U.S. SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                                 FORM 10-KSB
(MARK ONE)
    [ X ]    ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
             EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1997.

COMMISSION FILE NUMBER:     0-3851
                            ------

                                SUNGROUP, INC.
-----------------------------------------------------------------------------
(Name of small business issuer in its charter)

     Tennessee                              62-0790469
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(State or other jurisdiction of                         (IRS Employer
 incorporation or organization)                         Identification No.)

     2201 Cantu Court, Suite 102A               Sarasota, Florida 34232-6254
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(Address of principal executive offices)                    (Zip Code)

Issuer's telephone number:     941-377-6710

Securities to be registered pursuant to Section 12(b) of the Act:     NONE

Securities to be registered pursuant to Section 12(g) of the Exchange Act:

                          COMMON STOCK, NO PAR VALUE
-----------------------------------------------------------------------------
                               (Title of class)

Check whether the issuer (1) has filed all reports required to be filed by
Secti on 13 or 15(d) of the Securities 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
           -----      -----

Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ X ]

State issuer's revenues for its most recent fiscal year.  $9,161,416.

As of March 26, 1998, the aggregate market value of the Common Shares (based
on the average bid and asked price of $.375 per share in the over-the-counter
market) held by non-affiliates was approximately $700,973.

As of March 26, 1998, there were 6,543,700 Common Shares outstanding.

Transitional Small Business Disclosure Format. (Check One):
                                                    Yes        No   X
                                                        -----     -----


                                    Page 1            Exhibit Index on Page 20

<PAGE>

                              TABLE OF CONTENTS

ITEM                                                               PAGE
----                                                               ----

PART I
------

1     Description of Business                                      3

2     Description of Property                                      9

3     Legal Proceedings                                            10

4     Submission of Matters to a Vote of Security Holders          11

PART II
-------

5     Market for Common Equity and Related
      Stockholder Matters                                          11

6     Management's Discussion and Analysis                         11

7     Financial Statements                                         14

8     Changes in and Disagreements with Accountants on
      Accounting and Financial Disclosure                          14

PART III
--------

9     Directors, Executive Officers, Promoters and Control
      Persons; Compliance with Section 16(a) of the Exchange Act   14

10    Executive Compensation                                       17

11    Security Ownership of Certain Beneficial Owners and
      Management                                                   18

12    Certain Relationships and Related Transactions               20

13    Exhibits and Reports on Form 8-K                             21

      Signatures                                                   23

      Index to Exhibits                                            25

                                      2

<PAGE>

                                    PART I

Item 1.  Description of Business

GENERAL
-------

    SunGroup, Inc. ("Corporation") was incorporated in 1967 in the State of
Tennessee.  The Corporation's original name was Mooney Broadcasting
Corporation.  At a special stockholders meeting in 1984, a new Board of
Directors and corporate officers were elected and the Corporation's name was
changed to SunGroup, Inc.

    For the past five years, the Corporation's focus has been on restructuring
its debt obligations to generate sufficient cash flow to service these
requirements.  Since mid-1991, the Corporation has attempted to deal with its
liquidity needs.  There has been significant efforts to restructure or pay
down debts through negotiation and asset sales.

CHANGE IN EQUITY
----------------

    In 1996, the Corporation's shareholder's equity deficit was substantially
reduced.  This improvement resulted from the Corporation's sale of the assets
of its Pensacola radio station and its related debt forgiveness by the Federal
Deposit Insurance Corporation ("FDIC"), significant debt elimination due to
Statutes of Limitations expirations applicable to other Corporation debt and
loan restructurings.

SALE OF ASSETS
--------------

    The Corporation consummated the sale of its FM radio station, WOWW, in
Pensacola, Florida on July 2, 1996.  The radio station constituted all of the
operating assets of the Corporation's subsidiary located in Florida.  The
assets were sold exclusive of certain retained assets, including, without
limitation, accounts receivable.  The sale price of the assets of the radio
station was $2.3 million in cash, plus certain closing costs of approximately
$150,000.

    The Corporation previously had entered into an agreement with the FDIC,
the first lien holder of the assets, on the disposition of the sale proceeds
of the Pensacola radio station and release of its lien thereon.  The FDIC
received $2.094 million from the Pensacola radio station sale proceeds and
discharged the Corporation of indebtedness totaling approximately $5 million.
The Corporation dissolved this subsidiary with all of its outstanding debt in
1997.

                                      3

<PAGE>

    On February 3, 1998, the Corporation, with the approval of the Board of
Directors, entered into an Asset Purchase Agreement with SunBurst Media of
Dallas, Texas to sell substantially all of the assets of the corporation to
SunBurst Media.  A shareholders' proxy has been submitted to the Securities
and Exchange Commission (SEC) for their review and approval. The proxy will be
mailed to the shareholders in 2nd Quarter of 1998 and a vote on the sale will
be taken at the shareholders meeting during the 2nd Quarter 1998. SunGroup,
Inc. and SunBurst Media have also filed with the Federal Communications
Commission (FCC) for the transfer of the licenses.

PRINCIPAL SERVICES
------------------

    The Corporation itself and through its subsidiary corporations is
principally engaged in the ownership, operation and management of commercial
radio stations in the United States.  As of December 31, 1997, the Corporation
owned and/or operated eight radio stations located in Albuquerque/Santa Fe,
New Mexico (KKSS-FM); Shreveport, Louisiana (KMJJ-FM); Bryan/College Station,
Texas (KKYS-FM); Abilene, Texas (KEAN-AM KEAN-FM and KROW-FM); Longview, Texas
(KYKX-FM) and Mt. Pleasant Radio, Inc. Local Marketing Agreement (LMA) with
Mt. Pleasant, Texas (KALK-FM).  A summary of information in chart form
regarding each of the Corporation's owned stations is set forth under "Item 2.
Properties".

    On June 6, 1996, the Corporation entered into an Asset Purchase Agreement
with Foster Communications Company for the purchase of the construction permit
of KROW in Abilene, Texas.  The Federal Communications Commission approved the
transfer of the license for the construction permit to the Corporation on
September 25, 1996.  The Corporation constructed a new radio broadcast studio
at its current facilities at KEAN in Abilene.  The new station was placed in
operation on October 29, 1997.

COMPANY STRATEGY
----------------

    In developing its radio stations, the Corporation has taken a variety of
actions to improve its radio stations' cash flow.  These actions include cost
control programs, implementation of numerous promotional activities,
performing internal and external programming reviews to improve the stations'
products in light of their respective target audiences, and enhancing total
station revenues through the development of alternative revenue sources such
as marketing the radio stations' current database of listeners.  The
Corporation has had each station implement a five year strategic business plan
and has developed a new internal control policy to implement within the
Corporation.  The Corporation has set up a structure in which the general
managers of the stations meet twice a year to focus on matters affecting the
industry and exchange ideas with the design of developing new ideas to
increase revenues in each of the six local markets.  The Corporation has also
implemented an annual meeting for its stations' sales managers to exchange
sales ideas and receive management training.  The Corporation has implemented
a company-wide interview process on sales

                                      4

<PAGE>

recruiting.  It has also started to focus on non-traditional revenue sources
for its radio stations (database telemarketing, etc.).

    The Corporation continues to focus on the latest technology available to
it. The Corporation has created an Intranet System and each station is on the
Internet.

    In operating its radio stations, the Corporation concentrates on the
development of strong, decentralized, local management at the station level
which is responsible for the day to day operations of that station and is
compensated based upon the station's financial performance.  Local management
consists of a general manager, sales manager, operations/program director,
engineer, and business manager.  Local management, in cooperation with the
Corporation's management, is responsible for programming and sales.  Corporate
management is responsible for long-range planning, establishing company-wide
policies and procedures, allocating resources and maintaining overall control
of the stations.

PROGRAMMING FORMATS AND STRUCTURE
---------------------------------

    Each of the Corporation's radio stations has adopted a programming format
designed to competitively fulfill the needs and tastes of its community and to
provide a public service.  In order to compete effectively, each station seeks
to develop a defined group, or target audience, within the total potential
listenership.  The format and target audience create each station's identity
and are the determinants of program selection, promotional campaigns, on-air
personnel, and other programming factors.  See "Item 2.  Properties" for more
information on station programming formats.

    Some of the Corporation's radio stations are affiliated with one of the
national networks.  Each such affiliation provides non-local news, feature
segments and programming services.  Network affiliation is significantly less
important in the radio segment of the broadcasting industry (as opposed to the
television segment).  Therefore, radio network affiliations and revenues are
not of major significance to the Corporation.

    At most of the Corporation's radio stations, with the exception of network
news and other network programming, the staff of each station originates,
prepares and presents substantially all of the station's non-music
programming.  Each station has one or more studios for production and
recording of material for later airing or from which live programming can be
broadcast.

REVENUES AND COMPETITION
------------------------

    The Corporation's radio stations principally derive their revenues from
local advertising, national advertising, and activities tied to the radio
station. The local sales staff of each station is responsible for servicing
the needs of advertising clients located in the community in which it is
located.  Sales to national advertisers are arranged primarily by a sales
representation firm.  Using a network of offices in important cities, this
national firm

                                      5

<PAGE>

employs its best efforts to exclusively secure national advertising for the
station under a contractual agreement.  The sales representation firm receives
compensation in the form of commissions on net revenue produced for each
station from advertising solicited and sold nationally.

    Advertising rates charged by a radio station are based upon market
analysis of radio advertising results, competitive factors, added value
promotions, and competitive pricing in the marketplace.  Success in developing
programming with broad popular appeal, particularly among those segments of
the listening audience most sought after by advertisers, and the ability of a
sales staff to communicate the advantages of their radio station's product,
are the major competitive variables of revenues.  The future performance of
each of the Corporation's radio stations will also depend upon a number of
external factors, including the general strength of the local and national
economy, population growth, overall advertising revenues, retail sales trends,
relative efficiency compared to other media and future governmental regulation
and policies.

    The Corporation's radio stations compete for revenues with other media
outlets in their respective areas.  In addition to rival radio stations in all
of the Corporation's markets duopolies have been formed which create a new and
more formidable type of competitor.  Recently, FCC regulations regarding local
radio station ownership have been relaxed (see "FCC Regulations").  This
change will have a significant impact on both the Corporation and its
competitors.  Other sources of competition for advertising expenditures
include television and cable television, newspapers, magazines, billboards,
direct mail, and many local creative advertising sources.

    Management believes that the Corporation's radio stations are generally
focused on achieving their competitive goals as measured by overall ratings
and target audience performance, advertiser appeal and establishment of clear,
positive, local market identity.  Because of the volatile nature of radio
competition and ever-changing listening audience tastes, maintenance of the
Corporation's current market standings entails risk and is subject to
competitive pressures.  Because of a lack of funds, the Corporation does not
have the same ability as better financed stations to protect its format and
market position or to acquire additional stations within the market to enhance
its position.  However, the Corporation built a new FM station in Abilene,
Texas and has recently had and is involved in ongoing discussions with several
other radio stations with regards to expanding its coverage in its current
markets through operating and purchasing additional and new stations.

SEASONALITY
-----------

    Advertising expenditures in the radio industry generally tend to follow
overall retail sales seasonal patterns, but expenditures vary by programming
format.  Typically, sales are strongest during the fourth quarter and weakest
in the first quarter of the calendar year.  The Corporation continues to work
on ways to eliminate the seasonal variations of its revenue.

                                      6

<PAGE>

FCC REGULATIONS
---------------

    The Corporation's radio broadcasting operations are subject to the
jurisdiction of the FCC under the Communications Act of 1934, as amended.  FCC
regulations govern issuance, term, renewal and transfer of licenses necessary
for operation of radio stations.  Upon application, and in the absence of
conflicting applications (which would require the FCC to hold a hearing) or
adverse findings as to the licensee's qualifications, existing radio licenses
will be renewed without hearing for additional seven year terms.  All of the
Corporation's radio stations, except KMJJ-FM in Shreveport, Louisiana, have
filed license renewals during 1997.  The FCC is in the process of reviewing
the license renewals and the corporation expects the licenses to be renewed.
KMJJ-FM license was renewed by the FCC on December 5, 1996 with a term
expiring June 1, 2003.

    On February 8, 1996, President Clinton signed into law the
Telecommunications Act of 1996.  This law will have a significant impact on
the radio industry. First, the law eliminates the restrictions on the number
of AM and FM stations which may be owned or controlled nationally by one
entity.  Previously, the law restricted ownership or control by one entity to
no more than 20 AM and 20 FM stations nationally.  Second, the local radio
station ownership rules were changed to be based upon the number of stations
controlled by an entity, not its market share.  The number of stations an
entity can control in a market depends upon the number of signals in the
market, but the number of stations which can now be owned by one entity is
significantly greater than in the past.

    The statements above do not purport to be a complete summary of the
Communications Act of 1934, as amended, and the rules and regulations of the
FCC or of pending proposals.  For a complete statement, reference is made to
the Communications Act, the Telecommunications Act of 1996, and to any related
rules, regulations and proposals.

                                      7

<PAGE>

        Below is a table of the Corporation's radio stations and the current
expiration date of each station's FCC authorization:


        STATION                         EXPIRATION DATE
---------------------------------------------------------------------
KEAN-AM/FM - Abilene                    October 1, 1997
                                        (in application)

KKYS-FM - Bryan/College Station         October 1, 1997
                                        (in application)

KMJJ-FM - Shreveport                    June 1, 2003

KKSS-FM - Albuquerque/Santa Fe          August 1, 1997
                                        (in application)

KYKX-FM- Longview                       October 1, 1997
                                        (in application)

KROW-FM - Abilene                       August 1, 2005

Employees
---------
        The Corporation had 101 full-time and 136 total employees as of
December 31, 1997.  Each station normally employs an average of fifteen to
twenty-five people.  The Corporate office staff consists of three employees.
The Corporation considers relations with its employees to be good.

                                   8
<PAGE>

                    ITEM 2:  DESCRIPTION OF PROPERTY
<TABLE>
<CAPTION>
                                                                           TOWER
                        DATE                                               LEASE     OFFICE LEASE
STATION/LOCATION      ACQUIRED  FREQUENCY   LICENSED POWER    FORMAT     EXPIRATION   EXPIRATION
-------------------------------------------------------------------------------------------------
<S>                     <C>      <C>        <C>             <C>             <C>          <C>
KKSS-FM Albuquerque/
Santa Fe, New Mexico    1986     97.3 MHZ   100,000 watts   Contemporary    2002         1998

KEAN-AM Abilene, Texas  1985     1280 KHz       500 watts   Country         Own          2000

KEAN-FM Abilene, Texas  1985     105.1 MHZ   100,000 watts  Country         1999         2000

KYKX-FM Longview, Texas 1985     105.7 MHZ   100,000 watts  Country         2017         Own

KKYS-FM Bryan/
College Station, Texas  1989     104.9 MHZ    50,000 watts  Contemporary    Own          2002

KMJJ-FM Shreveport,
Louisiana               1989     99.7 MHZ     50,000 watts  Urban           2013         Own

KROW-FM Abilene, Texas  1996     92.5 MHZ     50,000 watts  Contemporary    Own          Own

</TABLE>

                                   9
<PAGE>


Item 2.  Description of Property

        None of the Corporation's individual properties amounts to ten percent
or more of its total assets.  All of the real estate owned by the Corporation
is subject to several mortgages.

        The ownership or leasing of tower space by which the Corporation
broadcasts its radio signal is critical to the Corporation.  The Corporation's
management believes that its current tower leases are adequate for its
existing operations.

        In December, 1996, the Corporation moved its headquarters from
Indianapolis, Indiana to Sarasota, Florida.  The Corporation leases
approximately 2,100 square feet of office space in Sarasota under a lease
expiring in December, 2001.  The Corporation's subsidiaries typically operate
in approximately 3,000-4,000 square feet of office space.

        The Corporation does not invest in real estate other than to own or
lease office space or towers for radio operating purposes.  The Corporation
does not own securities in any company involved in real estate activities.

        Management believes that there is adequate insurance coverage on its
property and equipment.

Item 3.  Legal Proceedings

        The Corporation in the normal course of business is a defendant in a
small number of routine lawsuits.  Management believes that the results of any
such litigation will not have an material adverse effect upon the conduct of
the Corporation's business or its financial position.

        Applications for the renewals of the licenses of stations KEAN(AM),
Abilene, Texas; KEAN-FM, Abilene, Texas; KYKX (FM), Longview, Texas; and KKYS
(FM) Bryan, Texas (the "Stations") were filed with the Federal Communications
Commission ("FCC") in March 1997.  Those applications included information
regarding the Stations' respective Equal Employment Opportunity ("EEO")
programs.  On August 1, 1997, the FCC formally requested additional
information concerning the Stations' EEO efforts.  In response, the Stations
submitted additional EEO information to the FCC.

        On March 12, 1998, in response to an inquiry about the status of the
Stations' renewal applications, Paulette Laden, the Chief of the FCC's EEO
Branch, contacted the Corporation's legal counsel, at the law firm of Wiley,
Rein & Fielding by telephone.  Ms. Laden advised our FCC counsel that based on
the responses provided by the Stations, she had determined that the Stations
had "serious" deficiencies with respect to their EEO recruitment efforts.  Ms.
Laden advised that the EEO Branch is drafting a decision for review and
disposition by the full Commission.  Ms. Laden did not provide any further
details.

        Depending on the seriousness of the EEO program deficiencies that may
be found at one or more of the Stations, the range of remedies which may be
imposed by the FCC include: (1) assessing forfeitures against the licensees of
one or more of the Stations; (2) granting the renewals of one or more of the
Stations' licenses subject to special EEO reporting conditions; (3) granting
the renewals of one or more of the Stations' licenses for a short-term subject
to such reporting conditions; (4) assessing forfeitures and granting
short-term renewals to one or more of the Stations as described above; or (5)
denying one or more of the requested renewals of the Stations' licenses.


                                      10
<PAGE>

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

    No matters were submitted to a vote of the Corporation's security holders
during the fourth quarter of 1997.

                                   PART II

Item 5.  Market for Common Equity and Related Stockholder Matters

    There is no active public trading market for the Corporation's common
stock, but it is traded on the over the counter market and has two market
makers.

    As of December 31, 1997, the Corporation had 495 shareholders of record.

    The Corporation has not paid any cash dividends on its common shares in
the last seven years and does not expect to pay dividends in the foreseeable
future.  Two of the Corporation's subsidiaries are prohibited, pursuant to
loan agreements, from making distributions to the parent and most of the
Corporation's restructured debt payments are tied to the cash flow of specific
subsidiaries or the cash flow of the consolidated entity.  Lack of
distributions to the Corporation as the parent company by its subsidiaries and
debt service payment requirements leave the Corporation with inadequate cash
to pay any cash dividends in the foreseeable future.

Item 6.  Management's Discussion and Analysis

Results of Operations:  1997 vs. 1996
-------------------------------------

    For the years ended December 31, 1997 and 1996, the Corporation operated
the same properties, except for WOWW-FM in Pensacola.  Gross revenues for 1997
were up $211,378 or 2.4 % from 1996.  This increase is due to slight increases
in local and national advertising.  Miscellaneous and network income was flat
for 1996.

    Agency commissions as a percentage of gross sales were approximately 10.7%
in 1997 vs. 11.0% in 1996.  This decrease is attributable to less political
advertising revenue which originates through agencies.

    Technical and programming expenses decreased 2.02% in 1997 from 1996.  The
decrease is attributable to the sale of the Pensacola station in 1996.
Excluding the Pensacola station, expenses increased 7.82%  This increase is a
result of higher music licensing fees.  The Corporation had a small increase
in the percentage royalty it must pay to various music licensing agencies
during 1997 and this percentage is applied directly to the Corporation's level
of sales.  Therefore, an increase in sales will increase this expense
commensurately.

    Selling, general and administrative expenses, which includes depreciation
and amortization, increased $573,597 in 1997 from 1996.  This increase is
attributable to higher commission costs, and related payroll expenses due to
increased sales.  The Corporation also incurred additional legal and
professional fees in its efforts to refinance the debt.

    The Corporation did not dispose of any assets in 1997 versus a gain of
$640,355 in 1996.  The gains in 1996 were from the sale of the WOWW radio
station in Pensacola ($634,980) and the disposal of other assets in the
ordinary course of business ($5,375).

    Interest expense increased 20.6% in 1997.  This was a result of an
adjustment to the


                                      11
<PAGE>

notes payable.

    In 1996, the Corporation also recorded other income of $864,450.  This
income is for receipt of the new broadcasting tower and related equipment from
Service Broadcasting Corporation at the Corporation's Longview, Texas station.
There was no other income in 1997.

    In 1997, other income (expense) consisted of interest income and other
miscellaneous items.  The Corporation recorded $21,412 in miscellaneous
expense, which is comprised of $19,761 in fees related to the Local Marketing
Agreement (LMA) of KALK-FM in Mt. Pleasant, Texas and $8,759 in interest
income.

    The Corporation recorded approximately $9,307,700 in gains from debt
extinguishment during 1996.  This gain was attributable to the settlement with
the FDIC at the time of the sale of the Pensacola radio station and the
write-off of several notes whose Statute of Limitations had expired.  In 1997,
the Corporation recorded no gains from debt extinguishment.

    The Corporation recognized an income tax benefit of $629,400 in 1997.
This is due largely to the Corporation recognizing a deferred asset related to
its net operating losses from prior year and the current year.  The
Corporation had income tax expense of $1,701,713 in 1996 primarily due to the
sale of WOWW in Pensacola and the gain from debt extinguishment.

    The Corporation, through one of its subsidiaries, RadioSunGroup of Texas,
Inc., has signed a Local Marketing Agreement (LMA) and Right to Purchase
Agreement with Mt. Pleasant Radio, Inc. for the Corporation to manage and
ultimately purchase radio station KALK-FM, Mt. Pleasant, Texas.

    RadioSunGroup of Texas, Inc. has also acquired a construction permit for
KROW-FM in Abilene, Texas.  The Corporation has constructed the station and it
became operational on October 29, 1997.

    In April, 1997, KKYS-FM, owned by RadioSunGroup of Bryan/College Station,
Inc., a subsidiary of the Corporation, relocated its offices and studios to a
new site in the market.  The new location provides better visibility in and
access to the community.

    KEAN-AM, owned by RaidoSunGroup of Texas, Inc., which previously had been
simulcast with KEAN-FM, changed to a sports format in February, 1997.  The
change was made to give the audience another choice in the market which they
did not previously have.  The Corporation views this change as a good
opportunity to create additional income and net revenue, and the changed
format during the second quarter of 1997 resulted in positive cash flow from
this radio station to the Corporation.

                                      12

<PAGE>

    The Corporation is aware of the issues associated with the programming
code in existing computer systems as the Millennium (year 2000) approaches.
The "year 2000" problem is pervasive and complex as virtually every computer
operation will be affected in some way by the rollover of the two-digit value
to 00.  The issue is whether computer systems will properly recognize data
sensitive information when the year changes to 2000.  Systems that do not
properly recognize such information could generate erroneous data or cause a
system to fail.  The Corporation will take steps in 1998 to contact the
various software suppliers it uses to correct the problem.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

    The Corporation's principal source of funds is cash flow provided by the
operation of its radio stations.  Its primary needs include working capital,
capital expenditures to maintain property, plant, and equipment, and repayment
of debt.  During 1997, the Corporation generated sufficient funds for working
capital, scheduled debt repayment and capital expenditures.  In 1997, the
Corporation generated $846,452 in cash before debt service and capital
expenditures.  This compares to $1.33 million in 1996.

    On December 15, 1997, the Corporation reached agreement with First Savings
Bank, Arlington, Texas,  ("FSB") to renew one of the Corporation's loans,
which was to have matured on December 15, 1997.  The note has a principal
balance of $2,184,322 and has been renegotiated to mature on June 30, 1998.
The note calls for monthly interest payments of $21,843.

    The Corporation entered into a loan agreement with Young Investments on
December 24, 1997 in the amount of $800,000.00, with a 10% interest rate to be
paid monthly.  The note expires June 30, 1998.  Proceeds from the loan were
used to payoff the notes of James D. Osburn and Arden Osburn which matured on
January 1, 1998.  The payoffs for these two notes were made on January 2,
1998.  In addition, Kenneth R. Reynolds agreed to extend his note with the
Corporation, which was to mature on January 1, 1998, until June 30, 1998 at an
interest rate of ten percent (10%), with interest payments to be made monthly.

    On March 1, 1998, the Corporation entered into loan agreements with John
W. Biddinger; Margaret H. Biddinger; and Karen Biddinger in the aggregate
amount of $400,000.00.  The notes are to mature on June 30, 1998 and carry a
10% interest rate to be paid monthly.  The proceeds were used to pay down the
prior note from Young Investments.  Young Investments was issued a new note on
March 1, 1998 for $400,000.00, maturing on June 30, 1998, bearing an interest
rate of ten-percent (10%), interest payable monthly.

    The Corporation has notes with several entities (see Exhibit #(ii)
attached) which matured on February 15, 1998.  All note holders are aware of
the Asset Purchase Agreement (APA) with SunBurst Media for the sale of the
corporation.

                                      13

<PAGE>

Item 7.  Financial Statements

    The information called for by this Item is included as Exhibit 99 to this
report beginning on page 94.

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

    None.

                                   PART III

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

    Listed below are the Directors of the Corporation as of December 31, 1997,
their years of service as a Director, and ages:

DIRECTOR                AGE     SERVICE AS DIRECTOR       TERM EXPIRES

John W. Biddinger       57      August, 1984 - Present        2000

James M. Elliott        55      November, 1984 - Present      1997

Dan E. Young            68      December, 1985 - Present      1997

        Biographical information concerning Mr. Biddinger is set forth below
under the caption "Executive Officers".

        James M. Elliott has been President of Elliott and Associates, an
investment advisor and investment manager, since 1991.  Prior thereto, he was
Vice President and Chief Financial Officer of the Indiana University
Foundation.

        Daniel E. Young has been President of Young Investments, Inc. since
1979.  He has been active in the ownership and management of automobile
franchise operations and is a multi-dealership owner.

Executive Officers
------------------

        Listed below are the Executive Officers of the Corporation as of
December 31, 1997, their positions, offices and ages:


Officer                 Age             Position

John W. Biddinger       57              President

James A. Hoetger        44              Vice President, Treasurer and Secretary


                                      14
<PAGE>

        John W. Biddinger was elected President on May 24, 1991, and had been
Chairman of the Executive Committee of the Corporation since 1984.  Mr.
Biddinger is also President and a Director of Biddinger Investment Capital
Corporation, a leverage buy-out and workout specialist firm.

        James A. Hoetger became Vice President/Finance and Chief Financial
Officer of the Corporation in September, 1996, replacing John Southwood, Jr.,
who resigned to pursue other interests.  Previously, he was Vice President and
Corporate Controller of Tak Communications, Inc., Madison, Wisconsin, and was
responsible for all accounting and certain collection functions.

Term of Office
--------------

        The executive officers and Directors of the Corporation serve annual
terms or until their successors are duly elected and qualified.




                                      15
<PAGE>

Indemnification
---------------

        The Corporation's By-Laws provides for the indemnification of any and
all of its directors and/or officers.  The By-Laws require the Corporation to
indemnify the covered individuals for liabilities incurred by them because of
any act or omission, or neglect or breach of duty, committed while acting in
the capacity as an officer or director of the Corporation to the fullest
extent permitted by law.  Certain actions, including acts for which
indemnification is found by a court to be illegal or contrary to public policy
are excluded from such coverage.

Compliance With Section 16(a) of the Exchange Act
-------------------------------------------------

        Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Corporation's directors, executive officers and persons who own
more than ten percent of the Corporation's common stock to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of common stock of the Corporation.  Officers, directors
and greater than ten percent shareholders are required by the Securities and
Exchange Commission regulations to furnish the Corporation with copies of all
Section 16(a) forms they file.

        Specific due dates for these reports have been established, and the
Corporation is required to disclose in this report any failure to file such
forms by these dates during 1997.  To the Corporation's knowledge, based
solely on review of the copies of such reports furnished to the Corporation
and written representations that no other reports were required, with respect
to the fiscal year ended December 31, 1997, all Section 16(a) filing
requirements applicable to the Company's officers, directors and greater than
ten percent shareholders were complied with.


                                      16
<PAGE>

Item 10.  Executive Compensation

        The following table summarizes the compensation paid by the
Corporation to its current Chief Executive Officer, as of December 31, 1997,
for the past three fiscal years.  The Corporation had no other executive
officers at December 31, 1997 whose total annual salary and bonus from the
Corporation exceeded $100,000 during the past fiscal year.


SUMMARY COMPENSATION TABLE

                             Annual Compensation

<TABLE>
<CAPTION>

Name and                                                     Other Annual         All Other
Principal Position         Year    Salary ($)   Bonus ($)   Compensation ($)    Compensation(s)
------------------------------------------------------------------------------------------------
<S>                        <C>      <C>           <C>             <C>                  <C>
John W. Biddinger, CEO     1997     132,200       0               0                    0
                           1996     132,200       0               0                    0
                           1995     132,200       0               0                    0
</TABLE>

Compensation of Directors
-------------------------

        Members of the Board of Directors who are not officers of the
Corporation receive $1,000 per meeting for their attendance at regularly
scheduled Board meeting.  There were two such meetings in 1997.  Messrs.
Elliott and Young attended all such meetings.

Board Committees
----------------

        The Corporation's Compensation Committee consists of Mr. Elliott.  The
duties of this Committee are to review the compensation of the Corporation's
executive officers.  The Corporation has no audit or nominating committee.

Employment Agreements
---------------------

        The Corporation entered into a three year employment agreement with
John W. Biddinger effective in 1991.  This agreement has been extended through
May 31, 2000.  The agreement calls for a minimum annual compensation of
$125,000 and annual bonuses of up to 50% of annual salary.  The agreement
calls for Mr. Biddinger to receive 24 months of annual compensation should he
be dismissed without cause or if there is a change in control of the
Corporation (as defined in the agreement).

        The agreement provides for a death benefit to Mr. Biddinger's estate
of two and one half times the current annual base salary and a lump sum
payment equal to two times the current annual base salary if he should become
permanently disabled (as defined in the agreement).  The Corporation is not
insured against either of these events.  The agreement also grants Mr.
Biddinger the option to "put" all of his stock back to the Corporation at a
mutually agreed upon fair market value (as defined in the agreement).

                                      17
<PAGE>

        Mr. Biddinger has agreed in restructuring part of the Corporation's
debt to hold his compensation at $132,200 per year.

        The Corporation entered into an Employment Agreement with James A.
Hoetger on September 9, 1997.  This Agreement is in effect through December
31, 1999. The Employment Agreement calls for annual compensation of $75,000 in
1998 and $80,000 in 1999 and bonuses based on merit and performance determined
by the President of the Corporation.

Item 11.  Security Ownership of Certain Beneficial Owners and Management

        The following tables set forth information as of December 31, 1997, as
to the beneficial ownership, direct or indirect, of the Corporation's common
stock by all Directors, all current Directors and Officers as a group, and all
persons known by the Corporation to own beneficially more than 5% of the
Corporation's common stock.

        The aggregate percentage of ownership is based on 6,543,700 shares of
common stock outstanding and all exercisable options and warrants related to
individuals listed in the tables.

                                      18

<PAGE>

                           OWNERSHIP BY MANAGEMENT
                      OF THE CORPORATION'S COMMON STOCK

                                 Amount and Nature of
Name and Address                Beneficial Ownership (1)  Percent of Class (2)
------------------------------------------------------------------------------
John W. Biddinger
7491 Albert Tillinghast Drive
Sarasota, FL  34240                   2,420,056                  37.0%

James M. Elliott
230 Fountain Square
Bloomington, IN 47404                    20,000                    .3%

Dan E. Young (3)
3210 E. 96th Street                     626,179                   9.6%

All Present Directors and
 Executive Officers as a
 Group (3 persons)                    3,066,235                  46.9%


                          FIVE PERCENT SHAREHOLDERS
                      OF THE CORPORATION'S COMMON STOCK


                                 Amount and Nature of
Name and Address                Beneficial Ownership (1)  Percent of Class (2)
------------------------------------------------------------------------------
John W. Biddinger
7491 Albert Tillinghast Drive
Sarasota, FL  34240                   2,420,056                  37.0%

Conseco, Inc. (3)
11825 N. Pennsylvania Street
Carmel, Indiana  46032                5,972,060                  47.7%

Antar & Co.
601 Jefferson Street
Houston, Texas  77002                 1,911,014                  29.2%

Dan E. Young (3)
3210 East 96th Street
Indianapolis, Indiana                   626,179                   9.6%


                                      19
<PAGE>

(1)     All shares are held directly unless otherwise noted.

(2)     Pursuant to applicable Securities and Exchange Commission rules, a
        person is deemed beneficial owner of those shares not outstanding
        which are subject to options, warrants, rights or conversion
        privileges if that person can exercise such options, warrants, rights
        or privileges within 60 days.  Any such shares are deemed to be
        outstanding for the purpose of computing the percentage of outstanding
        common stock owned by such person individually, but are not deemed to
        be outstanding for the purpose of computing the percentage ownership
        of any other person.

(3)     The Corporation has issued the following warrants to purchase shares
        of its common stock:

        Conseco, Inc.               5,972,060
        Dan Young, IRA                304,803

        All of the warrants for Dan Young, IRA are exercisable for $.11 (in
        total, not per share), and all of the warrants for Conseco are
        exercisable for $1.00 (in total, not per share), are presently
        exercisable, and terminate if not previously exercised by February 15,
        2003.

        The Dan Young, IRA exercised its warrants (304,803) on January 15,
1998.

POTENTIAL CHANGE IN CONTROL
---------------------------

        As outlined in Footnote 2, Conseco, Inc. holds exercisable warrants
for 5,972,060 shares at a total exercise price of $1.00.  If these warrants
were exercised, Conseco would control 45.9% of the Corporation's common stock
on a fully diluted basis.  The warrants expire on February 15, 2003 and are
nontransferable until February 15, 1997.  If by February 15, 1998, certain
restructured notes owed to Conseco are not repaid, it will receive additional
warrants for 10% of the Corporation's common stock on a fully diluted basis.

Item 12.  Certain Relationships and Related Transactions

        The Corporation, through its subsidiary RadioSunGroup of Texas,
entered into a Local Marketing Agreement with Mt. Pleasant Radio, Inc. for
KALK-FM in Mt. Pleasant on January 28, 1997, effective June 1, 1997.  As part
of the agreement, the Corporation also has the option to purchase all of the
assets of KALK-FM.

        In order for the Corporation to complete the construction permit for
KROW-FM in Abilene, Texas, the Corporation entered into a leasing contract
with SLT of Indiana, Inc. for broadcast equipment.  The lease is for
five-years, beginning December 1, 1998.


                                      20

<PAGE>

Item 13.  Exhibits and Reports on Form 8-K
    (a)   Exhibits:
          ---------
          1     Asset Purchase Agreement (APA)
          2     Press Release

Exhibit No.    Description of Exhibit
-----------    ----------------------
    3          (i)     Articles of Incorporation (1)
               (ii)    By-Laws as presently in effect (1)

    10         Material Contracts

               (a)     Reinstatement, modification, renewal and extension
               agreement between SunGroup, Inc. and Kenneth R. Reynolds in the
               amount of $2,500,000. (2)

               (b)     Reinstatement, modification, renewal and extension
               agreement between SunGroup, Inc. and Arden Wilson Osburn in the
               amount of $1,250,000. (2)

               (c)     Reinstatement, modification, renewal and extension
               agreement between SunGroup, Inc. and John D. Osburn in the
               amount of $1,250,000. (2)

               (d)     Promissory Note for $880,000 between SunGroup, Inc. and
               Bankers National Life Insurance Company with related warrant
               A-1 for 592,875 shares. (2)

               (e)     Promissory Note for $4,000,000 between SunGroup, Inc.
               and Western National Life Insurance Company with related
               warrant A-2 for 2,892,000 shares. (2)

               (f)     Promissory Note for $93,333.06 between SunGroup, Inc.
               and John W. Biddinger with a related warrant A-3 for 59,287
               shares. (2)

               (g)     Promissory Note for $124,469.18 between SunGroup, Inc.
               and Robert A. Davies and related warrant A-4 for 81,575
               shares. (2)

                                      21

<PAGE>

               (h) Promissory Note for $176,800 between SunGroup, Inc. and
               Indiana University Foundation with related warrant A-5 for
               118,575 shares. (2)

               (i)     Promissory Note for $265,200 between SunGroup, Inc. and
               Dan E. Young - IRA Trust with related warrant A-6 for 177,862
               shares. (2)

               (j)     Agreement by and among RadioSunGroup of Bryan/College
               Station, Inc., SunGroup Broadcasting of Louisiana, Inc.,
               SunGroup, Inc. and Radio USA, Ltd. regarding exchange of common
               stock for debt. (3)

               (k)     Second Amended and Restate Promissory Note dated
               September 30, 1993 executed by RadioSunGroup of Bryan/College
               Station, Inc. ("RSG") and SunGroup Broadcasting of Louisiana,
               Inc. ("SGBL"), payable to the order of the Federal Deposit
               Insurance Corporation ("FDIC") in the original principal amount
               of $2,205,509.02 and its related First Amendment to Assumption
               Agreement and Amended and Restated Loan Agreement dated
               September 30, 1993. (3)

               (l)     Adjustment letter related to warrant A-1 issued to
               Bankers National Life Insurance Company in the original amount
               of 592,875 shares amended to 1,016,010 shares. (3)

               (m)     Adjustment letter related to warrant A-2 issued to
               Western National Life Insurance Company in the original amount
               of 2,892,000 shares amended to 4,956,050 shares. (3)

               (n)     Adjustment letter related to warrant A-4 issued to
               Robert N. Davies in the original amount of 81,575 shares
               amended to 139,797 shares. (3)

               (o)     Adjustment letter related to warrant A-5 issued to IU
               Foundation in the original amount of 118,575 shares amended to
               203,202 shares. (3)

               (p)     Adjustment letter related to warrant A-6 issued to Dan
               Young IRA in the original amount of 177,862 shares amended to
               304,803. (3)

               (q)     Employment agreement with John W. Biddinger,
               President. (3)

               (r)     Amendment number one to the John W. Biddinger
               Employment Agreement. (3)

               (s)     Amendment number two to the John W. Biddinger
               Employment Agreement.


                                      22

<PAGE>

               (t)     Key Employee Incentive Stock Plan of 1986. (4)

               (u)     Act of Loan Modification and Acknowledgment by
               RadioSunGroup of Bryan/College Station, Inc., SunGroup
               Broadcasting of Louisiana, Inc. and SunGroup, Inc. in
               favor of First Savings Bank of Arlington, Texas, dated December
               15, 1996.

               (v)     Act of Loan Modification and Acknowledgment by
               RadioSunGroup of Bryan/College Station, Inc., SunGroup
               Broadcasting of Louisiana, Inc. and SunGroup, Inc. in
               favor of First Savings Bank of Arlington, Texas, dated December
               15, 1997.

     21        Subsidiaries of the Registrant. (5)
     27        Financial Data Schedule. (5)
     99        Financial Statements
               (a)     No Reports on Form 8-K were filed during the last
               quarter of 1997.
               (b)     8-K Report for the first quarter of 1998 was filed.


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

1       Incorporated by reference to the Corporation's Annual Report on Form
        10-K for the year ended December 31, 1984.

2       Incorporated by reference to the Corporation's Annual Report on Form
        10-K for the year ended December 31, 1992.

3       Incorporated by reference to the Corporation's Annual Report on Form
        10-KSB for the year ended December 31, 1993.

4       Incorporated by reference to the Corporation's Annual Report on Form
        10-KSB for the year ended December 31, 1986.

                                      23
<PAGE>
                                  SIGNTURES
                                  ---------

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

DATED:     March 27, 1998          By:     /s/ John W. Biddinger
                                   ------------------------------------
           Sarasota, Florida               John W. Biddinger, President

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

DATED:     March 27, 1998          /s/ John W. Biddinger
                                   John W. Biddinger, Director and
                                   (Principal Executive Officer)

DATED:     March 27, 1998          /s/ James M. Elliott
                                   James M. Elliott, Director

DATED:     March 27, 1998          /s/ James A. Hoetger
                                   James A. Hoetger, Treasurer, Secretary
                                   and Vice President
                                   (Principal Accounting/Financial Officer)

DATED:     March 27, 1998          /s/ Dan E. Young
                                   Dan E. Young, Director

                                      24

<PAGE>

                              INDEX OF EXHIBITS

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

    3          (i)     Articles of Incorporation (5)                 N/A
               (ii)    By-Laws as presently in effect (1)

    10         Material Contracts

               (a)     Reinstatement, modification, renewal          N/A
               and extension agreement between SunGroup, Inc.
               and Kenneth R. Reynolds in the amount of
               $2,500,000. (6)

               (b)     Reinstatement, modification, renewal and      N/A
               extension agreement between SunGroup, Inc. and
               Arden Wilson Osburn in the amount of $1,250,000. (2)

               (c)     Reinstatement, modification, renewal and      N/A
               extension agreement between SunGroup, Inc. and
               John D. Osburn in the amount of $1,250,000. (2)

               (d)     Promissory Note for $880,000 between          N/A
               SunGroup, Inc. and Bankers National Life Insurance
               Company with related warrant A-1 for 592,875
               shares. (2)

               (e)     Promissory Note for $4,000,000 between        N/A
               SunGroup, Inc. and Western National Life Insurance
               Company with related warrant A-2 for 2,892,000
               shares. (2)

               (f)     Promissory Note for $93,333.06 between        N/A
               SunGroup, Inc. and John W. Biddinger with a related
               warrant A-3 for 59,287 shares. (2)

               (g)     Promissory Note for $124,469.18 between       N/A
               SunGroup, Inc. and Robert A. Davies and related
               warrant A-4 for 81,575 shares. (2)

               (h)     Promissory Note for $176,800 between          N/A
               SunGroup, Inc. and Indiana University Foundation
               with related warrant A-5 for 118,575 shares. (2)


                                      25
<PAGE>

                              INDEX OF EXHIBITS

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

               (i)     Promissory Note for $265,200 between          N/A
               SunGroup, Inc. and Dan E. Young - IRA Trust with
               related warrant A-6 for 177,862 shares. (2)

               (j)     Agreement by and among RadioSunGroup of       N/A
               Bryan/College Station, Inc., SunGroup Broadcasting
               of Louisiana, Inc., SunGroup, Inc. and Radio USA,
               Ltd. regarding exchange of common stock for
               debt. (3)

               (k)     Second Amended and Restate Promissory Note    N/A
               dated September 30, 1993 executed by RadioSunGroup
               of Bryan/College Station, Inc. ("RSG") and SunGroup
               Broadcasting of Louisiana, Inc. ("SGBL"), payable
               to the order of the Federal Deposit Insurance
               Corporation ("FDIC") in the original principal
               amount of $2,205,509.02 and its related First
               Amendment to Assumption Agreement and Amended and
               Restated Loan Agreement dated September 30,
               1993. (3)

               (l)     Adjustment letter related to warrant A-1      N/A
               issued to Bankers National Life Insurance Company
               in the original amount of 592,875 shares amended
               to 1,016,010 shares. (3)

               (m)     Adjustment letter related to warrant A-2      N/A
               issued to Western National Lie Insurance Company
               in the original amount of 2,892,000 shares amended
               to 4,956,050 shares. (3)

               (n)     Adjustment letter related to warrant A-4      N/A
               issued to Robert N. Davies in the original amount
               of 81,575 shares amended to 139,797 shares. (3)

               (o)     Adjustment letter related to warrant A-5      N/A
               issued to IU Foundation in the original amount
               of 118,575 shares amended to 203,202 shares. (3)


                                      26
<PAGE>

               (p)     Adjustment letter related to warrant A-6      N/A
               issued to Dan Young IRA in the original amount
               of 177,862 shares amended to 304,803. (3)

               (q)     Employment Agreement with John W.             N/A
               Biddinger,  President. (3)

               (r)     Amendment number one to the John W.           N/A
               Biddinger Employment Agreement. (3)

               (s)     Key Employee Incentive Stock Plan of          N/A
               1986. (4)

               (t)     Amendment number two to the John W.           N/A
               Biddinger Employment Agreement. (5)

               (u)     Act of Loan Modification and Acknowledgment   N/A
               by RadioSunGroup of Bryan/College Station, Inc.,
               SunGroup Broadcasting of Louisiana, Inc. and
               SunGroup, Inc. in favor of First Savings Bank of
               Arlington, Texas, dated December 15, 1996. (5)

               (v)     Employment Agreement with James A. Hoetger,   29
               Vice President.

               (w)     Act of Loan Modification and Acknowledgment   33
               by RadioSunGroup of Bryan/College Station, Inc.,
               SunGroup Broadcasting of Louisiana, Inc. and
               SunGroup, Inc. in favor of First Savings Bank of
               Arlington, Texas, dated December 15, 1997.

               (x)     Agreement By and Among RadioSunGroup of       49
               Texas, Inc. and Mt. Pleasant Radio, Inc., dated
               January 27, 1997.

               (y)     Secured Promissory Note for $800,000          69
               between RadioSunGroup of Texas, Inc. and Young
               Investments Company (A Nevada Partnership) dated
               December 24, 1997.

               (z)     Cancellation of Secured Promissory Note,      71
               dated February 28, 1998.


                                      27
<PAGE>

               (aa)     Secured Promissory Note for $400,000         72
               between RadioSunGroup of Texas and Young
               Investments Company (A Nevada Partnership) dated
               March 1, 1998 and UCC-1 form.

               (bb)     Secured Promissory Note for $150,000         75
               between RadioSunGroup of Texas and John W. Biddinger
               dated March 1, 1998 and UCC-1 form.

               (cc)     Secured Promissory Note for $150,000         78
               between RadioSunGroup of Texas and Margaret H.
               Biddinger dated March 1, 1998 and UCC-1 form.

               (dd)     Secured Promissory Note for $100,000         81
               between RadioSunGroup of Texas and Karen Biddinger
               dated March 1, 1998 and UCC-1 form.

               (ee)     Renewal and Extension Agreement effective    84
               January 2, 1998 by and between RadioSunGroup of
               Texas, Inc. ("Borrower") and Kenneth R. Reynolds
               ("Lender") in the amount of $516,600.00.

               (ff)     Renewal and Extension Agreement effective    85
               January 2, 1998 by and between RadioSunGroup of
               Texas, Inc. ("Borrower") and Kenneth R. Reynolds
               ("Lender") in the amount of $270,600.00.

               (gg)     Renewal and Extension Agreement effective    86
               January 2, 1998 by and between RadioSunGroup of
               Texas, Inc. ("Borrower") and Kenneth R. Reynolds
               ("Lender") in the amount of $32,800.00.

               (hh)     Tri-Party Payment Agreement effective        87
               January 2, 1998 by and between Radio SunGroup of
               Texas, Inc., Kenneth R. Reynolds, John Osburn
               and Arden Osburn.

               (ii)     List of SunGroup notes, which matured of     90
               February 15, 1998


    21         Subsidiaries of the Registrant (5)                    N/A

    27         Financial Data Schedule (5)                           N/A

    99         Financial Statements                                  94

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

1       Incorporated by reference to the Corporation's Annual Report on Form
        10-K for the year ended December 31, 1984.

2       Incorporated by reference to the Corporation's Annual Report on Form
        10-K for the year ended December 31, 1992.

3       Incorporated by reference to the Corporation's Annual Report on Form
        10-KSB for the year ended December 31, 1993.

4       Incorporated by reference to the Corporation's Annual Report on Form
        10-K for the year ended December 31, 1986.

5       Incorporated by reference to the Corporation's Annual Report on Form
        10-K for the year ended December 31, 1996.

                                      28