-----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, MCbHH5Z/oQPpEk5F2ZBoVoz/+QX1er5ok4joYxeqjnjiER9cDxUGzHHRXnBOw012 u6siqCxT7v4X4MMS8F/heg== 0001021890-97-000295.txt : 19971028 0001021890-97-000295.hdr.sgml : 19971028 ACCESSION NUMBER: 0001021890-97-000295 CONFORMED SUBMISSION TYPE: 10KSB/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19971027 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: 0930 FILING VALUES: FORM TYPE: 10KSB/A SEC ACT: SEC FILE NUMBER: 000-11043 FILM NUMBER: 97700784 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 10KSB/A 1 AMENDED ANNUAL REPORT ON FORM 10-KSB JUNE 30, 1997 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KSB/A [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 1997 OR [ ] TRANSITION REPORT UNDER 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. -------------------------------------------- (Name of small business issuer in its charter) Colorado 84-0858679 ------------------------------ ---------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 80 North Hoyt Street Denver, Colorado 80226 -------------------------------------- -------- (Address of principal executive offices) (Zip Code) Issuer's telephone number: (303) 238-0937 Securities registered under Section 12(b) of the Exchange Act: NONE Securities registered under Section 12(g) of the Exchange Act: No Par Value Common Stock ------------------------- (Title of Class) 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. ES [X] NO [ ] Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of 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. [ ] The issuer had no revenues for the fiscal year ended June 30, 1997. As of October 2, 1997, the aggregate market value of the issuer's voting stock held by nonaffiliates was $70,811.76. As of October 2, 1997, the issuer had 4,641,522 shares of its no par value common stock issued and outstanding. Transitional Small Business Format. YES [ ] NO [X] ORION FINANCIAL, LTD. 1997 FORM 10-KSB ANNUAL REPORT TABLE OF CONTENTS PART I PAGE NUMBER - ------ ----------- Item 1. Description of Business 3 Item 2. Description of Property 3 Item 3. Legal Proceedings 3 Item 4. Submission of Matters to Vote of Security Holders 3 PART II - ------- Item 5. Market for Common Equity and Related Stockholder Matters 3 Item 6. Management's Discussion and Analysis or Plan of Operation 4 Item 7. Financial Statements 4 Item 8. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 4 PART III - -------- Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act 5 Item 10. Executive Compensation 6 Item 11. Security Ownership of Certain Beneficial Owners and Management 8 Item 12. Certain Relationships and Related Transactions 9 Item 13. Exhibits and Reports on Form 8-K 9 Signatures 10 2 PART I ITEM 1. DESCRIPTION OF BUSINESS (a)(b) BUSINESS DEVELOPMENT AND BUSINESS OF THE ISSUER. Orion Financial, Ltd. (the "Company," formerly known as Orion Broadcast Group, Inc.), is a Colorado corporation formed on October 7, 1981. 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 the Company is currently investigating business combinations, the Company has not agreed upon any specific business combination. The Company recently planned to enter the business of manufacturing and selling children's shoes through the acquisition of the assets of a shoe company that is no longer in business. The Company loaned the acquisition candidate $10,000 and paid $60,000 as a standby letter of credit fee. The transaction has not been consummated because certain financing pre-conditions were not satisfied. The Company believes that it will recover the $60,000 fee but will not recover the $10,000 loan. The Company currently has one part-time employee, Dean H. Boedeker, the Company's President. ITEM 2. DESCRIPTION OF PROPERTY The Company has no properties. ITEM 3. LEGAL PROCEEDINGS The Company is a party to no 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, 1997. PART II ITEM 5. MARKET FOR 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 closing 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 3 without adjustment for retail markup, mark down, or commission and may not necessarily represent actual transactions. Common Stock ---------------------- Fiscal Quarter Ended High Low -------------------- ---- --- September 1995 .......................... .005 .005 December 1995 ........................... .005 .005 March 1996 .............................. .005 .005 June 1996 ............................... .005 .005 September 1996 .......................... .005 .005 December 1996 ........................... .005 .005 March 1997 .............................. .005 .005 June 1997 ............................... .005 .005 (b) HOLDERS. As of October 2, 1997, the Company had approximately 1,025 holders of record of its no par value common stock. (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. (d) RECENT SALES OF UNREGISTERED SECURITIES. No unregistered equity securities were sold by the Company between July 1, 1996 and June 30, 1997. ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Company has working capital of approximately $203,041, which should be sufficient for the Company to fund its obligations for the next 12 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 has no material commitments for capital expenditures. ITEM 7. FINANCIAL STATEMENTS The financial statements are attached following the signature page. ITEM 8. 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, 1997 and 1996. 4 PART III ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT (a) IDENTIFY DIRECTORS AND EXECUTIVE OFFICERS 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 ................ 62 1981 President, Chief Executive Officer and Director Donald W. Diones ................ 65 1981 Secretary and Director William J. White ................ 59 1995 Director There was no arrangement or understanding between any director or any other person pursuant to which any director was selected as such. 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 ................ 62 Chairman of the Board 1991 President and Chief Executive Officer 1993 Donald W. Diones ................ 65 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. 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: 5 Name Of Director or Officer Principal Occupation During The Last Five Years - ----------------- ----------------------------------------------- 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. 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 investment banking firm, from March 1992 to October 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. 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. (b) IDENTIFY SIGNIFICANT EMPLOYEES. Not applicable. (c) FAMILY RELATIONSHIPS. Not applicable. (d) INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS. No event required to be reported hereunder has occurred during the past five years. (e) PROMOTERS AND CONTROL PERSONS. No event required to be reported hereunder has occurred during the past five years. (f) SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to the registrant under Rule 16a-3(d) during its most recent fiscal year and Form 5 and amendments thereto furnished to the registrant with respect to its most recent fiscal year, no director, officer, or greater than 10% shareholder failed to timely file a Form 3, Form 4, or Form 5. ITEM 10. EXECUTIVE COMPENSATION The following table provides certain information pertaining to the compensation paid by the Company to Dean H. Boedeker, the President of the Company, for services rendered during the Company's fiscal years ended June 30, 1997, 1996, and 1995. No executive officer of the Company was paid over $100,000 6 in compensation from the Company during the Company's fiscal year ended June 30, 1997. SUMMARY COMPENSATION TABLE
Long Term Compensation Annual Compensation Awards -------------------------------- ------------ Other Year Annual Securities All Other Name and Ended Compen- Underlying Compensa- Principal Position June 30, Salary($) Bonus($) sation($) Options(#) tion($) - ------------------- ------- -------- ------- -------- ---------- --------- Dean H. Boedeker 1997 12,000(1) -- -- -- -- President and 1996 12,000(1) -- -- -- -- Chief Executive 1995 14,000(1) -- -- -- -- Officer - ------------------------
(1) Mr. Boedeker is entitled to $1,000 per month for serving as the President and Chief Executive Officer of the Company. OPTION GRANTS IN LAST FISCAL YEAR No options were granted by the Company to Dean H. Boedeker during the Company's fiscal year ended June 30, 1997. FISCAL YEAR END OPTION VALUES The following table sets forth information with respect to the unexercised options held by Dean H. Boedeker as of June 30, 1997.
Number of Securities Underlying Unexercised Value of In-the-Money Options at Options at June 30, 1997(#) June 30, 1997($)(1) ------------------------- -------------------------- Name Exercisable/ Unexercisable Exercisable/ Unexercisable - ----- ----------- ------------- ----------- ------------- Dean H. Boedeker ........... 400,000 - 0 - - 0 - - 0 - - --------------------
(1) The value of unexercised in-the-money options is the market price of the underlying shares of common stock at June 30, 1997, less the exercise price of the options. Mr. Boedeker did not exercise any options during the Company's fiscal year ended June 30, 1997. 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 7 attend. The Chairman of the Board and President receives $1,000 per month, as a stipend for the services he performs. 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 11. 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 October 2, 1997, 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 Percent Name of Beneficial Owner Beneficial Ownership(1) of Class ------------------------ ----------------------- -------- Dean H. Boedeker ................... 573,072(2) 11.4% Donald W. Diones ................... 531,572(3) 10.5% William J. White ................... 472,250(4) 9.4% All officers and directors as a group (3 Persons) ............. 1,576,894(5) 27.0% Thomas J. Bonomo ................... 582,929(6) 11.6% Thomas A. Breen .................... 434,375(7) 8.6% Edward O. Byrne .................... 400,938(8) 8.0% - ------------------- (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 80 North Hoyt Street, Denver, Colorado 80226. (3) Includes 400,000 shares underlying a stock option. Donald W. Diones' address is 1401 Seventeenth Street, Suite 1300, Denver, Colorado 80202. (4) Includes 400,000 shares underlying a stock option. William J. White's address is 1401 Seventeenth Street, Suite 1300, Denver, Colorado 80202. (5) Includes shares underlying the stock options held by Messrs. Boedeker, Diones and White. (6) Includes 400,000 shares underlying a stock option. Thomas J. Bonomo's address is 388 Market Street, No. 900, San Francisco, California 94111. (7) Includes 400,000 shares underlying a stock option. Thomas A. Breen's address is 225 South Lake Avenue, 11th Floor, Pasadena, California 91101. (8) Includes 400,00 shares underlying a stock option. Edward O. Byrne's address is 303 East Seventeenth Avenue, Suite 700, Denver, Colorado 80203. 8 (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. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS (a)(b) TRANSACTIONS WITH MANAGEMENT AND OTHERS AND CERTAIN BUSINESS RELATIONSHIPS. In September 1996, the Board of Directors of the Company extended the expiration dates of options relating to 2,000,000 shares of the Company's common stock that are exercisable at $.03 per share from April 27, 1998, to September 16, 2001. Included in the persons for whom the options were extended were Dean H. Boedeker and Donald W. Diones, directors of the Company, and Thomas A. Breen and Thomas J. Bonomo, former directors of the Company who currently beneficially own more than 5% of the Company's outstanding shares of common stock. In September 1996, the Board of Directors of the Company also granted an option to purchase 400,000 shares of the Company's common stock to William J. White, a director of the Company. Mr. White's option is exercisable at $.03 per share until September 16, 2001. ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K (a) 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 Broadcast Group, Inc., 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) Form of Amendment No. 2 to Option Agreement (incorporated by reference to Exhibit 10(D) to Orion Financial, Ltd.'s Annual Report on Form 10-K for the fiscal year ended June 30, 1996). Exhibit 10(E) Form of Option Agreement effective September 16, 1996 between Orion Financial, Ltd. and William J. White (incorporated by reference to Exhibit 10(E) to Orion Financial, Ltd.'s Annual Report on Form 10-K for the fiscal year ended June 30, 1996). Exhibit 27 Financial Data Schedule. (b) CURRENT REPORTS ON FORM 8-K: No Current Reports on Form 8-K were filed during the fiscal quarter ended June 30, 1997. 9 SIGNATURES 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. ORION FINANCIAL, LTD., a Colorado corporation By:/s/Dean H. Boedeker --------------------------------------- Dean H. Boedeker, President, Principal Executive Officer, Chief Financial Officer, and Principal Accounting Officer Dated: October 24, 1997 In accordance with 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. Date Name and Title Signature - ----- -------------- --------- October 24, 1997 Dean H. Boedeker Director /s/Dean H. Boedeker ---------------------------- October 24, 1997 Donald W. Diones Director /s/Donald W. Diones ---------------------------- October 24, 1997 William J. White Director /s/William J. White ---------------------------- 10 Orion Financial, Ltd. Report on Audit of Financial Statements For the Years Ended June 30, 1997 and 1996 ORION FINANCIAL, LTD. INDEX TO FINANCIAL STATEMENTS Page ---- Independent Auditor's Report................................................ F-2 Balance Sheet - June 30, 1997............................................... F-3 Statements of Operations - For the Years Ended June 30, 1997 and 1996....... F-4 Statement of Changes in Stockholders' Equity - For the Period from July 1, 1995 through June 30, 1997......................................F-5 Statements of Cash Flows - For the Years Ended June 30, 1997 and 1996....... F-6 Notes to Financial Statements............................................... F-7 F-1 INDEPENDENT AUDITOR'S REPORT Board of Directors Orion Financial, Ltd. Denver, Colorado We have audited the accompanying balance sheet of Orion Financial, Ltd. as of June 30, 1997 and 1996, and the related statements of operations, stockholders' equity and cash flows for the years ended June 30, 1997 and 1996. 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, 1997, and the results of its operations and its cash flows for the years ended June 30, 1997 and 1996, in conformity with generally accepted accounting principles. /s/ Hein + Associates LLP HEIN + ASSOCIATES LLP Denver, Colorado September 9, 1997 F-2
ORION FINANCIAL, LTD. BALANCE SHEET JUNE 30, 1997 -------- ASSETS ------ CURRENT ASSETS - Cash and cash equivalents ............................................. $ 203,041 ---------- TOTAL CURRENT ASSETS ........................................................ $ 203,041 ========== LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES - Accounts payable and accrued expenses ................................. $ 8,923 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 Additional paid-in capital ............................................ 4,639,182 Accumulated deficit ................................................... (4,816,386) ---------- Total stockholders' equity ................................ 194,118 ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .................................. $ 203,041 ==========
See accompanying notes to these financial statements. F-3
ORION FINANCIAL, LTD. STATEMENTS OF OPERATIONS For the Years Ended June 30, ---------------------------- 1997 1996 ---- ---- REVENUE ...................................................... $ -- $ -- GENERAL AND ADMINISTRATIVE EXPENSES .......................... 38,579 37,774 OTHER INCOME (EXPENSE) - Interest income .......................................... 10,797 13,200 ----------- ----------- NET LOSS ..................................................... $ (27,782) $ (24,574) =========== =========== NET LOSS PER COMMON SHARE .................................... $ (.01) $ (.01) =========== =========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING ......... 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, 1995 THROUGH JUNE 30, 1997 COMMON STOCK ADDITIONAL TOTAL -------------------------- PAID-IN ACCUMULATED STOCKHOLDERS' SHARES AMOUNT CAPITAL DEFICIT EQUITY ------ ------ ---------- ----------- ------------- BALANCES, July 1, 1995 ............ 4,641,522 $ 371,322 $ 4,639,182 $(4,764,030) $ 246,474 Net loss ...................... -- -- -- (24,574) (24,574) ----------- ----------- ----------- ----------- ----------- BALANCES, June 30, 1996 ........... 4,641,522 371,322 4,639,182 (4,788,604) 221,900 Net loss ...................... -- -- -- (27,782) (27,782) ----------- ----------- ----------- ----------- ----------- BALANCES, June 30, 1997 ........... 4,641,522 $ 371,322 $ 4,639,182 $(4,816,386) $ 194,118 =========== =========== =========== =========== ===========
See accompanying notes to these financial statements. F-5
ORION FINANCIAL, LTD. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, ---------------------------- 1997 1996 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) ....................................................... $ (27,782) $ (24,574) Adjustments to reconcile to net cash from operating activities: Increase (decrease) in - Accounts payable and accrued expenses ......................... 8,747 (19,065) --------- --------- Net cash used in operating activities .............................. (19,035) (43,639) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of marketable securities ....................................... -- (394,661) Proceeds from sale of marketable securities ............................. 194,888 447,045 --------- --------- Net cash provided by investing activities .......................... 194,888 52,384 --------- --------- NET INCREASE IN CASH AND EQUIVALENTS ........................................... 175,853 8,745 CASH AND CASH EQUIVALENTS, beginning of year ................................... 27,188 18,443 --------- --------- CASH AND CASH EQUIVALENTS, end of year ......................................... $ 203,041 $ 27,188 ========= ========= 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 NATURE OF 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. 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. 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. Use of Estimates - The preparation of the Company's financial statements in conformity with generally accepted accounting principles requires the Company's management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. Accounting for Stock-Based Compensation - In fiscal 1997, the Company adopted the provisions of Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (FAS 123). FAS 123 encourages, but does not require, companies to recognize compensation expense for grants of stock, stock options, and other equity instruments to employees based on fair value. Companies that do not adopt the fair value accounting rules must disclose the impact of F-7 ORION FINANCIAL, LTD. NOTES TO FINANCIAL STATEMENTS adopting the new method in the notes to the financial statements. Transactions in equity instruments with non-employees for goods or services must be accounted for on the fair value method. The Company has elected not to adopt the fair value accounting prescribed by SFAS 123 for its employees, and is subject only to the disclosure requirements. The adoption of SFAS 123 had no effect on the Company's financial statements. 3. 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. 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. In September 1996, the Board of Directors extended the expiration date of these options to September 2001. None have been exercised to date. In September 1996, the Board of Directors granted stock options covering 400,000 shares to a director, exercisable at $.03 per share through September 2001. The market price of the Company's common stock was $.005 per share. If compensation cost had been recognized using the fair value approach prescribed by SFAS 123 rather than the intrinsic value method under APB 25, there would have been no change to the Company's reported net loss. F-8 ORION FINANCIAL, LTD. NOTES TO FINANCIAL STATEMENTS 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. 4. INCOME TAXES: The amounts which give rise to the net deferred tax asset (liability) as of June 30, 1997, are as follows: Net operating loss carryforward $ 444,000 Valuation allowance (444,000) -------- Net deferred tax asset $ -- ======== At June 30, 1997, the Company had net operating losses (NOL) carryforwards for income tax purposes of approximately $1,200,000 that will expire between 1997 and 2012. 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. 5. SUBSEQUENT EVENTS: Subsequent to June 30, 1997, the Company advanced approximately $60,000 for a standby letter of credit fee related to a proposed acquisition candidate. In addition, the Company loaned $10,000 to the acquisition candidate. Certain preconditions to the acquisition have not occurred and it is currently unlikely that the acquisition will be consummated. The Company's advance for the standby letter of credit fee is being held by a law firm in Hong Kong, China and the Company has requested its return. The $10,000 loan will be recorded as a bad debt in the first quarter of fiscal 1998. F-9 EXHIBIT INDEX Exhibit Description Page No. - -------- ----------- -------- 3(A) Articles of Incorporation of Orion Financial, Ltd., as N/A 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 Broadcast Group, Inc., 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 Option Plan N/A (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 (incorporated N/A 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 September 27, N/A 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) Form of Amendment No. 2 to Option Agreement (incorporated by N/A reference to Exhibit 10(D) to Orion Financial, Ltd.'s Annual Report on Form 10-K for the fiscal year ended June 30, 1996). 10(E) Form of Option Agreement effective September 16, 1996 N/A between Orion Financial, Ltd. and William J. White (incorporated by reference to Exhibit 10(E) to Orion Financial, Ltd.'s Annual Report on Form 10-K for the fiscal year ended June 30, 1996). 27 Financial Data Schedule. EX-27 2 FINANCIAL DATA SCHEDULE
5 YEAR JUN-30-1997 JUL-01-1996 JUN-30-1997 203,041 0 0 0 0 203,041 0 0 203,041 8,923 0 0 0 371,322 4,639,182 203,041 0 0 0 38,579 0 0 0 (27,782) 0 0 0 0 0 (27,782) (.01) 0
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