UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                   FORM 10-QSB

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                       For the period ended June 30, 1997

                                       OR
[ ] TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE 
    EXCHANGE ACT OF 1934  
                     For the  transition  period from  __ to __

                           Commission File No. 0-22744


                           VIKING CAPITAL GROUP, INC.
                           -------------------------
        (Exact name of small business issuer as specified in its charter)


                     Utah                             87-0442090
                     ----                             ----------
         (State or other jurisdiction of      (IRS Employer Identification No.)
         incorporation or organization)

                         Two Lincoln  Centre,  Suite 300,  5420 LBJ FWY,
                         Dallas, Texas 75240  (Address of principal
                         executive offices)

                                 (214) 386-9996
                           (Issuer's telephone number)


 (Former name, former address and former fiscal year, if changed since 
  last report)

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

As of June 30,  1997,  14,322,511  shares of  Common  Stock of the  issuer  were
outstanding.


<PAGE>




                           VIKING CAPITAL GROUP, INC.



                                      INDEX


                                                                        Page
                                                                        Number
                                                                        ------
PART I - FINANCIAL INFORMATION

      Item 1. Financial Statements
            
         Consolidated Balance Sheets - June  30, 1997 and 12/31/1996        3

         Consolidated Statements of Operations - For the three              
         months ended June  30, 1997, 1996, and November 12, 1986           4   

         Consolidated Statements of Operations - For the six              
         months ended June  30, 1997, 1996, and November 12, 1986           5 

         Consolidated Statement of Stockholders' Equity (Deficit)           6

         Consolidated Statements of Cash Flows - For the three
         months ended June  30, 1997 and 1996                               7

         Notes to Consolidated Condensed Financial Statements               9


      Item 2. Management's Discussion and Analysis or Plan of Operation.   10


PART II - OTHER INFORMATION

      Item 5. Other Information                                            11

SIGNATURES                                                                 13

                                       2
<PAGE>

                           VIKING CAPITAL GROUP, INC.
                        (A Development Stage Enterprise)

                           CONSOLIDATED BALANCE SHEETS

                                   (Unaudited)

<TABLE>
<S>                                                           <C>                 <C>   

                                                                    June 30,       December 31,
                                                                    1997           1996
                                                              ----------------------------------
                                                   ASSETS

Current Assets:
    Cash                                                       $    11,832           $     9,920
    Accounts receivable                                                  0                99,703

    Notes and accounts receivable and accrued interest              77,241                72,485
    Prepaid expenses                                                22,075                   588
                                                                -----------          -----------
        Total Current Assets                                       111,147               182,696

Office furniture and equipment, net                                 99,133               103,538
                                                                                

Other Assets:
    Other assets                                                    31,767                31,767
                                                               -----------           -----------
        Total Other Assets                                          31,767                31,767
                                                               -----------           -----------

Total Assets                                                   $   242,047           $   318,001
                                                               ===========           ===========

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:
    Accounts payable and accrued expenses                      $    44,536           $    87,289
    Accrued payroll and payroll taxes                              353,477               304,342
    Dividends payable                                                   -0-                  -0-
    Note payable and accrued interest                              789,637               342,329
                                                               -----------           -----------
        Total Current Liabilities                                1,187,650               733,960

Long-term debt:
    Notes payable                                                       -0-                  -0-
    Obligations under capital leases, less current portion          93,546                76,565
                                                               -----------           -----------
         Total Liabilities                                     $ 1,281,196               810,525

Stockholders' Deficit:
    Common stock $0.001 par value; 150,000,000 shares authorized;
         14,322,511 and 13,971,720 issued and outstanding as of
         June 30, 1997 and December 31, 1996, respectively          14,323                 13,971
    Common stock Class B $0.001 par value; 100,000 shares
         authorized and outstanding                                    100                    100
    Preferred stock $1.00 par value; 50,000,000 shares authorized;
    -0- and -0-  shares issued and outstanding as of
    June 30, 1997 and December 31, 1996, respectively                   -0-                   -0-
                                                                 
    Paid-in capital                                              3,341,626              3,294,575
                                                                                                            
    Deficits accumulated in the development stage               (4,388,789)            (3,794,764)
                                                               -----------            -----------
         Total Stockholders' Deficit                            (1,032,740)              (486,118)
                                                                                                               

    Less  Treasury stock, 25,625                                    (6,406)                 6,406
                                                               -----------            -----------
                                                                                                               
    Total stockholder's deficit                                 (1,039,146)              (492,524)

TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT                     $   242,047            $   318,001
                                                               ===========            ===========
                                                                          
</TABLE>

                                       3
<PAGE>


                           VIKING CAPITAL GROUP, INC.
                        (A Development Stage Enterprise)

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                    Three Months Ended June 30, 1997 and 1996
         and Period from November 12, 1986 (inception) to June 30, 1997

<TABLE>
<S>                                                     <C>            <C>           <C>     

                                                                                     Period from
                                                          Three Months Ended         November 12,
                                                               June 30,               1986 to
                                                           1997        1996          June 30, 1997
                                                          ----------------------------------------

Revenue                                                 $        -0-   $       -0-    $   316,855

Cost and expenses:
    Depreciation and amortization                             7,653            350         28,618
    General and administrative expenses                     258,394        350,893      4,534,324
                                                        -----------    -----------    -----------
       Total cost and expenses                             266,047         351,243      4,562,942
                                                        -----------    -----------    -----------

Loss from operations                                      (266,047)       (351,243)    (4,246,087)


Other income/expenses:
    Interest income                                          2,568           2,077         21,129
    Interest and penalty expense                           (23,809)         (4,733)       105,318
    Other                                                      -0-             -0-        (37,260)
                                                        ----------     -----------    -----------
      Total other income/expense                           (21,241)         (2,656)      (121,449)
                                                        -----------    -----------    -----------
        

Loss before income taxes                               $  (287,288)       (353,899)   $(4,367,568)

Income tax provision                                            -0-            -0-            (32)
                                                        -----------    ------------   -----------

Net loss                                                  (287,288)   $  ,(353,899)   $(4,367,568)
                                                        ===========    ===========    ===========
 


Loss per common share attributable to common 
   stockholders:
       Primary                                          $    (.020)    $     (.027)
       Assuming full dilution                           $    (.020)    $     (.027)

Dividends per share of preferred stock                  $       -0-    $       -0-


</TABLE>

                                       4

<PAGE>



                           VIKING CAPITAL GROUP, INC.
                        (A Development Stage Enterprise)

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                     Six Months Ended June 30, 1997 and 1995
         and Period from November 12, 1986 (inception) to June 30, 1997


<TABLE>
<S>                                                             <C>               <C>                <C>    

                                                                                                     Period from
                                                                         Six Months Ended            November 12,
                                                                             June 30,                   1986 to
                                                                      1997            1996           June 30, 1997
                                                                  ------------------------------------------------

Revenue                                                          $        -0-     $       -0-       $     316,855

Cost and expenses:
    Depreciation and amortization                                      14,783              650             28,618
    General and administrative expenses                               543,221          613,541          4,524,355
                                                                 ------------     ------------       ------------
       Total cost and expenses                                        558,004          614,191          4,552,973
                                                                 ------------     ------------       ------------

Loss from operations                                                 (558,004)        (614,191)        (4,236,118)


Other income/expenses:
    Interest income                                                     5,168            3,447             21,129
    Interest and penalty expense                                      (41,189)         (11,278)          (105,318)
    Other                                                                 -0-              -0-            (37,260)      
                                                                -------------     ------------      -------------
       Total other income/expenses                                     (36,021)         (7,831)          (121,449)
                                                                 ------------     -----------        -------------

Loss before income taxes                                             (594,025)        (622,022)        (4,357,567)

Income tax provision                                                     -0-               -0-                 (32)
                                                                 -----------      ------------       -------------

Net loss                                                         $   (594,025)    $   (622,022)      $  (4,357,599)
                                                                 ============     ============       =============
 


Loss per common share attributable to common stockholders:
       Primary                                                   $      (.041)    $       (.048)
       Assuming full dilution                                    $      (.041)    $       (.048)

Dividends per share of preferred stock                           $        -0-     $         -0-


</TABLE>



                                       5

<PAGE>



                           VIKING CAPITAL GROUP, INC.

                        (A Development Stage Enterprise)

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
                                   (Unaudited)
                         Six Months Ended June 30, 1996

<TABLE>
<S>                                                                     <C>              <C>              <C>    

                                                                                          Deficit
                                                                                          Accumulated
                                       Class B                            Additional       During the
                                      Common     Common    Preferred      Paid-in         Development     Treasury
DOLLAR AMOUNTS                         Stock      Stock       Stock        Capital            Stage         Stock           Total
--------------                      ----------- ---------- ----------    ------------     -------------  ---------     ----------

Balance, December 31, 1996         $    100     $ 13,971 $     -0-      $  3,294,764     $  (3,794,764)    (6,406)    $  (492,524)  
                                                                                                                                   
Issuance of common stock:                                                                                                          
    For services                        -0-          216       -0-            21,374               -0-        -0-          21,590  
    For cash                            -0-           25       -0-             7,475               -0-        -0-           7,500  
                                                                                                                                   
Retirement of:                                                                                                                     
    Common stock                        -0-         -0-        -0-                -0-              -0-        -0-             -0- 
    Preferred stock                     -0-         -0-        -0-                -0-              -0-        -0-             -0-
                                                                                                                                   
Cumulative preferred stock                                                                                                         
    dividends                           -0-         -0-        -0-                -0-              -0-        -0-             -0-
                                                                                                                                   
Net loss                                -0-         -0-        -0-                -0-         (594,025)       -0-        (594,025)  
                                    -------    --------    ---------    ------------     --------------    -------     ------------
                                                                                                                                   
Balance, June 30, 1997            $    100     $ 14,320 $      -0-     $  3,341,626     $   (4,388,789)       -0-     $ (1,039,149)
                                    =======    ========    =========    ============     ==============                ============
                                                                                                                                   
</TABLE>                         
                       

                                                   Shares Issued
                                                    -------------
                                           Class B
                                          Common      Common         Preferred
SHARE AMOUNTS                              Stock       Stock          Stock
--------------
Balance, December 31, 1996                 100      13,971,720     10,000
                                          -------------------------------------
Issuance of common stock:
    For services                             -0-      215,900             -0-
    For cash                                 -0-       25,000             -0-
    For loan & interest conversion           -0-       37,358             -0-
    For loan Incentive                       -0-       71,033            
    

Balance, June 30, 1997                      100     14,321,011           -0-
                                     ===========     ==========    ==========


                                       6
<PAGE>



                           VIKING CAPITAL GROUP, INC.

                        (A Development Stage Enterprise)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                     Six Months Ended June 30, 1997 and 1996
         and Period from November 12, 1986 (inception) to June 30, 1997


<TABLE>
<S>                                                                     <C>     <C>     <C>            <C>   
                   
                                                                                 Period from
                                                                            Six Months Ended           November 12,
                                                                              June 30,                 1986 to
                                                                              1997        1996        June 30, 1997
                                                                          ------------------------------------------

Cash Flows From Operating Activities:
    Net loss                                                             $  (594,025)   $   (622,022)  $(4,357,599)
    Noncash charges included in operations
       Depreciation and amortization                                          14,783             650        28,618
       Common stock issued for services                                       28,696         209,843      1,028,825 
       Class B Common stock issued for services                                  -0-             -0-           100
       Note payable issued for services                                          -0-             -0-         3,200
       Common stock issued for services and accrued expenses                     -0-             -0-        52,754
       Provision for doubtful notes receivable                                   -0-             -0-        20,102
       Common stock issued for interest payable                                  -0-             -0-        20,102
       Loss on assets                                                            -0-             -0-        15,000
    Changes in assets and liabilities
       Accounts Recievable                                                    99,703             -0-        -0-        
       Prepaid Expenses                                                       (21,487)        (21,518)     (21,487)   
       Accrued interest receivable                                               -0-           (3,750)      (7,211)
       (Increase) in deposits                                                    -0-             -0-       (31,767)     
       Accounts payable and accrued expenses                                 (29,452)        (12,409)       63,417
       Accrued payroll and payroll taxes                                      42,435           4,611       344,987
       Advances to stockholder expensed to consulting                            -0-             -0-        57,706
                                                                         -----------    ------------   -----------
            Net Cash Used for Operating Activities                          (459,347)       (430,595)   (2,772,921)
Cash Flows From Investing Activities:
    Capital expenditures                                                         -0-          (1,009)       21,464
    Loans made to shareholder                                                    -0-             -0-       (17,000)
    Loans made to others                                                     (4,756)         (57,730)      (191,264)
    Loan repayments                                                            5,000             -0-        15,500
    Other                                                                        -0-          (2,000)      (15,000)
                                                                         -----------    ------------   -----------
           Net Cash Used for Investing Activities                            (4,756)         (55,754)     (229,228)
Cash Flows From Financing Activities:
    Stock sale expenses                                                          -0-             -0-       (11,716)
    Proceeds from sale of common stock                                        17,500         601,850     1,728,293
    Proceeds from notes payable                                              573,900             -0-     1,792,886
    Repayment of notes payable                                               (115,385)        (82,500)    (498,329)
    Security deposit                                                             -0-          (21,517)        -0-
    Proceeds from preferred stock sale                                           -0-             -0-        20,000
    Repurchase of preferred stock                                                -0-          (11,319)     (11,319)
    Preferred dividends paid                                                     -0-             (300)      (5,834)
                                                                         -----------    ------------   -----------
           Net Cash Provided by Financing Activities                          466,015         536,214    3,013,981
                                                                         -----------    ------------   -----------

Increase (decrease) in Cash                                                  1,912             40,860     11,832

Cash at Beginning of Period                                                  9,920             77,023          -0-
                                                                         -----------    ------------   -----------

Cash at End of Period                                                    $  11,832     $      117,883  $  11,832
                                                                         ===========    ============   ===========

</TABLE>

                                       7
<PAGE>


                           VIKING CAPITAL GROUP, INC.
                        (A Development Stage Enterprise)

               CONSOLIDATED STATEMENTS OF CASH FLOWS- (Continued)
                                   (Unaudited)
                     Six Months Ended June 30, 1997 and 1996
         and Period from November 12, 1986 (inception) to June 30, 1997

         SUPPLEMENTAL DISCLOSURE OF CASH FLOW AND NON-CASH INVESTING AND
                              FINANCING ACTIVITIES

<TABLE>
<S>                                                            <C>               <C>               <C>    

                                                                                                      Period from
                                                                      Six Months Ended               November 12,
                                                                             June 30,                   1986 to
                                                                      1997           1996           June 30. 1997
                                                                --------------------------------------------------

Cash Flow Information:
    Interest paid                                              $         -0-          $  5,563       $     34,642
    Income taxes paid                                          $         -0-               -0-       $         32


Non-Cash Investing Activities:
    Common stock issued for:
       Acquisition of VISI                                      $        -0-          $    -0-       $        434
       Oil lease                                                $        -0-          $    -0-       $     40,000

Non-Cash Financing Activities:
    Preferred stock issued for:
       Note payable-related party                               $        -0-          $     -0-      $     60,000
       Accrued interest-related party                           $        -0-          $     -0-      $      4,500
       Accrued expenses-related party                           $        -0-          $     -0-      $     25,500

    Common stock issued for:
       Services                                                 $     28,696          $   209,843    $    890,612
       Repayment of notes payable                               $     11,207          $     2,500    $    321,357
       Payment of interest                                      $        -0-          $       150    $     20,103
       Payment of accounts payable                              $        -0-          $        -0-   $     15,000
       Conversion of preferred stock                            $        -0-          $        -0-   $    100,000
       Payment of preferred stock dividend                      $        -0-          $        -0-   $     25,556

    Note payable issued for services                            $        -0-          $        -0-   $      3,200
    Assignment of oil lease in payment of note payable          $        -0-          $        -0-   $     40,000

Common stock acquired for conversion of note receivable         $        -0-          $        -0-   $      6,406

Common stock cancelled for conversion of note receivable        $        -0-          $        -0-   $      5,600

Additions to equipment under capital leases                     $     10,378          $        -0-   $    107,631

</TABLE>

                                       8
<PAGE>




                           VIKING CAPITAL GROUP, INC.

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)



1.   The interim financial  statements are prepared pursuant to the requirements
     for reporting on Form 10-QSB.  The June 30, 1997 financial  statements were
     derived from unaudited data and does not include all  disclosures  required
     by  generally  accepted  accounting   principles.   The  interim  financial
     statements  and  notes  thereto  should  be read in  conjunction  with  the
     financial  statements and notes included in the Company's Form 10-KSB as of
     and for the period ended  December 31, 1996. In the opinion of  management,
     the  interim  financial  statements  reflect  all  adjustments  of a normal
     recurring  nature  necessary  for a fair  statement  of the results for the
     interim periods presented. The current period results of operations are not
     necessarily indicative of results which ultimately will be reported for the
     full year ending December 31, 1997.

      The financial  statements  have been prepared on the  assumption  that the
      Company will continue as a going concern.  Its continued existence depends
      upon the  success  of  management's  efforts to raise  additional  capital
      necessary to meet the Company's obligations as they come due and to obtain
      sufficient capital to execute its business plan.

      Management  has  estimated  that the Company  will  require an  additional
      $300,000 to $500,000 to operate until phase two is completed. Phase two of
      the Company's  plans to acquire an insurance  company and to acquire books
      of business  from existing  insurance  companies  will require  additional
      capital.

      During the period  April 1, 1997 to June 30,  1997,  the Company  incurred
      additional short term debt of approximately $255,500.

      There  can be no  degree  of  assurance  given  that the  Company  will be
      successful in completing  additional  financing  transactions.  Should the
      Company be unsuccessful in its efforts to obtain adequate  financing,  its
      current financial  condition may be affected  adversely,  and such affects
      may be material.
                                       9


<PAGE>


2.   817,490  common stock options were granted during the second quarter at the
     rate of between $0.30 to $1.00 per share for a period of one to five years.


                           SUBSEQUENT TO JUNE 30, 1997

         Subsequent  to June 30,  1997,  548,948  options were issued for one to
five years with option prices ranging from $0.50 to $1.00

Item 2. Management's Discussion and Analysis or Plan of Operations.


Material Changes in Results of Operations

         During  the  three  month  period  ended  June 30,  1997,  the  company
continued in its efforts to secure  capital and  implement  its proposed plan of
business. The Company had no operating revenues during such period.

         In  connection  with its efforts to attract  capital and  implement its
plan of business,  the Company incurred general and administrative  expenses and
reported net losses of $258,394 and  $266,047  respectively  for the three month
period ended June 30, 1997.


Material Changes in Financial Condition, Liquidity and Capital Resources

         The Company had a cash balance of $11,832 at June 30, 1997.  During the
second quarter of 1997,  the company  raised  $255,500 via short term loans from
unrelated and related parties.

                                       10

<PAGE>


         Even after the  receipt of  $255,500  from these  sources,  the Company
lacks  adequate  financing to implement  its full plan of business or to sustain
its operations beyond the following twelve months.  Management  believes that to
support the first  stage of the  Company's  plan of  operations,  involving  the
supporting of the operations of its  subsidiaries;  Viking  Insurance  Services,
Inc., Viking Financial  Services,  Inc., Viking  Administrator,  Inc. and Viking
Systems Inc., will require  additional  capital over the next twelve months. The
Company is currently  evaluating  various options to raise  additional  capital,
including  possible  placements  of debt  and  equity.  There  is no  assurance,
however,  that the Company will be successful in securing  additional  financing
and,  therefore,  there is no assurance  that the Company can implement its full
plan of operations.

                           PART II - OTHER INFORMATION

Item 5. Other Information

         The Company's common stock trades on the OTC Electronic Bulletin Board.
Its symbol is "VGCP".

         Company  information can be found on the World Wide Web. The address is
http://www.vcgi.com.

  
                                     11
<PAGE>


                                  EXHIBIT INDEX
                                  -------------


EXHIBIT
NUMBER                           DESCRIPTION
-------                          -----------



21.1                             List of Subsidiaries of the Registrant 
27.1                             Financial Data Schedule  



                                       12



<PAGE>


                                   SIGNATURES



         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



                                                   VIKING CAPITAL GROUP, INC.

Dated: August 14, 1997                     By:  \s\  William J. Fossen
                                                ---------------------------
                                                William J. Fossen, President


Dated: August 14, 1997                      By: \s\  William J. Fossen
                                                ------------------------
                                                William J. Fossen, Principal
                                                Financial and Accounting Officer


                                       13

<PAGE>