRED STOCK          110       1                                           10,999                                      11,000
SALE OF 800,000 SHARES,
   NET OF UNDERWRITING
   DISCOUNTS AND
   OFFERING COSTS                       640,000   8,000    160,000 1,600,000   7,107,405                                   8,715,405
ACCRETION TO REDEMPTION
   VALUE OF STOCK                                               --    42,118                  (42,118)                  -
NET INCOME                                                                                     42,651                         42,651
                         ------  ------  ------  ------   --------  --------    --------     --------   --------  --------  --------
BALANCE, DECEMBER 31,
   1996                     110       1 730,000   8,900    160,000 1,642,118   7,132,504          533         --        -- 8,784,056
ISSUANCE OF OPTIONS                                                              100,000                                     100,000
ACCRETION TO REDEMPTION
   VALUE OF COMMON
   STOCK                                                        --    90,122                  (90,122)                            --
NET INCOME                                                                                      4,266                          4,266
                         ------  ------  ------  ------   --------  --------    --------     --------   --------  --------  --------
BALANCE, DECEMBER 31,
   1997                     110       1 730,000   8,900    160,000 1,732,240   7,232,504      (85,323)        --        -- 8,888,322
ACCRETION TO REDEMPTION
   VALUE OF COMMON
   STOCK                                                              85,484                  (85,484)                            --
NET INCOME                                                                                    140,517                        140,517
                         ------  ------  ------  ------   --------  --------    --------     --------   --------  --------  --------
</TABLE>

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

                                      F-5
<PAGE>

                                                      ORION ACQUISITION CORP. II
                                                   (A DEVELOPMENT STAGE COMPANY)
                                              STATEMENTS OF SHAREHOLDERS' EQUITY
           FOR THE PERIOD FROM OCTOBER 19, 1995 (INCEPTION) TO DECEMBER 31, 2003

================================================================================

<TABLE>
<CAPTION>
                                                                                            Deficit
                                                          Common Stock Subject             Accumulated
                         Preferred Stock  Common Stock  to Possible Redemption Additional  during the   Treasury Stock
                         --------------- -------------- ----------------------  Paid-in    Development ----------------
                         Shares Amount  Shares  Amount    Shares    Amount      Capital      Stage     Shares   Amount
                         ------ ------  ------  ------   --------  --------    --------     --------   -------  -------
Total
-----
<S>                      <C>    <C>    <C>      <C>      <C>      <C>         <C>           <C>        <C>      <C>      <C>
BALANCE, DECEMBER 31,
   1998                     110 $   1  730,000  $ 8,900   160,000  $1,817,724 $7,232,504    $(30,290)  $    --  $   --   $9,028,839
ELIMINATION OF REDEMPTIVE
   COMMON STOCK
   PROVISION                           160,000       --  (160,000) (1,600,000) 1,600,000                                         --
REVERSAL OF ACCRETION
   TO REDEMPTIVE VALUE
   OF COMMON STOCK                                             --    (217,724)               217,724                             --
DIVIDEND                                                                                    (275,641)                      (275,641)
LIQUIDATING DIVIDEND                                                          (6,924,359)                                (6,924,359)
NET INCOME                                                                                    95,760                         95,760
                         ------ ------  ------  -------  --------  --------    --------     --------   -------  -------  ----------

BALANCE, DECEMBER 31,
   1999                     110     1  890,000    8,900        --        --    1,908,145       7,553        --       --   1,924,599
SALE OF PRIVATE PLACEMENT
   SHARES                              212,157    2,122                          294,898                                    297,020
NET LOSS                                                                                     (27,703)                       (27,703)
                         ------ ------  ------  -------  --------  --------    --------     --------   -------  -------  ----------
BALANCE, DECEMBER 31,
   2000                     110     1 1,102,157  11,022        --        --    2,203,043     (20,150)       --       --   2,193,916
NET LOSS                                                                                     (80,070)                       (80,070)
                         ------ ------  ------  -------  --------  --------    --------     --------   -------  -------  ----------
BALANCE, DECEMBER 31,
   2001                     110     1 1,102,157  11,022        --        --    2,203,043    (100,220)       --       --   2,113,846
ACQUISITION OF TREASURY
   STOCK IN CONJUNCTION
   WITH SETTLEMENT
   AGREEMENT                                                                         713               (71,250)    (713)         --
NET LOSS                                                                                    (112,049)                      (112,049)
                         ------ ------  ------  -------  --------  --------    --------     --------   -------  -------  ----------
BALANCE, DECEMBER 31,
   2002                     110     1 1,102,157  11,022        --        --    2,203,756    (212,269)  (71,250)    (713)  2,001,797
CANCELLATION OF TREASURY
   STOCK                                (71,250)   (713)                                                71,250      713          --
NET INCOME                                                                                       390                            390

BALANCE, DECEMBER 31,
   2003                     110 $   1 1,030,907 $10,309        --  $     --   $2,203,756   $(211,879)  $    --  $    --  $2,002,187
                         ------ ------  ------  -------  --------  --------    --------     --------   -------  -------  ----------
</TABLE>

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

                                      F-6
<PAGE>

                                                      ORION ACQUISITION CORP. II
                                                   (A DEVELOPMENT STAGE COMPANY)
                                                        STATEMENTS OF CASH FLOWS
                              FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002 AND
           FOR THE PERIOD FROM OCTOBER 19, 1995 (INCEPTION) TO DECEMBER 31, 2003

================================================================================

<TABLE>
<CAPTION>
                                                                                              For the
                                                                                            Period from
                                                                                            October 19,
                                                              For the Year Ended               1995
                                                                  December 31,            (Inception) to
                                                         -----------------------------      December 31,
                                                             2003             2002             2003
                                                         ------------     ------------     ------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                      <C>              <C>              <C>
   Net income (loss)                                     $        390     $   (112,049)    $     63,372
   Adjustments to reconcile net income (loss) to net
      cash provided by (used in) operating activities
        Note discount amortization                                 --               --           37,500
        Stock-based compensation expense                           --               --          100,000
        (Increase) decrease in
           Income taxes receivable                            (31,697)          24,842          (33,549)
           Deferred tax assets                                     --               --             (221)
           Prepaid assets                                          --           12,568           (3,212)
           Other assets                                            --            5,064            5,064
        Increase (decrease) in
           Accounts payable and accrued expenses               (8,482)          (9,762)          22,652
                                                         ------------     ------------     ------------

Net cash provided by (used in) operating activities           (39,789)         (79,337)         191,996
                                                         ------------     ------------     ------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of United States Treasury bills                        --               --       (1,506,615)
   Funds issued for note receivable                          (500,000)              --         (500,000)
   Sales or maturities of investments                              --               --        1,506,615
                                                         ------------     ------------     ------------

Net cash provided by investing activities                    (500,000)              --         (500,000)
                                                         ------------     ------------     ------------

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

New cash provided by financing activities                          --               --        1,800,925
                                                         ------------     ------------     ------------
</TABLE>

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

                                      F-7
<PAGE>

                                                      ORION ACQUISITION CORP. II
                                                   (A DEVELOPMENT STAGE COMPANY)
                                                        STATEMENTS OF CASH FLOWS
                              FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002 AND
           FOR THE PERIOD FROM OCTOBER 19, 1995 (INCEPTION) TO DECEMBER 31, 2003

================================================================================

<TABLE>
<CAPTION>
                                                                              For the
                                                                            Period from
                                                                            October 19,
                                               For the Year Ended              1995
                                                  December 31,            (Inception) to
                                         -----------------------------      December 31,
                                             2003             2002             2003
                                         ------------     ------------     ------------
<S>                                      <C>              <C>              <C>
Net increase (decrease) in cash          $   (539,789)    $    (79,337)    $  1,492,921

CASH, BEGINNING OF PERIOD                   2,032,710        2,112,047               --
                                         ------------     ------------     ------------

CASH, END OF PERIOD                      $  1,492,921     $  2,032,710     $  1,492,921
                                         ============     ============     ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION

   INCOME TAXES PAID                     $        800     $         --     $     61,800
                                         ============     ============     ============
</TABLE>

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

                                      F-8
<PAGE>

NOTE 1 - ORGANIZATION AND LINE OF BUSINESS

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

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

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Development Stage Enterprise
      ----------------------------

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

      Fair Value of Financial Instruments
      -----------------------------------

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

      Accounting for Stock-Based Compensation
      ---------------------------------------

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

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

                                   F-9
<PAGE>

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      Income Taxes
      ------------

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

      Loss per Share
      --------------

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

      The following potential common shares have been excluded from the
      computation of diluted net loss per share for the years ended December 31,
      2003 and 2002 because they are not exercisable until after a Business
      Combination:

                                                       2003         2002
                                                     --------     --------
             Class B Warrants                         358,000      358,000
             Series A convertible preferred stock     110,000      110,000
             Stock option                              10,000       10,000

      Estimates
      ---------

      The preparation of financial statements requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the
      date of the financial statements and the reported amounts of revenue and
      expenses during the reporting period. Actual results could differ from
      those estimates.

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

                                      F-10
<PAGE>

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      Recently Issued Accounting Pronouncements
      -----------------------------------------

      In April 2003, the Financial Accounting Standards Board ("FASB") issued
      SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and
      Hedging Activities." SFAS No. 149 amends and clarifies accounting and
      reporting for derivative instruments and hedging activities under SFAS No.
      133, "Accounting for Derivative Instruments and Hedging Activities." SFAS
      No. 149 is effective for derivative instruments and hedging activities
      entered into or modified after September 30, 2003, except for certain
      forward purchase and sale securities. For these forward purchase and sale
      securities, SFAS No. 149 is effective for both new and existing securities
      after September 30, 2003. This statement is not applicable to the Company.

      In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
      Financial Instruments with Characteristics of both Liabilities and
      Equity." SFAS No. 150 establishes standards for how an issuer classifies
      and measures in its statement of financial position certain financial
      instruments with characteristics of both liabilities and equity. In
      accordance with the standard, financial instruments that embody
      obligations for the issuer are required to be classified as liabilities.
      SFAS No. 150 will be effective for financial instruments entered into or
      modified after May 31, 2003 and otherwise will be effective at the
      beginning of the first interim period beginning after June 15, 2003. This
      statement is not applicable to the Company.

NOTE 3 - CASH

      The Company maintains cash deposits at one financial institution. Deposits
      at the financial institution are insured by the Federal Deposit Insurance
      Corporation up to $100,000. As of December 31, 2003, the uninsured
      portions amounted to $103,313. The Company has not experienced any losses
      in such accounts and believes it is not exposed to any significant credit
      risk on cash.

      The Company also maintains cash deposits at one investment brokerage.
      Deposits at the investment brokerage are insured by the Securities
      Investment Protection Corporation ("SIPC") up to $500,000 with an
      additional non-SIPC insurance coverage up to $900,000. As of December 31,
      2003, the uninsured portions amounted to $684,668. The Company has not
      experienced any losses in such accounts and believes it is not exposed to
      any significant credit risk on cash.

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

                                      F-11
<PAGE>

NOTE 4 - CONVERTIBLE NOTE RECEIVABLE

      On December 9, 2003, in conjunction with a non-binding letter of intent
      for a merger, the Company entered into a convertible promissory note for
      gross proceeds of $500,000. If the merger does not close, the note is
      convertible at the Company's option into 500,000 shares of the merger
      company's Series D preferred stock and a warrant. The note earns interest
      at 10% per annum, and the principal and any unpaid interest are due on
      June 30, 2004. The note is secured by substantially all the assets of the
      merger company.

      The warrant entitles the Company to purchase 500,000 shares of the merger
      company's common stock at an exercise price of $0.10 per share. The
      warrant expires in December 2006.

NOTE 5 - CONTINGENCIES

      Litigation
      ----------

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

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

      The former directors of the Company who were named as defendants in the
      suit made demand upon the Company for reimbursement of attorneys' fees
      incurred in defense of the suit prior to its voluntary dismissal. The
      former directors contended that they were entitled to reimbursement of
      attorneys' fees under a provision of Delaware corporate law. The Company
      considered the reimbursement request. An accrual was not made for any
      potential reimbursement in the accompanying financial statements.

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

                                      F-12
<PAGE>

NOTE 5 - CONTINGENCIES (CONTINUED)

      Litigation (Continued)
      ----------

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

      In the complaint, the Company alleged a series of causes of action,
      including a claim against the Company's former directors for breach of
      fiduciary duty in connection with the diversion of a corporate
      opportunity, and against other defendants for aiding and abetting the
      claimed breach of fiduciary duty and duty of loyalty. On May 15, 2002, a
      settlement agreement was signed between the Company and the Mentmore
      defendants, which was subject to execution and court approval. The
      settlement called for certain of the defendants to surrender 71,250 shares
      of the Company's common stock that were owned by those defendants, which
      the Company received and has canceled. In addition, certain of the
      defendants surrendered a warrant to purchase 100,000 shares of the
      Company's common stock, which the Company has canceled, and the former
      directors withdrew their claims for reimbursement by the Company of their
      defense costs.

NOTE 6 - SHAREHOLDERS' EQUITY

      Private Placements
      ------------------

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

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

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

                                      F-13
<PAGE>

NOTE 6 - SHAREHOLDERS' EQUITY (CONTINUED)

      Public Offering
      ---------------

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

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

      The Class A Warrants and Class B Warrants are redeemable, each as a class,
      in whole and not in part, at a price of $0.05 per warrant upon 30 days'
      notice at any time, provided that the Company has consummated a Business
      Combination and that the last sale price of the common stock on all 10
      trading days ending on the day immediately prior to the day on which the
      Company gives notice of redemption has been $11 or higher. The Class A
      Warrants expired on July 1, 2001.

      Convertible Preferred Stock
      ---------------------------

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

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

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

                                      F-14
<PAGE>

NOTE 6 - SHAREHOLDERS' EQUITY (CONTINUED)

      Options
      -------

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

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

      Warrants
      --------

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

      Dividend
      --------

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

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

                                      F-15
<PAGE>

NOTE 6 - SHAREHOLDERS' EQUITY (CONTINUED)

      Elimination of Redemptive Common Stock Provision
      ------------------------------------------------

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

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

NOTE 7 - INCOME TAXES

      The tax effects of temporary differences which give rise to the deferred
      tax provision at December 31, 2003 consisted of the following:

            Deferred tax assets
                 Net operating loss carryforward          $   48,462
            Less valuation allowance                          48,241
                                                          ----------

                      NET DEFERRED TAX ASSETS             $      221
                                                          ==========

      The following table presents the current and deferred income tax provision
      for (benefit from) federal and state income taxes for the years ended
      December 31, 2003 and 2002:

                                             2003            2002
                                          ----------      ----------
            Current
                 Federal                  $  (31,697)     $       --
                 State                           800              --
                                          ----------      ----------

                                             (30,897)             --
                                          ----------      ----------

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

                      TOTAL               $  (30,897)     $       --
                                          ==========      ==========

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

                                      F-16
<PAGE>

NOTE 7 - INCOME TAXES (CONTINUED)

      The provision for income taxes differs from the amount that would result
      from applying the federal statutory rate for the years ended December 31,
      2003 and 2002 as follows:

                                                              2003       2002
                                                            --------   --------
            Statutory regular federal income benefit rate    (34.0)%    (34.0)%
            State taxes                                       (4.1)      (4.3)
            Prior year adjustments                              --      (25.2)
            Change in valuation allowance                     38.1       59.3
            Other                                               --        4.2
                                                            --------   --------
                 TOTAL                                          --%        --%
                                                            ========   ========

      The valuation allowance decreased by $31,982 and increased by $54,223
      during the years ended December 31, 2003 and 2002, respectively. The
      deferred income tax benefit of the loss carryforward is the only
      significant deferred income tax asset or liability of the Company and has
      been offset by a valuation allowance since management does not believe the
      recoverability of this deferred tax asset during the next fiscal year is
      more likely than not. Accordingly, a deferred income tax benefit for the
      year ended December 31, 2003 has not been recognized in these financial
      statements.

      As of December 31, 2003, the Company had net operating loss carryforwards
      for federal and state income tax purposes of approximately $114,000 and
      $265,000, respectively. The net operating loss carryforwards begin
      expiring in 2021 and 2011, respectively.

NOTE 8 - RELATED PARTY TRANSACTIONS

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

NOTE 9 - SUBSEQUENT EVENT

      On March 9, 2004, in conjunction with a non-binding letter of intent for a
      merger, the Company entered into a second convertible promissory note for
      gross proceeds of $250,000. If the merger does not close, the note is
      convertible at the Company's option into 250,000 shares of the merger
      Company's Series E preferred stock and a warrant. The note earns interest
      at 10% per annum, and the principal and any unpaid interest are due on
      June 30, 2004. The note is secured by substantially all the assets of the
      merger company.

      The warrant entitles the Company to purchase 250,000 shares of the merger
      company's common stock at an exercise price of $0.10 per share. The
      warrant expires in December 2006.

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

                                      F-17
<PAGE>
                                    PART III

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

The current directors and officers of Orion are as follows:

<TABLE>
<CAPTION>
                                   Director
Name                       Age      Since                         Position
----                       ---      -----                         --------
<S>                         <C>      <C>       <C>
Christopher A. Marlett      39       1999      Chairman of the Board, Chief Executive
                                                  Officer, President and Director
Anthony DiGiandomenico      37       1999      Chief Financial Officer and Director
Dyana Williams Marlett      37       1999      Chief Operating Officer, Secretary,
                                                  Treasurer and Director
</TABLE>

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

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

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

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

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

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

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<PAGE>

believes that, during the fiscal year ended December 31, 2003, all filing
requirements applicable to its executive officers, directors and ten percent
stockholders were fulfilled.

AUDIT COMMITTEE ISSUES

Orion does not have a separate, standing audit committee. The board of directors
handles these functions. Orion's directors are each involved actively in the
financial services industry and are familiar with evaluating financial reports
and the financial condition of public and private companies. Because of
experience, education and current employment, Messrs. Marlett and DiGiandomenico
and Ms. Marlett would be considered financial experts under Regulation S-B.
Because of this expertise, the board determined it was not necessary to have an
audit committee in connection with its operations at this time. None of the
directors would be deemed "independent" under either SEC guidelines or the
various exchange guidelines.

CODE OF ETHICS

The Company has not adopted a formal code of ethics statement. The board of
directors evaluated the business of the company and the number of employees and
determined that since the business is largely limited to maintaining its cash
investments while its searches for a target company and consummates an
acquisition and the only persons acting for Orion are the three directors who
are also the officers, general rules of fiduciary duty and federal and state
securities laws are adequate ethical guidelines. Moreover, each of the directors
is a registered person with the NASD and subject to regulation and scrutiny of
that entity.

SHAREHOLDER-DIRECTOR COMMUNICATION

Orion neither has a nominating committee for persons to be proposed as directors
for election to the board of directors nor a formal method of communicating
nominees from shareholders. Orion does not have any restrictions on shareholder
nominations under its certificate of incorporation or by-laws. The only
restrictions are those applicable generally under Delaware Corporate Law and the
federal proxy rules. Currently the entire board of directors decides on
nominees, on the recommendation of one or more members of the board. None of the
members of the board of directors are "independent." The board of directors will
consider suggestions from individual shareholders, subject to evaluation of the
person's merits. Stockholders may communicate nominee suggestions directly to
any of the board members, accompanied by biographical details and a statement of
support for the nominees. The suggested nominee must also provide a statement of
consent to being considered for nomination. Although there are no formal
criteria for nominees, the board of directors believes that persons should be
actively engaged in business endeavors, have a financial background, and be
familiar with acquisition strategies and money management.

Because the management and directors of Orion are the same persons, the board of
directors has determined not to adopt a formal methodology for communications
from shareholders on the belief that any communication would be brought to the
boards' attention by virtue of the co-extensive employment.

The board of directors does not have a formal policy of attendance of directors
at the annual meeting. It does encourage such attendance. Orion did not have an
annual meeting in 2003.

ITEM 10. EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

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

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<PAGE>

COMPENSATION OF DIRECTORS

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

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as of March 15, 2004 based on
information obtained from the persons named below. It states the beneficial
ownership of shares of the common stock by (i) each person known to be the owner
of more than 5% of the outstanding shares of common stock, (ii) each director
and (iii) all executive officers and directors as a group.

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

Christopher A. Marlett(1)                         256,000              23.8%
Anthony DiGiandomenico(1)                          81,025(3)            7.6%
Dyana Williams Marlett(1)                          38,000(4)            3.7%
Topix, Inc.(6)                                     70,000               6.8%
All directors and executive officers as a
  group (five persons)                            375,025(5)           36.4%

_____________________

(1)   Each person's address is care of the Company at 401 Wilshire Boulevard,
      Santa Monica, California 90401.

(2)   Percentage includes all outstanding shares of Common Stock plus any shares
      of common stock that the person has the right to acquire within 60 days
      pursuant to options, warrants, conversion privileges or other rights.

(3)   Includes 3,000 shares held in an individual retirement account.

(4)   Includes 3,000 shares held in custodian accounts.

(5)   See Notes 3 and 4 above.

(6)   The address of Topix, Inc. is 401 Wilshire Boulevard, Santa Monica,
      California 90401. Excludes 57,500 shares of common stock that may be
      acquired by Topix under 57,000 Class B Warrants which are not currently
      exercisable.

Orion does not have any equity compensation plans that have or required
shareholder approval. Orion will consider adopting an equity compensation plan
and other equity based compensation for executives on an individual basis in the
future in connection with an acquisition. At such time, Orion will obtain the
required approvals.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

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<PAGE>

DiGiandomenico and Dyana Williams Marlett are officers and/or directors of the
Company and principals MDB Capital Group LLC.

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

      (a)   Exhibits

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

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

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

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

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

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

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

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

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

10.3  Secured Promissory Note of Citadel Inc.(4)

10.4  Security Agreement between Registrant and Citadel Media Inc.(4)

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

31.1  Form of Certification Pursuant to Rule 13a-14 and 15d-14 under the
      Securities and Exchange Act of 1934, as Amended. (Filed herewith)

32.1  Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to
      Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith)

________________________

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

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

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

(4)   Incorporated by reference from Registrant's Report on Form 8-K filed
      December 9, 2003.

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<PAGE>

      (b)   Reports on Form 8-K

            The Company filed a Report on Form 8-K on December 9, 2003 under
            Item 5, a loan of $500,000 to Citadel Media, Inc., on a secured
            basis.

ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES.

AUDIT FEES

In each of fiscal years 2002 and 2003, for the aggregate professional services
rendered by the principal accounting firm for the audit of its annual financial
statements and review of financial statements and other statutory and regulatory
filings, Orion paid the sum of $27,863.16 and $24,856.77, respectively.

AUDIT RELATED FEES

In each of the fiscal years 2002 and 2003, Orion paid no amounts in respect of
audit related fees.

TAX FEES

In each of the fiscal years 2002 and 2003, Orion paid $4,785.35 and $3,514.37,
respectively, for tax compliance, tax advice and related professional services
rendered by Orion's principal accounting firm.

ALL OTHER FEES

Orion did not pay any amounts in respect of other audit services in fiscal years
2002 and 2003.

BOARD APPROVAL

The services rendered by Orion's principal accounting firm were approved by the
board of directors because it does not have an audit committee. Approval was
based on an evaluation of past services and the need for these services in the
current period, comparative analysis of rates and availability of service staff
and management's recommendation. Each service was specifically evaluated before
an engagement was undertaken.

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<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Section 13 or 15 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on the 31st day of
March 2004.

                                        ORION ACQUISITION CORP. II


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

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

<TABLE>
<CAPTION>
Name                                                Title                                       Date
----                                                -----                                       ----
<S>                               <C>                                                       <C>
/s/ Christopher A. Marlett        Chairman of the Board, President and Chief                March 31, 2004
------------------------------    Executive Officer (Principal Executive Officer)
Christopher A. Marlett


/s/ Anthony DiGiandomenico        Chief Financial Officer and Director (Chief               March 31, 2004
------------------------------    Accounting Officer and Principal Account Officer)
Anthony DiGiandomenico

/s/ Dyana Williams Marlett        Chief Operating Officer, Secretary, Treasurer             March 31, 2004
------------------------------    and Director
Dyana Williams Marlett
</TABLE>