U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE TRANSITION PERIOD FROM TO
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Commission file number 0-11043
ORION FINANCIAL, LTD.
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(Exact name of small business issuer as specified in its charter)
Colorado 84-0858679
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
80 N. Hoyt Street
Lakewood, Colorado 80226
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(Address of principal executive offices)
(303) 238-0937
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(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 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 [ ]
The number of shares outstanding of the Issuer's Common Stock, no par value
common stock, as of September 30, 1997, was 4,641,522.
Transitional small business disclosure format:
Yes [ ] No [X]
9 Total Pages
1
ORION FINANCIAL, LTD.
FORM 10-QSB FOR THE QUARTER ENDED SEPTEMBER 30, 1997
INDEX
SECTION PAGE
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PART I - FINANCIAL INFORMATION*
Balance Sheets - March 31, 1998 & June 30, 1997 3
Statement of Operations - For the three months ended
March 31, 1998 & 1997 4
Statement of Operations - For the nine months ended
March 31, 1998 & 1997 5
Statements of Cash Flow - For the nine months ended
March 31, 1998 and 1997 6
Notes to the Financial Statements 7
Management's Discussion and Analysis or Plan of Operations 8
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 9
Signatures 10
* The accompanying financial statements are not covered by an Independent
Certified Public Accountant's Report.
2
Orion Financial, Ltd.
Balance Sheets
Assets March 31, June 30, 1997
1998 (Unaudited)
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Current Assets
Cash ......................................... $ 167,436 $ 203,041
Short Term investments ....................... 0 0
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Total Current Assets ................... 167,436 203,041
Total Assets ................................. $ 167,436 $ 203,041
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Liabilities & Equity
Current Liabilities
Accounts Payable & Accrued Expenses .......... $ 0 $ 8,923
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Equity
Common Stock ................................. 371,322 371,322
Additional Paid in Capital ................... 4,639,182 4,639,182
Accumulated Deficit .......................... (4,843,068) (4,816,386)
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Total Equity ........................... 167,436 194,118
Total Liabilities & Equity ................... $ 167,436 $ 203,041
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3
Orion Financial, Ltd.
Statement of Operations
(Unaudited)
Three Months Ended
March 31,
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1998 1997
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Interest Income ............................ $ 1,560 $ 102
Accounting & Legal Expenses ................ (3,878) (9,138)
Compensation Expenses ...................... (3,000) (3,000)
Miscellaneous Expenses ..................... (958) (797)
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Net Income (Loss) .......................... $ (6,276) $ (12,833)
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Net Income (Loss) per Share ................ $ 0.00 $ 0.00
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Weighted Average Shares Outstanding ........ 4,641,522 4,641,522
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4
Orion Financial, Ltd.
Statement of Operations
(Unaudited)
Nine Months Ended
March 31,
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1998 1997
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Interest Income ............................ $ 4,733 $ 5,728
Miscellaneous Income ....................... 119 0
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Total Income ............................... 4,852 5,728
Accounting & Legal Expenses ................ (8,343) (11,648)
Bad Debts .................................. (10,000) 0
Compensation Expenses ...................... (9,000) (9,000)
Miscellaneous Expenses ..................... (4,192) (2,977)
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Net Income (Loss) .......................... $ (26,683) $ (17,897)
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Net Income (Loss) per Share ................ $ (0.01) $ 0.00
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Weighted Average Shares Outstanding ........ 4,641,522 4,641,522
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5
Orion Financial, Ltd.
Statement of Cash Flows
(Unaudited)
Nine Months Ended
March 31,
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1998 1997
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Cash Flow from operating activities:
Net income (loss) ........................................................ $ (26,683) $ (17,897)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Changes in assets and liabilities:
Accounts Payable ............................................................... (8,923) (176)
Accrued Liabilities ............................................................ 0 0
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Net cash provided (used) by operating activities ......................... (35,606) (18,073)
Increase (decrease) in cash and cash equivalents ............................... (35,606) (18,073)
Cash and cash equivalents, beginning of period ................................. 203,041 222,076
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Cash and cash equivalents, end of period ....................................... $ 167,435 $ 204,003
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6
ORION FINANCIAL, LTD.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. GENERAL:
Orion Financial, Ltd. (the "Company"), has elected to omit substantially
all footnotes to the Financial Statements for the nine months ended March
31, 1998, since there have been no material changes to the information
previously reported by the Company in its annual report filed on Form 10-K,
for the year ended June 30, 1997.
2. UNAUDITED INFORMATION:
The information herein was taken from the books and records of the Company
without audit. However, such information reflects all adjustments which
are, in the opinion of management, necessary in order to make the financial
statements not misleading. The information presented is not necessarily
indicative of the results from operations expected for the full fiscal
year.
7
ORION FINANCIAL, LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Orion Financial, Ltd. (the "Company") had working capital at March 31, 1998, of
approximately $167,436, 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 has entered into a Binding Letter of Agreement with Terry Hunter and
his management team ("Team") and Investment Management of America, Inc. ("IMA")
pursuant to which the Company has agreed to issue 26,139,940 shares of the
Company's common stock to IMA and certain of its related persons for $35,000,
the Company has agreed to raise a minimum of $880,000 in the form of convertible
debt or equity, the Company has agreed to acquire certain of the assets of
Athletic Footwear, Inc. ("AFI"), a defunct shoe manufacturer, and pay off
certain of AFI's bridge loans for a total of 1,152,780 shares of the Company's
common stock and certain of the Company's directors and major shareholders are
to exercise their options to purchase 2,400,000 shares of the Company's common
stock. As a result of the transaction, the board of directors and officers of
the Company will change and IMA and certain of its related persons will control
the Company.
In connection with the Binding Letter of Agreement, the Company has also entered
into a Production and Inventory Dating Agreement with Asia Pacific Industries
Development Group ("APIDG") pursuant to which the Company has agreed to issue
APIDG 4,548,787 shares of the Company's common stock if the transactions set
forth in the Binding Letter of Agreement are consummated. Pursuant to the
Production and Inventory Dating Agreement, the Company has agreed to order all
shoe products that it will sell in the United States, Peoples Republic of China,
Australia, Taiwan, Hong Kong, Thailand, Singapore, Indonesia, the Philippines,
Malaysia, Viet Nam and Laos from factories designated by APIDG and APIDG has
agreed to provide the Company with inventory financing. The Company and APIDG
have agreed, that after the first order is placed by the Company and the payment
for that order is made, APIDG will establish a joint venture in Hong Kong and
act as the sole agent for the Company's shoe products for China and southeast
Asia and develop the markets there. APIDG has agreed that the Company will own a
minimum of 10% of the new joint venture company.
The purpose of the transactions will be to enable the Company, assuming that the
Company is able to raise additional capital, of which there are no assurances,
to begin to manufacture and market a full line of children's fashion athletic,
canvas and casual footwear such as were previously manufactured and marketed by
AFI. There are no assurances that the Company will be successful in consummating
the transactions pursuant to the Binding Letter of Agreement or be successful in
raising additional financing to be able to enter into the business of
manufacturing and marketing shoes.
The Company has no other material commitments for capital expenditures.
8
RESULTS OF OPERATIONS
The Company had no significant operations during the fiscal quarter. Revenue
consists solely of interest income on the remaining cash on hand. Expenses are
generally related to the payment of professional fees in the preparation of
filings pursuant to the Securities Exchange Act of 1934, as amended, minimal
compensation to the Company's President, and one time write off of $10,000 bad
debt. This bad debt charge is the unsuccessful results of an attempt to attract
a merger candidate.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
10.1 Binding Letter of Agreement among Terry Hunter, Investment Management of
America, Inc. and Orion Financial, Ltd.
10.2 Production and Inventory Dating Agreement between Asia Pacific Industries
Development Group and the Company.
27 Financial Data Schedule
(b) Reports on Form 8-K.
No reports on Form 8-K were filed by the Company during the quarter ended
March 31, 1998.
9
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.
Orion Financial, Ltd.
Dated April 23, 1998 /s/ Dean H. Boedeker
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Dean H. Boedeker
President and Principal Financial Officer
10
EXHIBIT INDEX
10.1 Binding Letter of Agreement among Terry Hunter, Investment Management of
America, Inc. and Orion Financial, Ltd.
10.2 Production and Inventory Dating Agreement between Asia Pacific Industries
Development Group and the Company.
27 Financial Data Schedule