content: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington D.C. 20549
  
                                      FORM 8-K
  
                                   CURRENT REPORT
  
  Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  
  Date of Report (Date of earliest event reported): July 9, 1996
  
  
                             Orion Acquisition Corp. II
           -------------------------------------------------------------
               (Exact name of registrant as specified in its charter)
  
  
  
  Delaware                           000-20837                     13-3863260
  - ----------------------------------------------------------------------------   
  (State or other jurisdiction       (Commission              (IRS Employer 
  of incorporation)                   File Number)            Identification No.) 
  
  
                1430 Broadway, 13th Floor, New York, New York 10018
  - -------------------------------------------------------------------------------
            (Address of principal executive offices)         (Zip Code) 
  
                                   (212) 391-1392
                   ---------------------------------------------
                (Registrant's telephone number, including area code)
  
  
  
  - ----------------------------------------------------------------------------- 
  (Former name or former address, if changed since last report.) 
  
  
  
  <PAGE>
  
  
  Item 5.  Other Events 
  
  The following  are the balance  sheets of Orion  Acquisition  Corp. II (the
  "Company"),  at March  11,  1996  and July 9,  1996,  audited  by the  Company's
  accountants, BDO Seidman, LLP. The Company closed its initial public offering of
  800,000  Units,  consisting  of  800,000  shares  of Common  Stock  and  800,000
  Redeemable Class A Common Stock Purchase Warrants,  and 320,000 Redeemable Class
  B Unit Purchase Warrants on July 9, 1996.
  
  
  REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
  
  
  Orion Acquisition Corp. II 
  New York, New York 
  
  We have audited the accompanying  balance sheets of Orion Acquisition Corp.
  II (a  corporation  in the  development  stage) as of March 11, 1996 and July 9,
  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  balance  sheets are free of material
  misstatement.  An audit includes examining, on a test basis, evidence supporting
  the  amounts  and  disclosures  in the balance  sheets.  An audit also  includes
  assessing the  accounting  principles  used and  significant  estimates  made by
  management,  as well as evaluating the overall  balance sheet  presentation.  We
  believe that our audits provide a reasonable basis for our opinion.
  
  In our opinion, the balance sheets referred to above present fairly, in
  all material  respects,  the financial position of Orion Acquisition Corp. II as
  of March  11,  1996,  and July 9, 1996 in  conformity  with  generally  accepted
  accounting principles.
  
  
  New York, New York                                             BDO Seidman, LLP 
  July 9, 1996 
  
  
  
  <PAGE>
  
                                   Balance Sheets
  
  <TABLE>
                                                                            
  Assets                                                                         March 11, 1996                  July 9, 1996 
  <S>                                                                        <C>                            <C>               
  Cash                                                                       $          115,283             $         664,405 
  Cash in escrow (Note 1)                                                                                           8,000,000 
  Deferred registration costs (Note 3)                                                  135,522                               
  Deferred financing costs (Note 3)                                                      14,554                               
  
  Total assets                                                               $          265,359             $       8,664,405 
  
                                                                                                
  Liabilities and Stockholders' Equity                                                          
  Accrued expenses                                                           $          152,183             $         114,000 
  Notes payable (Note 5)                                                                 65,184                               
  Total liabilities                                                                     217,367                       114,000 
  
                                                                                                
  Commitment (Note 4) 
  
  Common stock subject to possible conversion,  
    159,920 shares at redemption value (Note 1)                                                                     1,599,200 
  
                                                                                                
  Stockholders' Equity:                                                                         
  Convertible preferred stock, $.01 par value,  
    shares authorized 200 and 1,000,000; 
    110 shares issued and outstanding (Note 1)                                                1                             1 
  Subscription receivable (Note 5)                                                      (11,000)                              
  Common stock, $.01 par value, 200,000 and 10,000,000 
    shares authorized;  90,000 and 890,000 shares issued 
    and outstanding (which includes 159,920 shares subject 
    to possible redemption) (Note 1)                                                        900                         8,900 
  Additional paid-in capital                                                             62,599                     6,998,185 
  Accumulated deficit during the development stage                                       (4,508)                       (55,881) 
  Total stockholders' equity                                                             47,992                     6,951,205 
                                                                                                
  Total liabilities and stockholders' equity                                 $          265,359             $       8,664,405 
                                                                                                
  
  See accompanying notes to balance sheets. 
  
  </TABLE>
  
  
  <PAGE>
  
  ===============================================================================
  Notes to Balance Sheets 
  ===============================================================================
  
  1.   Organization and Business Operations 
  
       The  Company  was  incorporated  in  Delaware  on October  19, 1995 for the
  purpose of raising capital to fund the  acquisition of an unspecified  operating
  business.  All  activity to date  relates to the  Company's  formation  and fund
  raising. The Company has selected December 31, as its fiscal year end.
  
       The registration  statement for the Company's  Initial Public Offering (the
  "Offering")  became  effective  on July 2, 1996.  The  Company  consummated  the
  Offering on July 9, 1996 and raised net proceeds of $8,891,293 (see Note 2). The
  Company's   management  has  broad  discretion  with  respect  to  the  specific
  application of the net proceeds of the Offering,  although  substantially all of
  the net proceeds of the Offering  are  intended to be generally  applied  toward
  consummating  a  business  combination  with an  operating  business  ("Business
  Combination").  Furthermore, there is no assurance that the Company will be able
  to successfully effect a Business Combination. An aggregate of $8,000,000 of the
  net  proceeds  will be held in an escrow  account  which will be invested  until
  released in short-term United States Government  Securities,  including treasury
  bills and cash and cash  equivalents  ("Proceeds  Escrow  Account"),  subject to
  release at the earlier of (i) consummation of its first Business  Combination or
  (ii) liquidation of the Company (see below). The remaining proceeds will be used
  to pay  for  business,  legal  and  accounting,  due  diligence  on  prospective
  acquisitions,  costs  relating  to  the  Offering  and  continuing  general  and
  administrative expenses in addition to other expenses.
  
       The Company,  prior to the consummation of any Business  Combination,  will
  submit such transaction to the Company's  stockholders for their approval,  even
  if the  nature  of the  acquisition  is such as  would  not  ordinarily  require
  stockholder  approval under applicable state law. All of the Company's  original
  stockholders, including all directors and the Company's executive officers, have
  agreed to vote their  respective  shares of common stock in accordance  with the
  vote of the  majority  of the  shares  voted by all  other  stockholders  of the
  Company ("non-affiliated public stockholders") with respect to any such Business
  Combination. A Business Combination will not be consummated unless approved by a
  vote of two-thirds of the shares of common stock owned by non-affiliated  public
  stockholders.
  
       At the  time  the  Company  seeks  stockholder  approval  of any  potential
  Business  Combination,  the Company will offer ("Redemption  Offer") each of the
  non-affiliated  public  stockholders  of the Company the right,  for a specified
  period of time not less than 20  calendar  days,  to redeem his shares of common
  stock.  The per  share  redemption  price  ("Liquidation  Value")  will  also be
  determined  by dividing the greater of (i) the  Company's  net worth or (ii) the
  amount of assets of the Company in the escrow  account  including  all  interest
  earned  thereon  by the  number of  shares  held by such  non-affiliated  public
  stockholders.  In connection with the Redemption Offer, if non-affiliated public
  stockholders  holding  less than 20% of the common  stock elect to redeem  their
  shares, the Company may, but will not be required to, proceed.  The Company will
  redeem such shares by applying the Liquidation  Value to the number of shares to
  be redeemed.  In any case, if non-affiliated  public stockholders holding 20% or
  more of the common  stock elect to redeem  their  shares,  the Company  will not
  proceed  with such  potential  Business  Combination  and will not  redeem  such
  shares.  Accordingly, a portion of the net proceeds from the Offering (19.99% of
  the amount held in the Trust Fund) has been  classified  as common stock subject
  to  possible  redemption  in the  accompanying  balance  sheet at the  estimated
  redemption value.
  
       All shares of the common stock outstanding immediately prior to the date of
  the Offering have been placed in escrow until the earlier of (i) the  occurrence
  of the first Business Combination, (ii) 18-months from the effective date of the
  Offering or (iii)  24-months from the effective date of the Offering if prior to
  the  expiration  of such  18-month  period the  Company  has become a party to a
  letter of intent or a definitive agreement to effect a Business Combination,  in
  which case such period, shall be extended six months.  During the escrow period,
  the  holders  of  escrowed  shares of common  stock  will not be able to sell or
  otherwise  transfer  their  respective  shares of  common  stock  (with  certain
  exceptions),  but will retain all other rights as  stockholders  of the Company,
  including  without  limitation,  the right to vote escrowed shares in accordance
  with a  vote  of a  majority  of  the  shares  voted  by  non-affiliated  public
  stockholders with respect to a Business Combination or liquidation proposal.
  
       If the Company does not effect a Business Combination within 18-months from
  the  effective  date or  24-months  from  the  effective  date if the  extension
  criteria  have  been   satisfied,   the  Company  will  submit  for  stockholder
  consideration a proposal to liquidate the Company and , if approved,  distribute
  to the then holders of common  stock  (issued in the Offering or acquired in the
  open market  thereafter) all assets remaining  available for distribution  after
  payment of  liabilities  and after having made  appropriate  provisions  for the
  payment of liquidating  distributions  upon each class of stock,  if any, having
  preference over the common stock.
  
  2.   Public Offering 
  
       On July 9, 1996 the Company  sold 800,000  units  ("Units") in the Offering
  and  320,000  Class B  redeemable  common  stock  purchase  warrants  ("Class  B
  Warrant"). Each Unit consists of one share of the Company's common stock and one
  Class A redeemable common stock purchase warrant ("Class A Warrant"). Each Class
  A Warrant  entitles the holder to purchase  from the Company one share of common
  stock  at an  exercise  price  of $9.00  commencing  on the  date of a  Business
  Combination and expiring on the fifth anniversary from such date, and each Class
  B Warrant  entitles  the holder to  purchase  one Unit at an  exercise  price of
  $0.125  commencing  on the date of a Business  Combination  and  expiring on the
  first  anniversary from such date. The Class A Warrants and Class B Warrants are
  redeemable,  each as a class,  in whole and not in part,  at a price of $.05 per
  warrant  upon  30  days  notice  at any  time  provided  that  the  Company  has
  consummated a Business  Combination  and the last sale price of the common stock
  on all ten trading days ending on the day immediately  prior to the day on which
  the Company gives notice of redemption, has been $11.00 or higher.
  
  <PAGE>
  
  3.   Summary of Significant Accounting Policies 
  
  Deferred Registration Costs 
  
       Registration costs represent primarily  professional fees and a license fee
  relating to the Offering.  In January 1996,  the Company  entered into a license
  agreement with Bright Licensing Corp. for the right to use certain service marks
  for the sole purpose of marketing  such Offering at a cost of $100,000 which was
  included  with  deferred  registration  costs.  The  license  fee was payable in
  installments  of  $10,000  upon its  execution  and  $90,000  at the  earlier of
  eighteen  months  from  the date of its  execution  or the  consummation  of the
  Offering.  As a result of the  consummation of the Offering on July 9, 1996, all
  deferred registration costs were charged to stockholders' equity.
  
  Deferred Financing Costs 
  
       Net unamortized  costs incurred in connection with the private placement of
  unsecured  promissory  notes (see Note 5) totaling  $15,750 were being amortized
  over eighteen  months using the  straight-line  method.  As of July 9, 1996, the
  unsecured  promissory  notes  were  completely  satisfied  as a  result  of  the
  consummation  of the  Offering,  at  which  point  the  balance  of  unamortized
  financing costs were amortized against interest expense.
  
  Income Taxes 
  
       The Company  follows the  Financial  Accounting  Standards  Board  ("FASB")
  Statement  No. 109.  This  statement  requires  that  deferred  income  taxes be
  recorded   following  the  liability   method  of  accounting  and  be  adjusted
  periodically when income tax rates change.
  
  Estimates 
  
       The  preparation  of financial  statements  in  conformity  with  generally
  accepted  accounting  principles  requires  management  to  make  estimates  and
  assumptions  that  affect the  reported  amounts of assets and  liabilities  and
  disclosure of  contingent  assets and  liabilities  at the date of the financial
  statements  and the  reported  amounts  of  revenues  and  expenses  during  the
  reporting period. Actual results could differ from those estimates.
  
  Investments 
  
       The Company will follow Statement of Financial Accounting Standards No. 115
  ("SFAS  115"),   "Accounting   for  Certain   Investments  in  Debt  and  Equity
  Securities".
  
  Fair Value of Financial Instruments 
  
       The carrying  values of  financial  instruments  including  cash in escrow,
  accrued expenses and notes payable  approximate fair value at March 11, 1996 and
  July 9, 1996 because of the relatively short maturities of these instruments.
  
  4.   Commitments 
  
       The Company has  entered  into an oral  agreement  with  Mentmore  Holdings
  Corporation,  a Delaware  corporation which is affiliated with Richard L. Kramer
  and William L. Remley, to lease office space and to be provided with secretarial
  and office services  commencing  upon the closing of this Offering.  The Company
  will pay $2,500 per month to Mentmore for their provision of such services.
  
  
  5.   Stockholders' Equity 
  
  (a)  Private Placement 
  
       In January  1996,  the Company  completed  a private  offering to a limited
  group of  investors  which  consisted,  in  aggregate,  of $100,000 in unsecured
  promissory  notes bearing interest at 8% per annum. The notes were repaid on the
  consummation of the Company's  Offering  together with accrued interest totaling
  $3,533. In addition,  the Company also issued to the private placement investors
  15,000 shares of common stock for $7,500.  The notes were discounted $37,500 for
  financial  statement reporting purposes as a result of the fair value attributed
  to the common stock issued to the private placement shareholders.  The effective
  rate on the notes was approximately 45%.
  
  (b)  Preferred Stock 
  
       The Company is authorized to issue 1,000,000 shares of preferred stock with
  such designations,  voting and other rights and preferences as may be determined
  from time to time by the Board of Directors.
  
       The Company has outstanding 110 shares of Series A preferred stock which is
  owned by CDIJ Capital Partners,  L.P., an indirect affiliate of Bright Licensing
  Corp. The purchase price for such shares was $11,000 in the aggregate, which was
  paid  simultaneously  with  the  consummation  of the  Offering.  The  Series  A
  preferred  stock are  non-voting and are each  convertible  into 1,000 shares of
  common stock for a period of one year following the  consummation  of a Business
  Combination.  In the event that a  Business  Combination  does not occur  within
  18-months  from the effective  date, or 24-months from the effective date if the
  extension criteria are satisfied,  the Series A preferred stock will be redeemed
  by the Company at its original cost basis.
  
  (c) Common Stock 
  
       On July 9,  1996,  2,310,000  shares  of common  stock  were  reserved  for
  issuance upon exercise of redeemable warrants and underwriter's warrants.
  
  (d) Options 
  
       The Company has granted  options to purchase  100,000  Units to  Cranbrooke
  Corporation, a Delaware corporation which is affiliated with two officers of the
  Company.  The option is exercisable for a period of three years from the date of
  a Business  Combination  at an exercise  price of $12.50 per Unit. The option is
  fully vested; however, the options will be canceled if Mr. Kramer and Mr. Remley
  cease to serve as directors or  executive  officers of the Company  prior to the
  Business  Combination.  The shares  issuable  upon  exercise  of the options and
  underlying  warrants  may not be  sold or  otherwise  transferred  for 120  days
  subsequent to the first Business Combination.
  
  
  
                                     SIGNATURES
  
  
       Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
  Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned hereunto duly authorized.
  
  
  
                                                       Orion Acquisition Corp. II 
                                                       (Registrant) 
  
  Dated:  July 12, 1996                                /s/ William L. Remley 
                                                       William L. Remley 
                                                       President and Treasurer
metadata_documents: [{"type": "8-K", "sequence": "1", "description": "INTERIM BALANCE SHEET", "secsgml_size_bytes": 20171}]
metadata_filer: {"company-data": {"conformed-name": "ORION ACQUISITION CORP II", "cik": "0001011835", "assigned-sic": "6770", "irs-number": "133863260", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-20837", "film-number": "96594154"}, "business-address": {"street1": "1430 BROADWAY", "street2": "13TH FL", "city": "NEW YORK", "state": "NY", "zip": "10018", "phone": "2123911392"}, "mail-address": {"street1": "1430 BROADWAY 13TH FLOOR", "city": "NEW YORK", "state": "NY", "zip": "10018"}}
text: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington D.C. 20549
  
                                      FORM 8-K
  
                                   CURRENT REPORT
  
  Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  
  Date of Report (Date of earliest event reported): July 9, 1996
  
                             Orion Acquisition Corp. II
           -------------------------------------------------------------
               (Exact name of registrant as specified in its charter)
  
  Delaware                           000-20837                     13-3863260
  - ----------------------------------------------------------------------------   
  (State or other jurisdiction       (Commission              (IRS Employer 
  of incorporation)                   File Number)            Identification No.) 
  
                1430 Broadway, 13th Floor, New York, New York 10018
  - -------------------------------------------------------------------------------
            (Address of principal executive offices)         (Zip Code) 
  
                                   (212) 391-1392
                   ---------------------------------------------
                (Registrant's telephone number, including area code)
  
  - ----------------------------------------------------------------------------- 
  (Former name or former address, if changed since last report.)
  Item 5.  Other Events 
  
  The following  are the balance  sheets of Orion  Acquisition  Corp. II (the
  "Company"),  at March  11,  1996  and July 9,  1996,  audited  by the  Company's
  accountants, BDO Seidman, LLP. The Company closed its initial public offering of
  800,000  Units,  consisting  of  800,000  shares  of Common  Stock  and  800,000
  Redeemable Class A Common Stock Purchase Warrants,  and 320,000 Redeemable Class
  B Unit Purchase Warrants on July 9, 1996.
  
  REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
  
  Orion Acquisition Corp. II 
  New York, New York 
  
  We have audited the accompanying  balance sheets of Orion Acquisition Corp.
  II (a  corporation  in the  development  stage) as of March 11, 1996 and July 9,
  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  balance  sheets are free of material
  misstatement.  An audit includes examining, on a test basis, evidence supporting
  the  amounts  and  disclosures  in the balance  sheets.  An audit also  includes
  assessing the  accounting  principles  used and  significant  estimates  made by
  management,  as well as evaluating the overall  balance sheet  presentation.  We
  believe that our audits provide a reasonable basis for our opinion.
  
  In our opinion, the balance sheets referred to above present fairly, in
  all material  respects,  the financial position of Orion Acquisition Corp. II as
  of March  11,  1996,  and July 9, 1996 in  conformity  with  generally  accepted
  accounting principles.
  
  New York, New York                                             BDO Seidman, LLP 
  July 9, 1996
  Balance Sheets
  
                                                                            
  Assets                                                                         March 11, 1996                  July 9, 1996
  Cash                                                                       $          115,283             $         664,405 
  Cash in escrow (Note 1)                                                                                           8,000,000 
  Deferred registration costs (Note 3)                                                  135,522                               
  Deferred financing costs (Note 3)                                                      14,554                               
  
  Total assets                                                               $          265,359             $       8,664,405 
  
                                                                                                
  Liabilities and Stockholders' Equity                                                          
  Accrued expenses                                                           $          152,183             $         114,000 
  Notes payable (Note 5)                                                                 65,184                               
  Total liabilities                                                                     217,367                       114,000 
  
                                                                                                
  Commitment (Note 4) 
  
  Common stock subject to possible conversion,  
    159,920 shares at redemption value (Note 1)                                                                     1,599,200 
  
                                                                                                
  Stockholders' Equity:                                                                         
  Convertible preferred stock, $.01 par value,  
    shares authorized 200 and 1,000,000; 
    110 shares issued and outstanding (Note 1)                                                1                             1 
  Subscription receivable (Note 5)                                                      (11,000)                              
  Common stock, $.01 par value, 200,000 and 10,000,000 
    shares authorized;  90,000 and 890,000 shares issued 
    and outstanding (which includes 159,920 shares subject 
    to possible redemption) (Note 1)                                                        900                         8,900 
  Additional paid-in capital                                                             62,599                     6,998,185 
  Accumulated deficit during the development stage                                       (4,508)                       (55,881) 
  Total stockholders' equity                                                             47,992                     6,951,205 
                                                                                                
  Total liabilities and stockholders' equity                                 $          265,359             $       8,664,405 
                                                                                                
  
  See accompanying notes to balance sheets.
  ===============================================================================
  Notes to Balance Sheets 
  ===============================================================================
  
  1.   Organization and Business Operations 
  
       The  Company  was  incorporated  in  Delaware  on October  19, 1995 for the
  purpose of raising capital to fund the  acquisition of an unspecified  operating
  business.  All  activity to date  relates to the  Company's  formation  and fund
  raising. The Company has selected December 31, as its fiscal year end.
  
       The registration  statement for the Company's  Initial Public Offering (the
  "Offering")  became  effective  on July 2, 1996.  The  Company  consummated  the
  Offering on July 9, 1996 and raised net proceeds of $8,891,293 (see Note 2). The
  Company's   management  has  broad  discretion  with  respect  to  the  specific
  application of the net proceeds of the Offering,  although  substantially all of
  the net proceeds of the Offering  are  intended to be generally  applied  toward
  consummating  a  business  combination  with an  operating  business  ("Business
  Combination").  Furthermore, there is no assurance that the Company will be able
  to successfully effect a Business Combination. An aggregate of $8,000,000 of the
  net  proceeds  will be held in an escrow  account  which will be invested  until
  released in short-term United States Government  Securities,  including treasury
  bills and cash and cash  equivalents  ("Proceeds  Escrow  Account"),  subject to
  release at the earlier of (i) consummation of its first Business  Combination or
  (ii) liquidation of the Company (see below). The remaining proceeds will be used
  to pay  for  business,  legal  and  accounting,  due  diligence  on  prospective
  acquisitions,  costs  relating  to  the  Offering  and  continuing  general  and
  administrative expenses in addition to other expenses.
  
       The Company,  prior to the consummation of any Business  Combination,  will
  submit such transaction to the Company's  stockholders for their approval,  even
  if the  nature  of the  acquisition  is such as  would  not  ordinarily  require
  stockholder  approval under applicable state law. All of the Company's  original
  stockholders, including all directors and the Company's executive officers, have
  agreed to vote their  respective  shares of common stock in accordance  with the
  vote of the  majority  of the  shares  voted by all  other  stockholders  of the
  Company ("non-affiliated public stockholders") with respect to any such Business
  Combination. A Business Combination will not be consummated unless approved by a
  vote of two-thirds of the shares of common stock owned by non-affiliated  public
  stockholders.
  
       At the  time  the  Company  seeks  stockholder  approval  of any  potential
  Business  Combination,  the Company will offer ("Redemption  Offer") each of the
  non-affiliated  public  stockholders  of the Company the right,  for a specified
  period of time not less than 20  calendar  days,  to redeem his shares of common
  stock.  The per  share  redemption  price  ("Liquidation  Value")  will  also be
  determined  by dividing the greater of (i) the  Company's  net worth or (ii) the
  amount of assets of the Company in the escrow  account  including  all  interest
  earned  thereon  by the  number of  shares  held by such  non-affiliated  public
  stockholders.  In connection with the Redemption Offer, if non-affiliated public
  stockholders  holding  less than 20% of the common  stock elect to redeem  their
  shares, the Company may, but will not be required to, proceed.  The Company will
  redeem such shares by applying the Liquidation  Value to the number of shares to
  be redeemed.  In any case, if non-affiliated  public stockholders holding 20% or
  more of the common  stock elect to redeem  their  shares,  the Company  will not
  proceed  with such  potential  Business  Combination  and will not  redeem  such
  shares.  Accordingly, a portion of the net proceeds from the Offering (19.99% of
  the amount held in the Trust Fund) has been  classified  as common stock subject
  to  possible  redemption  in the  accompanying  balance  sheet at the  estimated
  redemption value.
  
       All shares of the common stock outstanding immediately prior to the date of
  the Offering have been placed in escrow until the earlier of (i) the  occurrence
  of the first Business Combination, (ii) 18-months from the effective date of the
  Offering or (iii)  24-months from the effective date of the Offering if prior to
  the  expiration  of such  18-month  period the  Company  has become a party to a
  letter of intent or a definitive agreement to effect a Business Combination,  in
  which case such period, shall be extended six months.  During the escrow period,
  the  holders  of  escrowed  shares of common  stock  will not be able to sell or
  otherwise  transfer  their  respective  shares of  common  stock  (with  certain
  exceptions),  but will retain all other rights as  stockholders  of the Company,
  including  without  limitation,  the right to vote escrowed shares in accordance
  with a  vote  of a  majority  of  the  shares  voted  by  non-affiliated  public
  stockholders with respect to a Business Combination or liquidation proposal.
  
       If the Company does not effect a Business Combination within 18-months from
  the  effective  date or  24-months  from  the  effective  date if the  extension
  criteria  have  been   satisfied,   the  Company  will  submit  for  stockholder
  consideration a proposal to liquidate the Company and , if approved,  distribute
  to the then holders of common  stock  (issued in the Offering or acquired in the
  open market  thereafter) all assets remaining  available for distribution  after
  payment of  liabilities  and after having made  appropriate  provisions  for the
  payment of liquidating  distributions  upon each class of stock,  if any, having
  preference over the common stock.
  
  2.   Public Offering 
  
       On July 9, 1996 the Company  sold 800,000  units  ("Units") in the Offering
  and  320,000  Class B  redeemable  common  stock  purchase  warrants  ("Class  B
  Warrant"). Each Unit consists of one share of the Company's common stock and one
  Class A redeemable common stock purchase warrant ("Class A Warrant"). Each Class
  A Warrant  entitles the holder to purchase  from the Company one share of common
  stock  at an  exercise  price  of $9.00  commencing  on the  date of a  Business
  Combination and expiring on the fifth anniversary from such date, and each Class
  B Warrant  entitles  the holder to  purchase  one Unit at an  exercise  price of
  $0.125  commencing  on the date of a Business  Combination  and  expiring on the
  first  anniversary from such date. The Class A Warrants and Class B Warrants are
  redeemable,  each as a class,  in whole and not in part,  at a price of $.05 per
  warrant  upon  30  days  notice  at any  time  provided  that  the  Company  has
  consummated a Business  Combination  and the last sale price of the common stock
  on all ten trading days ending on the day immediately  prior to the day on which
  the Company gives notice of redemption, has been $11.00 or higher.
  3.   Summary of Significant Accounting Policies 
  
  Deferred Registration Costs 
  
       Registration costs represent primarily  professional fees and a license fee
  relating to the Offering.  In January 1996,  the Company  entered into a license
  agreement with Bright Licensing Corp. for the right to use certain service marks
  for the sole purpose of marketing  such Offering at a cost of $100,000 which was
  included  with  deferred  registration  costs.  The  license  fee was payable in
  installments  of  $10,000  upon its  execution  and  $90,000  at the  earlier of
  eighteen  months  from  the date of its  execution  or the  consummation  of the
  Offering.  As a result of the  consummation of the Offering on July 9, 1996, all
  deferred registration costs were charged to stockholders' equity.
  
  Deferred Financing Costs 
  
       Net unamortized  costs incurred in connection with the private placement of
  unsecured  promissory  notes (see Note 5) totaling  $15,750 were being amortized
  over eighteen  months using the  straight-line  method.  As of July 9, 1996, the
  unsecured  promissory  notes  were  completely  satisfied  as a  result  of  the
  consummation  of the  Offering,  at  which  point  the  balance  of  unamortized
  financing costs were amortized against interest expense.
  
  Income Taxes 
  
       The Company  follows the  Financial  Accounting  Standards  Board  ("FASB")
  Statement  No. 109.  This  statement  requires  that  deferred  income  taxes be
  recorded   following  the  liability   method  of  accounting  and  be  adjusted
  periodically when income tax rates change.
  
  Estimates 
  
       The  preparation  of financial  statements  in  conformity  with  generally
  accepted  accounting  principles  requires  management  to  make  estimates  and
  assumptions  that  affect the  reported  amounts of assets and  liabilities  and
  disclosure of  contingent  assets and  liabilities  at the date of the financial
  statements  and the  reported  amounts  of  revenues  and  expenses  during  the
  reporting period. Actual results could differ from those estimates.
  
  Investments 
  
       The Company will follow Statement of Financial Accounting Standards No. 115
  ("SFAS  115"),   "Accounting   for  Certain   Investments  in  Debt  and  Equity
  Securities".
  
  Fair Value of Financial Instruments 
  
       The carrying  values of  financial  instruments  including  cash in escrow,
  accrued expenses and notes payable  approximate fair value at March 11, 1996 and
  July 9, 1996 because of the relatively short maturities of these instruments.
  
  4.   Commitments 
  
       The Company has  entered  into an oral  agreement  with  Mentmore  Holdings
  Corporation,  a Delaware  corporation which is affiliated with Richard L. Kramer
  and William L. Remley, to lease office space and to be provided with secretarial
  and office services  commencing  upon the closing of this Offering.  The Company
  will pay $2,500 per month to Mentmore for their provision of such services.
  
  5.   Stockholders' Equity 
  
  (a)  Private Placement 
  
       In January  1996,  the Company  completed  a private  offering to a limited
  group of  investors  which  consisted,  in  aggregate,  of $100,000 in unsecured
  promissory  notes bearing interest at 8% per annum. The notes were repaid on the
  consummation of the Company's  Offering  together with accrued interest totaling
  $3,533. In addition,  the Company also issued to the private placement investors
  15,000 shares of common stock for $7,500.  The notes were discounted $37,500 for
  financial  statement reporting purposes as a result of the fair value attributed
  to the common stock issued to the private placement shareholders.  The effective
  rate on the notes was approximately 45%.
  
  (b)  Preferred Stock 
  
       The Company is authorized to issue 1,000,000 shares of preferred stock with
  such designations,  voting and other rights and preferences as may be determined
  from time to time by the Board of Directors.
  
       The Company has outstanding 110 shares of Series A preferred stock which is
  owned by CDIJ Capital Partners,  L.P., an indirect affiliate of Bright Licensing
  Corp. The purchase price for such shares was $11,000 in the aggregate, which was
  paid  simultaneously  with  the  consummation  of the  Offering.  The  Series  A
  preferred  stock are  non-voting and are each  convertible  into 1,000 shares of
  common stock for a period of one year following the  consummation  of a Business
  Combination.  In the event that a  Business  Combination  does not occur  within
  18-months  from the effective  date, or 24-months from the effective date if the
  extension criteria are satisfied,  the Series A preferred stock will be redeemed
  by the Company at its original cost basis.
  
  (c) Common Stock 
  
       On July 9,  1996,  2,310,000  shares  of common  stock  were  reserved  for
  issuance upon exercise of redeemable warrants and underwriter's warrants.
  
  (d) Options 
  
       The Company has granted  options to purchase  100,000  Units to  Cranbrooke
  Corporation, a Delaware corporation which is affiliated with two officers of the
  Company.  The option is exercisable for a period of three years from the date of
  a Business  Combination  at an exercise  price of $12.50 per Unit. The option is
  fully vested; however, the options will be canceled if Mr. Kramer and Mr. Remley
  cease to serve as directors or  executive  officers of the Company  prior to the
  Business  Combination.  The shares  issuable  upon  exercise  of the options and
  underlying  warrants  may not be  sold or  otherwise  transferred  for 120  days
  subsequent to the first Business Combination.
  
                                     SIGNATURES
  
       Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
  Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned hereunto duly authorized.
  
                                                       Orion Acquisition Corp. II 
                                                       (Registrant) 
  
  Dated:  July 12, 1996                                /s/ William L. Remley 
                                                       William L. Remley 
                                                       President and Treasurer