-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FUagMq8v6uBQTlaIonxXbAwxk3i/7e0AxztDzKgIWRgprxyluFeBgO81Qi/detWR 53r1lg3E+AyUxajwKOeAiA== 0000918402-96-000081.txt : 19960614 0000918402-96-000081.hdr.sgml : 19960614 ACCESSION NUMBER: 0000918402-96-000081 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19960613 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ORION FINANCIAL LTD CENTRAL INDEX KEY: 0000711210 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE AGENTS & MANAGERS (FOR OTHERS) [6531] IRS NUMBER: 840858679 STATE OF INCORPORATION: CO FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-11043 FILM NUMBER: 96580308 BUSINESS ADDRESS: STREET 1: 80 NORTH HOYT ST CITY: DENVER STATE: CO ZIP: 80226 BUSINESS PHONE: 8183044167 MAIL ADDRESS: STREET 1: 80 NORTH HOYT STREET CITY: DENVER STATE: CO ZIP: 80226 FORMER COMPANY: FORMER CONFORMED NAME: ORION BROADCAST GROUP INC DATE OF NAME CHANGE: 19900130 10-K/A 1 AMENDED ANNUAL REPORT ON FORM 10-K FORM 10-K/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________. Commission file Number: 0-11043 ORION FINANCIAL, LTD. ---------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Colorado 84-0858679 ------------------------------ ------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) Number) 80 North Hoyt Street Denver, Colorado 80226 -------------------------------------- (Address of Principal Executive Offices) Registrant's telephone number, including area code: (303) 238-0937 Securities registered pursuant to Section 12(g) of the Act: No Par Value Common Stock ------------------------- (Title of Class) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and, (2) has been subject to such filing requirements for the past 90 days. YES [ ] NO [X] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not 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-K or any amendment to this Form 10-K. [ ] As of March 11, 1996, the aggregate market value of the Registrant's voting stock held by nonaffiliates was $15,208. As of March 11, 1996, Registrant had 4,641,522 shares of its no par value common stock issued and outstanding. Total Pages __ PART I ITEM 1. BUSINESS (a) General Development of Business. Orion Financial, Ltd. (the "Company," formerly known as Orion Broadcast Group, Inc.), is a Colorado corporation formed on October 7, 1981. In May 1987, the Company, through Orion Financial Services Corporation, completed the acquisition and reorganization of FNRS Acquisition Corporation, formerly known as FN Acquisition, an indirect subsidiary of the Company, including the purchase of FN Realty Services ("FN Realty"), and the formation of FNRS Financial Corporation, both wholly-owned subsidiaries of FNRS Acquisition Corporation. The principal activities of these corporations included providing loan servicing and collection, accounting, data processing and portfolio administration services to the real estate and finance industries. On July 13, 1992, FNRS Financial Corporation, FN Realty Services, Inc., FNRS Acquisition Corporation, Orion Services Company, Orion Financial Services Corporation and Orion Broadcast of Rockford, Inc., all of which were direct or indirect subsidiaries of Orion Financial, Ltd., filed voluntary petitions in the United States Bankruptcy Court for the District of Colorado to reorganize under Chapter 11 of the Federal Bankruptcy laws. Effective June 25, 1993, the Company sold to Thomas A. Breen, who is currently a director of the Company and who was previously the President of the Company, all of the outstanding common stock of Orion Broadcast of Rockford, Inc. and all of the outstanding common stock of Orion Services Company, for $10.00. As a result, the Company no longer has any operations. The Company is seeking to enter into a business combination that would provide the Company with operations. Although at this time the Company is investigating business combinations, the Company has not agreed upon any specific business combination. (b) Financial Information About Industry Segments. The Company has no industry segments. (c) Narrative Description of Business. The Company has no operations to describe. (i) Products and Services. The Company has no operations. (ii) Status of Product. There has been no public announcement of, nor has the Company otherwise made public information about, any new product or industry segment of the Company requiring the investment by the Company of a material amount of its total assets, or which is otherwise material to the Company's operations. (iii) Raw Materials. The availability of raw materials is not applicable to the Company because the Company has no operations. (iv) Patents, Trademarks and Licenses. Not applicable. (v) Seasonality. The Company has no operations that could be seasonal in nature. (vi) Working Capital Items. The Company has no operations and, therefore, has no need to carry any significant amount of inventory or accounts receivable or other items which would require a large amount of working capital. (vii) Customer Dependence. The Company has no customers. (viii) Backlog of Orders. The Company has no operations that would give rise to a backlog of orders. (ix) Government Contracts. The Company has no government contracts. - 2 - (x) Competition. The Company has no operations. (xi) Research and Development. The Company has not engaged in any material research and development activities during its last three years. (xii) Environmental Regulation. Compliance with federal, state and local provisions regulating the discharge of materials into the environment does not have any material effect on the capital expenditures, earnings and competitive positions of the Company. (xiii) Employees. The Company currently has one part-time employee, Dean H. Boedeker, the Company's President, who receives compensation of $1,000 per month. (d) Financial Information About Foreign and Domestic Operations and Export Sales. The Company has no operations. ITEM 2. PROPERTIES The Company has no properties. ITEM 3. LEGAL PROCEEDINGS The Company is not involved in any material pending legal proceedings. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matter was submitted to a vote of the Company's security holders during the Company's fiscal quarter ended June 30, 1995. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS (a) Market Information. The Company's common stock is traded in the over-the-counter market. The following table shows the range of high and low bid quotations for the common stock, for the periods indicated, as reported by the National Quotation Bureau, Inc. These quotations represent inter-dealer prices without adjustment for retail markup, markdown, or commission and may not necessarily represent actual transactions.
Common Stock --------------------- Fiscal Quarter Ended High Low - -------------------- ---- ----- September 1993...................................... .01 .005 December 1993....................................... .02 .01 March 1994.......................................... .01 .005 June 1994........................................... .005 .005 September 1994...................................... .005 .005 December 1994....................................... .005 .005 March 1995.......................................... .005 .005 June 1995........................................... .005 .005
(b) Holders. As of March 8, 1996, the Company had approximately 1,029 holders of record of its no ------- par value common stock. - 3 - (c) Dividends. The Company has not declared cash dividends on its common stock since its inception and the Company does not anticipate paying any dividends in the foreseeable future. ITEM 6. SELECTED FINANCIAL DATA The following is selected consolidated financial information concerning the Company. This information should be read in conjunction with the consolidated financial statements appearing elsewhere in this Annual Report.
For the Years Ending June 30, -------------------------------------------------------------------- 1995 1994 1993 1992 1991 ---- ---- ---- ---- ---- (In thousands except per share information) Revenue .............................. $ -- $ 7 $ 14 $ 25 $ 32 Net income (loss) .................... 90 $ (57) $ (129) $(1,668) $ (22) Net income (loss) per Common Share ........................ 0.02 $ (0.01) $ (0.03) $ (0.36) -- Weighted Average Number of Shares Outstanding ................... 4,642 4,642 4,642 4,642 4,853 For the Years Ending June 30, -------------------------------------------------------------------- 1995 1994 1993 1992 1991 ---- ---- ---- ---- ---- (In thousands except per share information) Working Capital....................... $ 246 $ 79 $ 126 $ 158 $ 415 Total Assets ......................... 266 163 213 379 5,094 Total Long-Term Liabilities .......... -- -- -- -- 143 Total Stockholders' Equity ........... 246 156 213 342 2,009
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company has working capital of approximately $246,000 which should be sufficient for the Company to fund its obligations for the next 18 to 24 months provided the Company does not enter into a business combination that provides the Company with business operations. The Company's minimal cash position limits the Company in its future direction because it does not have the ability to raise additional funds through borrowings or equity offerings given its lack of business operations. The long term survivability of the Company depends on whether or not the Company is able to enter into a business combination that would provide the Company with successful business operations. The Company was relieved of its major debt guaranty due to the sale of its subsidiaries in June 1993. At the time of the sale, the Company had guaranteed approximately $485,000 of a subsidiary's bank debt. The Company has no material commitments for capital expenditures. - 4 - Results of Operations The Company had no significant operations during fiscal 1995, 1994 and 1993 other than occasional supervision of the bankruptcy proceedings of its subsidiaries. In January 1995, the Company received $208,000 from the settlement proceeds of a lawsuit in which FNRS Acquisition Corporation, a former subsidiary of the Company, was the plaintiff. The settlement proceeds were the only source of cash for the Company during fiscal 1995 and resulted in the Company realizing net income of $90,488 for fiscal 1995. The Company reported a loss of approximately $57,000 in fiscal 1994 and a loss of approximately $129,000 in fiscal 1993. The loss in fiscal 1994 was less than in fiscal 1993 because approximately $70,000 of the loss in fiscal 1993 was a one time loss that related to depreciation and writedown of obsolete computer equipment utilized by the bankrupt subsidiaries. Revenue in each fiscal year consisted of interest income on the remaining cash on hand. On July 13, 1992, the subsidiaries of the Company filed for protection under Chapter 11 of the federal bankruptcy laws. The filings were precipitated by a breach of contract by the Resolution Trust Corporation with FNRS Financial Corp. These subsidiaries were sold to an officer of the Company for a nominal amount in June 1993. Inflation The effects of inflation of the Company's operations is not material and is not anticipated to have any material effect in the future. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See Item 14(a) for a list of the Financial Statements included in this report following the signature page. The supplementary financial information required by Item 302 of Regulation S-K does not apply to the Company. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There were no changes in accountants or disagreements of the type required to be reported under this item between the Company and its independent accountants during the fiscal years ended June 30, 1995, and 1994. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (a) Identification of Directors The present term of office of each director will expire at the next annual meeting of shareholders. The name, position with the Company, age of each director and the period during which each director has served are as follows:
Name and Position in the Company Age Director Since - -------------------------------- --- ------------- Dean H. Boedeker ..................................... 61 1981 President, Chief Executive Officer and Director Thomas A. Breen ...................................... 39 1987 Director - 5 - Name and Position in the Company Age Director Since - -------------------------------- --- ------------- Donald W. Diones ..................................... 64 1981 Secretary and Director William J. White ..................................... 58 1995 Director
There was no arrangement or understanding between any director or any other person pursuant to which any director was selected as such. (b) Identification of Executive Officers. Each executive officer will hold office until his successor duly is elected and qualified, until his resignation or until he shall be removed in the manner provided by the Company's Bylaws. The Company's executive officers, their ages, positions with the Company and periods during which they served are as follows:
Name of Executive Officer and Position in Company Age Officer Since - ------------------------------------------------- --- ------------- Dean H. Boedeker...................................... 61 Chairman of the Board 1991 President and Chief Executive Officer 1993 Donald W. Diones...................................... 64 Secretary 1993
There was no arrangement or understanding between any executive officer and any other person pursuant to which any person was selected as an executive officer. (c) Identification of Certain Significant Employees. Not applicable. (d) Family Relationships. Not applicable. (e) Business Experience. Background. The following is a brief account of the business experience during the past five years of each director and executive officer of the Company: Name of Director or Officer Principal Occupation During the Last Five Years - ---------------- ------------------------------------------------ Thomas A. Breen Senior Vice President of WestStar Loan Servicing, Inc., which services loans, since January 1, 1995; President of Orion Broadcast of Rockford, Inc., a holding company which through its subsidiaries provides loan servicing, since June 1991; President of the Company from June 1991 to September 1993; Chief Financial Officer of the Company from January 1984 to September 1993; Secretary of the Company from May 1985 through June 1991; and director of the Company since July 1987. - 6 - Dean H. Boedeker Director of the Company since 1981; Chairman of the Board of Directors of the Company since July 1991; President and Chief Executive Officer of the Company since September 1993; Senior Vice President or Vice President of R A F Financial Corporation, an investment banking firm, since March 1992; Secretary and Treasurer and a director of Diones, Broom, Battreall & Boedeker, Inc., an investment banking firm, from June 1985 to March 1992. Donald W. Diones Director of the Company since 1981; Senior Vice President of Bigelow & Company, an investment banking firm, since May 1995; Senior Vice President of Dougherty Dawkins Strand & Bigelow, Incorporated, an investment banking firm, from October 1992 to May 1995; Senior Vice President of R A F Financial Corporation, an invest-ment banking firm, from March 1992 to October 1992; President and a director of Diones, Broom, Battreall & Boedeker, Inc., an investment banking firm, from June 1982 to March 1992. William J. White Director of the Company since 1995; Chairman of Bigelow & Company, an investment banking firm, since May 1995 President and owner of First Denver Financial Corporation, a private investment firm, since April 1992; President of the Affiliated Capital Markets division of Affiliated National Bank Denver (now BankOne), a national bank, from June 1990 to April 1992. Directorships. No director of the Company is a director of an entity that has its securities registered pursuant to Section 12 of the Securities Exchange Act of 1934. (f) Involvement in Certain Legal Proceedings. No event required to be reported hereunder has occurred during the past five years. (g) Promoters and Control Persons. No event required to be reported hereunder has occurred during the past five years. (h) Compliance With Section 16(a) of the Securities Exchange Act of 1934. To the Company's knowledge, during the Company's fiscal year ended June 30, 1995, the only director, officer or more than 10% shareholder of the Company failed to timely file a Form 3, Form 4 or Form 5 was William J. White who was late in filing a Form 3. ITEM 11. EXECUTIVE COMPENSATION The following table provides certain information pertaining to the compensation paid by the Company and its subsidiaries for services rendered to Dean H. Boedeker, the President of the Company during the Company's fiscal year ended June 30, 1995. No executive officer of the Company was paid over $100,000 in compensation from the Company and its subsidiaries during the Company's fiscal year ended June 30, 1995. - 7 -
SUMMARY COMPENSATION TABLE Long Term Compensation Annual Compensation Awards -------------------------------------------------- ----------- Other Year Annual Securities All Other Name and Ended Compen- Underlying Compensa- Principal Position June 30, Salary($) Bonus($) sation($) Options(#) tion($) - ------------------ -------- --------- -------- --------- ----------- --------- Dean H. Boedeker ...................... 1995 14,000(1) -- -- -- -- President and ........................ 1994 10,000(1) -- -- 400,000 -- Chief Executive ...................... 1993 -- -- -- -- -- Officer - ---------------------
(1) Mr. Boedeker is entitled to $1,000 per month for serving as the President and Chief Executive Officer of the Company. OPTION GRANTS IN LAST FISCAL YEAR No options were granted by the Company to Dean H. Boedeker during the Company's fiscal year ended June 30, 1995. FISCAL YEAR END OPTION VALUES The following table sets forth information with respect to the unexercised options held by Dean H. Boedeker as of June 30, 1995.
Number of Securities Underlying Unexercised Value of In-the-Money Options at Options at June 30, 1995(#) June 30, 1995($)(1) ------------------------- -------------------------- Name Exercisable/ Unexercisable Exercisable/ Unexercisable - ---- ----------- ------------- ----------- ------------- Dean H. Boedeker..... 400,000 - 0 - - 0 - - 0 - - ------------------------
(1) Value of unexercised in-the-money options is the market price of the underlying shares of common stock at June 30, 1995, less the exercise price of the options. Mr. Boedeker did not exercise any options during the Company's fiscal year ended June 30, 1995. Compensation of Directors--Standard Arrangement. Directors of the Company who are not employees or officers receive $500.00 plus expense reimbursement for each Board of Directors meeting which they attend. The Chairman of the Board and President receives $1,000 per month, as a stipend for the services he performs. Compensation of Directors--Other Arrangements. None. - 8 - Employment Contracts and Termination of Employment and Change-In-Control Arrangements. There is no employment contract between the Company and Dean H. Boedeker or any compensatory plan or arrangement between the Company and Dean H. Boedeker. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. (a)(b) Security Ownership of Certain Beneficial Owners and Management. The following table sets forth as of March 11, 1996, the number of shares of the Company's outstanding common stock beneficially owned by each of the Company's current directors and officers, sets forth the number of shares of the Company's common stock beneficially owned by all of the Company's current directors and officers as a group and sets forth the number of shares of the Company's common stock owned by each person who owned of record, or was known to own beneficially, more than 5% of the Company's outstanding shares of common stock:
Amount and Nature of Beneficial Percent Name of Beneficial Owner Ownership (1) of Class - ------------------------ ---------------- -------- Dean H. Boedeker.................. 573,072(2) 11.4% Thomas A. Breen................... 434,375(3) 8.6% Donald W. Diones.................. 531,572(4) 10.5% William J. White.................. 72,250 1.6% All officers and directors as a group (4 Persons)............ 1,611,269(5) 27.6% Thomas J. Bonomo.................. 582,929(6) 11.6% - ------------------
(1) Each person has the sole voting and investment power over the shares indicated. (2) Includes 400,000 shares underlying a stock option. Dean H. Boedeker's address is 1700 Lincoln Street, 32nd Floor, Denver, Colorado 80203. (3) Includes 400,000 shares underlying a stock option. Thomas A. Breen's address is 116 North Maryland, Lower Level, Glendale, California 91206. (4) Includes 400,000 shares underlying a stock option. Donald W. Diones' address is 1401 Seventeenth Street, Suite 1300, Denver, Colorado 80202. (5) Includes shares underlying the stock options held by Messrs. Boedeker, Breen and Diones. (6) Includes 400,000 shares underlying a stock option. Thomas J. Bonomo's address is 388 Market Street, No. 900, San Francisco, California 94111. (c) Changes in Control. There are presently no arrangements of any kind which may at a subsequent date result in a change in control of the Company. - 9 - ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS (a)(b) Transactions With Management and Others and Certain Business Relationships. Effective June 25, 1993, the Company sold all the outstanding shares of common stock of Orion Broadcast of Rockford, Inc. and Orion Services Company to Thomas A. Breen, the former President and a current director of the Company. Orion Broadcast of Rockford, Inc. directly or indirectly held a controlling interest in Orion Financial Services Corporation, FNRS Acquisition Corporation, FNRS Financial Corporation and FN Realty Services, Inc. Because of the bankruptcy of FNRS Financial Corporation and FN Realty Services, Inc., the Board of Directors of the Company determined that there was no possible benefit to the Company in retaining any direct ownership of Orion Broadcast of Rockford, Inc. or its subsidiaries. The total amount paid by Thomas A. Breen for the shares was $10.00. In addition, the Company was released from the Company's guarantee of approximately $500,000 of debt owed by FNRS Financial Corporation. In addition, Thomas A. Breen agreed for a two year period to provide services to the Company in the connection with the preparation of financial records and statements and in connection with the Company's filing requirements under the federal securities laws. At the same time, the Company entered into an agreement with Orion Broadcast of Rockford, Inc. pursuant to which the Company agreed to advance funds to enable Orion Broadcast of Rockford, Inc. to file lawsuits against certain persons who owed funds to Orion Broadcast of Rockford, Inc. In consideration for the advance of the funds, the Company agreed with Orion Broadcast of Rockford, Inc. that the Company would receive all amounts paid or advanced to collect on the debts and 50% of any amount over and above such amounts. The Company received a total of $1,000. In addition, the Company entered into an agreement with FNRS Acquisition Corporation pursuant to which the Company agreed to advance funds or directly pay all costs and expenses of pursuing the litigation of FNRS Acquisition Corporation, against First Nationwide Financial Corporation and others. The Company's total obligation was $50,000, which the Company would be entitled to receive out of the proceeds of the litigation. The balance of the proceeds would be divided so that the Company would receive 80% of the first $100,000, 70% of the next $100,000, 60% of the next $100,000 and 50% of any balance. As a result of settlement of the lawsuits, the Company has received approximately $208,500. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a)(1) Financial Statements. Independent Auditor's Report Balance Sheets--As of June 30, 1995 and 1994 Statements of Operations--Years ended June 30, 1995, 1994, and 1993 Statement of Changes in Stockholders' Equity--For the Period from July 1, 1992 through June 30, 1995 Statements of Cash Flows--Years ended June 30, 1995, 1994, and 1993 Notes to Financial Statements (a)(2) Financial Statement Schedules. None. (b) Current Reports on Form 8-K: No Current Reports on Form 8-K were filed during the fiscal quarter ended June 30, 1995. - 10 - (c) Exhibits. Exhibit 3(A) Articles of Incorporation of Orion Financial, Ltd., as amended (incorporated by reference to Exhibit 3(A) to Orion Financial, Ltd.'s Annual Report on Form 10-K for the fiscal years ended June 30, 1993 and 1992. Exhibit 3(B) Bylaws of Orion Financial, Ltd., as amended (incorporated by reference to Exhibit 3(B) to Orion Financial, Ltd.'s Annual Report on Form 10-K for the fiscal years ended June 30, 1993 and 1992. Exhibit 10(A) Orion Financial, Ltd. 1991 Non-Qualified Stock Option Plan (incorporated by reference to Exhibit 10(A) to Orion Financial, Ltd.'s Annual Report on Form 10-K for the fiscal years ended June 30, 1993 and 1992. Exhibit 10(B) Form of Option Agreement dated April 27, 1993 (incorporated by reference to Exhibit 10(B) to Orion Financial, Ltd.'s Annual Report on Form 10-K for the fiscal years ended June 30, 1993 and 1992. Exhibit 10(C) Form of Amendment to Option Agreement dated September 27, 1993 (incorporated by reference to Exhibit 10(C) to Orion Financial, Ltd.'s Annual Report on Form 10-K for the fiscal years ended June 30, 1993 and 1992. Exhibit 10(D) Agreement dated as of April 7, 1993, between the Company and Thomas A. Breen (incorporated by reference to Exhibit 10(D) to Orion Financial, Ltd.'s Annual Report on Form 10-K for the fiscal years ended June 30, 1993 and 1992. Exhibit 10(E) Agreement dated as of April 7, 1993, between the Company and Orion Broadcast of Rockford, Inc. (incorporated by reference to Exhibit 10(E) to Orion Financial, Ltd.'s Annual Report on Form 10-K for the fiscal years ended June 30, 1993 and 1992. Exhibit 10(F) Agreement dated as of April 7, 1993, between the Company and FNRS Acquisition Corporation (incorporated by reference to Exhibit 10(F) to Orion Financial, Ltd.'s Annual Report on Form 10-K for the fiscal years ended June 30, 1993 and 1992. Exhibit 27 Financial Data Schedule. - 11 - SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ORION FINANCIAL, LTD. a Colorado corporation By /s/ Dean H. Boedeker ----------------------- Dean H. Boedeker President, Principal Executive Officer Chief Financial Officer, and Principal Accou ting Officer Dated June 12, 1996 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: Date Name and Title Signature - ---- ---------------- ---------- June 12, 1996 Thomas A. Breen /s/ Thomas A. Breen Director ---------------------- June 12, 1996 Dean H. Boedeker /s/ Dean H. Boedeker Director ---------------------- June 12, 1996 Donald W. Diones /s/ Donald W. Diones Director ----------------------- June 12, 1996 William J. White /s/ William J. White Director ----------------------- - 12 - Orion Financial, Ltd. Report on Audit of Financial Statements For the Years Ended June 30, 1995, 1994, and 1993 ORION FINANCIAL, LTD. INDEX TO FINANCIAL STATEMENTS Page ---- Independent Auditor's Report................................................F-2 Balance Sheets - June 30, 1995 and 1994.....................................F-3 Statements of Operations - For the Years Ended June 30, 1995, 1994, and 1993........................................................F-4 Statement of Changes in Stockholders' Equity - For the Period from July 1, 1992 through June 30, 1995...............................F-5 Statements of Cash Flows - For the Years Ended June 30, 1995, 1994, and 1993.........................................................F-6 Notes to Financial Statements................................................F-7 INDEPENDENT AUDITOR'S REPORT Board of Directors Orion Financial, Ltd. Denver, Colorado We have audited the accompanying balance sheets of Orion Financial, Ltd. as of June 30, 1995 and 1994, and the related statements of operations, stockholders' equity and cash flows for each of the three years in the period ended June 30, 1995. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Orion Financial, Ltd., as of June 30, 1995 and 1994, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 1995, in conformity with generally accepted accounting principles. HEIN + ASSOCIATES LLP Denver, Colorado February 8, 1996 F-2
ORION FINANCIAL, LTD. BALANCE SHEETS JUNE 30, 1995 1994 --------- --------- ASSETS CURRENT ASSETS: Cash and cash equivalents ......................................... $ 18,443 $ 85,881 Marketable securities ............................................. 247,272 -- ----------- ----------- Total current assets .......................................... 265,715 85,881 FURNITURE AND EQUIPMENT, at cost: Furniture, fixtures, and equipment ................................ -- 27,549 Less accumulated depreciation ..................................... -- (25,549) ----------- ----------- -- 2,000 OTHER ASSETS: Restricted cash ................................................... -- 50,000 Advance to affiliate .............................................. -- 25,000 ----------- ----------- TOTAL ASSETS .......................................................... $ 265,715 $ 162,881 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES - Accounts payable and accrued expenses ............................. $ 19,241 $ 6,895 COMMITMENTS AND CONTINGENCIES (Note 6) STOCKHOLDERS' EQUITY: Preferred stock, no par value; 200,000,000 shares authorized; no shares issued or outstanding .................................. -- -- Common stock, stated value of $.08 a share; 200,000,000 shares authorized; 4,641,522 shares issued and outstanding ........... 371,322 371,322 Additional paid-in capital ........................................ 4,639,182 4,639,182 Accumulated deficit ............................................... (4,764,030) (4,854,518) ----------- ----------- Total stockholders' equity ................................ 246,474 155,986 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ............................ $ 265,715 $ 162,881 =========== ===========
See accompanying notes to these financial statements. F-3
ORION FINANCIAL, LTD. STATEMENTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, ---------------------------------------- 1995 1994 1993 ------------ ----------- ----------- REVENUE ................................ $ -- $ -- $ -- COSTS AND EXPENSES: General and administrative ......... 42,430 53,525 74,390 Depreciation and amortization ...... 2,000 10,000 15,550 ----------- ----------- ----------- Total expenses ............ 44,430 63,525 89,940 ----------- ----------- ----------- OTHER INCOME (EXPENSE): Interest income .................... 5,937 6,794 824 Other income ....................... 128,981 -- 13,566 Write-off of fixed assets .......... -- -- (53,638) ----------- ----------- ----------- 134,918 6,794 (39,248) ----------- ----------- ----------- NET INCOME (LOSS) ...................... $ 90,488 $ (56,731) $ (129,188) =========== =========== =========== NET INCOME (LOSS) PER COMMON SHARE ..... $ .02 $ (.01) $ (.03) =========== =========== =========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING ....................... 4,641,522 4,641,522 4,641,522 =========== =========== ===========
See accompanying notes to these financial statements. F-4
ORION FINANCIAL, LTD. STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE PERIOD FROM JULY 1, 1992 THROUGH JUNE 30, 1995 Additional Total COMMON STOCK Paid-In Accumulated Stockholders' Shares Amount Capital Deficit Equity --------- ---------- ------------ ------------ ------------- BALANCES, July 1, 1992 .... 4,641,522 $ 371,322 $ 4,639,182 $(4,668,599) $ 341,905 Net loss .... -- -- -- (129,188) (129,188) --------- ----------- ----------- ----------- ----------- BALANCES June 30, 1993 ... 4,641,522 371,322 4,639,182 (4,797,787) 212,717 Net loss .... -- -- -- (56,731) (56,731) --------- ----------- ----------- ----------- ----------- BALANCES June 30, 1994 ... 4,641,522 371,322 4,639,182 (4,854,518) 155,986 Net income .. -- -- -- 90,488 90,488 --------- ----------- ----------- ----------- ----------- BALANCES June 30, 1995 ... 4,641,522 $ 371,322 $ 4,639,182 $(4,764,030) $ 246,474 ========= =========== ========== ========== ==========
See accompanying notes to these financial statements. F-5
ORION FINANCIAL, LTD. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, ----------------------------------- 1995 1994 1993 --------- ---------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) ..................................................... $ 90,488 $ (56,731) $(129,188) Adjustments to reconcile net loss to net cash from operating activities: Depreciation and amortization ................................ 2,000 10,000 15,550 Write-off of fixed assets .................................... -- -- 53,638 Gain from settlement of litigation ........................... (128,981) -- -- Gain on sale of land ......................................... -- -- (13,566) Changes in operating assets and liabilities: ................. -- (Increase) decrease in Restricted Cash ................... 50,000 -- -- Increase (decrease) in Accounts payable and accrued expenses.......................... 12,346 6,895 (36,859) -------- ------- -------- Net cash provided by (used in) operating activities .......... 25,853 (39,836) (110,425) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of marketable securities ..................................... (247,272) -- -- Advance to affiliate .................................................. (54,571) -- 26,018 Proceeds from settlement of litigation ................................ 208,552 -- (25,000) Payments received from subsidiaries ................................... -- -- -- Proceeds from sale of land ............................................ -- -- 39,832 ------- ------- --------- Net cash provided by (used in) investing activities .......... (93,291) -- 40,850 ------- ------- --------- NET DECREASE IN CASH AND EQUIVALENTS ..................................... (67,438) (39,836) (69,575) CASH AND CASH EQUIVALENTS, beginning of year ............................. 85,881 125,717 195,292 ------- ------- ------- CASH AND CASH EQUIVALENTS, end of year ................................... $ 18,443 $ 85,881 $ 125,717 ========= ========= ========= SUPPLEMENTAL DISCLOSURES: Cash paid for interest ................................................ $ -- $ -- $ -- ========= ========= ========= Cash paid for taxes ................................................... $ -- $ -- $ -- ========= ========= =========
See accompanying notes to these financial statements. F-6 ORION FINANCIAL, LTD. NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION AND OPERATIONS: Operations - Orion Financial, Ltd. (the Company) was incorporated in Colorado in 1981. Through June 25, 1993, the Company had the following wholly-owned subsidiaries: Orion Services Company (formerly Vehicle Resource Corporation or VRC), Orion Broadcast of Rockford, Inc. (Orion Rockford), and United Leasing Company (inactive). In 1987, Orion Rockford formed Orion Financial Services Corporation (Orion Financial), a 94% owned subsidiary, to enter into the acquisition of FNRS Acquisition Corporation (FNRS Acquisition). FNRS Acquisition acquired FN Realty Services, Inc. (FN Realty) and formed FNRS Financial Corporation (FNRS) in fiscal 1988. The operations of VRC were discontinued in fiscal 1990, while the operations of FN Realty were discontinued during fiscal 1991. On July 13, 1992, all of the Company's active subsidiaries declared bankruptcy under Chapter 11 of the bankruptcy code. Effective June 25, 1993, the Company sold its entire interest in VRC and Orion Rockford to the former president of the Company (see Note 3). At present, the Company has no operations. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Cash Equivalents - Cash equivalents are generally comprised of highly liquid instruments with original maturities of three months or less, such as money funds and certificates of deposit. These investments are stated at cost which approximates market value. Furniture, Fixtures, and Equipment - Such amounts are stated at cost with depreciation computed principally using the straight-line method over the estimated useful lives of the assets, ranging from three to six years. Net Income (Loss) Per Share - Net income (loss) per share has been computed based on the weighted average number of shares outstanding during the period. Stock options have been excluded from the computation because their effect would be anti-dilutive. Income Taxes - The Company accounts for income taxes on the liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Marketable Securities - Marketable securities consist of U.S. Treasury bills, which have been classified as trading securities. Trading securities are carried at market value (which approximates cost) at June 30, 1995. F-7 ORION FINANCIAL, LTD. NOTES TO FINANCIAL STATEMENTS 3. SALE OF SUBSIDIARIES: On July 13, 1992, all of the Company's active subsidiaries declared bankruptcy under Chapter 11 of the bankruptcy code, due to, among other things, cash flow difficulties experienced after the loss of a major customer. The subsidiaries attempted to reorganize, but effective June 25, 1993, due to continuing losses, the Company sold its entire interest in the subsidiaries to the former president of the Company for a nominal amount and a release of the Company's guarantee on certain debt of FNRS. The transaction resulted in no gain or loss. 4. RESTRICTED CASH: Restricted cash is comprised of collateral on a bond posted by the Company for FNRS. The bond was required by a state in which FNRS previously conducted business. FNRS has voluntarily withdrawn from doing business in this state and surrendered its license. The underlying bond was released in August 1994. 5. RELATED PARTY TRANSACTIONS: On April 7, 1993, the Company entered into an agreement with FNRS Acquisition to advance it funds for a lawsuit it had brought against another party. The agreement limited such advances to a maximum of $50,000, of which $25,000 had been advanced at June 30, 1993. The Company was to be reimbursed for any advances made out of the proceeds of any settlement or judgment received, with proceeds in excess of advances allocated between the Company and FNRS Acquisition. The litigation was settled in January 1995, and the Company received approximately $208,000 from the settlement proceeds, resulting in a gain of approximately $129,000. The Company paid approximately $8,000 in legal expenses on behalf of some of its former subsidiaries during fiscal 1993. The legal expenses related to the bankruptcies of the former subsidiaries. The Company received $39,832 in repayments in July 1992 on amounts owed to it from VRC and Orion Rockford. 6. COMMITMENTS AND CONTINGENCIES: The Company was named as a co-defendant in a lawsuit brought against FNRS by a former vendor, which alleged breach of contract. Damages were not specified. The claim was dismissed pending settlement of FNRS's bankruptcy, but if the claim is not disposed of in the bankruptcy settlement, it could be refiled. The Company believes it has valid defenses against this claim. F-8 ORION FINANCIAL, LTD. NOTES TO FINANCIAL STATEMENTS 7. STOCKHOLDERS' EQUITY: The Company adopted an incentive stock option plan in 1984 reserving 312,500 shares of common stock for certain employees, officers, and directors. The exercise price was required to be at least the fair market value of the stock on the date of the grant, and the term of each option granted was not to be for more than ten years from the date of the grant. The plan expired in February 1994. If options were granted to individuals owning more than ten percent (10%) of the outstanding common stock, the exercise price had to be at least one hundred ten percent (110%) of the fair market value of the stock on the date of the grant and the term for each option granted would not be for more than five years from the date of the grant. On July 13, 1987, the Board of Directors of the Company granted a stock option under the 1984 stock option plan for 187,500 shares of the Company's common stock to a director and officer of the Company. The option was exercisable at $.72 per share with 62,500 options expiring in July 1992, 1993, and 1994. No options were exercised and they have all expired. In June 1991, the Board granted a stock option under the 1984 plan to an officer of the Company for 30,000 shares exercisable at $.47 per share through 2001. None of these options have been exercised. On November 8, 1991, the Company adopted a 1991 Non-Qualified Stock Option Plan for the directors, officers and employees of the Company. Two million shares are reserved under this plan. The terms of each option granted will not be for more than ten years from date of grant, and no options can be granted under the plan after November 8, 2001. No options have been granted under this plan. In April 1993, the Board of Directors of the Company granted stock options covering 2,000,000 shares of the Company's common stock, 400,000 shares each to four directors of the Company at that time (including the president of the Company), and 400,000 shares to an individual from the Company's legal counsel. The options are exercisable at $.03 per share through April 1998. None have been exercised to date. The Company has authorized, but unissued, preferred stock which may be issued in series with such preferences as determined by the Company's Board of Directors. F-9 ORION FINANCIAL, LTD. NOTES TO FINANCIAL STATEMENTS 8. INCOME TAXES: There was no provision for income taxes for the year ended June 30, 1995 due to the use of net operating loss carryforwards. The amounts which give rise to the net deferred tax asset (liability) as of June 30, 1995, are as follows: Net operating loss carryforward..... $ 450,000 Valuation allowance ................ (450,000) -------- Net deferred tax asset (liability).. $ -- ========= At June 30, 1995, the Company had net operating losses (NOL) carryforwards for income tax purposes of approximately $1,200,000 that will expire between 1997 and 2010. Upon the sale of the Company's subsidiaries in June 1993, a substantial portion of the NOL carryforwards were lost for use by the Company, as they had been incurred at the subsidiary level. 9. SUMMARIZED FINANCIAL INFORMATION OF SUBSIDIARIES: Following are the results of operations of FNRS Acquisition: Statement of Operations
FOR THE PERIOD ENDED JUNE 25, 1993 ------------ (Unaudited) Revenue................................. $3,713,000 Operating expenses...................... 3,532,000 ---------- Net income.............................. $ 181,000 ==========
F-10 EXHIBIT INDEX Exhibit Description Page No. - ------- ----------- -------- 3(A) Articles of Incorporation of Orion Financial, N/A Ltd., as amended (incorporated by reference to Exhibit 3(A) to Orion Financial, Ltd.'s Annual Report on Form 10-K for the fiscal years ended June 30, 1993 and 1992. 3(B) Bylaws of Orion Financial, Ltd., as amended N/A (incorporated by reference to Exhibit 3(B) to Orion Financial, Ltd.'s Annual Report on Form 10-K for the fiscal years ended June 30, 1993 and 1992. 10(A) Orion Financial, Ltd. 1991 Non-Qualified Stock N/A Option Plan (incorporated by reference to Exhibit 10(A) to Orion Financial, Ltd.'s Annual Report on Form 10-K for the fiscal years ended June 30, 1993 and 1992. 10(B) Form of Option Agreement dated April 27, 1993 N/A (incorporated by reference to Exhibit 10(B) to Orion Financial, Ltd.'s Annual Report on Form 10-K for the fiscal years ended June 30, 1993 and 1992. 10(C) Form of Amendment to Option Agreement dated N/A September 27, 1993 (incorporated by reference to Exhibit 10(C) to Orion Financial, Ltd.'s Annual Report on Form 10-K for the fiscal years ended June 30, 1993 and 1992. 10(D) Agreement dated as of April 7, 1993, between the N/A Company and Thomas A. Breen (incorporated by reference to Exhibit 10(D) to Orion Financial, Ltd.'s Annual Report on Form 10-K for the fiscal years ended June 30, 1993 and 1992. 10(E) Agreement dated as of April 7, 1993, between the N/A Company and Orion Broadcast of Rockford, Inc. (incorporated by reference to Exhibit 10(E) to Orion Financial, Ltd.'s Annual Report on Form 10-K for the fiscal years ended June 30, 1993 and 1992. 10(F) Agreement dated as of April 7, 1993, between the N/A Company and FNRS Acquisition Corporation (incorporated by reference to Exhibit 10(F) to Orion Financial, Ltd.'s Annual Report on Form 10-K for the fiscal years ended June 30, 1993 and 1992. EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AND STATEMENT OF OPERATIONS OF ORION FINANCIAL, LTD AS OF JUNE 30, 1995 AND FOR THE YEAR THEN ENDED. 12-MOS JUN-30-1995 JUN-30-1995 18,443 247,272 0 0 0 265,715 0 0 265,715 19,241 0 0 0 371,322 0 265,715 0 0 0 0 44,430 0 0 90,488 0 90,488 0 0 0 90,488 .02 .02
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