FLEX ACQUISITION CORP, SB-2/A, 1997-10-01

FLEX ACQUISITION CORP
SB-2/A, 1997-10-01
SHORT-TERM BUSINESS CREDIT INSTITUTIONS

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As filed with the Securities and Exchange Commission on September ___,
1997
Registration No. 333-17107

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________

AMENDMENT NO. 2
TO
FORM SB-2

REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
_______________

FLEX ACQUISITIONS CORPORATION
(Exact name of registrant as specified in its charter)

TEXAS __________ 76-0498636
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation Industrial Classification Identification
or organization) Code Number) Number)

MICHAEL T. FEARNOW
770 S. POST OAK LANE PRESIDENT
SUITE 515 FLEX ACQUISITIONS CORPORATION
HOUSTON, TEXAS 77056 770 S. POST OAK LANE, SUITE 515
(713) 840-7500 HOUSTON, TEXAS 77056
(Address, including zip code, (713) 840-7500
and telephone number including (Name, address ,including zip code,
area code, of registrant's and telephone number, including
principal executive offices) area code, of agent for service)

Copies to:
M. STEPHEN ROBERTS, ESQ.
770 S. POST OAK LANE, SUITE 515
HOUSTON, TEXAS 77056
(713) 961-2696
FACSIMILE: (713) 961-1148

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO
THE PUBLIC: As soon as practicable following the effectiveness of this
Registration Statement.

If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box.

<PAGE>
EXPLANATORY NOTE

This Registration Statement covers the registration of (i) up to a
maximum of 100,000 units ("Units"), each Unit consisting of 100,000 shares of
its $.001 par value common stock, 200,000 Class B Warrants and 200,000
Class C Warrants for sale by the Company in a public offering (the
"Units Offering") and (ii) the distribution of 20,000 shares of common
stock owned by the sole shareholder of the Registrant, its corporate parent,
to its shareholders as a stock dividend ("Dividend Distribution").

The complete Prospectus relating to the Units Offering follows
immediately after this Explanatory Note. Following the Prospectus for the
Units Offering are pages of the Dividend Distribution Prospectus
relating solely to the Dividend Distribution, including alternative front
cover pages and a section entitled "Concurrent Public Offering" to be
used in lieu of the section entitled "Plan of Distribution" in the
Prospectus relating to the Units Offering . Certain sections of the
Prospectus for the Units Offering , such as "Use of Proceeds" and
"Dilution," will not be used in the Prospectus relating to the Dividend
Distribution.

Approximate date of commencement of proposed sale of securities to the
public: As soon as practicable after the Registration Statement becomes
effective.

If the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box [X]

<PAGE>
CALCULATION OF REGISTRATION FEE

PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER SHARE (1) OFFERING PRICE (1) FEE
<S> <C> <C> <C> <C>
Units, each consisting of one share of common . . 100,000 $ 6.00 $ 600,000 $ 181.80
stock, $.001 par value, two Class B Warrants and
two Class C Warrants (2)
Common Stock ($.001) (2). . . . . . . . . . . . . 100,000 $ .00 $ 0 $ 0.00
Class B Warrants (2). . . . . . . . . . . . . . . 200,000 $ .00 $ 0 $ 0.00
Common Stock Underlying Class B Warrants. . . . . 200,000 $ 6.25 $ 1,250,000 $ 378.75
Class C Warrants (3). . . . . . . . . . . . . . . 200,000 $ .00 $ 0 $ 0.00
Common Stock Underlying Class C Warrants. . . . . 200,000 $ 10.00 $ 2,000,000 $ 606.00
Common Stock (4) . . . . . . . . . . . . . . . . 20,000 $ 0.04 $ 800 $ 0.24
TOTAL . . . . . . . . . . . . . . . . . . . . . . $ 1,166.79
=============
<FN>

(1) Estimated solely for purposes of calculating the registration fee pursuant to Rule 457.
(2) The actual Unit is not being registered as a security, as such Unit only represents a minimum purchase
amount.
(3) Pursuant to Rule 416, there are also being registered such indeterminable additional shares of Common
Stock as may be issued pursuant to the anti-dilution provisions of the Class B and Class C Warrants, should such
provisions become operative.
(4) These 20,000 shares are owned by the sole shareholder of the Registrant, its corporate parent, and are to be
distributed by the sole shareholder to its shareholders as a stock dividend. The registration fee is based upon the
book value of the Registrant as of July 31, 1996.
(5) No registration fee is required for these common shares, Class B Warrants and Class C Warrants, because
the securities are being offered pursuant to the Units which are being registered in this same registration
statement. Regulation 230.457(g).
</TABLE>

The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission acting pursuant to said
section 8(a) may determine.

<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.

SUBJECT TO COMPLETION,
PRELIMINARY PROSPECTUS DATED SEPTEMBER __, 1997

FLEX ACQUISITIONS CORPORATION
(A TEXAS CORPORATION)

100,000 UNITS, EACH UNIT CONSISTING OF ONE SHARE OF COMMON STOCK,
TWO CLASS B WARRANTS AND TWO CLASS C WARRANTS

Flex Acquisitions Corporation ("Company") is offering 100,000 Units, each
Unit consisting of one share of common stock, $.001 par value ("Common
Stock"), and four Common Stock purchase warrants ("Class B Warrants" and
"Class C Warrants," collectively, the "Warrants"). The shares of Common Stock
and Warrants included in the Units are immediately detachable, separately
transferable and separately tradeable as of the date of this Prospectus. The
Units will not be tradeable. All Units offered hereby are being sold by the
Company.

Each Class B Warrant and each Class C Warrant is presently exercisable
and entitles the holder thereof to purchase one share of Common Stock at an
exercise price of $6.25 and $10.00, respectively. The Warrants expire on
January 1, 2001, unless extended by the Company's Board of Directors. Each
Class B Warrant may be redeemed by the Company at any time after January 1,
1997 at a price of $0.05 per warrant if the reported closing bid price of the
Common stock is at least $7.50 per share (132% of the initial public offering
price of the Common Stock) for a period of 20 consecutive trading days
immediately prior to the date of the notice of redemption to warrant holders.
Each Class C Warrant may be redeemed by the Company at any time after January
1, 1997 at a price of $0.05 per warrant if the reported closing bid price of
the Common stock is at least $12.00 per share (222% of the initial public
offering price of the Common Stock) for a period of 20 consecutive trading
days immediately prior to the date of the notice of redemption to warrant
holders. Notice of the redemption will be mailed to all Warrant holders at
least 30 days before the date on which the Warrants have been called. See
"Description of Securities-Redeemable Common Stock Purchase Warrants."

Concurrently with the offering of the Units (the "Units
Offering" ), the Company is registering, by means of a separate prospectus,
20,000 shares of Common stock to be distributed by American NorTel
Communications, Inc. ("American NorTel"), the corporate parent of the Company,
to its shareholders by dividend (the "Spinoff"). Any closing of the Units
Offering is conditioned upon the consummation of certain transactions,
including the merger of the Company and another corporation with a similar
name, Flex Financial Group, Inc. ("Flex Financial"). The proposed Merger is
being registered with the Securities and Exchange Commission ("the SEC")
simultaneously with the registration of the offering of Units and the Spinoff
described herein. See "Summary of Proposed Transactions."

Prior to this Units Offering, there has been no public market for
the Common Stock or Warrants and there can be no assurance that such a market
will develop after the completion of this offering or, if developed, that it
will be sustained. The initial public offering price of the Shares and the
Warrants and the exercise price and other terms of the Warrants have been
arbitrarily determined by the Company and will not necessarily be related to
the assets, book value or any other established criterion of value. See
"Risk Factors" and "Plan of Distribution."

THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK AND IMMEDIATE AND SUBSTANTIAL DILUTION AND SHOULD NOT BE PURCHASED BY
INVESTORS WHO CANNOT AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE "RISK
FACTORS." COMMENCING ON PAGE 12 OF THIS PROSPECTUS FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON
STOCK OFFERED HEREBY.
____________________________________

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY OTHER STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

____________________________________

UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND ISSUER OF
RECIPIENT COMMISSIONS (1) OTHER PERSON (2)
----------- ---------------- -----------------
<S> <C> <C> <C>
Per Unit . . . . $ 6.00 $ .60 $ 5.40

Total Maximum
100,000 Units. $600,000.00 $ 60,000.00 $ 540,000.00

Total Minimum:
20,000 Units $120,000.00 $ 12,000.00 $ 108,000.00
<FN>

(1) Excludes a nonaccountable expense allowance payable to Selected
Broker-Dealers, (the "Selected Broker-Dealers"). The Company has agreed to
indemnify the Selected Broker-Dealers against certain liabilities under the
Securities Act of 1933, as amended. See "Plan of Distribution."
(2) Before deducting expenses, other than underwriting discounts and
commissions, payable by the Company, estimated to be $40,000 for a maximum
offering and $20,000 for a minimum offering.
</TABLE>

The Units are being offered severally by the Company and Selected
Broker-Dealers on a "best efforts all or none basis" as to 20,000 Units
and on a "best efforts basis" as to the remaining 80,000 Units. The
Selected Broker-Dealers reserve the right to reject any order in whole or part
and to withdraw, cancel or modify the offer without notice. The offering
will terminate upon the later of (i) 120 days after the date of this
Prospectus or (ii) if extended by the Company, 180 days after the date of this
Prospectus.

When collected, subscription funds will be held in an interest-bearing
escrow account with Southwest Bank of Texas, N.A., Houston, Texas or other
reputable banking institution ("Escrow Agent"). Upon receipt of
subscriptions for 20,000 Units, the net proceeds will be released from escrow
to the Company ("Initial Closing "). Subscriptions for additional
Units will be placed in escrow, and released to the Company every 30 days
("Interim Closings") until the termination of the offering, when any remaining
funds in escrow will be released to the Company ("Final Closing"). The
Company reserves the right to reject orders for the purchase of Units in whole
or in part, and if a subscription is rejected, the subscriber's funds will
returned without interest within three business days after rejection. Within
30 days following the Initial, each Interim and Final Closing, a subscriber's
security certificates will be mailed by first class mail.

The Company is not a "reporting company," as such term is employed in the
Securities Exchange Act of 1934. It is not listed on any exchange, and its
Common Stock is not eligible for quotation on the NASDAQ Small-Cap Market
("NASDAQ"). There presently is no public market for the Common Stock of the
Company, and there can be no assurance that such a market will develop or can
be sustained should there be a completion of the proposed Merger. Should the
proposed Merger not be effected, there will be no public market for the
securities of the Company because of the above-described escrow arrangement.
See "Summary of Proposed Transactions - The Escrow Arrangement." Should
the proposed Merger be effected, the Company intends to register pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as amended, (become a
"reporting company") and, in accordance therewith, will file reports, proxy
statements, and other information with the Securities and Exchange Commission
(the "Commission"). The Company intends to furnish its shareholders with
annual reports containing audited financial statements and such other periodic
reports as the Company deems appropriate or may be required by law.

THE DATE OF THIS PROSPECTUS IS _________________, 1997 .

<PAGE>
ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission in
Washington, D.C. a Registration Statement under the Securities Act of 1933, as
amended, with respect to the Common Stock offered by this Prospectus. For
further information with respect to the Company and the Common Stock offered
hereby, reference is made to the Registration Statement and the exhibits
listed in the Registration Statement. The Registration Statement can be
examined at the Public Reference Room of the Securities and Exchange
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and copies may
be obtained upon payment of the prescribed fees.

Should the proposed Merger be effected, the Company intends to
register pursuant to Section 12(g) of the Securities Exchange Act of 1934, as
amended, (become a "reporting company") and, in accordance therewith, will
file reports, proxy statements, and other information with the Securities and
Exchange Commission (the "Commission"). The Company intends to furnish
shareholders with annual reports containing financial statements audited by
independent certified public accountants and such other periodic reports as it
may deem appropriate or as required by law.

It is expected that certificates for the securities comprising the Units
offered hereby will be ready for delivery within 30 days after the date of any
closing of subscriptions and within two weeks with respect to the 20,000
Shares to be distributed by American NorTel to the escrow agent (see "The
Escrow Arrangement").

Should the proposed Merger described herein be approved by the requisite
shareholder vote of Flex Financial and become effective, the Company will file
a post-effective amendment to the Registration Statement described above and
cause stickers to be placed on the front cover page of all copies of the
Prospectus, which amendment and stickers will describe the results of the vote
and the effective date of the merger.

When used in the Prospectus, the words "estimate," "project," "intend,"
"expect," and similar expressions are intended to identify forward-looking
statements. Such statements are subject to risks and uncertainties that could
cause actual results to differ materially. For a discussion of such risks,
see "Risk Factors." Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date hereof.
The Company does not undertake any obligation to publicly release any
revisions to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

UNTIL _____________________, 1997 (90 DAYS AFTER THE REGISTERED
SECURITIES ARE RELEASED FROM ESCROW PURSUANT TO RULE 419 UNDER THE SECURITIES
ACT OF 1933), ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES
MAY BE REQUIRED TO DELIVER A PROSPECTUS.

TABLE OF CONTENTS

PAGE
----
<S> <C>

Additional Information

Introduction

Summary of Proposed Transaction
The Companies
The Spinoff
The Proposed Merger
The Escrow Arrangement
Degree of Management Control of Vote on Merger
Dissenters' Rights of Appraisal
Compliance With Governmental Regulations
Tax Consequences of The Transaction
Risk Factors

Risk Factors

Use of Proceeds

Capitalization

Dilution

Terms of The Transaction
Terms of The Merger
Reasons for The Merger and Spinoff
Accounting Treatment of Proposed Merger
Plan of Merger
Description of Securities
Federal Income Tax Consequences
Pro Forma Financial Information and Dilution
Material Contacts Among the Companies
Reoffering by Party Deemed to Be an Underwriter
Interest of Counsel
Special Provisions of the Articles of Incorporation and Texas Law

Pro Forma Financial Information and Dilution

Information About the Company
Description of Business and Properties
Course of Business Should the Merger Not Occur
Legal Proceedings
Market for The Company's Common Stock and Related Stockholder Matters
Rule 144 And Rule 145 Restrictions on Trading
Financial Statements

Information About Flex Financial
Management's Plan of Operation
Plan of Operation
Description of Business Properties
Legal Proceedings
Financial Statements

PAGE
----

Management Information
Security Ownership of Certain Beneficial Owners
Directors, Executive Officers and Significant Employees
Remuneration of Directors and Officers
Interest of Management and Others in Certain Transactions
Parents

Plan of Distribution

Plan of Merger
</TABLE>

<PAGE>
INTRODUCTION

SECURITIES ISSUED IN INITIAL PUBLIC OFFERING

The Company is issuing a maximum of 100,000 Units, each Unit consisting
of one share of Common Stock, two Class B Warrants and two Class C Warrants,
at a price of $6.00 per Unit. The shares of Common Stock and Warrants
included in the Units are immediately detachable, separately transferable and
separately tradeable as of the date of this Prospectus. The Units will not be
tradeable. All Units offered hereby are being sold by the Company
and Selected Broker-Dealers. See "Use of Proceeds."

SECURITIES ISSUED IN OTHER TRANSACTIONS BEING REGISTERED

Concurrently with the Units Offering , the Company is registering,
by means of a separate prospectus, 20,000 shares of Common stock to be
distributed by American NorTel Communications, Inc. ("American NorTel"), the
corporate parent of the Company, to its shareholders by dividend (the
"Spinoff"). The Units Offering is conditioned upon the consummation of
certain transactions including the merger of the Company and another
corporation with a similar name, Flex Financial Group, Inc. ("Flex
Financial"). The proposed Merger is being registered with the Securities and
Exchange Commission ("the SEC") simultaneously with the registration of the
offering of Units and the Spinoff described herein. See "Summary of
Proposed Transaction."

Any closing of the Units Offering is conditioned upon the
consummation of the merger of the Company and Flex Financial by filing
Articles of Merger with the Secretary of State of Texas.

<PAGE>
SUMMARY

The following is a summary of certain information contained elsewhere in
this Prospectus. Reference is made to, and this summary is qualified in its
entirety by, the more detailed information contained in or incorporated by
reference in this Prospectus and the Appendices hereto. Shareholders are
urged to read carefully this Prospectus and the Appendices hereto in their
entirety. Shareholders should carefully consider the information set forth
below under the heading "Risk Factors." As used in this Prospectus, unless
otherwise required by the context, the term "Flex Financial" means Flex
Financial Group, Inc. and the term "Company" means Flex Acquisitions
Corporation. Capitalized terms used herein without definition are, unless
otherwise indicated, defined in the text below and used herein with such
meanings.

The transaction discussed herein is a distribution by a corporation of a
dividend to its shareholders, the dividend consisting of all the capital stock
of a wholly-owned subsidiary corporation. The distributing corporation,
American NorTel Communications, Inc. ("American NorTel"), organized and owns
all 20,000 issued and outstanding shares ("the Shares") of Common Stock of the
Registrant, Flex Acquisitions Corporation ("the Company"). American NorTel
proposes to distribute the Shares ("the Spinoff") to its approximately 780
shareholders residing in 31 states and Canada on the basis of one share of
Common Stock of the Company for each 588 shares of common stock of American
NorTel held of record by its shareholders on September 30, 1996.

The Spinoff is being done with reference to a proposed merger ("the
Merger") between the Company and another corporation with a similar name, Flex
Financial Group, Inc. ("Flex Financial"). The proposed Merger is being
registered with the Securities and Exchange Commission ("the SEC")
simultaneously with the registration of the Spinoff described herein and
the registration of the Units Offering . The proposed Merger will be
submitted to the shareholders of Flex Financial for their approval or
rejection. American NorTel will approve the proposed Merger before the
Spinoff occurs, but there can be, and is, no assurance that the shareholders
of Flex Financial will approve the proposed Merger.

Should the Merger be approved by the shareholders of Flex Financial and
be effected, the Company and Flex Financial will merge, with the Company being
the surviving corporation. The shareholders of Flex Financial will exchange
all their capital stock in Flex Financial for 94,000 shares of Common Stock of
the Company, and the officers and directors of Flex Financial will become the
officers and directors of the Company.

THE COMPANIES

Three companies and their shareholders are affected by the Spinoff and
Merger transactions described in this Prospectus.

Flex Acquisitions Corporation (the "Company") was incorporated under the
laws of the State of Texas on March 21, 1996, for the purpose of merging with
Flex Financial Group, Inc. ("Flex Financial") should the Merger transaction
described herein be approved. The Company has no business operations or
significant capital and has no present intention of engaging in any active
business until and unless it merges with Flex Financial.

The business office of the Company is located at 770 S. Post Oak Lane,
Suite 515, Houston, Texas 77056. Its telephone number is 713/840-7500.

Flex Financial Group, Inc. ("Flex Financial") was incorporated under the
business corporation laws of the State of Texas on August 16, 1995.

GENERAL. Flex Financial was formed in August 1995 to participate in
certain short-term financing opportunities (terms of less than one year) in
the underwriting segment of the securities industry. The Company has no
business operations or significant capital and has no present intention of
engaging in any active business until and unless it completes the public
offering of its securities described herein ( "Units Offering" ).

BUSINESS PLAN. The Company intends to participate in short term
financing opportunities by (i) providing and/or participating in equity
subordination loans to selected underwriters requiring additional excess net
capital for underwriting specific issues on a firm commitment basis
("Subordination Loans") and (ii) providing and/or participating in bridge
loans to selected issuers meeting the Company's due diligence standards in
connection with initial public offerings and secondary financing ("Bridge
Loans"). The Company also intends to engage in "spinoff" activities such as
are described herein, such spinoffs to involve the distribution, by way of
stock dividends or otherwise, of registered shares of stock of other public
companies.

Management of the Company believes that financing opportunities will
become available to the Company due primarily to the liquidity of its assets,
its future status as a publicly-held company, and its flexibility in
structuring and participating in financing opportunities.

The business office of Flex Financial is 770 S. Post Oak Lane,
Suite 515, Houston, TX 77056. Its telephone number is 713/840-7500.

American NorTel Communications Inc. ("American NorTel") filed its
Certificate of Registration and Articles of Continuance with the Secretary of
State of the State of Wyoming and became a Wyoming corporation effective
February 9, 1993. The company was originally incorporated in British
Columbia, Canada on May 17, 1979. American NorTel's common stock has been
listed for trading on the Vancouver Stock Exchange since September 18, 1980.
In conjunction with a one for five consolidation, the company's name was
changed to Coldsprings Resources Ltd. on June 4, 1987. In conjunction with a
one for ten consolidation, its name was changed to Islehaven Capital
Corporation on July 14, 1987. The company changed its name to NorTel
Communications Inc. on June 17, 1991. In conjunction with a one for ten
consolidation, the company's name was changed to American NorTel
Communications Inc. on May 11, 1992.

American NorTel currently operates only in the telecommunications
business, providing long distance telephone service in combination with
additional related services in the United States and a number of foreign
countries, including Argentina, Brazil, Mexico, Canada, and Costa Rica. Until
the end of 1993, the Company was also in the mining development and
exploration business in Costa Rica and Canada, and has divested of its
remaining mining assets.

In 1987, American NorTel was inactive and was classified as dormant under
the rules of the Vancouver Stock Exchange. The then current management
organized a reverse takeover by a number of limited partnerships and private
companies which were engaged in the mining development and exploration
business and who, on July 14, 1987, transferred all of their assets into the
company for Treasury shares. The company is no longer active in the mining
development and exploration business. In 1990, American NorTel became active
in the long distance telecommunications business, which is now its only
business.

American NorTel has approximately 780 shareholders. The company seeks to
diversify its business opportunities and investment potential to its
shareholders by engaging in "spinoff" activities such as are described herein,
such spinoffs to involve the distribution, by way of stock dividends or
otherwise, of registered shares of stock of other companies. American NorTel
organized the Company and, prior to the date of this Prospectus, has been the
controlling shareholder of the Company.

American NorTel's address is 7201 E. Camelback Road, Suite 320,
Scottsdale, Arizona 85251. Its telephone number is 602/945-1266.

THE SPINOFF

American NorTel purchased 20,000 Shares of Common Stock of the Company
for a cash consideration of $1,000 and proposes to distribute to the
shareholders of American NorTel, as a stock dividend, these 20,000 Shares on
the basis of one share of the Company for every 588 shares of American NorTel
held of record on September 30, 1996. See "Terms of the Transaction."

THE PROPOSED MERGER

Upon the effectiveness both of the registration statement of which this
Prospectus is a part and the registration statement describing the Merger for
the benefit of the Flex Financial shareholders, the shareholders of the
Company and of Flex Financial will each vote to approve or reject a proposed
merger of Flex Financial into the Company on the following terms:

NUMBER OF SHARES OF CAPITAL STOCK (1)
BEFORE MERGER AFTER MERGER
BENEFICIAL OWNERS COMPANY FLEX FINANCIAL THE COMPANY
- ------------------------------ ------- --------------- ------------
<S> <C> <C> <C>
Flex Shareholders. . . . . . . 0 94,000 (3) 94,000 (4)
American NorTel. . . . . . . . 20,000 0 0 (5)
American NorTel's Shareholders 0 0 20,000 (5)
------- --------------- ------------
20,000 94,000 (3) 114,000 (4)
<FN>
(1) All shares of capital stock of the Company are shares of Common Stock.
All shares of capital stock of Flex Financial are shares of Common Stock.
(2) The surviving corporation of the Merger will be the Company but Flex
Financial's management and directors shall become the management and directors
of the Company.
(3) In addition to these shares, there are reserved 217,665 shares of Flex
Financial Common Stock issuable upon the exercise of outstanding options and
warrants.
(4) In addition to these shares, there will be reserved 217,665 shares of
the Company's Common Stock issuable upon the exercise of the presently issued
and outstanding Flex Financial options and warrants.
(5) American NorTel will distribute its 20,000 Shares to its approximately
780 shareholders ("the Spinoff" - see definition of this on page 2 under
"American NorTel Communications Inc.") prior to the vote on the Merger by the
Flex Financial stockholders. This distribution initially shall be made to
an escrow agent. See "The Escrow Arrangement" immediately below. Fractional
share interests will not be distributed but will be retained in escrow for
distribution as follows. The Company may choose to pay in cash the fair value
of fractions of a share as of the time when those entitled to receive such
fractions are determined or to aggregate fractional share interests with those
of other small-denomination shareholders who choose not to receive their
certificates, and have the shares sold through a broker into the open market
after trading in the shares should commence in the open market, and distribute
to those entitled the net cash proceeds of such sale.
</TABLE>

THE ESCROW ARRANGEMENT

EFFECT OF THE MERGER . A vote to approve the Merger by the sole
shareholder of the Company is assured. After such vote but before any vote by
the shareholders of Flex Financial, American NorTel shall declare a dividend
to its shareholders of the 20,000 shares of Common Stock of the Company held
by it ("the Spinoff Shares"). Certificates representing the 20,000 Spinoff
Shares shall be distributed by American NorTel to Southwest Bank of Texas NA
("the Escrow Agent") to be held in escrow pursuant to the provisions of
Securities and Exchange Commission Rule 419(e). Later distribution by the
Escrow Agent would be as follows:

EFFECTIVE TIME OF THE MERGER. Upon the legal effectiveness of the
Merger (should Flex Financial's shareholders approve the Merger) , the
Company shall supplement this Prospectus to indicate the fact and date of the
Merger. At such time as information concerning the Company in its
post-merger form shall have been made available to market makers of
the Company's stock and also published in Moody's OTC Industrial Manual, the
Company shall provide to the Escrow Agent the Company's representation that
the requirements of Securities and Exchange Commission Rule 419(e) have been
met, and the Escrow Agent shall distribute, subject to the small
shareholders' provisions described in the next paragraph , the escrowed
certificates representing the 20,000 Spinoff Shares to the owners of thereof.

INTERESTS OF CERTAIN PERSONS IN THE MERGER. With respect to
certificates representing the ownership of fewer than five Spinoff Shares of
the Company, the Escrow Agent shall not immediately distribute these
certificates to the American NorTel shareholders. Rather, each American
NorTel shareholder entitled to one of these small denomination certificates
shall be advised by American NorTel that the shareholder can elect either (i)
to receive his certificate or (ii) to have his shares aggregated with those of
other small-denomination shareholders who choose not to receive their
certificates, have his shares sold through a broker into the open market after
trading in the shares should commence in the open market, and receive the net
cash proceeds of the sale. Nor will fractional share interests be
distributed. The Company may choose to pay in cash the fair value of
fractions of a share as of the time when those entitled to receive such
fractions are determined or to aggregate fractional share interests with those
of other small-denomination shareholders who choose not to receive their
certificates, and have the shares sold through a broker into the open market
after trading in the shares should commence, and distribute to those entitled
the net cash proceeds of such sale.

CONDITIONS TO THE ESCROW AGREEMENT. There can be no assurance
that the proposed Merger between the Company and Flex Financial will occur,
since a favorable shareholder vote of Flex Financial's shareholders must be
obtained, and Flex Financial's management does not hold voting power over a
majority of any of its Common Stock, which two thirds vote is required for
Flex Financial to approve the Merger. Further, Flex Financial shareholder
voting on the proposed merger will be taken by written consent pursuant to
Texas corporate law and Flex Financial's bylaws which require that written
consent be unanimous.

Should the Merger not become effective, (i) Flex Financial will continue
as a closely-held company with its existing assets and business, (ii) the
Company will have no significant assets or business, and there will be no
trading market for its Common Stock, because the stock certificates
representing all its issued and outstanding shares of capital stock will still
be held in escrow by the Escrow Agent, and (iii) the Units Offering
will not be effected. As long as this escrow continues, no transfer or other
disposition of the Shares held in escrow shall be permitted other than by will
or the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Internal Revenue Code of 1986, as amended,
or Title 1 of the Employee Retirement Income Security Act or the rules
thereunder. The Company's management has no specific plans for an alternative
to a rejection of the proposed Merger but would seek to acquire a business or
assets that would constitute a business, using funds contributed by management
to pay the costs of such search. Upon execution of any agreement for the
acquisition of a business or assets that would constitute a business, the
Company shall file a post effective amendment to the Registration Statement
and shall supplement this Prospectus to disclose information about the
alternative business or assets acquisition, including financial statements and
other information required by the Securities and Exchange Commissions's Rule
419. Upon the legal effectiveness of the acquisition described in the amended
registration statement and supplemented Prospectus, an additional
post-effective amendment to the registration statement would be filed, and
upon the effectiveness of such post-effective amendment filed with the
Commission, the Escrow Agent would distribute the stock certificates held in
escrow. Should no alternative to the Merger be effected within 18 months
after the effective date of the Registration Statement of which this
Prospectus is a part, Flex Financial has agreed to convert its $4,000 Note
according to its terms into common stock representing 80% of the outstanding
voting shares of the Company's Common Stock and will have the voting rights to
cause a dissolution of the Company. Flex Financial has indicated its
intentions to so exercise these voting rights to that effect at that time.
See "The Escrow Arrangement."

PURPOSE OF THE ESCROW AGREEMENT. The purpose of the Escrow is (i) to
establish a definitive date for determining the fair market value of the
Spinoff Shares at $.02, the estimated book value of Flex Acquisitions
on the dividend distribution date for purposes of determining if the
distribution is to be taxed as a dividend and as ordinary income (See "Federal
Income Tax Consequences - Shareholders of American NorTel"); (ii) to ensure
that the distribution of Spinoff Shares to American NorTel shareholders is a
distribution pursuant to an effective registration statement under the Act;
and (iii) to comply with the provisions of Securities and Exchange Commission
Rule 419(e).

DEGREE OF MANAGEMENT CONTROL OF VOTE ON MERGER

Texas corporate law requires that the Merger be approved by a vote
of a two-thirds (2/3's) vote of the outstanding shares of Common Stock of each
of the Company and Flex Financial. With respect to such companies, the
percentage of outstanding shares entitled to vote and held by officers,
directors and their affiliates are as follows: the Company - 0%; and Flex
Financial - Common Stock - 43%.

DISSENTERS' RIGHTS OF APPRAISAL

No dissenter's rights of appraisal come into effect with respect to
the proposed Merger. While Texas and Wyoming corporate law provide
dissenter's rights of appraisal in the case of mergers, (1) all the issued and
outstanding shares of capital stock of the Company will be voted by the
American NorTel sole director, and a unanimous vote approving the Merger is
assured, and (2) Flex Financial shareholder voting on the proposed merger will
be taken by written consent pursuant to Texas corporate law and Flex
Financial's bylaws which require that written consent be unanimous, and
therefore, no dissenter's rights of appraisal would be created by either vote
because a vote to disapprove or a failure of unanimous approval would defeat
the Merger.

COMPLIANCE WITH GOVERNMENTAL REGULATIONS

No federal or state regulatory requirements, other than securities laws
and regulations, must be complied with or federal or state approval obtained
in connection with the Spinoff and Merger, other than the filing of articles
of merger with the Secretary of State of Texas after a favorable vote might be
obtained on the proposed merger.

TAX CONSEQUENCES OF THE TRANSACTION

The Merger should be a "tax-free" reorganization under Section 368(a)(1)
of the Internal Revenue Code. The Spinoff is a taxable distribution for both
American NorTel and American NorTel's shareholders, but the value of the
Spinoff Shares for taxable purposes is believed by American NorTel to be $0.02
per Share. See "Terms of the Transaction Federal Income Tax Consequences."

RISK FACTORS

Ownership of the Common Stock of the Company is speculative and involves
a high degree of risk, whether the Merger with Flex Financial be effected or
not. See "Risk Factors" below.

<PAGE>
RISK FACTORS

The shareholders of Flex Financial, all of whom shall be asked to vote on
the proposed Merger, are making an investment decision that involves a high
degree of risk and should carefully consider the following factors in
evaluating the Merger, the surviving corporation, and its business in
determining whether to approve the Merger.
In addition to the other information contained in this Prospectus, the
following risk factors should be considered when evaluating an investment in
the shares of Common Stock offered hereby.

RISKS INHERENT IN DEVELOPMENTAL STAGE COMPANY . The Company was
organized in March 1996 and has no operating history, revenues from
operations, or assets. The Company received $1,000 cash for the initial
issuance of 20,000 shares of its common stock and $4,000 for the issuance of a
convertible, subordinated, redeemable note. The proceeds from its issuance of
equity and debt has been expended on organizational expenses and the expenses
associated with the Units Offering. The Company faces all of the risks of
a new business and those risks specifically inherent in the investigation,
participation, or investment in financings of the type sought by the Company.
Purchase of the securities in this offering must be regarded as placing funds
at a high risk in a new or "start-up" venture with all of the unforeseen
costs, expenses, problems, and difficulties to which such ventures are
subject. There is no assurance that the Company will close the Units
Offering necessary for it to implement its business plan, or if it does, that
The Company will be able to locate and participate in financing and investment
opportunities. In addition, even if the Company becomes involved in a
financing opportunity, there is no assurance that it will generate revenues or
profits, nor that the value or market price of the Company's Common Stock
would be increased thereby.

ARBITRARY DETERMINATION OF OFFERING PRICE AND WARRANT EXERCISE PRICE.
The offering price of the Common Stock was arbitrarily determined by the
Company, and may not be indicative of the market price of the Common Stock
after the Units Offering. The exercise price of the Warrants was arbitrarily
determined by the Company and is not necessarily indicative of the actual or
projected value of he Common Stock or the Warrants. Among the factors
considered in establishing the offering price of the Common Stock and the
exercise price of the Warrants were: the proceeds to be raised by the Company,
the percentage of ownership to be held by investors in this Units Offering,
the experience of Company management, the current market conditions in the
over-the-counter securities market, the Company's capital structure, possible
future capital requirements of the Company, potential dilution to shareholders
from Warrant exercise, and the general prospects for the Company.
Accordingly, there is no relationship whatsoever between the offering price
and the assets, earnings or book value of the Company, or any other recognized
criteria of value. See "Plan of Distribution."

NO ASSURANCE OF A PUBLIC MARKET AND LIKELIHOOD OF A VOLATILE MARKET.
While the shares of Common Stock of the Company to be issued or distributed
pursuant to this Prospectus will be free of restrictions on transferability
for all persons except "affiliates" of the Company and Flex Financial (and
with respect to such "affiliates" such shares may be transferred subject to
certain restrictions), there is presently no public market for the Common
Stock of the Company and there is no assurance that a public market for such
securities will develop after the occurrence of the Merger described in this
Prospectus, or, if one develops, that it will be sustained. It is likely that
any market that develops for the Common Stock, should it develop, will be
highly volatile and that the trading volume in such market will be limited.

MARKET RESTRICTIONS ON BROKER-DEALERS. The Company's common stock is
covered by a Securities and Exchange Commission Rule 15-g that imposes
additional sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and accredited
investors (generally institutions with assets in excess of $5 million or
individuals with net worth in excess of $1 million or annual income exceeding
$200,000 or $300,000 jointly with their spouse). For transactions covered by
the rule, the broker-dealer must make a special suitability determination for
the purchaser and receive the purchaser's written agreement to the transaction
prior to the sale. Consequently, the rule may affect the ability of
broker-dealers to sell the Company's securities and also may affect the
ability of persons receiving shares in this offering to sell their shares in
the secondary market. Further, the Company's Common Stock, after the Merger,
will initially be quoted on an NASD inter-dealer system called "the Bulletin
Board," will not have $4 million in assets or $2 million in stockholders'
equity which are both required for it to qualify for quotation on NASDAQ, and
may not be expected to command a market price of $5 per share, the price
required for a non-NASDAQ-quoted security to escape the trading severities
imposed by the Securities and Exchange Commission on so-called "penny stocks."
These trading severities tend to reduce broker-dealer and investor interest in
penny stocks and could operate (i) to inhibit the ability of the Company's
stock to reach a $3 per share trading price that would make it eligible for
quotation on NASDAQ even should it otherwise qualify for quotation on NASDAQ
and (ii) to inhibit the ability of the Company to use its stock for business
acquisition purposes. See "Information about the Company - Market for the
Company's Common Stock and Related Stockholders Matters."

DEPENDENCE ON KEY PERSONNEL. The affairs of the surviving company,
should the Merger be approved, shall be conducted by the present management of
Flex Financial. The loss of the services of any of these persons and other
key employees, for any reason, may have a materially adverse effect on the
prospects of the emergent company. There are no employment contracts with
management or key personnel of the Company. The Company will be heavily
dependent on the skills, talents, and abilities of its management and
consultants to successfully implement its business plan. Although management
has experience in seeking, investigating and participating in financing and
investment opportunities, management will generally depend on their general
business expertise in making decisions regarding the Company's operations.
Because investors will not be able to evaluate the merits of possible business
opportunities by the Company, they should critically assess the information
concerning the Company's management. The success of the emergent Company is
dependent upon, among other things, the services of Michael T. Fearnow,
President of Flex Financial, and of M. Stephen Roberts, who will provide
certain financial and legal consulting services to the Company. The Company
has not entered into employment agreements with any of its officers. Flex
Financial does not have, nor does it or the Company presently intend to
obtain, key man life insurance (with proceeds payable to the Company) on the
life of Mr. Fearnow. The loss of the services of Messrs. Fearnow and Roberts
for any reason, may have a material adverse effect on the prospects of the
Company.

DEPENDENCE ON OUTSIDE CONSULTANTS AND ADVISERS; CONFLICTS OF INTEREST.
Mr. Fearnow will as an officer of the Company provide without compensation
the ministerial duties necessary for the president of the Company and will
with respect thereto have a continuing fiduciary obligation to the Company.
Mr. Fearnow will provide as a consultant ongoing advice and consultation with
respect to business opportunities and the business activities of the
Company. During the investigation of a possible business opportunity and
in order to supplement the business experience of management, the Company may
employ accountants, technical experts, appraisers, attorneys, or other
consultants and advisers. The selection of any advisers will be made by
management and without any control from stockholders.

Certain conflicts of interest may exist between the Company and Mr.
Fearnow as a result of his position as an officer and director of the Company
and his service as a consultant. In particular, he will face a conflict of
interest with regard to his possible future participation in other business
relationships with companies to which the Company may provide financing. In
such cases, Mr. Fearnow may have interests that conflict with those of the
Company. Although Mr. Fearnow will attempt to resolve any conflicts in favor
of the Company, there is no assurance that this will be the case. The Company
has not established procedures for the resolution of such conflicts of
interest.

LACK OF INDEPENDENT DIRECTORS. Upon completion of the Units Offering,
and for a foreseeable period of time thereafter, the Company's board of
directors will have only one director. AS such, upon completion of the Units
Offering, the Company's sole director will be Michael T. Fearnow, the
Company's sole officer.

IMPRACTICABILITY OF EXHAUSTIVE INVESTIGATION OF FINANCING OPPORTUNITIES.
The Company's limited funds will likely make it impracticable to conduct a
complete and exhaustive investigation and analysis of a financing opportunity
before the Company commits its capital or other resources. Management
decisions may be made without detailed due diligence, feasibility studies,
independent analysis, market surveys, and the like which, if the Company had
more funds available, would be desirable. Management decisions will be
particularly dependent on information provided by the issuer, underwriter,
their principals, or others associated with the business opportunity seeking
the Company's participation.

ADVERSE EFFECT OF SALE OF LESS THAN TOTAL OFFERING. In the event less
than the total number of Securities being offered hereby should be sold, the
proposed operations of the Company, primarily providing Subordination and
Bridge Loans, would be adversely affected and therefore reduced. The
Company's operations may require additional financing for which the Company
has not arranged and no assurance can be offered that such financing would be
available.

TAX CONSEQUENCES. The anticipated favorable tax consequences of the
proposed Merger and Spinoff to the Company and its shareholders (see "Terms of
the Transaction - Federal Income Tax Consequences") are not supported by an
advance ruling by the Treasury Department but are based upon an opinion of M.
Stephen Roberts, Esq., in his capacity as tax counselor to the Company (which
tax opinion is one of the exhibits to the registration statement of which this
Prospectus is a part). Should the actual income tax consequences be different
than as represented herein by the Company, significant gain or loss might be
recognized and reportable by any of the Company, American NorTel, or American
NorTel's approximately 780 shareholders to whom will be distributed the 20,000
Spinoff Shares should the Merger be effected.

DIVIDENDS NOT LIKELY. Should the Merger be effected, for the foreseeable
future it is anticipated that any earnings which may be generated from
operations of the emergent company will be used to finance the growth of such
company, and cash dividends will not be paid to holders of the Common Stock.

POSSIBLE FUTURE DILUTION. In addition to the Shares registered for the
proposed Merger and for the Spinoff, the Company has registered 2,000,000
shares to be available for issuance in possible business combinations or asset
acquisitions, the issuance of which would dilute the percentage ownership and
could dilute the net tangible book value per share of shareholders of the
surviving company.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the Units offered by it
hereby, assuming a public offering price of $6.00 per Unit and after deducting
underwriting discounts and estimated offering expenses, are estimated to be
approximately $88,000, if the minimum number of 20,000 Units is sold and
$500,000 if the maximum number of 100,000 Units is sold. If the
minimum offering amount is sold, the net proceeds are estimated to be
$88,000. The following table sets forth the estimated application by
the Company of the net proceeds to be derived from the sale of Units offered
hereby.

MINIMUM MAXIMUM
OFFERING OFFERING
AMOUNT, PERCENTAGE AMOUNT, PERCENTAGE
20,000 OF NET 100,000 OF NET
USE OF PROCEEDS UNIT PROCEEDS UNITS PROCEEDS
- ------------------------------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C>
To pay principal and accrued
Interest on Flex Financial
Bridge Loan Notes (1) . . . $ 60,000 68% $ 60,000 12%

To make Subordination and
Bridge Loans. . . . . . . . 28,000 32% 395,000 79%

To provide general working
capital . . . . . . . . . . 0 0% 45,000 9%

Total Net Proceeds. . . $ 88,000 100% $ 500,000 100%
<FN>

(1) Principal of $50,000, bearing interest at 10% per annum (estimated
accrued interest of $10,000), currently due and payable on the earlier of March
31, 1998 or the closing of a public offering of the Company's securities
pursuant to the Securities Act of 1933, as amended, representing gross proceeds
of no less than $60,000. Proceeds of the Bridge Loans were used by Flex
Financial to defray the legal, audit and other expenses of the Units Offering,
Merger and Spinoff transactions, including registration of the Merger
transaction.
</TABLE>

The Company intends to use the net proceeds of the Units Offering first
to retire the Bridge Loans, then to apply the remaining net proceeds to making
Subordination and Bridge Loans, provided however, that 15% of net proceeds
exceeding $200,000 ($45,000) shall be applied to general working capital
(overhead or general and administrative expenses).

Pending use of the net proceeds for the above purposes, the Company
intends to invest such funds in short-term, investment-grade, interest-bearing
obligations. The Company believes that the maximum offering proceeds from the
sale of Common Stock and Warrants offered hereby will enable the Company to
satisfy its anticipated financing needs for a period of at least 12 months
following this offering. The Company does not anticipate additional capital
requirements thereafter unless for the purposes of expanding its available
capital to permit expansion of its participation in Subordination and Bridge
Loans or the replacement of capital depleted by extraordinary losses in its
loan portfolio. The Company believes it will be able to provide for its
working capital needs from the maximum offering proceeds of the Units Offering
and operating revenues. Based on the Company's current assumptions relating
to implementation of its business plan (including the timetable of, and cost
associated with, making Subordination and Bridge Loans), the Company will seek
to participate in up to six subordination and/or bridge loans during the 12
months following consummation of this Units Offering. If the Company's
plans change, its assumptions prove to be inaccurate, or the capital resources
available to the Company otherwise prove to be insufficient to implement its
business plan (as a result of unanticipated expenses, problems or
difficulties, or otherwise), the Company would be required to seek additional
financing or curtail its activities.

If less than the maximum number of Units offered hereby is sold, there
can be no assurance that the Company will have sufficient capital resources to
permit the Company to participate in Subordination and Bridge Loans of the
number, amount and in the timing proposed in its business plan or to otherwise
implement such plan.

CAPITALIZATION

The following table sets forth the capitalization of the Company at July
31, 1997, (i) on a pro forma basis giving effect to the Merger and (ii) as
adjusted to reflect the sale of the 100,000 Shares of Common Stock, 200,000
Class B Warrants and 200,000 Class C Warrants offered by the Company hereby
(at an initial public offering price of $5.70 per share of Common Stock, $.10
per Class B Warrant and $.05 per Class C Warrant), and the application of the
net proceeds therefrom. See "Use of Proceeds."
<TABLE>
<CAPTION>

JULY 31, 1997
---------------
NET
MERGER PRO FORMA OFFERING
ADJUSTMENTS POST- PROCEEDS AS
ACTUAL (2) MERGER (3) ADJUSTED
-------- ------------- --------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
SHAREHOLDERS' EQUITY:
Common Stock, $0.001 par value.
Authorized 10,000,000 shares;
actual issued and outstanding
20,000 shares pre-Merger;
114,000 post-Merger; and
214,000 shares post-Units
Offering (1) . . . . . . . . . . $ 20 $ 94 $ 114 $ 100 $ 214

Additional paid-in capital . . . . 980 82,106 83,086 499,900 582,986

Deficit accumulated during
the developmental stage. . . . (676) (116,777) (117,453) - (117,453)

Total shareholders' equity . . . . 324 (34,577) (34,253) $ 500,000 465,747

Total capitalization . . . . . . . $ 324 $ (34,577) $ (34,253) $ 500,000 $ 465,747

<FN>

(1) Table reflects Actual shares outstanding of 20,000 held by American NorTel; post Merger
shares outstanding of 114,000 reflects issuance of additional 94,000 shares to Flex Financial
shareholders in exchange for 94,000 shares of Flex Financial $.01 par value common stock pursuant to
Merger; and post Units Offering shares outstanding of 214,000 reflecting issuance of additional
100,000 shares pursuant to Units Offering. Does not include 217,665 shares of Common Stock
subject to warrants and options outstanding at July 31, 1997 nor 400,000 shares of common Stock
subject to warrants to be issued in this offering if the maximum number of Units are sold.
(2) Represents the historical cost of $82,200 paid for 94,000 shares of $.01 par value Flex
Financial common stock to be exchanged for 94,000 shares of the Company's $.001 par value common
shares pursuant to the Merger; the $(116,777) deficit accumulated during the developmental stage of
Flex Financial; resulting in a deficit of $(34,577) for Flex Financial shareholder equity.
(3) "Common Stock" and "Additional Paid-in Capital" reflect net proceeds of $5.00 per share from
the Units Offering (gross proceeds of $600,000, less offering expenses of $100,000) applied $100 to
Common Stock and $499,900 to Additional Paid-in Capital.
</TABLE>

DILUTION

The pro forma net tangible book value (deficit) of the Company
giving effect to the Merger as of July 31, 1997 was approximately $(34,253) or
$(0.30) per share of Common Stock. Net tangible book value per share
represents the amount of total tangible assets of the Company less total
liabilities, divided by the number of shares of Common Stock outstanding.
After giving effect to the sale of the 100,000 shares of Common Stock, 200,000
Class B Warrants and 200,000 Class C Warrants offered hereby at an initial
public offering price of $5.70 per share, $.10 per Class B Warrant and $.05
per Class C Warrant, respectively, and the receipt by the Company of the net
proceeds therefrom, the pro forma net tangible book value of the Company as of
July 31, 1997 would have been $465,747 or $2.17 per share. This represents an
immediate increase in pro forma net tangible book value of $2.47 per share to
existing shareholders and an immediate dilution of $3.53 per share to new
investors ("New Investors") purchasing shares of Common Stock in this
Offering. The following table illustrates this per share dilution:

<S> <C>
Assumed initial public offering price per share . . . . . . . . . . . . . . . $ 5.70
Net tangible book value per share before offering . . . . . . . . . . . . . $0.30
Increase in net tangible book value per share attributable to New Investors $ 2.47
Pro Forma net tangible book value per share after offering. . . . . . . . . . $ 2.17
Dilution per share to New Investors . . . . . . . . . . . . . . . . . . . . . $3.53
</TABLE>

The following table summarizes, as of July 31, 1997, the number of shares
of Common Stock purchased from the Company, the total cash consideration paid,
and the average price per share paid by existing shareholders and to be paid
by purchasers of shares of Common Stock offered hereby at an initial offering
price of $5.70 (excluding the cost of Class B and Class C Warrants):

SHARES PURCHASED TOTAL CASH CONSIDERATION
NUMBER PERCENTAGE AMOUNT PERCENTAGE
<S> <C> <C> <C> <C>
Existing Shareholders 114,000 53.3% 83,200 12.7%
New Investors . . . . 100,000 46.7% 570,000 87.3%
Total. . . . . . 214,000 100% 653,200 100%
</TABLE>

TERMS OF THE TRANSACTION

The Company and Flex Financial, pursuant to approval by their respective
boards of directors, have entered into an agreed plan of merger, a copy of
which is included herein (see "Plan of Merger"). In order for the merger
contemplated by the Plan of Merger to become effective, it is necessary that
each of the following occur:

(i) a registration statement covering the 20,000 Spinoff Shares
offered herein and a registration statement covering the 94,000 Merger shares
(for distribution to Flex Financial's shareholders) (a) must be filed with the
Securities and Exchange Commission and with appropriate state securities
regulatory agencies and (b) must become effective;

(ii) the shareholders of each of the Company and of Flex Financial
must, by a requisite vote of the shares outstanding, approve the merger
contemplated by the Plan of Merger; and

(iii) certain documents evidencing the approved merger must be prepared
and filed with the appropriate state authority in the State of Texas.

These conditions are not waivable.

TERMS OF THE MERGER

The terms of the proposed merger ("the Merger") are as follows:

l. Flex Financial shall merge into the Company, a Texas corporation.

2. Upon the effectiveness of the Merger, all the issued and
outstanding shares of capital stock of Flex Financial shall be converted into
94,000 shares of Common Stock of the Company.

3. The Company shall reserve 217,665 additional shares of
its Common Stock for possible issuance upon the exercise of Company options
and warrants to be issued to replace presently outstanding and unexercised
Flex Financial options and warrants.

4. The business of Flex Financial shall be conducted, after the
Merger, by the Company, into which Flex Financial shall have merged, but Flex
Financial's management and directors shall become the management and directors
of the Company.

5. American NorTel shall distribute to its shareholders ("the
Spinoff"), on a basis proportionate to their shareholdings in American NorTel,
20,000 Shares ("the Spinoff Shares") of Common Stock of the Company now held
by American NorTel. Each American NorTel shareholder shall receive one share
of the Company for each 588 shares of American NorTel held of record on
September 30, 1996; provided that certificates representing the ownership
of fewer than five Spinoff Shares of the shall not immediately be distributed
to the American NorTel shareholders. Rather, each American NorTel shareholder
entitled to one of these small denomination certificates shall be advised by
American NorTel that the shareholder can elect either (i) to receive his
certificate or (ii) to have his shares aggregated with those of other
small-denomination shareholders who choose not to receive their certificates,
have his shares sold through a broker into the open market after trading in
the shares should commence in the open market, and receive the net cash
proceeds of the sale. Nor will fractional share interests be distributed.
The Company may choose to pay in cash the fair value of fractions of a share
as of the time when those entitled to receive such fractions are determined or
to aggregate fractional share interests with those of other small-denomination
shareholders who choose not to receive their certificates, and have the shares
sold through a broker into the open market after trading in the shares should
commence, and distribute to those entitled the net cash proceeds of such
sale.

6. There shall also be registered as part of the Merger registration
statement filed with the Securities and Exchange Commission, two million
additional shares of Common Stock of the Company ("the Shelf Shares"), which
Shelf Shares shall be available after the Merger for issuance, upon the filing
of post-effective amendments to the Merger registration statement, in
subsequent, possible mergers or acquisitions with companies engaged in
business activities of types related or similar to those now conducted by Flex
Financial. Management of Flex Financial (who shall become the management of
the Company after the Merger) has no current plans, arrangements or
understandings with respect to possible merger, acquisitions or business
combinations for which the Shelf Shares would be used.

7. Should the Merger not be approved by the unanimous written
consent of persons holding all of the issued and outstanding shares
of Common Stock of Flex Financial, none of Flex Financial, the Company, or
American NorTel shall be liable to any of the others, the sole obligation of
each being to pay its expenses relating to the registration of the Shares
described herein.

8. The historical financial statements of the post-Merger Company
shall be those of Flex Financial.

REASONS FOR THE MERGER AND SPINOFF

The managements of the Company and of Flex Financial believe that Flex
Financial's shareholders will benefit from receiving shares that have been
registered under the Securities Act in exchange for their shares of capital
stock of Flex Financial. Further, the managements of the Company and of Flex
Financial believe that the distribution of Shares to the stockholders of
American NorTel in the Spinoff will provide the basis for the creation of a
public market for the common stock of the post-merger Company and that the
existence of such a public market will benefit the Flex Financial
stockholders. No assurance can be given, however, that a market will
develop for the Common Stock or, if it develops, that it will be sustained.
See "Risk Factors - No Assurance of a Public Market and Likelihood of a
Volatile Market."

In determining to undertake the Merger and Spinoff on the terms
proposed, the board of directors of Flex Financial considered the 17% dilution
to shareholders of Flex Financial and the fairness of the consideration
received by the shareholders pursuant to the Merger and Spinoff. The board
considered among other factors: prior disclosures to shareholders as to
expected dilution in any merger and spinoff transaction, the amount of capital
contributed by the shareholders, the estimated expenses and timing of an
independent initial public offering of securities, the percentage of ownership
to be held by investors in this Units Offering, the current market conditions
in the over-the-counter securities market, the Company's proposed capital
structure, possible future capital requirements of the Company, potential
dilution to shareholders from Warrant exercise, the estimated costs of
acquiring a fully reporting and current public shell corporation, the dilutive
effects of such alternative transactions, the company's ability to develop a
public market for its common stock, and the costs and dilutive effect of
similar transactions necessary to accomplish a public underwriting and to
become a widely owned public company. The board concluded that alternative
undertakings posed a number of obstacles which management determined were
unreasonable, including: substantial time requirements, legal and accounting
costs, the inability to obtain an underwriter willing to commit to a firm
underwriting, limited capital available to the company, and the potential
amount of dilution likely to be experienced by the Flex Financial shareholders
and other costs associated with an IPO or shell acquisition.

The management of Flex Financial determined that, after research into
other possible alternatives, the proposed Merger and Spinoff presented the
fastest and least expensive method of accessing the U.S. public securities
markets and providing the most desirable corporate vehicle for conducting its
business operations. The criteria applied by the board was to obtain trading
status for the shares held by Flex Financial's shareholders and to seek to
raise additional capital in order to expand its business operations while
utilizing its existing infrastructure, management and knowledge of its
industry at the least cost to shareholders measured in terms of capital
expended and dilution. Applying this criteria, the board determined that,
considering the 17% dilution was in line with prior disclosures to
shareholders regarding expected dilution in any merger and spinoff
transaction, the terms of the proposed Merger and Spinoff were fair to its
shareholders.

ACCOUNTING TREATMENT OF PROPOSED MERGER
Because the Company is only a corporate shell and not an operating
entity, the proposed Merger will be accounted for as if Flex Financial
recapitalized.

PLAN OF MERGER

The complete Plan of Merger among the Company, Flex Financial, and
American NorTel is included in this Prospectus. See "PLAN OF MERGER."

DESCRIPTION OF SECURITIES

COMMON STOCK. The Company is authorized to issue 10 million shares of
Common Stock, $0.001 par value. As of the date of this Prospectus the Company
had 20,000 shares of Common Stock issued and outstanding.

VOTING RIGHTS. Holders of the shares of Common Stock are entitled
to one vote per share on all matters submitted to a vote of the shareholders.
Shares of Common Stock do not have cumulative voting rights, which means that
the holders of a majority of the shares voting for the election of the board
of directors can elect all members of the board of directors.

DIVIDEND RIGHTS. Holders of record of shares of Common Stock are
entitled to receive dividends when and if declared by the board of directors
out of funds of the Company legally available therefor.

LIQUIDATION RIGHTS. Upon any liquidation, dissolution or winding up
of the Company, holders of shares of Common Stock are entitled to receive pro
rata all of the assets of the company available for distribution to
shareholders, subject to the prior satisfaction of the liquidation rights of
the holders of outstanding shares of Preferred Stock.

PREEMPTIVE RIGHTS. Holders of Common Stock do not have any
preemptive rights to subscribe for or to purchase any stock, obligations or
other securities of the Company.

REGISTRAR AND TRANSFER AGENT. Registrar and Transfer Company, 10
Commerce Drive, Cranford, New Jersey 07016-3572 serves as the transfer agent
and registrar of the Company.

DISSENTER'S RIGHTS. Under current Texas law, a shareholder is
afforded dissenters' rights which if properly exercised may require the
corporation to repurchase its shares. Dissenters' rights commonly arise in
extraordinary transactions such as mergers, consolidations, reorganizations,
substantial asset sales, liquidating distributions, and certain amendments to
the company's certificate of incorporation.

REDEEMABLE COMMON STOCK PURCHASE WARRANTS. Pursuant to this Prospectus,
the Company is offering 200,000 Class B Redeemable Common Stock Purchase
Warrants ("Class B Warrants") and 200,000 Class C Redeemable Common Stock
Purchase Warrants ("Class C Warrants")to purchase an aggregate of 400,000
shares of Common Stock.

CLASS B WARRANTS. The Class B Warrants are being issued under a
Warrant Agreement dated November 15, 1995 between the Company and Warrant
Holders. Each Class B Warrant will be exercisable immediately upon its
acquisition and until January 1, 2001, at an exercise price of $6.25 per
Warrant, and shall entitle the holder thereof to receive one (1) share of
Stock for each Class B Warrant exercised. Fractional shares of Stock will not
be required to be issued upon exercise of the Class B Warrants. A Class B
Warrant may be exercised by surrendering a Class B Warrant certificate with an
executed form of election to purchase shares attached to the certificate, and
paying to the Company the full exercise price for the B Warrants being
exercised. Holders of Class B Warrants will not be entitled (by virtue of
being Class B Warrant holders) to receive dividends, vote, receive notices of
shareholders' meetings or otherwise have any rights of shareholders of the
Company.

The Class B Warrants are redeemable, at the option of the Company,
at a price of $0.05 per Class B Warrant at any time after January 1, 1997,
upon not less than 30 days prior written notice, provided that there is a
public trading market for the Common Stock and that the reported high bid
price of the Common Stock equals or exceeds $7.50 per share for the 20
consecutive trading days immediately prior to the date of the notice of
redemption to warrant holders.

The exercise price, number and kind of shares of Common Stock to be
obtained by the exercise of the Class B Warrants is subject to adjustment in
the event of a split of the Common Stock or in the event of the reorganization
or recapitalization of the Company or of the merger or consolidation of the
Company.

The Company will reserve from the authorized and unissued shares a
sufficient number of shares of Common Stock for issuance upon the exercise of
the Class B Warrants.

CLASS C WARRANTS. The Class C Warrants are being issued under a
Warrant Agreement dated November 15, 1995, between the Company and Warrant
Holders. Each Class C Warrant will be exercisable immediately upon its
acquisition and until January 1, 2001, at an exercise price of $10.00 per
Warrant, and shall entitle the holder thereof to receive one (1) share of
stock for each Class C Warrant exercised. Fractional shares of stock will not
be required to be issued upon exercise of the Class C Warrants. A Class C
Warrant may be exercised by surrendering a Class C Warrant certificate with an
executed form of election to purchase shares attached to the certificate, and
paying to the Company the full exercise price for the Class C Warrants being
exercised. Holders of Class C Warrants will not be entitled (by virtue of
being Class C Warrant holders) to receive dividends, vote, receive notices of
shareholders' meetings or otherwise have any rights of shareholders of the
Company.

The Class C Warrants are redeemable, at the option of the Company,
at a price of $0.05 per Class C Warrant at any time after January 1, 1997,
upon not less than 30 days prior written notice, provided that there is a
public trading market for the Common Stock and that the reported high bid
price of the Common Stock equals or exceeds $12.00 per share for the 20
consecutive trading days immediately prior to the date of the notice of
redemption to warrant holders.

The exercise price, number and kind of shares of Common Stock to be
obtained by the exercise of the Class C Warrants is subject to adjustment in
the event of a split of the Common Stock or in the event of the reorganization
or recapitalization of the Company or of the merger or consolidation of the
Company.

The Company will reserve from the authorized and unissued shares a
sufficient number of shares of Common Stock for issuance upon the exercise of
the Class C Warrants.

PREFERRED STOCK. The Company is authorized to issue 10 million shares of
Preferred Stock, $0.001 par value. The preferences, rights and attributes of
the Preferred Stock, which may be set forth in series, shall be determined by
the board of directors at such times as series are authorized to be issued.
As of the date of this Prospectus, the Company has not issued any shares of
its authorized Preferred Stock.

OTHER SECURITIES OF THE COMPANY. Under the terms of the Merger, all
warrants and options of Flex Financial which are outstanding on the Effective
Date shall be canceled and converted into warrants and options of the Company
of equivalent tenor. Therefore upon the Effective Date of the Merger, the
Company will have pursuant to the Merger the following additional securities
outstanding.

Class A Common Stock Purchase Options. In September 1995, Flex
Financial authorized the issuance of 80,000 Class A Common Stock Purchase
Options ("Class A Options") in connection with a private placement of 80,000
shares of common stock to its founding shareholders. As of the date of this
Prospectus, all of such Class A Options continue to be owned by the original
subscribers and are outstanding. The Class A Options are currently
exercisable and will terminate on December 31, 2000, and may be exercised at a
price of $.50 per share.

Unit Purchase Options. In connection with an IPO Bridge Loan, Flex
Financial issued $50,000 principal amount of 10% subordinated notes ("Notes")
and Unit Purchase Options ("Option Units"). The Option Units entitle the
holders to purchase such number of equivalent units of Flex Financial's
securities as may be offered in an initial public offering at an aggregate
offering price of at least $60,000 pursuant to an effective registration
statement filed under the Securities Act that closes prior to June 30, 1996.
The number of equivalent units purchasable at a price of $.50 per unit is
determined by dividing the IPO unit offering price into the principal amount
of Notes. Under the terms of this Units Offering , holders of the
Option Units are entitled to purchase 8,333 equivalent Units. By mutual
consent, the applicable IPO closing date and expiration date for exercise was
extended to March 31, 1998 and the holders were granted an additional 8,000
Option Units. As of the date of this Prospectus, all of such Class A Options
continue to be owned by the original subscribers and are outstanding.

CLASS B AND CLASS C WARRANTS. As of the date of this Prospectus
Flex Financial had 28,000 Class B Warrants and 28,000 Class C Warrants
outstanding to purchase an aggregate of 56,000 shares of common stock. These
warrants were issued in a private placement that closed in April 1996 and are
identical to those purchasable in this offering.

FEDERAL INCOME TAX CONSEQUENCES

THE MERGER. The Merger should qualify as a type "A" reorganization under
Section 368(a)(1) of the Internal Revenue Code. However, when consideration
is given to the fact that the Company is newly organized, the "step
transaction doctrine" might be applied and, accordingly, the Company might be
considered a continuation of Flex Financial with only a change of name or
place of incorporation, a type "F" reorganization under Section 368(a)(1).
Whether the Merger be characterized as a type "A" or "F" reorganization, the
Company believes that there should be no recognition of taxable gain or loss
to the shareholders of the Company by reason of the Merger.

THE SPINOFF. It is anticipated that the distribution by American NorTel
to its shareholders of the 20,000 Spinoff Shares will be a taxable event to
American NorTel and to each of its shareholders receiving any of the Spinoff
Shares. Gain (but not loss) would be recognized by American NorTel under
Section 311 of the Internal Revenue Code for any excess of the fair market
value of the Company's stock on the date of actual distribution over the tax
basis to American NorTel of such stock.

SHAREHOLDERS OF AMERICAN NORTEL. As for American NorTel's shareholders
who receive Spinoff Shares of the Company, the Spinoff shall occur prior to
the vote by Flex Financial's shareholders to accept or reject the Merger.
Since the result of the vote by Flex Financial's shareholders cannot be
forecast, and since the Merger cannot and shall not become effective until
after a favorable vote is obtained on the Merger, American NorTel takes the
view that the fair market value of the Spinoff Shares on the date of the
Spinoff should not have increased over the $0.05 price paid by American NorTel
for the 20,000 Spinoff Shares.

American NorTel has no current or accumulated earnings, and the
distribution is being made from excess capital. Each shareholder of American
NorTel should reduce the adjusted basis of his American NorTel stock by the
fair market value of the distribution to him, and any remaining portion will
be treated as capital gain in the same manner as a sale or exchange of the
stock. This fair market value is assumed to be $0.02 per share, the
estimated book value of Flex Financial on the dividend date. American NorTel
undertakes to advise its shareholders in late 1997 or early 1998
should it deem the fair market value of the distributed Spinoff Shares on the
date of distribution to have been different than $0.02 per share or
should it have had earnings in 1997 , which would cause the
distribution, to the extent of such earnings, to be taxed as a dividend and as
ordinary income.

The above discussion is not based upon an advance ruling by the Treasury
Department but upon an opinion of M. Stephen Roberts, Esq., in his capacity as
tax counselor to the Company (which tax opinion is one of the exhibits to the
registration statement of which this Prospectus is a part). See "Risk Factors
- - Tax Consequences."

PRO FORMA FINANCIAL INFORMATION AND DILUTION

Due to the fact that the Company has no substance or operating history -
it was organized as a shell to accommodate the desire of Flex Financial's
management to provide for the issuance of securities registered under the
Securities Act to Flex Financial's shareholders, pro forma financial
information giving effect to the Merger would not vary in any significant
respect from the financial information of Flex Financial.

Essentially, the effect of the Spinoff and Merger is to dilute by
approximately 17% the equity of the shareholders of Flex Financial by
transferring this equity to the shareholders of American NorTel. The effect
of the Merger and Spinoff on the net tangible book value a share of the
Company's Common Stock and Flex Financial's Common Stock is as follows:

BEFORE MERGER SPINOFF AFTER MERGER SPINOFF
----------------------- ----------------------
<S> <C> <C>
Company's Common Stock. . . . $ 0.02 $ (0.30)
Flex Financial's Common Stock $ (0.36) $ (0.30)
</TABLE>

MATERIAL CONTACTS AMONG THE COMPANIES

Other than the proposed Spinoff and Merger described herein, there have
been no material contracts, arrangements, understandings, relationships,
negotiations or transactions among Flex Financial, the Company, and American
NorTel during the periods for which financial statements appear herein.

REOFFERING BY PARTY DEEMED TO BE AN UNDERWRITER

The Shares described herein are to be redistributed by the owner of such
Shares, American NorTel, who might be deemed to be an underwriter by reason of
its intent to distribute such Shares. (See "Terms of the Merger" above).

After the distribution by American NorTel of the Spinoff Shares to its
shareholders, American NorTel will no longer own any shares of capital stock
of the Company, except to the extent that an uncertain number of Spinoff
Shares representing undistributed fractional an whole share interests, would
not be allocated in the rounding down process (see "Terms of the Merger").

A consequence to American NorTel, should it be deemed to be an
underwriter of the Shares to be distributed to its shareholders, is that any
person who purchases the registered Shares within three years after the
distribution could assert a claim against American NorTel under Section 11 of
the Securities Act of 1933. The purchase could be in the open market as long
as the shares purchased can be traced to the registered Shares American NorTel
distributes to its shareholders. Such a claim, to be successful, must be
based upon a showing that statements in the registration statement were false
or misleading with respect to a material fact or that the registration
statement omitted material information required to be included therein.

Open market purchasers may have to prove reliance upon the alleged
misstatement or omission, but reliance may not necessarily require a showing
that the purchaser actually read the registration statement but, instead, that
the misstatements or omissions in the registration statement were a
substantial factor in the purchase of the shares.

INTEREST OF COUNSEL

M. Stephen Roberts, Esq., counsel to the Company, is named in this
Prospectus as having given an opinion on the validity of the securities being
registered, upon certain income tax consequences of the Merger and the
Spinoff, and upon other legal matters concerning the registration or offering
of the securities described herein. Mr. Roberts is the beneficial owner of
21% of the issued and outstanding shares of Common Stock of Flex
Financial and is the beneficial owner of less than .5% of the issued and
outstanding shares of Common Stock of American NorTel and, by reason of this
ownership, shall become the beneficial owner of approximately 20,102
Shares of the Company by way of the merger and American NorTel's distribution
of the 20,000 Spinoff Shares to its shareholders.

SPECIAL PROVISIONS OF THE ARTICLES OF INCORPORATION AND TEXAS LAW
The provisions of the Articles of Incorporation and the Company's Bylaws,
as amended (the "Bylaws"), summarized in the succeeding paragraphs, may be
deemed to have an anti-takeover effect or may delay, defer or prevent a tender
offer or takeover attempt that a shareholder might consider in such
shareholder's best interest, including those attempts that might result in a
premium over the market price for the shares held by a shareholder.

Pursuant to the Articles of Incorporation, the Board of Directors may, by
resolution, establish one or more series of preferred stock, having such
number of shares, designation, relative voting rights, dividend rates,
liquidation or other rights, preferences and limitations as may be fixed by
the Board of Directors without any further shareholder approval. Such rights,
preferences privileges and limitations as may be established could have the
effect of impeding or discouraging the acquisition of control of the Company.

LIMITATION OF DIRECTOR LIABILITY. Texas law authorizes a Texas
corporation to eliminate or limit the personal liability of a director to the
Company and its shareholders for monetary damages for breach of certain
fiduciary duties as a director. The Company believes that such a provision is
beneficial in attracting and retaining qualified directors, and accordingly,
its Articles of Incorporation include a provision eliminating a director's
liability for monetary damages for any breach of fiduciary duly as a director,
except: (i) for any breach Of the duty of loyalty to the Company or its
shareholders; (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) for any
transaction from which the director derived an improper personal benefit; or
(iv) for certain other actions. Thus, pursuant to Texas law, the Company's
directors are not insulated from liability for breach of their duty of loyalty
(requiring that, in making a business decision, directors act in good faith
and in the honest belief that the action was taken in the best interest of the
Company), or for claims arising under the federal securities laws. The
foregoing provisions of the Company's Articles of Incorporation may reduce the
likelihood of derivative litigation against directors and may discourage or
deter shareholders or management from bringing a lawsuit against directors for
breaches of their fiduciary duties, even though such an action, if successful
might otherwise have benefitted the Company and its shareholders. Further,
the Company may, but has no present intent to, execute indemnity agreements
with present and future directors and officers for the indemnification of and
advancement of expenses to such persons to the full extent permitted by law.

INDEMNIFICATION. To the maximum extent permitted by law, the Articles
of Incorporation and the Bylaws provide for mandatory indemnification of
directors, officers, employees and agents of the Company against all expense,
liability and loss to which they may become subject or which they may incur as
a result of being or having been a director, officer, employee or agent of the
Company. In addition, the Company must advance or reimburse directors and
officers and may advance or reimburse employees and agents for expenses
incurred by them in connection with indemnifiable claims. The Company
believes that such a provision is beneficial in attracting and retaining
qualified directors.

Under Texas corporation law, a corporation is authorized to indemnify
officers, directors, employees and agents who are made or threatened to be
made parties to any civil, criminal, administrative or investigative suit or
proceeding by reason of the fact that they are or were a director, officer,
employee or agent of the corporation or are or were acting in the same
capacity for another entity at the request of the corporation. Such
indemnification includes expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
persons if they acted in good faith and in a manner reasonably believed to be
in or not opposed to the best interests of the corporation or, with respect to
any criminal action or proceeding, if they had no reasonable cause to believe
their conduct was unlawful. In the case of any action or suit by or in the
right of the corporation against such persons, the corporation is authorized
to provide similar indemnification, provided that, should any such persons be
adjudged to be liable for negligence or misconduct in the performance of
duties to the corporation, the court conducting the proceeding must determine
that such persons are nevertheless fairly and reasonably entitled to
indemnification.

The Articles of Incorporation include a provision eliminating liability
for monetary damages for any breach of fiduciary duty as a director, except:
(i) for any breach of the duty of loyalty to the Company or its stockholders;
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law; (iii) for any transaction from which
the director derived an improper personal benefit; or (iv) for certain other
actions. Thus, pursuant to Texas law, directors of the Company are not
insulated from liability for breach of their duty of loyalty (requiring that,
in making a business decision, directors act in good faith and in the honest
belief that the action was taken in the best interest of the corporation), or
for claims arising under the federal securities laws. The foregoing
provisions of the Articles of Incorporation may reduce the likelihood of
derivative litigation against directors and may discourage or deter
stockholders or management from bringing a lawsuit against directors for
breaches of their fiduciary duties, even though such an action, if successful,
might otherwise have benefitted the Company and its stockholders. Further,
the Company may, but has no present intent to, execute indemnity agreements
with present and future directors and officers for the indemnification of and
advancing of expenses to such persons to the full extent permitted by law.

To the extent any such indemnified persons are successful on the merits
in defense of any such action, suit or proceeding, Texas law provides that
they shall be indemnified against reasonable expenses, including attorney
fees. A corporation is authorized to advance anticipated expenses for such
suits or proceedings upon an undertaking by the person to whom such advance is
made to repay such advances if it is ultimately determined that such person is
not entitled to be indemnified by the corporation. Indemnification and
payment of expenses provided by Texas law are not deemed exclusive of any
other rights by which an officer, director, employee or agent may seek
indemnification or payment of expenses or may be entitled to under any bylaw,
agreement, or vote of shareholders or disinterested directors. In such
regard, a Texas corporation is empowered to, and may, purchase and maintain
liability insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation. As a result of such corporation law,
the Company may, at some future time, be legally obligated to pay judgments
(including amounts paid in settlement) and expenses in regard to civil or
criminal suits or proceedings brought against one or more of its officers,
directors, employees or agents, as such, with respect to matters involving the
proposed Merger or, should the Merger be effected, matters that occurred prior
to the Merger with respect to Flex Financial.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable.

PRO FORMA FINANCIAL INFORMATION AND DILUTION

Due to the fact that the Company has no substance or operating history
- - it was organized as a shell to accommodate the desire of Flex Financial's
management to provide for the issuance of securities registered under the
Securities Act to Flex Financial's shareholders, pro forma financial
information giving effect to the Merger would not vary in any significant
respect from the financial information of Flex Financial.

Essentially, the immediate effect of the Merger is to dilute by 17% the
equity of the shareholders of Flex Financial by transferring this equity to
the present shareholders of American NorTel.

INFORMATION ABOUT THE COMPANY

The Company was incorporated under the laws of the State of Texas on
March 21, 1996. It has no business or significant assets and was organized
for the purpose of entering into the Merger proposed herein. (See "Terms of
the Transaction - Terms of the Merger.) It has no employees; its management
will serve without pay until the Merger should become effective.

DESCRIPTION OF BUSINESS AND PROPERTIES

Should the Merger be approved and effected, the Company shall be the
surviving company, but the Company's management (see " Management
Information - Directors, Executive Officers, and Significant Employees")
shall not remain as the management of the Company. Control of the Company,
through the voting power to elect the entire board of directors and thereby to
replace management, shall pass to the present shareholders of Flex Financial,
and Flex Financial's present directors and officers shall become the directors
and officers of the Company.

It is the intention of Flex Financial's present management to continue
the business of Flex Financial as the business of the Company (see
"Information about Flex Financial - Plan of Operation ") after the
Merger.

The Company's present management consists of one person, Michael T.
Fearnow. Prior to October 1, 1996, M. Stephen Roberts, Esq., served as the
Company's management. Mr. Roberts is an attorney who was employed to
incorporate the Company, prepare merger documents needed for the registration
statement filed for the proposed merger, and serve as management of the
Company pending the Merger.

If the minimum number of Units are sold, the Company expects to
realize net proceeds of $88,000 and if the maximum number of Units are sold
the Company expects to realize net proceeds of $500,000. The Company will use
the first $60,000 of the net proceeds raised from the Units Offering to repay
the Bridge Loans and accrued interest. The Company will use the $28,000
balance of net proceeds of a minimum Units Offering as principal to make
Subordination and Bridge Loans. The Company will use $395,000 of the balance
of net proceeds of a maximum Units Offering as principal to make Subordination
and Bridge Loans and will use the remaining $45,000 to provide general working
capital to be applied to overhead and/or general and administrative expenses.

Although a minimum Units Offering will severely limit the Company's
ability to participate in Subordination and Bridge Loans because of the
limited capital the Company will have available for investment, and may
require that the Company actively seek Spinoff Transactions to generate
revenues, management believes that the Company can satisfy its cash
requirements for the twelve month period following closing of the Units
Offering without being required to raise additional funds during that period.
The Company does not anticipate the purchase or sale of assets for the twelve
month period following closing of the Units Offering nor does it expect to
have any employees or to hire any employees during the upcoming twelve month
period. The Company does not intend to use any of its cash or capital to
engage in Spinoff Transactions. All costs and expenses associated with a
Spinoff Transaction will be borne by the Public Candidate. The Company has
limited overhead expense and no employees and intends that its cash payments
for general, administrative and overhead expenditures be limited to 15% of net
Units Offering proceeds in excess of $200,000. Further, the Company's cash
requirements are expected to be minimized as a result of an agreement with
Focus-Tech Investments, Inc. described below.

Upon closing of the Units Offering Focus-Tech Investments, Inc., a Nevada
corporation wholly owned by Mr. Fearnow, has agreed to provide to the Company
such general and administrative services, which will include the cost of the
use of office space, personnel, facilities and equipment, as may be required
for the Company's business use on a monthly basis. The Company will share a
portion of approximately 3,000 square feet of office space in premises
occupied by Focus-Tech Investments, Inc. and Financial Public Relations, Ltd.
at 770 S. Post Oak Lane, Suite 515, Houston, Texas 77056. The Company
believes that such space and services will be adequate for the business of
Flex Financial into the foreseeable future. The Company has agreed to pay
Focus-Tech a monthly fee of $4,000 for such general and administrative
services and Focus-Tech has agreed to make this space available as long as
required for the use of the Company. Focus-Tech has agreed that its fee for
providing such services shall be paid only out of 15% of net Units Offering
proceeds in excess of $200,000 ($45,000) and thereafter agrees to accrue the
monthly fee for payment solely out of the fees, interest earned and earnings
generated by the Company's business.

During the twelve month period following closing of the Units Offering,
the Company expects to earn fees and interest on Bridge Loans and
Subordination Loans by participating in Subordination and Bridge Loans of less
than six months duration in amounts of $10,000 to $150,000 depending upon the
capital available. The Company expects that such fees and earnings will be
sufficient to meet its operating expenses. The Company will attempt to
diversify its loan portfolio and limit the size and number of transactions
consistent with the amount of capital raised in the Units Offering. The
minimum net proceeds of $88,000 is expected to permit the Company to repay the
Bridge Loans and have sufficient capital to participate in minimal
Subordination and Bridge Loans. The maximum net proceeds of $500,000 is
expected to permit the Company to participate in three to six Subordination
and Bridge Loan transactions during the 12 months following closing of the
Units Offering. The Company further intends to syndicate its participation in
Subordination and Bridge Loans through third party investors as a means of
reducing its risk and diversifying its financing portfolio. The Company also
expects to retain a minority equity position in a Public Candidate as a fee
for acting as the parent corporation in a Spinoff Transaction after
distributing a major portion of the earned equity to its shareholders in the
form of a dividend.

The Company does not anticipate the need for additional capital on a long
term basis unless it suffers significant losses in its loan portfolio, loss of
earnings. Lack of positive cash flow, inadequate capital, or loss of
commitment from Focus-Tech to provide facilities and equipment. The Company
does not believe it can participate in more than three to six Subordination
and Bridge Loan transactions a year because of the completion time of a
transaction and the duration of the loans. The net proceeds of a maximum
Units Offering and fees and interest earned from Subordination and Bridge
Loans is expected to provide sufficient capital to support the Company's
business operations into the long term. The Company also intends to liquidate
any equity retained in a Spinoff Transaction during the twenty-four-month
period of a public market developing in the Public Candidate. In the event
earnings from the Company's short term financing transactions are not
sufficient to meet its operating expenses, or if the Company determines to
expand its participation in Subordination and Bridge Loans, or it the Company
suffers losses in its loan portfolio requiring additional capital, or
otherwise, the Company will endeavor to raise needed capital in a private
placement or public offering of its securities.

COURSE OF BUSINESS SHOULD THE MERGER NOT OCCUR

Should the Merger not be approved and effected, the Company will be
without any property or business. The Company's management has no present
plans for this contingency but would seek to acquire, in exchange for stock of
the Company, a business or assets that would constitute a business. Should no
acquisition that would cause the Company to become a going concern be made
within 18 months after the date of the Registration Statement of which this
Prospectus is a part, the holders of the majority of the issued and
outstanding shares of Common Stock will have the voting power to cause a
dissolution of the Company, and persons who would be the holders of a majority
of these shares have indicated their intention to do so.

LEGAL PROCEEDINGS

Neither the Company nor its property is a party to or the subject of
pending legal proceedings.

MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

There is no public trading market for the Company's Common Stock. As of
the date of this Prospectus, there is one holder of record of the Company's
20,000 shares of issued and outstanding capital stock. After the Spinoff (see
"Terms of the Transaction - Terms of the Merger") these 20,000 shares of stock
shall be owned of record by American NorTel's approximately 780 shareholders.

Should the Merger be approved and effected, (i) the Escrow Agent will
release from escrow the certificates representing the ownership of the 20,000
Spinoff Shares, which certificates would be delivered to the approximately 780
persons owning the Spinoff Shares (except for certificates representing
fractional share interests and small-denomination shareholders, see "The
Escrow Arrangement") and (ii) the 12 shareholders of Flex Financial
will receive 94,000 shares of Common Stock of the Company in exchange for all
the issued and outstanding shares of capital stock of Flex Financial.
An additional 217,665 shares of Common Stock of the Company will be
reserved for issuance against the exercise of Company options and warrants
that would replace existing options and warrants of Flex Financial.

There can be, and is, no assurance that market makers will make or
maintain a market in the stock or that, even if a market is made and
maintained in the stock, that the stock will trade at prices deemed attractive
or reasonable to the shareholders of the Company.

The Company's stock will not be eligible for quotation on the NASDAQ
Small Cap Market ("NASDAQ") (i) until it trades at a price of $3 per share or
higher and (ii) unless it meets other NASDAQ requirements regarding assets and
shareholders' equity, which it will not yet meet even if the Merger is
approved and effected. No assurance can be made that the Common Stock will
ever become eligible for quotation on NASDAQ.

The Company's stock is expected to be quoted on an NASD
inter-dealer system called "the Bulletin Board." While some Bulletin
Board stocks are actively traded, they do not draw the interest of the NASD
brokerage community held by NASDAQ stocks or exchange-listed stocks. The
eligibility requirements for listing the Company's stock on exchanges are
generally as high or higher than the requirements for eligibility for
quotation on NASDAQ, and the Company has no present plans to list its stock on
an exchange. Hence, the plans of the Company to use its stock for business
acquisition purposes are likely to be adversely affected unless and until its
stock becomes eligible for quotation on NASDAQ.

Further, holders of the Shares offered herein face the prospect, should
the Merger be approved and effected, of an indefinite period during which the
Shares will be subject to trading severities imposed on Bulletin Board,
so-called "penny stocks" (stocks that trade at less than $5 per share) by
regulations of the Securities and Exchange Commission. The effect of these
trading severities is to reduce broker-dealer and investor interest in trading
or owning "penny stocks" and, hence, could inhibit the ability of the
Company's stock to reach a trading level of $3 per share or higher and thereby
become eligible for quotation on NASDAQ even if the Company meets NASDAQ's
assets and shareholders' equity requirements in the future.

Flex Financial has obtained agreements from the beneficial owners of at
least 50% of their presently outstanding shares of capital stock to the effect
that these owners will not sell any of their shares of post-Merger Company
stock (without first obtaining the written authorization of Flex Financial's
president) for the following periods after the Merger becomes effective and
information about the Company is published in Moody's OTC Industrial Manual:
Flex Financial's shareholders - 180 days.

RULE 144 AND RULE 145 RESTRICTIONS ON TRADING

Should the Merger and Spinoff transaction described herein be approved
and effected, all issued and outstanding shares of Common Stock of the Company
shall have been issued or distributed pursuant to registration with the
Commission. Nevertheless, some of the Shares, even though deemed not to be
"restricted securities," as such term is used by the Commission, will be
subject to certain restrictions on their transfer for value.

Holders of the Shares who are deemed to be affiliates of Flex Financial
at the time of the vote on the Merger, in order to sell their Shares, must
either register them for sale or comply with the resale provisions set forth
in paragraph (d) of the Commission's Rule 145, unless some other
exemption-from-registration provision is available. The resale provisions of
paragraph (d) of Rule 145 refer to certain provisions of the Commission's Rule
144 which require that:

- there must be available, to the public, current information about
the Company of a quality meeting certain Commission requirements,

- transfers for value by such affiliates can occur only either
through broker transactions not involving the solicitation of buyers or
directly to market-makers, and

- each such affiliate can transfer for value, during a 90-day period,
no more Shares than the greater of 1% of all issued and outstanding shares of
Common Stock of the Company (20,000 Shares immediately after the Merger) or
the average weekly volume of trading in such Common Stock reported through the
automated quotation system of NASDAQ during the four calendar weeks prior to
placing the sell order with a broker-dealer.

The above described resale provisions of Rule 145 shall continue, for
persons who are affiliates of Flex Financial at the time of the vote on the
Merger, for two years after the Merger, at which time only the current
public information requirement shall continue. At such time as any such
affiliate has ceased to be an affiliate of the post-merger company for at
least three months, and provided at least three years have
elapsed since the date of the Merger, then even the current public information
requirement will no longer be required for such a former affiliate to sell any
of the Shares acquired in the Merger.

The Company believes that none of the 20,000 Spinoff Shares will be
subject to any restrictions on trading or transfers for value, by reason of
these Shares' being registered for the Spinoff. Further, none of the 94,000
Shares of the Company to be distributed in the Merger to Flex Financial
shareholders other than to Flex Financial officers and directors and to
affiliates of Flex Financial prior to the Merger will be subject to any
restrictions on transfer. Accordingly, after the effective date of the Merger
and the redistribution of the Spinoff Shares, there shall be 114,000 Shares in
the "public float," i.e., subject to no Rule 144 or other applicable
securities law restrictions on their being traded or transferred for value.
It is estimated that in excess of 300 persons will own these Shares of record,
the offering of which for sale could have a materially adverse effect on the
market price of the Company's stock. However, for a period of 180 days after
the Merger should become effective and information about the post-Merger
Company has been published in Moody's OTC Industrial Manual, at least half of
the Flex Financial outstanding Shares are subject to restrictions on trading
by reason of agreements among the shareholders owning these Shares. See
"Information about the Company - Market for the Company's Common Stock and
Related Stockholder Matters."

There is no equity of the Company subject to outstanding options or
warrants to purchase, or securities convertible into, equity of the Company.
However, under the terms of the Merger, all warrants and options of Flex
Financial which are outstanding on the Effective Date shall be canceled and
converted into warrants and options of the Company to buy an equivalent number
of shares. See "Terms of the Transaction - Description of Securities -
Other Securities of the Company".

The Company has had no operations or earnings and has declared no
dividends on its capital stock. Should the Merger be approved and effected,
there are no restrictions that would, or are likely to, limit the ability of
the Company to pay dividends on its Common Stock, but the Company has no plans
to pay dividends in the foreseeable future and intends to use earnings, if
any, for business expansion purposes. (See "Information about the
Company- Description of Business and Properties.")

FINANCIAL STATEMENTS

Set forth below are the independent auditor's report dated August 5,
1997 with respect to the Company's financial statements as of July 31,
1997 and 1996, and the notes to the financial statements.

FLEX ACQUISITIONS CORPORATION
(A DEVELOPMENT STAGE COMPANY)

FINANCIAL STATEMENTS

JULY 31, 1997 AND 1996

C 0 N T E N T S

Page
<S> <C>
Independent Auditor's Report. . . . . . . . . 2

Balance Sheets. . . . . . . . . . . . . . . . 3

Statements of Operations. . . . . . . . . . . 4

Statements of Changes in Stockholder's Equity 5

Statements of Cash Flows. . . . . . . . . . . 6

Notes to Financial Statements . . . . . . . . 7-9
</TABLE>

INDEPENDENT AUDITOR'S REPORT

To the Stockholder and Directors of
Flex Acquisitions Corporation
(A Development Stage Company)
Houston, Texas

We have audited the accompanying balance sheets of Flex Acquisitions
Corporation (A Development Stage Company) as of July 31, 1997 and 1996,
and the related statements of operations, changes in stockholder's equity and
cash flows for the year ended July 31, 1997 and the period March 22,
1996 (date of inception) through July 31, 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 Flex Acquisitions Corporation
(A Development Stage Company) at July 31, 1997 and 1996, and the
results of its operations and its cash flows for the year and period
then ended in conformity with generally accepted accounting principles.

/s/Harper & Pearson Company
- ---------------------------------------
Harper & Pearson Company

Houston, Texas
August 5, 1997

<PAGE>
FLEX ACQUISITIONS CORPORATION
A DEVELOPMENT STAGE COMPANY
BALANCE SHEETS
JULY 31, 1997 AND 1996

ASSETS
------
<S> <C> <C>
OTHER ASSETS
Start-up costs . . . . . . . . . . . . . . . . . $ 4,992 $ 4,992
========= =============

LIABILITIES AND STOCKHOLDER'S EQUITY
- --------------------------------------------------

CURRENT LIABILITIES
Note payable, Flex Financial Group, Inc. . . . . $ 4,000 $ -0-
Accounts payable . . . . . . . . . . . . . . . . 134 134
Interest payable . . . . . . . . . . . . . . . . 534 134
--------- -------------

TOTAL CURRENT LIABILITIES. . . . . . . . . . 4,668 268
--------- -------------

LONG-TERM NOTE PAYABLE, FLEX FINANCIAL GROUP, INC. -0- 4,000
--------- -------------

STOCKHOLDER'S EQUITY
Preferred stock, no par value, 10,000,000
shares authorized, none issued and
outstanding, rights, preferences,
qualifications, limitations and
restrictions and any other benefits
to be determined by the Board of
Directors. . . . . . . . . . . . . . . . . . . -0- -0-
Common stock, $.001 par value, 10,000,000
shares authorized, 20,000 shares sold
and to be issued . . . . . . . . . . . . . . . 20 20
Additional paid-in capital . . . . . . . . . . . 980 980
Deficit accumulated during the development stage (676) (276)
--------- -------------

324 724
--------- -------------

$ 4,992 $ 4,992
========= =============
</TABLE>

See accompanying notes.

<PAGE>
FLEX ACQUISITIONS CORPORATION
A DEVELOPMENT STAGE COMPANY
STATEMENTS OF OPERATIONS
YEAR AND PERIOD ENDED JULY 31, 1997 AND 1996

July 31, Cumulative
1997 1996(1) (2)
---------- ------------ ---------
<S> <C> <C> <C>
EXPENSES
Interest expense. . . . . . . . . . . $ 400 $ 134 $ 534
Outside services. . . . . . . . . . . -0- 80 80
Bank service charges. . . . . . . . . -0- 54 54
Postage and delivery. . . . . . . . . -0- 8 8
---------- ------------ ---------

400 276 676
---------- ------------ ---------

NET LOSS. . . . . . . . . . . . . . . . $ (400) $ (276) $ (676)
========== ============ =========

LOSS PER COMMON SHARE . . . . . . . . . $ (.02) $ (.01) $ (.03)
========== ============ =========

SHARES USED IN COMPUTING LOSS PER SHARE 20,000 20,000 20,000
========== ============ =========

<FN>

(1) March 22, 1996 (Date of Inception) to July 31, 1996
(2) March 22, 1996 (Date of Inception) to July 31, 1997

</TABLE>

See accompanying notes.

<PAGE>
FLEX ACQUISITIONS CORPORATION
A DEVELOPMENT STAGE COMPANY
STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
YEAR ENDED JULY 31, 1997 AND PERIOD MARCH 22, 1996 THROUGH JULY 31,
1996

Additional
Preferred Common Paid-In Retained
Stock Stock Capital (Deficit) Total
---------- --------- ----------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Sale of Common
Stock . . . . $ -0- $ 20 $ 980 $ -0- $ 1,000

Net Loss. . . . -0- -0- -0- (276) (276)
---------- --------- ----------- ---------- --------------

Balance -
July 31, 1996 -0- 20 980 (276) 724

Net Loss. . . . -0- -0- -0- (400) (400)
---------- --------- ----------- ---------- --------------

Balance -
July 31, 1997 $ -0- $ 20 $ 980 $ (676) $ 324
========== ========= =========== ========== ==============

</TABLE>

See accompanying notes.

<PAGE>
FLEX ACQUISITIONS CORPORATION
A DEVELOPMENT STAGE COMPANY
STATEMENTS OF CASH FLOWS
YEAR AND PERIOD ENDED JULY 31, 1997 AND 1996

July 31, Cumulative
1997 1996(1) (2)
---------- ------------ ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (400) $ (276) $ (676)
---------- ------------ ---------
Adjustments to reconcile net loss to net
cash used by operating activities:
Change in operating assets and
liabilities:
Accounts payable -0- 134 134
Interest payable 400 134 534
---------- ------------ ---------

Total Adjustments 400 268 668
---------- ------------ ---------

Net Cash Used by Operating
Activities -0- (8) (8)
---------- ------------ ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
Start-up costs -0- (4,992) (4,992)
---------- ------------ ---------

Net Cash Used by Investing
Activities -0- (4,992) (4,992)
---------- ------------ ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term note payable, Flex Financial
Group, Inc. -0- 4,000 4,000
Proceeds from issuance of common stock -0- 1,000 1,000
---------- ------------ ---------

Net Cash Provided by Financing
Activities -0- 5,000 5,000
---------- ------------ ---------

NET INCREASE IN CASH -0- -0- -0-

CASH AT BEGINNING OF PERIOD -0- -0- -0-
---------- ------------ ---------

CASH AT END OF PERIOD $ -0- $ -0- $ -0-
========== ============ =========
<FN>

(1) March 22, 1996 (Date of Inception) to July 31, 1996
(2) March 22, 1996 (Date of Inception) to July 31, 1997

</TABLE>

See accompanying notes.

<PAGE>
FLEX ACQUISITIONS CORPORATION
A DEVELOPMENT STAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997 AND 1996

NOTE A BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES

Flex Acquisitions Corporation (A Development Stage Company) (Acquisitions) a
wholly owned Texas subsidiary of American Nortel Communications, Inc.
(American Nortel) was incorporated on March 21, 1996 for the purpose of; (a)
merging with Flex Financial Group, Inc. (Flex Financial), an entity
under common management because of overlapping director and
officers, and (b) a proposed filing of a registration statement with the
Securities and Exchange Commission. Simultaneously with these transactions, it
is anticipated that American Nortel will then distribute its shares of the
Company to American Nortel shareholders. The newly formed public Company will
then engage in the business of participating in certain short-term financing
opportunities (terms of less than one year) in the underwriting segment of the
securities industry and in certain long-term financing and investment
opportunities (terms of greater than one year) in transactions with operating
businesses with significant growth potential.

The Company has no business operations or significant capital and does not
intend to engage in any active business until it merges with Flex
Financial. Should the merger not occur, the Company would seek other business
opportunities and if none were found, would be dissolved within eighteen
months by a vote of the majority of its common stockholders.

Common management of the Company and Flex Financial result from the
following relationships; Michael T. Fearnow, sole director and officer of the
Company holds similar positions with Flex Financial and is the sole owner of
Focus-Tech Investments, Inc., a 17.5% owner of the Company. Financial Public
Relations, Ltd. is a Texas limited partnership with all interests owned by
entities controlled or owned by M. Stephen Roberts, a 17.5% owner of the
Company. Focus-Tech Investments, Inc. is a Nevada corporation wholly owned by
Michael T. Fearnow. Mr. Fearnow is also the sole director and officer of
Focus-Tech Investments, Inc. M. Stephen Roberts, attorney at law, is a 17.5%
owner of the Company and less than .5% shareholder in American Nortel.

Merger Spin-Off - The Company agreed to merge with Flex Financial on July 1,
- ----------------
1996. Flex Financial is a developmental stage company formed to participate in
certain short-term financing opportunities (terms of less than one year) in
the underwriting segment of the securities industry and to participate in
certain long-term financing and investment opportunities (terms of greater
than one year) in transactions with operating businesses with significant
growth potential.

The Company will be the surviving corporation (Survivor) but Flex Financial
will elect all directors and officers of the Survivor. All currently
outstanding stock of Flex Financial will be canceled and converted into 94,000
shares of the Company's common stock. Flex Financial has options and warrants
currently outstanding which will be canceled and options and warrants on the
Company's common stock will be issued according to the plan of merger.

The merger is contingent upon the effectiveness of the registration
statements, and upon the shareholders of the Company and of Flex Financial
approving the proposed merger.

Management's Estimates - Management uses estimates and assumptions in
- -----------------------
preparing financial statements in accordance with generally accepted
accounting principles. These estimates and assumptions affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities, and the reported revenues and expenses. Actual results could vary
from the estimates that were used.
Loss Per Common Share - Loss per common share is computed using the weighted
- -----------------------
average number of shares of common stock outstanding during the period.

FLEX ACQUISITIONS CORPORATION
A DEVELOPMENT STAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997 AND 1996

NOTE A BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)

Income Taxes - For the year and period ended July 31, 1997 and
- -------------
1996, the Company incurred net operating losses amounting to $400 and
$276 , respectively. Net operating loss carryforwards will expire
in the years 2012 and 2011, if not previously utilized.

No tax benefit for the loss carryforward has been reported in the financial
statements. Accordingly, the tax benefit of approximately $230
resulting from the utilization of the loss carryforward has been offset by a
valuation allowance of the same amount.

Start-up Costs - Represents legal and other costs associated with the
- ---------------
organization of the Company and services in connection with the anticipated
merger/spin-off with American Nortel Communications, Inc. and Flex Financial
Group, Inc. These costs will be amortized over a five year period upon
commencement of operations.

Operating Costs - Subsequent to December 31, 1996, pursuant to an agreement
- ------------------
with Flex Financial, the Company is provided free rent, accounting services,
management and other operating expenses.

NOTE B LONG-TERM NOTE PAYABLE, FLEX FINANCIAL GROUP, INC.

Long-term note payable to Flex Financial Group, Inc. at July 31, 1997 and
1996 is as follows:

1997 1996
-------- --------
<S> <C> <C>
Flex Financial Group, Inc. - 10% note,
at the option of the holder the note is
convertible into common stock in
multiples of $1,000 unpaid principal
at a conversion price of $.05 per share
at any time up to maturity, subordinated,
redeemable at a 10% premium due
March 31, 1998, renewable for an
additional two year term, interest
payable at redemption or maturity;
unsecured . . . . . . . . . . . . . . . . $ 4,000 $ 4,000

Less current portion. . . . . . . . . . . 4,000 -0-
-------- --------

Long-term portion . . . . . . . . . . . . $ -0- $ 4,000
======== ========
</TABLE>

<PAGE>

FLEX ACQUISITIONS CORPORATION
A DEVELOPMENT STAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997 AND 1996

NOTE C TRANSACTIONS AND BALANCES WITH FLEX FINANCIAL GROUP, INC. AND MR.
STEVE ROBERTS

Transactions and balances with Flex Financial and Mr. Roberts at July 31, 1997
and 1996 are as follows:

1997 1996
-------- --------
<S> <C> <C>
Flex Financial Group, Inc.
Interest expense/payable $ 400 $ 134
======== ========
Roberts - Attorney at Law;
initial registered agent
Start-up costs . . . . $ -0- $ 4,992
======== ========

</TABLE>

INFORMATION ABOUT FLEX FINANCIAL

Flex Financial Group, Inc. ("Flex Financial") was incorporated under the
Business Corporation Law of the State of Texas on August 17, 1995.

MANAGEMENT'S PLAN OF OPERATION

The following should be read in conjunction with the Financial Statements
of Flex Financial and the Notes thereto, and the other financial and other
information included elsewhere in this Prospectus. This Prospectus contains
certain statements regarding future trends which are subject to various risks
and uncertainties. Such trends, and their anticipated impact on Flex
Financial, could differ materially from those discussed in this Prospectus.
Factors that could cause or contribute to such differences include, but are
not limited to, those discussed in "Risk Factors" and elsewhere in this
Prospectus.

Flex Financial was organized in August 1995 and is in the development
stage. Flex Financial has not yet commenced operations, has not generated any
revenues from operations to date, and will not generate any revenues from
operations until after the completion of the Units Offering, which the
company anticipates will occur in December 1997. There can be no
assurance that the company will be able to successfully generate meaningful
revenue or achieve profitable operations.

Since inception, Flex Financial has developed a business plan; developed
and disseminated promotional material to prospective clients of its business
services; identified potential clients with respect to its services; developed
a marketing strategy; and raised an aggregate of $137,200 in gross proceeds
through private equity and debt offerings.

LIQUIDITY AND CAPITAL RESOURCES. As of July 31, 1997, Flex
Financial has approximately $10,000 in cash and cash equivalents. It
is anticipated that the company will realize $500,000 in net proceeds from the
sale of the Common Stock and Warrants offered in the Units Offering.
The net proceeds of the Units Offering will be used to pay off the
Bridge Loans, to commence investment in Bridge Loans and Subordination Loans,
and to pay for general administrative and overhead expenses incurred in
connection therewith.

Flex Financial is dependent upon the proceeds of the Units
Offering, existing cash, and cash flow from operations, if any, or other
financing, if available, to implement its proposed business plan.
Management believes that the proceeds from the sale of the Common Stock and
Warrants offered in the Units Offering will enable Flex Financial to
satisfy its anticipated financing needs for a period of at least 12 months
following the Effective Date. However, there can be no assurance that Flex
Financial will have sufficient capital resources to permit it to fully
implement its business plan.

PLAN OF OPERATION

BUSINESS OBJECTIVES. Flex Financial was formed primarily to serve
as a vehicle to invest in short-term financing opportunities in the
underwriting segment of the securities industry. The company intends to
participate in short-term financing opportunities by (i) providing equity
subordination loans to underwriters requiring additional excess net capital
for underwriting specific issues on a firm commitment basis ("Subordination
Loans") and (ii) providing bridge loans to selected issuers to connection with
initial public offerings and secondary financing ("Bridge Loans"). The
business objectives of the company are to (i) provide Subordination Loans to
selected underwriters for specific issues on terms suiting the company's
investment requirements, and (ii) to provide Bridge Loans on a highly
selective basis within established guidelines to issuers meeting the company's
due diligence standards. Flex Financial also intends to engage in "spinoff"
activities such as are described herein, such spinoffs to involve the
distribution, by way of stock dividends or otherwise, of registered shares of
stock of other companies. The company intends to use the proceeds of the
Units Offering primarily to provide the capital to commence the investigation,
negotiation and participation in Subordination and Bridge Loans.

The company believes that financing opportunities will become available
to it due primarily to the contacts of its officers, directors and
consultants with entities and individuals participating in various segments of
the securities industry, liquidity of its assets, its future status as a
publicly-held company, and its flexibility in structuring and participating in
financing opportunities. The company has no agreement or understanding to
participate in any financing opportunity, nor does it currently have any
opportunity under investigation. Decisions as to which financing
opportunities to participate in will be made by management of the company,
which will in all probability act without the consent, vote, or approval of
Flex Financial's stockholders except when required by applicable law.

BUSINESS EXPERIENCE OF PRINCIPALS. The present executive officer and
director and certain consultants who have been retained by Flex Financial have
business experience which has provided them with certain skills which the
company believes will be helpful in identifying and evaluating potential
Bridge Loan and Subordination Loan candidates and in negotiating the terms
of Bridge Loans and Subordination Loans. They have had significant
experience in a variety of business transactions, including providing
investment banking, underwritings, bridge loans and general business
consulting to public and private companies in the $5 million to $10 million
asset range. The company expects to actively recruit board members with
extensive management, financial and entrepreneurial backgrounds to assist in
these endeavors. The company expects that future directors will have similar
experience and/or extensive business management and financial management
experience. In addition, the Board of Directors may establish an advisory
committee (the "Advisory Committee") consisting of up to eight (8) persons to
assist in finding and evaluating potential candidates for Bridge Loans and
Subordination Loans. Members of the Advisory Committee will have significant
experience in the securities industry primarily in areas of business interest
to the company. The Advisory Committee will not have any role in the
management of the business of the company, but will be available, to the
extent management may require, to consult with management as to potential
candidates for Bridge Loans and Subordination Loans.

BUSINESS PLAN.

GENERAL. Flex Financial was organized to provide Subordination
Loans to selected underwriters requiring short term additional net capital to
underwrite specific issues on a firm commitment basis; to provide Bridge Loans
on a highly selective basis within established guidelines to selected issuers
meeting the company's due diligence standards to facilitate initial public
offerings or secondary financing; and to engage in "spinoff" activities in
which the company serves as a vehicle or facility for private operating
companies to effect public status.

The company will generally use the proceeds of the Units Offering,
after paying off the Bridge Loans, to investigate and, if warranted,
participate in a financing opportunity with immediate short-term earnings
potential. Because of the company's limited financial, managerial, and other
resources, the number of suitable potential financing opportunities which will
be available to it under its criteria will be extremely limited. The company
currently has no commitment or arrangement to participate in any financing
opportunity and cannot now predict what type of opportunity may become
available to it.

Management of the company has virtually unlimited discretion in searching
out and participating in a financing opportunity. The company is unable to
predict when it may become engaged in a financing opportunity. It expects,
however, that review and analysis of specific proposals and the selection of a
financing opportunity will likely take several weeks or more following the
successful completion of this offering. There can be no assurance as to when
or if a financing opportunity will become available, however, management is
confident that such opportunities will become available.

Management anticipates that the company may be able to participate in
ongoing financing opportunities. This diversification should enable the
company to reduce its risks by offsetting potential losses from one financing
against gains from another.

SUBORDINATION AND BRIDGE LOANS.

SUBORDINATION LOANS. Flex Financial intends to provide
Subordination Loans to selected underwriters to facilitate the underwriting of
specific issues on a firm commitment basis. Small underwriters seek
short-term equity subordinated underwriting loans to meet excess net capital
requirements for firm commitment underwritings. The Company intends to
participate in Subordination Loans that can be structured with the following
general terms. Subordination Loans will typically be very short term loans
(maximum term of 30 to 45 days) made to an underwriter for the purpose of
meeting excess net capital requirements for a specific firm commitment
underwriting. Principals of the underwriter will in most cases be required to
personally guarantee repayment of the loan. The terms of the loan will
normally require that loan proceeds be maintained in a segregated account
invested in short term money market or similar securities. The underwriter
will normally be expected to pay a minimum of 2% of the amount of the
underwriting for the loan, yielding a return of 7% to 10% to the Company.
The Company expects to participate in up to six Subordination Loans a
year in amounts ranging from $50,000 to $150,000 each, yielding a
return in excess of 50% per year.

BRIDGE LOANS. Flex Financial intends to provide Bridge Loans to
selected issuers to facilitate an issuer's initial public offering or
secondary public financing. Bridge Loans are typically short term loans
(maximum term of one year with mandatory prepayment out of the proceeds of the
underwriting) made to an issuer for the purpose of providing funds to pay
underwriting costs and to a lesser extent general corporate expenses relating
to the underwriting. The Company intends to participate in Bridge Loans that
can be structured with the following general terms. In the typical
transaction the Company would expect the loan to be repaid from the proceeds
of the underwriting within 4 to 6 months of the loan. The loan would typically
range in amount from $50,000 to $200,000 and normally carry an interest rate
of three to five points above prime. The Company will require an equity
enhancement in the form of warrants or cheap stock designed to provide a
return of 200% to 300% of the loan amount within 12 to 18 months of the loan.
In connection with equity enhancements, the Company will require demand and
piggy back registration rights with expenses paid by the issuer. Principals
of the issuer will be expected to personally guarantee repayment of the loan
and in most cases the loan will collateralized by some assets of the issuer.

TYPICAL SCENARIOS. Although the Company cannot predict the exact terms
and structure of any financing transaction in which it may participate, the
following represents the type of transaction structures that the Company will
attempt to negotiate.

With respect to a typical scenario for a Subordination Loan, the Company
intends to seek situations in which a small underwriter with net capital of
$500,000 or less wants to underwrite an entire issue of $4 million to $10
million on a firm commitment basis. NASD and SEC rules and regulations
require the underwriter to have excess net capital of 30% of the retention
less underwriting fees. A $5 million firm commitment underwriting would
require $5,000,000 X .90 = $4,500,000 X .30 = $1,350,000 in excess net
capital. An underwriter requiring another $850,000 in excess net capital to
underwrite the issue would require additional underwriters or a subordinated
underwriting loan to provide the additional $850,000 in excess net capital.
The Company would expect to participate in such a subordinated loan in the
amount of $150,000 which would underwrite $500,000 of the
issue. The underwriter would expect to pay a minimum of 2% of the
underwritten amount or $10,000 for the loan, yielding a return to the
Company of 7% to 10% over a 30 to 45 day period.

With respect to a typical scenario for a Bridge Loan transaction, the
Company will expect to make a one year $100,000 Bridge Loan to an
issuer to facilitate the issuer's initial public offering to be priced at
$5.00 per share. The loan would bear interest at 13% per annum with mandatory
prepayment from the proceeds of the underwriting at closing. The loan will be
personally guaranteed by the issuer's principals and collateralized by
available assets of the issuer. The Company would expect to receive a stock
purchase warrant to buy 50,000 shares of the issuer's common stock at
$2.00 per share as an equity enhancement. Six months after the loan the
underwriting closes and the Company would expect to be repaid $100,000
principal and $6,500 in interest. Twelve months after the underwriting
(18 months after the loan) assuming the issuer's stock is trading at $6.00,
the value of the warrants would be $200,000 or 200% of the original
loan. The results and return on the equity enhancement would of course be
completely dependent upon the performance of the issuer's publicly traded
securities and in some cases may be of no value. Normally, the securities
representing the equity enhancement is registered in the issuer's initial
public offering.

The level of the Company's participation in any particular
Subordination or Bridge Loan would depend upon available capital and prudent
risk management and portfolio diversification.
GENERAL CONSIDERATIONS. Management intends to participate in a portfolio
of subordinated loans and bridge loans that will provide prudent risk and
diversification. The amount of and timing of each transaction will be
determined by management taking into account the liquid assets and net worth
of the Company, and the ongoing general and administrative costs of the
Company. Whenever possible management will further diversify by participating
with other investors in its financing opportunities.

OTHER INVESTMENT TRANSACTIONS

GENERAL. By reason of its participation in Subordination and Bridge
Loans, Flex Financial expects to be presented investment
opportunities resulting in the acquisition of a non-controlling equity
interest in a company that wishes to become publicly held ("Public
Candidate") and which the Company believes has growth potential. These
opportunities are expected to be in the form of "spinoff" transactions.

INVESTMENT TRANSACTIONS. The Company will not use any portion of the
proceeds of this Units Offering to investigate and enter into any definitive
agreement relating to an Investment Transaction. The Company would not expect
to acquire more than a 10% equity interest in a Public Candidate in an
Investment Transaction.

TYPICAL SCENARIOS. In a typical scenario, Flex Financial may be
approached by a Public Candidate. Flex Financial will enter into an agreement
with the Public Candidate for a proposed merger-spinoff transaction
which would result in the Public Candidate becoming a publicly held
company. The proposed merger-spinoff would be effected by Flex Financial
forming a new subsidiary which would be thinly capitalized with Flex
Financial as its sole shareholder. The Target would merge into the
subsidiary with the Target shareholders receiving approximately 90% of the
issued and outstanding shares of the subsidiary and Flex Financial
retaining 10% of the shares. Subsequent to the merger, Flex Financial
will distribute some or all of the subsidiary's shares to its shareholders
(expected at that time to exceed 300 in number). Contemporaneously with the
merger-spinoff, the subsidiary would file a registration statement on Form S-4
with the Securities and Exchange Commission (the "SEC") to register the merger
shares and file a registration statement on Form SB-2 with the SEC to register
the spinoff shares. The subsidiary may in connection with the filing of the
S-4 register shelf shares for future issuance in association with possible
acquisitions and may in connection with the filing of the SB-2 register the
sale of additional shares to provide working capital or register the resale of
shares for the account of its shareholders. As a result of the transaction,
the Public Candidate becomes a publicly held company with Flex
Financial or its shareholders owning 10% of the public company. Flex
Financial will not bear any expense in connection with such a transaction.

METHOD OF PARTICIPATION. It is impossible to predict exactly how Flex
Financial may participate in an Investment Transaction, or if it will,
but generally speaking, the following represents the type of transaction
structures that the will attempt to negotiate. Subject to a letter of
intent, the company may agree to form a wholly-owned subsidiary. The
subsidiary may then enter into a definitive agreement under which the Public
Candidate merges into the subsidiary with the retaining a negotiated equity
interest in the surviving subsidiary (expected to be 10% of issued and
outstanding shares). The Company may then use the shares for, among other
things, distribution as a dividend to its shareholders, sale for cash,
exchange for other assets, or retention for investment purposes.

FLEX FINANCIAL MAY BE DEEMED TO BE AN UNDERWRITER. In a typical scenario
as described above, Flex Financial may be deemed an underwriter by reason of
its intent to distribute any shares that may be owned by it as a dividend
distribution to its shareholders ("Spinoff Shares").

After a distribution by Flex Financial of Spinoff Shares to its
shareholders, the company may no longer own any shares of capital stock of
the Public Candidate, except to the extent it may elect to distribute less
than all of the Spinoff Shares.

A consequence to Flex Financial should it be deemed to be an underwriter
of the shares to be distributed to its shareholders, is that any person who
purchases the registered Shares within three years after the distribution
could assert a claim against Flex Financial under Section 11 of the Securities
Act of 1933. The purchase could be in the open market as long as the shares
purchased can be traced to the registered Spinoff Shares Flex Financial
distributes to its shareholders. Such a claim, to be successful, must be
based upon a showing that statements in the registration statement were false
or misleading with respect to a material fact or that the registration
statement omitted material information required to be included therein.

FLEX FINANCIAL MAY HAVE EXPOSURE AS A CONTROL PERSON. In a typical
scenario as described above, the Company's organization of a subsidiary will
result in the company being a "control person" of the subsidiary, as that term
is defined in Section 15 of the Securities Act of 1933 ("the Act") from the
subsidiary's organization and until the any proposed merger should become
effective.

Section 15 of the Act imposes joint and several liability on persons who
control other persons substantively liable under other sections of the Act -
Section 11, for misrepresentations in a registration statement, Section 12(1)
- - the unlawful sale of unregistered securities, and Section 12(2)
misrepresentations in the sale of securities. A controlling person can avoid
liability by proving "he had no knowledge of or reasonable grounds to believe
in the existence of the facts by reason of which the liability of the
controlled person is alleged to exist."

MISCELLANEOUS MATTERS

SOURCES OF OPPORTUNITIES. The principals of Flex Financial have
extensive experience in working with small underwriters and in providing
investment banking, underwritings, bridge loans, and general business and
financial consulting to smaller public and private companies. The company
anticipates that financing opportunities will be referred by various sources,
including its officers and directors, professional advisers, securities
broker-dealers, members of the financial community, and others who may present
unsolicited proposals. The company may agree to pay a finder's fee or other
compensation for services provided by unaffiliated persons who submit a
financing opportunity in which the company participates. No guideline or
policy has been adopted by the company concerning the circumstances under
which a finder's fee will be paid or the amount of such fee.

The company will seek potential financing opportunities from all known
sources, but will rely principally on personal contacts of its officers,
directors and consultants as well as indirect associations between them and
other business and professional people. In some instances, the company may
publish notices or advertisements seeking a potential financing opportunity in
financial or trade publications.

CRITERIA. Subordination Loans will only be made to underwriters
acceptable to Flex Financial and in connection with specific
underwritings for issuers acceptable to the company. Bridge Loans will only
be made to companies that can pass an extensive due diligence review of the
company's management, business, deal structure, underwriter, and public
relations firm. The company may require representation on the issuer's board
and will require substantial penalties for a loan default, although in a
default situation Flex Financial's remedies may be limited. Any
participation by the company will be subject to the issuer executing a firm
commitment underwriting letter of intent with an underwriter approved by the
company.

The company will seek to enter into transactions with mature
businesses, but may seek a transaction with a business in any industry
and in any stage of development, including an established business which needs
additional funding or a firm which is in need of additional capital to
overcome financial problems or difficulties. However, the company does
not intend to enter into such transaction with a "start up" or new company.
The analysis of financing opportunities will be undertaken by or under
the supervision of the officers and directors. Certain of the Company's
officers, directors and consultants have extensive business experience in the
securities industry, particularly regarding small public underwritings, and
are primarily engaged in the business of analyzing businesses for underwriting
suitability and negotiating, participating in and advising as to Bridge Loans
and Subordination Loans. In analyzing prospective financing opportunities,
management will consider the following factors regarding an issuer: available
technical, financial, and managerial resources, working capital and other
financial requirements; history of operations, if any; quality and experience
of management services which may be available and the depth of that
management; capability of effecting an underwriting, including quality of
underwriter and professional advisers; and other relevant factors.

The company will analyze all available factors and make a determination
based upon a composite of available facts, without reliance on any single
factor.

PROCEDURES. A thorough evaluation of an issuer prior to a Bridge Loan
will be difficult. The company will have limited time and funds available in
its search for and analysis of financing opportunities and will not be able to
expend significant funds on a complete and exhaustive investigation of any
financing opportunity. However, the company will investigate, to an extent
believed reasonable by its management, such potential opportunities by
obtaining financial and other information reasonably available concerning the
issuer and/or underwriter; conducting meetings and interviews with management
and underwriter; reviewing experience and other financial factors; and other
reasonable methods.

As part of the Company's investigation, officers and directors may meet
personally with management and key personnel of the firm sponsoring the
investment opportunity, visit and inspect material facilities, obtain
independent analysis or verification of certain information provided, check
references of management and key personnel, and conduct other reasonable
measures, to the extent allowed by the Company's limited financial resources
and management and technical expertise.

The company will participate in a financing opportunity only pursuant to
negotiation and execution of a written agreement. Although the terms cannot
be predicted, agreements generally require specific representations and
warranties by all of the parties thereto and specify certain events of
default.

The investigation of specific financing opportunities and the
negotiation, drafting and execution of relevant agreements, disclosure
documents, and other instruments may require substantial management time and
attention and substantial costs for accountants, attorneys, and others. If a
decision is made not to participate in a specific financing opportunity, the
costs previously incurred in the related investigation would not be
recoverable. Furthermore, even if an agreement is reached for the
participation in a specific financing opportunity, the failure to consummate
that transaction may result in the loss to the company of the related costs
incurred.

COMPETITION. The company expects to encounter competition in its
efforts to locate opportunities for the employment of its capital. The
primary competition for desirable investments is expected to come from other
small companies organized and funded for similar purposes, small venture
capital partnerships and corporations, small business investment companies,
and individuals with unlimited financial resources. Many of these entities
may have significantly greater experience, resources, and managerial
capabilities than the company and will, therefore, be in a better position
than the company to obtain access to business opportunities. However, the
company believes that it has sufficient expertise and contacts to compete
successfully in this market.

DESCRIPTION OF BUSINESS PROPERTIES

Flex Financial currently shares a portion of approximately 3,000 square
feet of office space in premises occupied by Focus-Tech Investments, Inc. and
Financial Public Relations, Ltd. at 770 S. Post Oak Lane, Suite 515, Houston,
Texas 77056. Mr. Fearnow is a principal of Focus-Tech Investments, Inc.
("Focus-Tech"), a Nevada corporation, that provides investment banking
consulting services to FPR. Flex Financial believes that such space and
services will be adequate for the business of Flex Financial into the
foreseeable future. The cost for such space is included in a $4,000 per-month
fee charged by Focus-Tech for general and administrative services for calendar
year 1996.

Upon closing of the Units Offering Focus-Tech has agreed to provide to
Flex Financial for as long as required for Flex Financial's business use such
general and administrative services, which will include the cost of the use of
office space, personnel, facilities and equipment, for a monthly fee of
$4,000. Flex Financial believes that such space and services will be adequate
for the business of Flex Financial into the foreseeable future. Focus-Tech
has agreed to make this space available as long as required for the use of the
Flex Financial. Focus-Tech has agreed that its fee for providing such
services shall be paid only out of 15% of net Units Offering proceeds in
excess of $200,000, and thereafter agrees to accrue the monthly fee for
payment solely out of the fees, interest earned and earnings generated by the
Company's business.

Neither Flex Financial nor any of its property is a party to or the
subject of any pending legal proceedings.

FINANCIAL STATEMENTS

Set forth below are the independent auditor's report dated August 5,
1997, with respect to Flex Financial's financial statements as of
July 31, 1997 and 1996, and the notes to the financial statements.

FLEX FINANCIAL GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)

FINANCIAL STATEMENTS

JULY 31, 1997 AND 1996

C 0 N T E N T S

Page
----
<S> <C>
Independent Auditor's Report . . . . . . . . . . . . . . . . . 2

Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . 3

Statements of Operations . . . . . . . . . . . . . . . . . . . 4

Statements of Changes in Stockholders' Equity. (Deficit) 5

Statements of Cash Flows . . . . . . . . . . . . . . . . . . . 6

Notes to Financial Statements. . . . . . . . . . . . . . . . . 7-14
</TABLE>

INDEPENDENT AUDITOR'S REPORT

To the Stockholders and Directors of
Flex Financial Group, Inc.
(A Development Stage Company)
Houston, Texas

We have audited the accompanying balance sheets of Flex Financial Group, Inc.
(A Development Stage Company) as of July 31, 1997 and 1996, and the
related statements of operations, changes in stockholders' equity (deficit)
and cash flows for the year ended July 31, 1997 and the period
August 17, 1995 (date of inception) through July 31, 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.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Flex Financial Group, Inc. (A
Development Stage Company) at July 31, 1997 and 1996, and the results
of its operations and its cash flows for the year and period then ended
in conformity with generally accepted accounting principles.

/s/ Harper & Pearson Company
- -----------------------------------
Harper & Pearson Company

Houston, Texas
August 5, 1997

<PAGE>
FLEX FINANCIAL GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
JULY 31, 1997 AND 1996

ASSETS
----------
1997 1996
---------- ----------
<S> <C> <C>
CURRENT ASSETS
Cash. . . . . . . . . . . . . . . . . . . . . . . . . $ 9,564 $ 42,220
Interest receivable . . . . . . . . . . . . . . . . 596 1,486
Note receivable, Flex Acquisition Corporation . . . 4,000 25,000
Note receivable . . . . . . . . . . . . . . . . . . -0- 10,000
Loan origination costs, net . . . . . . . . . . . . -0- 1,250
Deferred registration costs . . . . . . . . . . . . 32,303 -0-
---------- ----------

TOTAL CURRENT ASSETS. . . . . . . . . . . . . . . 46,463 79,956
---------- ----------

OTHER ASSETS
Long-term note receivable, Flex Acquisition
Corporation . . . . . . . . . . . . . . . . . . . -0- 4,000
---------- ----------

$ 46,463 $ 83,956
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
- -----------------------------------------------------

CURRENT LIABILITIES
Accounts payable. . . . . . . . . . . . . . . . . . $ 22,218 $ 58
Notes payable . . . . . . . . . . . . . . . . . . . 50,000 50,000
Interest payable. . . . . . . . . . . . . . . . . . 8,822 3,822
Accrued overhead, Focus-Tech Investments, Inc.. . . -0- 8,891
---------- ----------

TOTAL CURRENT LIABILITIES . . . . . . . . . . . . 81,040 62,771
---------- ----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, no par value, 10,000,000
shares authorized, none issued and outstanding,
rights, preferences, qualifications, limitations
and restrictions and any other benefits to be
determined by the Board of Directors as provided
in the corporation's Articles of Incorporation. . -0- -0-
Common stock, $.01 par value, 10,000,000 shares
authorized, 94,000 shares sold and to be issued . 940 940
Additional paid-in capital. . . . . . . . . . . . . 81,260 81,260
Deficit accumulated during the development stage. . (116,777) (61,015)
---------- ----------

(34,577) 21,185
---------- ----------

$ 46,463 $ 83,956
========== ==========
</TABLE>

See accompanying notes.

<PAGE>
FLEX FINANCIAL GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
YEAR AND PERIOD ENDED JULY 31, 1997 AND 1996

July 31, Cumulative
1997 1996(1) (2)
---------- ------------ ----------
<S> <C> <C> <C>
INTEREST INCOME . . . . . . . . . $ 1,004 $ 2,278 $ 3,282
---------- ------------ ----------

EXPENSES
Advertising . . . . . . . . . . -0- 2,564 2,564
Amortization. . . . . . . . . . 1,250 -0- 1,250
Bad debt expense 10,000 -0- 10,000
Consulting expenses . . . . . . -0- 16,902 16,902
Filing fees . . . . . . . . . . 4,923 510 5,433
Interest expense. . . . . . . . 5,000 7,572 12,572
Legal and professional fees . . 14,905 6,100 21,005
Other expenses. . . . . . . . . 688 350 1,038
Printing. . . . . . . . . . . . -0- 1,295 1,295
Overhead allocation, Focus-Tech
Investments, Inc. . . . . . . 20,000 19,109 39,109
Accrued overhead, Focus-Tech
Investments, Inc. . . . . . . -0- 8,891 8,891
---------- ------------ ----------

56,766 63,293 120,059
---------- ------------ ----------

NET LOSS. . . . . . . . . . $ (55,762) $ (61,015) $(116,777)
========== ============ ==========

LOSS PER COMMON SHARE . . . . . . $ (.33) $ (.38) $ (.71)
========== ============ ==========

SHARES USED IN COMPUTING
LOSS PER SHARE. . . . . . . . . 166,982 158,815 163,270
========== ============ ==========

<FN>
1. August 17, 1995 (Date of Inception) to July 31, 1996
2. August 17, 1995 (Date of Inception) to July 31, 1997
</TABLE>

See accompanying notes.

<PAGE>
FLEX FINANCIAL GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
YEAR ENDED JULY 31, 1997 AND PERIOD AUGUST 17, 1996 THROUGH JULY 31, 1996

Additional
Preferred Common Paid-In Retained
Stock Stock Capital (Deficit) Total
----------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Sale of Common Stock. . $ -0- $ 940 $ 81,260 $ -0- $ 82,200

Net Loss. . . . . . . . -0- -0- -0- (61,015) (61,015)
----------- --------- --------- ---------- ----------

Balance - July 31, 1996 -0- 940 81,260 (61,015) 21,185

Net Loss. . . . . . . . -0- -0- -0- (55,762) (55,762)
----------- --------- --------- ---------- ----------

Balance - July 31, 1997 $ -0- $ 940 $ 81,260 $(116,777) $ (34,577)
=========== ========= ========= ========== ==========

</TABLE>

See accompanying notes.

<PAGE>
FLEX FINANCIAL GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
YEAR AND PERIOD ENDED JULY 31, 1997 AND 1996

July 31, Cumulative
1997 1996(1) (2)
---------- ------------ ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss . . . . . . . . . . . . . . . . . . . . $ (55,762) $ (61,015) $(116,777)
---------- ------------ ----------
Adjustments to reconcile net loss to net cash
used by operating activities:
Amortization of loan origination costs, net. . 1,250 3,750 5,000
Write-off of note receivable . . . . . . . . . 10,000 -0- 10,000
Change in operating assets and liabilities:
Interest receivable. . . . . . . . . . . . . . 890 (1,486) (596)
Accounts payable . . . . . . . . . . . . . . . 22,160 58 22,218
Interest payable . . . . . . . . . . . . . . . 5,000 3,822 8,822
Accrued overhead, Focus-Tech Investments, Inc. (8,891) 8,891 -0-
---------- ------------ ----------

Total Adjustments. . . . . . . . . . . . . . 30,409 15,035 45,444
---------- ------------ ----------

Net Cash Used by Operating Activities. . . . . (25,353) (45,980) (71,333)
---------- ------------ ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Deferred registration costs. . . . . . . . . . (32,303) -0- (32,303)
Loan origination costs . . . . . . . . . . . . -0- (5,000) (5,000)
Notes receivable . . . . . . . . . . . . . . . -0- (35,000) (35,000)
Note receivable. . . . . . . . . . . . . . . . -0- (10,000) (10,000)
Long-term note receivable,
Flex Acquisition Corporation . . . . . . . . -0- (4,000) (4,000)
Collection of notes receivable . . . . . . . . 25,000 10,000 35,000
---------- ------------ ----------
Net Cash Used by Investing Activities. . . . . (7,303) (44,000) (51,303)
---------- ------------ ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Notes payable. . . . . . . . . . . . . . . . . -0- 50,000 50,000
Proceeds from issuance of common stock . . . . -0- 87,200 87,200
Stock issuance costs . . . . . . . . . . . . . -0- (5,000) (5,000)
---------- ------------ ----------

Net Cash Provided by Financing Activities. . . -0- 132,200 132,200
---------- ------------ ----------

NET (DECREASE) INCREASE IN CASH. . . . . . . . . (32,656) 42,220 9,564

CASH AT BEGINNING OF PERIOD. . . . . . . . . . . 42,220 -0- -0-
---------- ------------ ----------

CASH AT END OF PERIOD. . . . . . . . . . . . . . $ 9,564 $ 42,220 $ 9,564
========== ============ ==========
<FN>
(1) August 17, 1995 (Date of Inception) to July 31, 1996
(2) August 17, 1995 (Date of Inception) to July 31, 1997
</TABLE>

See accompanying notes.

FLEX FINANCIAL GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997 AND 1996

NOTE A BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES

Flex Financial Group, Inc. (A Development Stage Company) (the Company) was
incorporated in August 1995 for the purpose of engaging in the business of
providing loans to companies going public; subordinated equity loans to
underwriters; and providing a platform for taking companies public through a
merger/spin-off transaction. It is anticipated by management that the Company
will become a publicly owned corporation within the near future.

Merger Spin-off - On June 30, 1996, the Company entered into an agreement with
- ---------------
American Nortel Communications, Inc. (American Nortel), a public corporation
engaged in providing long distance telephone services and owned by
approximately 780 individuals, for a proposed merger-spin-off transaction
which would create a public market for the Company's stock. The proposed
merger-spin-off would be effected by American Nortel capitalizing a recently
formed subsidiary (Flex Acquisitions Corporation) which would sell 20,000
shares of $.001 par value common stock to American Nortel for $1,000. Flex
Acquisitions, an entity under common management because of overlapping
director and officers, has authorized 10 million shares of Common Stock
with a par value of $.001 per share and 10 million shares of Preferred Stock
with no par value. The preferences, rights, and qualities of each series of
the Preferred Stock will be set by future resolutions of Flex Acquisitions
Board of Directors. All currently outstanding stock of the Company will be
canceled and converted into 94,000 shares of common stock of Flex
Acquisitions. The Company has options and warrants currently outstanding which
will be canceled and options and warrants on Flex Acquisitions' common stock
will be issued according to the plan of merger. Subsequent to the merger,
American Nortel will distribute to its shareholders the 20,000 shares of
common stock of Flex Acquisitions previously held by American Nortel.
Contemporaneously with the merger-spin-off, Flex Acquisitions will file a
registration statement on Form S-4 with the Securities and Exchange Commission
(SEC) to register 2,094,000 shares of Common Stock and file a registration
statement on Form SB-2 with the SEC to register the spin-off of the 20,000
shares by American Nortel and the sale of 100,000 shares of common stock by
Flex Acquisitions. Of the 2,094,000 shares of Common Stock, 2,000,000 will be
considered shelf shares for future issuance in association with possible
acquisitions.

Common management of the Company and Flex Acquisitions result from the
following relationships; Michael T. Fearnow, sole director and officer of the
Company holds similar positions with Flex Acquisitions and is the sole owner
of Focus-Tech Investments, Inc., a 17.5% owner of the Company. Financial
Public Relations, Ltd. is a Texas limited partnership with all interests owned
by entities controlled or owned by M. Stephen Roberts, a 17.5% owner of the
Company. Focus-Tech Investments, Inc. is a Nevada corporation wholly owned by
Michael T. Fearnow. Mr. Fearnow is also the sole director and officer of
Focus-Tech Investments, Inc. M. Stephen Roberts, attorney at law, is a 17.5%
owner of the Company and less than .5% shareholder in American Nortel.

Concentrations of Credit - Substantially all of the Company's loans have been
- -------------------------
granted to entities under common management and a third party customer of the
Company. The concentrations of credit by type of loan are set forth in Notes B
and C.

Interest Rate Risk - The Company is principally engaged in providing
- --------------------
short-term commercial loans with fixed interest rates. These loans have been
primarily funded through short-term notes payable and the sale of the
Company's stock.

FLEX FINANCIAL GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997 AND 1996

NOTE A BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)

Notes Receivable - Notes receivable are reported at the principal amount
- -----------------
outstanding. Management is of the opinion that all notes are fully
collectible, therefore, no allowance for possible credit losses is deemed
necessary.

Deferred Registration Costs - Deferred registration costs have been
-----------------------------
capitalized and will be netted against the proceeds, if any, received from the
sale of securities to the public.

Allowance for Possible Credit Losses - When deemed necessary, an allowance for
- ------------------------------------
possible credit losses is established to provide a valuation allowance for
losses expected to be incurred on loans and other commitments to extend
credit. All losses are charged to the allowance for possible credit losses
when the loss actually occurs or when a determination is made that a loss is
likely to occur. Recoveries are credited to the allowance at the time of
recovery.

Throughout the year, management estimates the likely level of losses to
determine whether the allowance for possible credit losses, when deemed
necessary, is adequate to absorb anticipated losses in the existing portfolio.
Based on these estimates, an amount is charged to the provision for possible
credit losses and credited to the allowance for possible credit losses in
order to adjust the allowance to a level determined to be adequate to absorb
losses.

Management's judgment as to the level of losses on existing loans involves the
consideration of current and anticipated economic conditions and their
potential effects on specific borrowers; an evaluation of the existing
rela-tionships among loans, potential loan losses, and the present level of
the allowance; and management's internal review of the loan portfolio. In
determining the collectibility of certain loans, management also considers the
fair value of any underlying collateral. The amounts ultimately realized may
differ from the carrying value of these assets because of economic, operating
or other conditions beyond the Company's control.

Statement of Cash Flows - For purposes of reporting cash flows, cash and cash
- ------------------------
equivalents includes only cash on hand and in demand deposit accounts with a
bank.

Loss Per Common Share - Loss per common share is computed using the weighted
- -----------------------
average number of shares of common stock outstanding during the period, as
adjusted for shares issuable upon exercise of options priced below the
anticipated IPO price per share as shown below:

<PAGE>
FLEX FINANCIAL GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997 AND 1996

1997 1996 Cumulative
-------- -------- -----------
<S> <C> <C> <C>
Weighted average shares outstanding
for issued shares. . . . . . . . . . . . . 94,000 85,833 90,288
Shares issuable upon, exercise of options. . 80,000 80,000 80,000
Less treasury shares repurchased from
option proceeds. . . . . . . . . . . . . (7,018) (7,018) (7,018)
-------- -------- -----------
Adjusted weighted average shares outstanding 166,982 158,815 163,270
======== ======== ===========
</TABLE>

NOTE A BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)

Income Taxes - For the year and period ended July 31, 1997 and 1996,
- -------------
the Company incurred net operating losses amounting to $55,762
and $61,015 , respectively . Net operating loss carryforwards will
expire in the years 2012 and 2011, if not previously utilized.

No tax benefit for the loss carryforward has been reported in the financial
statements. Accordingly, the tax benefit of approximately $39,700
resulting from the utilization of the loss carryforwards has been offset by a
valuation allowance of the same amount.

Common Stock - Common stock sold is subject to a subscription agreement which
- -------------
provides for, among other things; (1) each purchaser is sold "units" at a
price of $4,800 which includes 1,000 shares of common stock, 2000 Class B
warrants and 2,000 Class C warrants collectively referred to as offered
securities; and (2) purchaser of offered securities will not be able to resell
them until and unless the securities are registered pursuant to a registration
statement and properly qualified for sale in each jurisdiction. The Class B
and Class C redeemable warrants entitle the holders to purchase one share of
common stock for each warrant held at $6.25 and $10.00, respectively.

80,000 shares of the 94,000 common shares sold and to be issued were sold to
"Founders", subject to a separate subscription agreement at a price of $.25
per share. This subscription agreement provides the subscribers with the
option to purchase up to an additional 80,000 common shares at a per share
price of $.50. The option for the purchase of additional shares expires
December 31, 2000 , if not previously exercised.

No compensation expense has resulted from the issuance of any of the
Company's warrants or options as the exercise prices were in excess of the
fair market value of the Company's common stock.

Operating Costs - Subsequent to December 31, 1996, pursuant to an agreement
- ----------------
with Flex Acquisitions, the Company provides Flex Acquisitions rent,
accounting services, management and other operating expenses without
compensation.

<PAGE>
FLEX FINANCIAL GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997 AND 1996

NOTE B NOTES RECEIVABLE, RELATED PARTIES

Notes receivable due from entities under common management consist of the
following at July 31, 1997 and 1996.

1997 1996
-------- --------
<S> <C> <C>
Flex Acquisition Corporation - 10% note, at
the option of the holder, the note is
convertible into common stock in multiples
of $1,000 unpaid principal at a conversion
price of $.05 per share at any time up to
maturity, subordinated, redeemable at a 10%
premium, due March 31, 1998, renewable for
an additional two year term, interest due
at maturity; unsecured . . . . . . . . . . . $ 4,000 $ 4,000
Financial Public Relations, Ltd. - 10%
demand note receivable, interest due at
maturity; secured by warrant to purchase
24,000 shares of common stock of Industrial
Holdings, Inc. . . . . . . . . . . . . . . . -0- 10,000

Financial Public Relations, Ltd. - 10%
demand note receivable, interest due at
maturity; secured by warrant to purchase
24,000 shares of common stock of Industrial
Holdings, Inc. . . . . . . . . . . . . . . . -0- 10,000

Focus-Tech Investments, Inc. - two 10%
demand notes receivable, interest due at
maturity; secured by warrant to purchase
24,000 shares of common stock of Industrial
Holdings, Inc. . . . . . . . . . . . . . . . -0- 5,000
-------- --------

4,000 29,000

Less current portion . . . . . . . . . . . . . 4,000 25,000
-------- --------

Long-term note receivable, related party . . . $ -0- $ 4,000
======== ========

</TABLE>

<PAGE>
FLEX FINANCIAL GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997 AND 1996

NOTE C NOTE RECEIVABLE

Note receivable consists of the following at July 31, 1997 and 1996.

1997 1996
-------- --------
<S> <C> <C>
CARETECH, Inc. - 10% unsecured demand
note receivable, interest due at maturity.
During fiscal 1997, the balance was
deemed uncollectible and charged to bad
debt expense . . . . . . . . . . . . . . . $ -0- $ 10,000
======== ========
</TABLE>

NOTE D NOTES PAYABLE

Notes payable consist of the following at July 31, 1997 and 1996:

1997 1996
-------- --------
<S> <C> <C>
Two 10% unsecured, subordinated notes
payable on the earlier of (1) October 15,
1996, or (2) the closing of a public
offering of the Company's securities
pursuant to the Securities Act of 1933,
as amended, representing gross proceeds
of not less than $60,000; the notes are
subject to subscription and option agreements $ 50,000 $ 50,000
======== ========
</TABLE>

Effective October 15, 1996, these notes were amended to extend the
maturity dates to March 31, 1997. By mutual consent, the applicable IPO
closing date, debt maturity date, and expiration date for exercise was
extended to March 31, 1998 and the holders were granted an additional 8,000
Option Units, or an aggregate 16,333 Option Units

In connection with the issuance of these notes, the Company granted to
the purchasers Unit Purchase Options (Option Units). The Option Units entitle
the holders to purchase such number of equivalent units of the Company's
securities as may be offered in an initial public offering at an aggregate
offering price of at least $60,000 pursuant to an effective registration
statement filed under the Securities Act that closes prior to June 30, 1996.
The number of equivalent units purchasable at a price of $.50 per unit is
determined by dividing the Units Offering price into the principal amount of
notes. Under the terms of this Units Offering, holders of the Option Units are
entitled to purchase 8,333 equivalent Units.

<PAGE>
FLEX FINANCIAL GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997 AND 1996

NOTE E TRANSACTIONS AND BALANCES WITH ENTITIES AND AN INDIVIDUAL UNDER
COMMONMANAGEMENT

1997 1996
------- -------
<S> <C> <C>
Flex Acquisition Corporation (1)
Interest income/receivable . . . . . . . $ 400 $ 134
Financial Public Relationship, Ltd. (2)
Interest income. . . . . . . . . . . . . -0- 1,709
Interest receivable. . . . . . . . . . . -0- 917
Consulting expense . . . . . . . . . . . -0- 5,000
Focus-Tech Investments, Inc. (3)
Interest income/receivable . . . . . . . -0- 48
Overhead allocation - allocation covers
rent, telephone, fax, office supplies
and expenses, postage, repairs, use
of furniture and equipment, and
administration management as needed. . 20,000 19,109
Accrual of overhead. . . . . . . . . . . -0- 8,891
Consulting expense . . . . . . . . . . . -0- 2,500
M. Stephen Roberts - Attorney at Law;
initial registered agent (4)
Legal fees, various corporate matters. 4,850 13,550

Legal fees, registration costs . . . . 27,400 -0-
</TABLE>

(1) Michael T. Fearnow, sole director and officer of Flex Acquisitions
holds similar positions with the Company and is the sole owner of Focus-Tech
Investments, Inc., a 17.5% owner of the Company.
(2) Financial Public Relations, Ltd. is a Texas limited partnership with
all interests owned by entities controlled or owned by M. Stephen Roberts, a
17.5% owner of the Company.
(3) Focus-Tech Investments, Inc. is a Nevada corporation wholly owned by
Michael T. Fearnow. Mr. Fearnow is also the sole director and officer of
Focus-Tech Investments, Inc. Pursuant to an understanding between Focus-Tech
and Flex Financial, Focus-Tech provided to Flex Financial such general and
administrative services, including the cost of the use of office space,
personnel, facilities and equipment, as required for Flex Financial's business
in exchange for a general and administrative services fee of $4,000 per month
for the seven month period ending December 31, 1996. Flex Financial shares a
portion of approximately 3,000 square feet of office space in premises
occupied by Focus-Tech and Financial Public Relations, Ltd. at 770 S. Post Oak
Lane, Suite 515, Houston, Texas 77056. In lieu of actual payments by Flex
Financial to Focus-Tech, Flex Financial directly paid expenses of Focus-Tech
in the amount of $19,109 and received credit toward the payment of the $28,000
in general and administrative services fees owed to Focus-Tech. Overhead
allocation refers to amounts paid by Flex Financial on behalf of Focus-Tech
which were allocated as a credit against the general and administrative
services fee due Focus-Tech.

Accrual of overhead refers to the $8,891 balance due Focus-Tech against the
$28,000 in accrued general and administrative services fees after applying the
$19,109 credit given Flex Financial for its direct payments.

Management estimates that Flex Financial's expenses would have been
approximately $6,000 a month on a stand alone basis.

<PAGE>
FLEX FINANCIAL GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997 AND 1996

NOTE E TRANSACTIONS AND BALANCES WITH ENTITIES AND AN INDIVIDUAL UNDER
COMMON MANAGEMENT (CONTINUED)

Until the closing of the Units Offering, Focus-Tech will continue to provide
such space and services without charge to Flex Financial. Upon closing of the
Units Offering, Focus-Tech has agreed to provide to the Company such general
and administrative services, which will include the cost of the use of office
space, personnel, facilities and equipment, as may be required for the
Company's business use on a monthly basis for a fee of $4,000 per month and to
make this space available as long as required for the use of the Company. The
Company believes that such space and services will be adequate for the
business of the Company into the foreseeable future. Focus-Tech has agreed
that its fee for providing such services shall be paid only out of 15% of net
Units Offering proceeds in excess of $200,000, and thereafter agrees to accrue
the monthly fee for payment solely out of the fees, interest earned and
earnings generated by the Company's business.

(4) M. Stephen Roberts, attorney at law, is a 17.5% owner of the Company
and less than .5% shareholder in American NorTel.

<PAGE>

MANAGEMENT INFORMATION

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

THE COMPANY. The following table shows information as of August 31,
1997, with respect to each beneficial owner of more than 5% of Common
Stock of the Company and to each of the officers and directors of the Company
individually and as a group:

COMMON STOCK BENEFICIALLY OWNED
BEFORE MERGER (1) AFTER MERGER (2)
----------------- ----------------
NAME AND ADDRESS OF NUMBER PERCENT NUMBER PERCENT
BENEFICIAL OWNER OF SHARES OF CLASS OF SHARES OF CLASS
- ---------------------------------- ----------------- ---------------- --------- --------
<S> <C> <C> <C> <C>
American NorTel Communications . . 20,000 100 0 0
7201 East Camelback Road
Suite 320
Scottsdale, Arizona 85251

Officers and Directors as a Group. 0 0 0 0
(One person before Merger, one
person after Merger) (4)
<FN>
_______________
(1) Before the proposed Merger, all 20,000 shares of the issued and outstanding shares
of Common Stock of the Company are held of record and beneficially by American NorTel
Communications Inc.
(2) After giving effect to the Merger and Spinoff.
</TABLE>

<PAGE>
FLEX FINANCIAL. The following table describes what would be the effect
of the Merger between the Company and Flex Financial on the security ownership
of any person who is known to the Company to be a person who would be the
beneficial owner of more than 5% of the Common Stock of the Company, the chief
executive officer, the directors, and the directors and executive officers as
a group:

COMMON STOCK BENEFICIALLY OWNED

BEFORE MERGER (1) AFTER MERGER (2)
----------------- ----------------
NAME AND ADDRESS OF NUMBER PERCENT NUMBER PERCENT
BENEFICIAL OWNER OF SHARES OF CLASS OF SHARES OF CLASS
- ---------------------------------- ----------------- ---------------- --------- ---------
<S> <C> <C> <C> <C>
Michael T. Fearnow . . . . . . . . 20,000 21 20,000 17.5 (2)
Focus-Tech Investments, Inc.
770 S. Post Oak Lane, Suite 515
Houston, Texas 77056

M. Stephen Roberts, Esq. . . . . . 20,000 21 20,000 17.5 (3)
770 S. Post Oak Lane, Suite 515
Houston, Texas 77056

Ruth Shepley . . . . . . . . . . . 20,000 21 20,000 17.5 (4)
7617 Del Monte
Houston, Texas 77063

Lighthouse Resources Inc.. . . . . 20,000 21 20,000 17.5 (5)
43 Bluewater Drive
Eureka Springs, Arkansas 72632

Officers and Directors as a Group. 20,000 21 20,000 17.5
(One person)
<FN>

_______________
(1) The ownership is of record unless otherwise noted.
(2) After the Merger, Mr. Fearnow would be deemed to be the beneficial owner of 20,000
shares of Common Stock of the Company that would be owned of record by Focus-Tech
Investments, Inc. and would be deemed the beneficial owner of and holder of Class A Options
to purchase an additional 20,000 shares of Common Stock of the Company.
(3) After the Merger, Mr. Roberts would own 20,000 shares of the Company's Common Stock
of record and would hold Class A Options to purchase an additional 20,000 shares.
(4) After the Merger, Ms. Shepley would own 20,000 shares of the Company's Common Stock
of record and would hold Class A Options to purchase an additional 20,000 shares.
(5) After the Merger, Lighthouse Resources Inc., an unrelated entity, would own 20,000
shares of the Company's Common Stock of record and would hold Class A Options to purchase an
additional 20,000 shares.
</TABLE>

<PAGE>
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES

Set forth below are the names, ages, and terms of office of each of the
directors, executive officers and significant employees of both the Company
and Flex Financial and a description of the business experience of each.

PERSON . . . . . . . . . OFFICE OFFICE HELD SINCE TERM OF OFFICE
- ------------------------ ------------------- ----------------- --------------
Flex Financial:
Michael T. Fearnow, 52 Director, President 1995 October 1997
and Secretary
The Company:
Michael T. Fearnow, 52 Director, President 1996 March 1998
and Secretary
</TABLE>

_______________
MICHAEL T. FEARNOW. Mr. Fearnow has been an independent securities
consultant to small to medium-sized growth companies in the field of
investment banking transactions, financial and broker relations, and publicly
underwritten securities since 1987. Mr. Fearnow obtained a degree in Business
Administration from the University of Kansas in 1967. He began his investment
banking career as an account executive with Merrill Lynch in 1972 and by 1978
had become a Senior Account Executive and Product Manager for new issues
underwriting. In 1978, Mr. Fearnow was a co-founder of Porcari, Fearnow &
Associates, Inc., a full service NASD broker-dealer. He served as chairman
from 1978 to 1987 and structured and participated in financing numerous
private placements, public underwritings, venture capital transactions and
tax-sheltered investments and specialized in areas of financial planning and
due diligence.

REMUNERATION OF DIRECTORS AND OFFICERS

THE COMPANY. Mr. Fearnow, the sole officer and director of the Company
is receiving no compensation for his services for the Company. No
compensation is proposed to be paid to any officer or director of the Company
prior to the proposed Merger with Flex Financial.

FLEX FINANCIAL. Mr. Fearnow, the sole officer and director of Flex
Financial, is receiving no compensation for his services for Flex Financial.
He is receiving no compensation for his services for the Company. No
compensation is proposed to be paid to any officer or director of the Company
prior to the proposed Merger with Flex Financial. Should the Merger be
effected, Mr. Fearnow shall be the sole director of the post-Merger Company.
There are no present plans, arrangements, or understandings concerning any
change in compensation for him after the Merger, should the Merger be
effected.

The following sets forth the 1995, 1996 and 1997 remuneration of the
president of Flex Financial and the 1998 remuneration payments proposed to be
made to the three highest paid persons who are officers of Flex Financial,
among whom the president is one:

SECURITIES
NAME OF INDIVIDUAL UNDERLYING
OR GROUP CAPACITY YEAR SALARY STOCK OPTIONS
- ------------------ --------- --------- ------- -------------
<S> <C> <C> <C> <C>
Michael T. Fearnow President 1995-1997 $ 0.00 0
Michael T. Fearnow President 1998 $ 0.00 0
</TABLE>

STOCK OPTIONS. The Company has granted no stock options.
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS.

Flex Financial entered into a financial consulting agreement with
Financial Public Relations, Ltd. pursuant to which FPR rendered investment
banking consulting services to the Company. The services rendered by FPR
included assistance in the development of Flex Financial's business plan,
initial development of a contact list of potential clients with respect to
Subordination and Bridge Loans, and development of a marketing strategy with
respect to its business operations. Mr. Roberts is the general partner and
owner of FPR. Mr. Fearnow is a principal of Focus-Tech Investments, Inc., a
Nevada corporation, that provides investment banking consulting services to
FPR. Under the terms of the agreement, the Company paid FPR $5,000. The
services rendered to the Company by FPR were primarily for the services of and
provided through Messrs. Roberts and Fearnow.

Pursuant to an understanding between Focus-Tech and Flex Financial,
Focus-Tech provided to Flex Financial such general and administrative
services, including the cost of the use of office space, personnel, facilities
and equipment, as required for Flex Financial's business in exchange for a
general and administrative services fee of $4,000 per month for the seven
month period ending December 31, 1996. Flex Financial shares a portion of
approximately 3,000 square feet of office space in premises occupied by
Focus-Tech and Financial Public Relations, Ltd. ("FPR") at 770 S. Post Oak
Lane, Suite 515, Houston, Texas 77056. In lieu of actual payments by Flex
Financial to Focus-Tech, Flex Financial directly paid expenses of Focus-Tech
in the amount of $19,109 and received credit for those payments against the
$28,000 in general and administrative services fees owed to Focus-Tech.
Management estimates that Flex Financial's expenses would have been
approximately $6,000 a month on a stand alone basis.

Until the closing of the Units Offering Focus-Tech will continue to
provide such space and services without charge to Flex Financial. Upon
closing of the Units Offering Focus-Tech has agreed to provide to the Company
such general and administrative services, which will include the cost of the
use of office space, personnel, facilities and equipment, as may be required
for the Company's business use on a monthly basis for a fee of $4,000 per
month and to make this space available as long as required for the use of the
Company. The Company believes that such space and services will be adequate
for the business of the Company into the foreseeable future. Focus-Tech has
agreed that its fee for providing such services shall be paid only out of 15%
of net Units Offering proceeds in excess of $200,000, and thereafter agrees to
accrue the monthly fee for payment solely out of the fees, interest earned and
earnings generated by the Company's business.

Mr. Roberts negotiated the Spinoff transaction with American NorTel and
throughout 1996 and 1997 has performed legal services in organizing the
Company and Flex Financial, with respect to private placements by Flex
Financial, with respect to the Merger and Spinoff transactions, and with
respect to registering the Merger and Spinoff transaction with the Securities
and Exchange Commission (the "Commission"). For these services and for
additional legal services Mr. Roberts is to perform with respect to the
Commission should the Merger be approved by Flex Financial, Mr. Roberts has
been paid $4,992 by the Company and $22,350 by Flex Financial through July 31,
1996, and $11,793 by Flex Financial through July 31, 1997. It is estimated
that Mr. Roberts will be paid a total of $35,000 by Flex Financial and the
Company with respect to services rendered in connection with registering the
Merger, Spinoff and Public Offering.

In connection with organizing the Company, FPR, a Texas limited
partnership wholly controlled by Mr. Roberts, paid an aggregate of $10,000 to
purchase a total of 40,000 shares of Common Stock at an average sales price of
$.25 per share. These Shares were purchased 20,000 shares for the account of
Mr. Roberts and 20,000 for the account of Focus-Tech Investments, Inc., a
Nevada corporation wholly owned by Mr. Fearnow. FPR delivered its promissory
note in the principal sum of $10,000, payable on demand and bearing interest
at 10%, to the Company in payment for the shares. On July 31, 1996 FPR paid
all principle and interest due on said note.

In February and March 1996 FPR borrowed $20,000 from Flex Financial
evidenced by two promissory notes bearing interest at 10% and secured by
marketable securities valued in excess of $100,000. Both notes were repaid
with interest on November 15, 1996.

From February through August 1996 Focus-Tech borrowed $13,000 from Flex
Financial evidenced by four promissory notes bearing interest at 10% and
secured by marketable securities valued in excess of $100,000. All four notes
were repaid with interest on November 15, 1996.
The Company and Flex Financial has retained Mr. Roberts for various
securities matters relating to its contemplated IPO for which it paid an
initial retainer of $5,000 plus hourly fees ranging form $50 to $150 per hour.
The Company believes that these services will be rendered on terms at least as
favorable as it could obtain from unaffiliated persons. In addition, Mr.
Roberts has and will act as corporate general counsel and has and will render
legal services regarding various corporate matters related thereto.

PARENTS

The direct parent of the Company is American NorTel Communications Inc.,
which owns all the issued and outstanding stock of the Company. No
shareholder of American NorTel owns sufficient stock to exercise control over
Flex Financial through stock ownership.

The parents of Flex Financial are its board of directors. No shareholder
of Flex Financial owns sufficient stock to exercise control over Flex
Financial through stock ownership.

<PAGE>
PLAN OF DISTRIBUTION

The Selected Broker-Dealer Agreement, a copy of which has been filed with
the Securities and Exchange Commission as an exhibit to the Registration
Statement provides in part as follows:

The Company has agreed to pay Selected Broker-Dealers (the "Selected
Broker-Dealers") a nonaccountable expense allowance of 2% of the sales price
of all Units sold in this offering from referrals by the Company and a
commission of 10% and a nonaccountable expense allowance of 2% of the sales
price of all other Units sold in this offering. The nonaccountable expense
allowance is limited to a maximum of $18,000 on all Units sold.

The obligation of the Selected Broker-Dealers to offer Units described
herein is subject to (a) the accuracy of the representations and warranties of
the Company contained in the Selected Broker-Dealer Agreement, (b) performance
by the Company of its obligations contained herein, (c) approval of certain
legal matters by the Selected Broker-Dealers or counsel for the Selected
Broker-Dealers and (d) the condition, among others, that a Registration
Statement on Form SB-2 shall have become effective with the U.S. Securities
and Exchange Commission. The Selected Broker-Dealers have agreed to
cross-indemnify the Company regarding certain matters. In the opinion of the
Securities and Exchange Commission, such indemnification is contrary to public
policy and therefore, unenforceable.

The Company is offering a minimum of 20,000 Units and a maximum of
100,000 Units at a purchase price of $6.00 per Unit. The Company has not
entered into any Selected Broker-Dealer Agreement with any NASD member. The
Selected Broker-Dealers have made no commitment to sell any of the Units
offered hereby and no assurance is given than any of the Units offered hereby
will be sold. The Selected Broker-Dealers will agree only to use their "best
efforts" to sell the Units offered hereby.

The proceeds from the sale of Units will be held in an Escrow Account at
Southwest Bank of Texas, N.A., Houston, Texas, until a minimum of 20,000 Units
have been sold. If at least 20,000 Units are not sold by 120 days from the
date of this Prospectus, which date may be extended for an additional period
of 60 days by the Company, the proceeds received from investors will be
promptly refunded to the investors in full without interest thereon and or
deduction of any kind therefrom, such as sales commissions or expenses of the
offering. Until the proceeds from the sale of at least 20,000 Units are
deposited in escrow investors will not be security holders nor able to demand
return of their subscription proceeds.

All purchasers' checks should be made payable to "Flex Acquisitions
Corporation - Escrow Account." Certificates evidencing Common Stock and
Warrants will be issued to purchasers only if the proceeds from the sale of at
least 20,000 Units are actually deposited in escrow and released to the
Company pursuant to the Escrow Agreement. Until such time as the proceeds are
actually received by the Company and the certificates delivered to the
purchasers thereof, such purchasers will be deemed subscribers and not
security holders of the Company. During the selling period, purchasers will
have no right to demand return of their subscription proceeds. If the minimum
proceeds are successfully obtained, the Units Offering will be continued until
completed, until the maximum period of the Units Offering has elapsed or until
the Units Offering is terminated by the Company, whichever occurs first.

PLAN OF MERGER

Set forth below is a copy of the Plan of Merger between the Company and
Flex Financial Group, Inc.:

PLAN AND AGREEMENT OF MERGER

PLAN AND AGREEMENT OF MERGER, dated as of July 1, 1996, between FLEX
ACQUISITIONS CORPORATION, a Texas corporation ("FAC") and FLEX FINANCIAL
GROUP, INC., a Texas corpora-tion ("FLEX FINANCIAL"); (all collectively called
the "Constituent Corporations").

The Boards of Directors of the Constituent Corporations deem it advisable
for the general welfare of the Constituent Corpora-tions and their respective
stockholders that the Constituent Cor-porations merge into a single
corporation pursuant to this Agree-ment and the Texas Business Corporation
Act.

The parties hereby agree as follows:

3. ab MERGER AND MODE OF CARRYING IT INTO EFFECT

1.1 Merger. The Constituent Corporations will be at the Effective
Date in the manner authorized and prescribed by the Texas Business Corporation
Act, merged into a single corporation, which corporation is FAC (hereinafter
sometimes called the "Surviving Corporation"), and the parties hereby adopt
the agreements, terms and conditions relating to the Merger and the mode of
carrying the same into ef-fect, which the parties covenant to observe, keep
and perform, set forth in this Agreement.

1.2 Effecting the Merger. This Agreement will be consummated and the
Merger effected by the filing of Articles of Merger as required by Texas law,
with the Secretary of State of the State of Texas, whereupon as of the
Effective Date the separate corporate existence of Flex Financial will cease
and Flex Financial will be merged with and into the Surviving Corporation.

1.3 Effective Date. As used in this Agreement, the term "Effective
Date" means the date Articles of Merger will have been filed with the
Secretary of State of the State of Texas, after satisfaction of the
requirements of the applicable law of such state prerequi-site to such filing.

1.4 Articles of Merger. Upon the approval of the merger by the
shareholders of FAC and by the shareholders of Flex Financial, the officers of
FAC shall file with the Secretary of State of the State of Texas Articles of
Merger pursuant to the provisions of Article 5.04 of the Texas Business
Corporation Act; provided, however, that at any time prior to the filing of
such Articles of Merger with the Secretary of State of Texas, the Plan may be
terminated by the board of directors of Flex Financial notwithstanding
approval of this Agreement by the stockholders of Flex Financial or of FAC.

2. ARTICLES OF INCORPORATION; BYLAWS; DIRECTORS AND OFFICERS

2.1 Articles of Incorporation. The Articles of Incorpora-tion of FAC
in effect on the date of this Agreement and the Effective Date will be the
Articles of Incorporation of the Surviving Corporation until altered or
amended as provided therein and by the laws of the State of Texas.

2.2 Bylaws. The bylaws of FAC on the Effective Date of the merger
shall be the bylaws of the Surviving Corporation.

2.3 Directors. The entire Board of Directors of the Surviving
Corporation will consist of those persons who comprise the Board of Directors
of FAC on the Effective Date; who, subject to the provisions of the bylaws of
the Surviving Corporation and the laws of the State of Texas will hold office
until the first an-nual meeting of stockholders of the Surviving Corporation
held subsequent to the Effective Date or until their respective suc-cessors
are elected and qualified.

2.4 Officers. The principal officers of the Surviving Corpora-tion,
from and after the Effective Date of the merger shall be the persons acting as
the principal officers of FAC on the Effective Date; who, subject to the
provisions of the bylaws of the Surviving Corporation and the laws of the
State of Texas, will hold office until the first meeting of the Board of
Direc-tors following the first annual meeting of stockholders of the Surviving
Corporation held subsequent to the Effective Date or until their respective
successors are elected and qualified.

3. APPROVAL OF MERGER

3.1 Stockholder Approvals. This Agreement shall be submitted
separately to the shareholders of the Constituent Corporations in the manner
provided by the laws of the State of Texas for approval and pursuant to any
applicable federal securities laws.

4. CONVERSION AND ISSUE OF SECURITIES.

The manner of converting the shares of each of the Constituent
Corporations into securities of the Surviving Corporation and re-lated
provisions are as follows:

A. All shares of capital stock of Flex Financial which shall be
issued and outstanding on the Effective Date shall, on the Effective Date, be
canceled and shall be converted into that number of shares of Common Stock,
par value $0.001 per share, of FAC.

B. All 20,000 shares of Common Stock, par value $0.001 per share, of
FAC which shall be outstanding immediately prior to the Effective Date shall,
on the Effective Date, continue to be outstanding.

C. All warrants and options of Flex Financial which shall be
outstanding on the Effective Date shall, on the Effective Date, be canceled
and shall be converted into warrants and options of FAC of equivalent tenor.

5. CERTAIN EFFECTS OF THE MERGER

At the Effective Date, the separate existence and corporate organization
of Flex Financial, except insofar as it may be continued by statute, shall
cease and FAC shall continue as the Surviving Corporation, which shall
succeed, without other transfer or further act or deed whatsoever, to all the
rights, property and assets of the Constituent Corporations and shall be
subject to and liable for all the debts and liabilities of each; otherwise,
its identity, existence, purposes, rights, immunities, properties, liabilities
and obligations shall be unaffected and unimpaired by the Merger except as
expressly provided herein.

6. TAX TREATMENT

The merger of FAC and Flex Financial shall be accomplished as a tax-free
reorganization as defined in Section 368(a)(1)(A) of the Internal Revenue Code
of 1986, as amended.

Executed on the 1st day of July, 1996, at Houston, Texas.

FLEX FINANCIAL GROUP, INC.

By:/s/ Michael T. Fearnow
------------------------
Michael T. Fearnow, President

FLEX ACQUISITIONS CORPORATION

By:/s/ M. Stephen Roberts
------------------------
M. Stephen Roberts, President

PART II

OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the costs and expenses, other than
underwriting commissions and the nonaccountable expense allowance. None of
the expenses are being paid by the distributing security holder, American
NorTel Communications, Inc. All expenses are being paid by Flex Financial
Group, Inc., the Company with which the Registrant proposes to Merger.

ITEM AMOUNT
- -------------------------- -------
<S> <C>
Registration fees. . . . . $ 3,000
Escrow agent's fee . . . . 1,750
Stock transfer agent's fee 4,000
Printing and engraving . . 5,000 (1)
Postage. . . . . . . . . . 4,000 (1)
Legal. . . . . . . . . . . 35,000
Accounting . . . . . . . . 15,000
Moodys publication fee . . 3,500
TOTAL . . . . . . . . $71,250
<FN>
(1) Estimate
</TABLE>

INDEMNIFICATION OF DIRECTORS AND OFFICERS

There is set forth in the Prospectus under "Terms of The Transaction -
Special Provisions of The Articles of Incorporation And Texas Law" a
description of the laws of Texas with respect to the indemnification of
officers, directors, and agents of corporations incorporated in Texas.

The Company has charter provisions and bylaw provisions that insure or
indemnify, to the full extent allowed by the laws of Texas, directors,
officers, employees, agents or persons serving in similar capacities in other
enterprises at the request of the Company.

To the extent of the indemnification rights provided by the Texas
statutes and provided by the Company's charter and bylaws, and to the extent
of the Company's abilities to meet such indemnification obligations, the
officers, directors and agents of the Company would be beneficially affected.

RECENT SALES OF UNREGISTERED SECURITIES

On March 31, 1996, the Registrant issued its convertible subordinated
redeemable note ("Flex Note") in the principal sum of $4,000 to Flex
Financial. The Flex Note bears 10% interest with principal and interest due
March 31, 1998 and is convertible into Common Stock at a conversion price of
$.05 per share. If the Merger is consummated the Flex Note be eliminated as
part of the transaction. If the Merger or any other merger is not effected
within 18 months of the effective date of the S-4 registration statement, Flex
Financial has agreed to convert the Flex Note into Common Stock of the Company
and exercise its voting rights to cause a dissolution of the Company.

On September 1, 1996 the Registrant issued 20,000 shares of its Common
Stock to its corporate parent, American NorTel Communications, Inc., a Wyoming
corporation, for a cash consideration of $1,000 received on April 12, 1996.
This is the only issuance of Common Stock by the Registrant, which remains a
wholly-owned subsidiary of American NorTel Communications, Inc.

There was no underwriter, and the securities were not offered to any
person other than American NorTel Communications, Inc.

The securities were not registered under the Securities Act of 1933 in
reliance upon the exemption from registration provided by Section 4(2) of the
Securities Act. It is believed that Congress never intended, in enacting the
Securities Act, that a corporation needs the protection of the registration
provisions of the Securities Act when it organizes a wholly-owned subsidiary
corporation whose directions and policies will be established and governed by
the corporate parent.

The following is a summary of the transactions by Flex Financial since
its incorporation on August 17, 1995, involving sales of its securities that
were not registered under the Securities Act of 1933, as amended (the
"Securities Act"):

In October, 1995, the founding shareholders of Flex Financial (Focus-Tech
Investments, Inc., M. Stephen Roberts, Ruth Shepley and Lighthouse Resources
Inc.) received 80,000 shares of Common Stock for a consideration of $.25 per
share. The issuance of these 80,000 shares was deemed exempt from
registration under the Securities Act in reliance on Section 4(2) of such Act.
In addition, the recipients of the 80,000 shares of founders' Common Stock
represented their intentions to acquire the securities for investment only and
not with a view to or for sale in connection with any distribution thereof and
appropriate legends were affixed to the share certificates.

On or about October 31, 1995, Flex Financial closed a $50,000 bridge loan
with two investors. Flex Financial issued $50,000 principal amount of 10%
subordinated notes ("Notes") and Unit Purchase Options ("Option Units"). The
Option Units entitle the holders to purchase such number of equivalent units
of the Company's securities as may be offered in an initial public offering at
an aggregate offering price of at least $60,000 pursuant to an effective
registration statement filed under the Securities Act and that closes prior to
June 30, 1996. The number of equivalent units purchasable at a price of $.50
per unit is determined by dividing the IPO unit offering price into the
principal amount of Notes. Effective October 15, 1996, the Notes and other
agreements were amended to increase the number of Option Units available and
to extend maturity dates to March 31, 1997. Effective June 13, 1997, the
Notes and other agreements were amended to increase the number of Option Units
purchasable to 16,333 and to extend maturity dates of the Notes to the earlier
of the closing date of an IPO at an aggregate offering price of at least
$60,000 pursuant to an effective registration statement filed under the Act
and that closes prior to March 31, 1998, or March 31, 1998. Issuance of the
Notes and Option Units were deemed exempt from registration under the
Securities Act in reliance on Section 4(2) of such Act. In addition, the
recipients of the notes and options represented their intentions to acquire
the securities for investment only and not with a view to or for sale in
connection with any distribution thereof and appropriate legends were affixed
to the securities.

On or about April 21, 1996, Flex Financial closed a $67,200 offering of
14,000 Units, each Unit consisting of 1 share of Common Stock, 2 Class B
Warrants and 2 Class C Warrants. The issuance of the 14,000 shares of Common
Stock at $4.80 per share were deemed exempt from registration under the
Securities Act in reliance on Rule 506 promulgated under the Securities Act.

All recipients had adequate access to information about the Flex
Financial, and the recipients represented their intentions to acquire the
securities for investment only and not with a view to or for sale in
connection with any distribution thereof and appropriate legends were affixed
to the share certificates. Flex Financial believes that all of the purchasers
of the Common Stock in this offering at $4.80 per Unit were accredited
investors as defined in Rule 501 promulgated under the Securities Act.

<PAGE>
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

Separately bound but filed as part of this Form SB-2 Registration
Statement are the following exhibits. There are no financial statement
schedules required by Regulation S-B.
<TABLE>
<CAPTION>

EXHIBIT
ITEM
- -------
<S> <C> <C>
1.1 . . - Form of Underwriting Agreement (3)
1.2 . . - Form of Selected Broker-Dealer Agreement (2)
2.1 . . - Agreement of Merger of July 1, 1996 between Flex Acquisitions Corporation And Flex
Financial Group, Inc. (1)
2.2 . . - Business Combination-Spinoff Agreement of June 30, 1996 among Flex Acquisitions
Corporation; Flex Financial Group, Inc.; and American NorTel Communications, Inc. (1)
3.1 . . - Certificate of Incorporation of Flex Acquisitions Corporation (1)
3.2 . . - Certificate of Incorporation of Flex Financial Group, Inc. and amendments thereto. (1)
3.3 . . - Bylaws of Flex Acquisitions Corporation (1)
3.4 . . - Bylaws of Flex Financial Group, Inc. (1)
4.1 . . - Form of Class B Redeemable Common Stock Purchase Warrant**
4.2 . . - Form of Class C Redeemable Common Stock Purchase Warrant**
4.3 . . - Form of Class A Unit Purchase Options (deleted)
4.4 . . - Form of Common Stock Purchase Options (deleted)
4.5 . . - Form of Unit Purchase Options**
4.6 . . - Form of Class A Common Stock Purchase Options**
5.1 . . - Opinion of M. Stephen Roberts, Esq., as to the legality of the securities covered by the Form
S-4 and Form SB-2 Registration Statements**
8.1 . . - Opinion of M. Stephen Roberts, Esq., as to tax matters and tax consequences to the
shareholders**
10.1. . - Escrow Agreement among Flex Acquisitions Corporation; American NorTel Communications,
Inc., and Southwest Bank of Texas N.A. (1)
10.2. . - Agreement of Flex Financial relating to compliance with S.E.C. Rule 419**
23.1. . - Consent of M. Stephen Roberts, Esq., to the reference to him as an attorney who has passed
upon certain information contained in the Registration Statement**
23.2. . - Consent of Harper & Pearson Company, independent auditors of Flex Acquisitions Corporation
(superceded by Exhibit 23.4)
23.3. . - Consent of Harper & Pearson Company, independent auditors of Flex Financial Group, Inc.
(superceded by Exhibit 23.5)
23.4 - Consent of Harper & Pearson Company, independent auditors of Flex Acquisitions Corporation
(superceded by Exhibit 23.6)
23.5. . - Consent of Harper & Pearson Company, independent auditors of Flex Financial Group, Inc.
(superceded by Exhibit 23.7)
23.6. . - Consent of Harper & Pearson Company, independent auditors of Flex Acquisitions
Corporation**
23.7. . - Consent of Harper & Pearson Company, independent auditors of Flex Financial Group, Inc.**
27.1. . - Financial Data Schedule. (superceded by Exhibit 27.2)
27.2. . - Financial Data Schedule.**
<FN>
**Filed herewith.
(1) Previously filed as an Exhibit to this Registration Statement filed on Form SB-2 on November 29,
1996.
(2) Previously filed as an Exhibit to this Registration Statement, as Amendment No. 1 to Form SB-2,
filed on June 23, 1997.
(3) Deleted.
</TABLE>

<PAGE>
UNDERTAKINGS

Flex Acquisitions Corporation will:

1. File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:

(i) include any prospectus required by Section 10(a)(3) of the
Securities Act;

(ii) reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
the registration statement; and

(iii) include any additional or changed material information on
the plan of distribution.

2. For determining liability under this Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering.

3. File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 ("the Act") may be permitted to directors, officers and
controlling persons of Flex Acquisitions Corporation pursuant to the foregoing
provisions, or otherwise, Flex Acquisitions Corporation has been advised that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable.

In the event that a claim for indemnification against such liabilities
(other than the payment by Flex Acquisitions Corporation of expenses incurred
or paid by a director, officer or controlling person of Flex Acquisitions
Corporation in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, Flex Acquisitions Corporation will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

Flex Acquisitions Corporation hereby undertakes to respond to requests
for information that is incorporated by reference into the Prospectus-Proxy
Statement pursuant to Item 4 of this Form, within one business day of receipt
of such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.

Flex Acquisitions Corporation hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Houston, Texas on
September 12, 1997.

FLEX ACQUISITIONS CORPORATION

By: /s/Michael T. Fearnow
-----------------------
Michael T. Fearnow
Chief Executive Officer, President and
Chairman of the Board of Directors
(Principal Executive Officer)

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

FLEX ACQUISITIONS CORPORATION

By: /s/Michael T. Fearnow
-----------------------
Michael T. Fearnow
Chief Executive Officer, President,
Chief Financial Officer, Chairman
of the Board of Directors, and Director
(Principal Executive Officer)
(Principal Financial and
Accounting Officer)

Date: September 12, 1997

<PAGE>
FLEX ACQUISITIONS CORPORATION
EXHIBIT INDEX
TO
AMENDMENT NO. 2
TO
FORM SB-2
REGISTRATION STATEMENT
<TABLE>
<CAPTION>

EXHIBIT NO. DESCRIPTION PAGE
<C> <S> <C>
4.1 Form of Class B Redeemable Common Stock Purchase Warrant
4.2 Form of Class C Redeemable Common Stock Purchase Warrant
4.5 Form of Unit Purchase Options
4.6 Form of Class A Common Stock Purchase Options
5.1 Opinion of M. Stephen Roberts, Esq., as to the legality of the securities covered by the
Form S-4 and Form SB-2 Registration Statements
8.1 Opinion of M. Stephen Roberts, Esq., as to tax matters and tax consequences to the
shareholders
10.2 Agreement of Flex Financial relating to compliance with S.E.C. Rule 419
23.1 Consent of M. Stephen Roberts, Esq., to the reference to him as an attorney who has
passed upon certain information contained in the Prospectus Statement
23.6 Consent of Harper & Pearson Company, independent auditors of Flex Acquisitions
Corporation
23.7 Consent of Harper & Pearson Company, independent auditors of Flex Financial Group,
Inc.
27.2 Financial Data Schedule
</TABLE>

<PAGE>
ALTERNATE PROSPECTUS

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED ____________________

FLEX ACQUISITIONS CORPORATION
(a Texas corporation)

20,000 Shares of Common Stock
(Par Value, $0.001 per Share)

(These 20,000 Shares are for the account of a Distributing Shareholder)

Flex Acquisitions Corporation ("Company") is registering, by means of
this prospectus, 20,000 shares of Common stock to be distributed by American
NorTel Communications, Inc. ("American NorTel"), the corporate parent of the
Company, to its shareholders by dividend (the "Spinoff").

Concurrently with the Spinoff, the Company is offering, by means of a
separate prospectus, 100,000 Units ("Units Offering" or "Concurrent Public
Offering"), each Unit consisting of one share of common stock, $.001 par value
("Common Stock"), and four Common Stock purchase warrants ("Class B Warrants"
and "Class C Warrants", collectively, the "Warrants"). The shares of Common
Stock and Warrants included in the Units are immediately detachable,
separately transferable and separately tradeable as of the date of this
Prospectus. The Units will not be tradeable. All Units offered thereby are
being sold by the Company. See "CONCURRENT PUBLIC OFFERING"

Any closing of the Units Offering is conditioned upon the consummation of
certain transactions, including the merger of the Company and another
corporation with a similar name, Flex Financial Group, Inc. ("Flex
Financial"). The proposed Merger is being registered with the Securities and
Exchange Commission ("the SEC") simultaneously with the registration of the
offering of Units and the Spinoff described herein. See "SUMMARY OF PROPOSED
TRANSACTIONS."

Prior to this offering, there has been no public market for the Common
Stock or Warrants and there can be no assurance that such a market will
develop after the completion of this offering or, if developed, that it will
be sustained. The initial public offering price of the Shares and the
Warrants and the exercise price and other terms of the Warrants have been
arbitrarily determined by the Company and will not necessarily be related to
the assets, book value or any other established criterion of value. See "RISK
FACTORS".

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" COMMENCING ON PAGE 12
____________________________________

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
____________________________________

UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND ISSUER OR
RECIPIENT COMMISSIONS OTHER PERSON(1)
<S> <C> <C> <C>
Per Share. . . . . . $ .04(2) $ 0 $ .04
Total: 20,000 Shares $ 800.00(3) $ 0 $ 800.00
- -------------------- ----------- -------------- ----------------
<FN>
The date of this Prospectus is _________________, 1997

(1) The estimated expenses of the transaction described herein are $10,000
all of which is being borne by Flex Financial Group, Inc. ("Flex Financial"),
a corporation with whom the Company proposes to merge. These expenses are
primarily federal and state registration fees and legal fees.

(2) Based upon the book value of Flex Financial on July 31, 1997.

(3) These 20,000 Shares are owned by American NorTel Communications, Inc.
("American NorTel"), a shareholder of the Company. These Shares will be
distributed to an escrow agent (the "Spinoff") for distribution to the
approximately 780 shareholders of American NorTel at such time as (i) a
proposed merger (the "Merger") between the Company and Flex Financial Group,
Inc., a Texas corporation ("Flex Financial") should be effected, (ii) this
Prospectus is supplemented to indicate the date the Merger was effected, and
(iii) information concerning the surviving Company shall have been made
available to the public and the National Association of Securities Dealers
member firms. See "THE ESCROW ARRANGEMENT."
</TABLE>

The Company is not a "reporting company," as such term is employed in the
Securities Exchange Act of 1934. It is not listed on any exchange, and its
Common Stock is not eligible for quotation on the NASDAQ Small-Cap Market
("NASDAQ"). There presently is no public market for the Common Stock of the
Company, and there can be no assurance that such a market will develop or can
be sustained should there be a completion of the proposed Merger. Should the
proposed Merger not be effected, there will be no public market for the
securities of the Company because of the above-described escrow arrangement.
See "SUMMARY OF PROPOSED TRANSACTIONS - The Escrow Arrangement." Should the
proposed Merger be effected, the Company intends to register pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as amended, (become a
"reporting company") and, in accordance therewith, will file reports, proxy
statements, and other information with the Securities and Exchange Commission
(the "Commission"). The Company intends to furnish its shareholders with
annual reports containing audited financial statements and such other periodic
reports as the Company deems appropriate or may be required by law.

<PAGE>
ALTERNATE PROSPECTUS PAGE

CONCURRENT PUBLIC OFFERING

The Registration Statement, of which this Prospectus form a part,
contains a separate prospectus with respect to a concurrent public offering
(the "Concurrent Public Offering" or "Units Offering") by the Company of
100,000 Units, each Unit consisting of one share of common stock, $.001 par
value ("Common Stock"), and four Common Stock purchase warrants ("Class B
Warrants" and "Class C Warrants", collectively, the "Warrants").

<PAGE>
EXHIBIT 4.1

FORM OF CLASS B COMMON STOCK PURCHASE WARRANT

CLASS B COMMON STOCK PURCHASE WARRANT

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933 (
"ACT") OR APPLICABLE STATE SECURITIES LAWS ("STATE ACTS") AND SHALL NOT BE
SOLD, PLEDGED, HYPOTHECATED, DONATED, OR OTHERWISE TRANSFERRED (WHETHER OR NOT
FOR CONSIDERATION ) BY THE HOLDER EXCEPT UPON THE ISSUANCE TO THE COMPANY OF A
FAVORABLE OPINION OF COUNSEL OR SUBMISSION TO THE COMPANY OF SUCH EVIDENCE AS
MAY BE SATISFACTORY TO COUNSEL TO THE COMPANY, IN EACH SUCH CASE, TO THE
EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT AND THE
STATE ACTS.

WARRANT TO PURCHASE ______________ SHARES OF COMMON STOCK

FLEX FINANCIAL GROUP, INC.
( a Texas corporation )
770 S. Post Oak Lane, Suite 515
Houston, Texas 77056

Not Transferable or Exercisable Except
upon Conditions Herein Specified

FLEX FINANCIAL GROUP, INC., a Texas corporation ("Company"), hereby
certifies that __________________________________________, his registered
successors and permitted assigns registered on the books of the Company
maintained for such purposes, as the registered holder hereof ("Holder"), for
value received, the receipt of which is acknowledged, is entitled to purchase
from the Company the number of fully paid and nonassessable shares of Common
Stock of the Company, $.01 par value ("Shares"), stated above at the purchase
price per Share set forth in Section 1 (b) below ("Exercise Price") (the
number of Shares and Exercise Price being subject to adjustment as hereinafter
provided) upon the terms and conditions herein provided.

1. Exercise of Warrants.

(a) Subject to subsection (b) of this Section 1, upon
presentation and surrender of this Warrant Certificate, with the attached
Purchase Form duly executed, at the principal office of the Company, or at
such other place as the Company may designate by notice to the Holder hereof,
together with a certified or bank cashier 's check payable to the order of the
Company in the amount of the Exercise Price times the number of Shares being
purchased, the Company shall deliver to the Holder hereof, as promptly as
practicable, certificates representing the Shares being purchased. This
Warrant may be exercised in whole or in part; and, in case of exercise hereof
in part only, the Company, upon surrender hereof, will deliver to the Holder a
new Warrant Certificate or Warrant Certificates of like tenor entitling the
Holder to purchase the number of Shares as to which this Warrant has not been
exercised.

(b) Unless adjusted as otherwise provided herein, the Exercise
Price of each share of Common Stock underlying the Warrant issued hereunder
shall be $6.25. The exercise Price may be adjusted by the Company pursuant to
subsection (d) or (f).

(c) This warrant may be exercised at any time on and after the
date hereof until the expiration of the Warrant at 5:00 p.m., Houston, Texas
time, on January 1, 2001, or such later date as may be established pursuant
to subsection (d).

(d) At any time or from time to time prior to the expiration
date then in effect, the Company may, in its sole discretion, extend the
expiration date to provide for an additional period or periods during which
the Warrant may be exercised as the Company, in its sole discretion may elect.
In connection with any such extension of the expiration date, the Company may,
in its sole discretion, increase or decrease the exercise price payable during
any such extension.

(e) The Company may in its sole discretion call the Warrants at
any time after January 1, 1997, by paying Warrant Holders $.05 per Warrant, if
the shares of Common Stock have traded at $7.50 per share for 30 consecutive
trading days. Notice of the call will be mailed to all Warrant Holders at
least 30 days but no more than 60 days before the date on which the Warrants
have been called.

(f) The Board of Directors retains the right, upon giving
written notice to the Warrant Holders, to reduce the Exercise Price of the
Warrants.

2. Exchange and Transfer of Warrant.

At any time prior to the exercise hereof, upon presentation and
surrender to the Company, this Warrant (a) may be exchanged, alone or with
other Warrants of like tenor registered in the name of the Holder, for another
Warrant or other Warrants of like tenor in the name of such Holder exercisable
for the same aggregate number of Shares as the Warrant or Warrants
surrendered, but (b) may not be sold, transferred, hypothecated, or assigned,
in whole or in part, without the prior written consent of the Company. The
Company will not unreasonably withhold such consent.

3. Rights and Obligations of Warrant holder.

(a) The Holder of this Warrant Certificate shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at
law or in equity; provided, however, that in the event that any certificate
representing the Shares is issued to the Holder hereof upon exercise of this
Warrant, such Holder shall, for all purposes, be deemed to have become the
holder of record of such Shares on the date on which this Warrant Certificate,
together with a duly executed Purchase Form, was surrendered and payment of
the Exercise Price was made, irrespective of the date of delivery of such
Share certificate. The rights of the Holder of this Warrant are limited to
those expressed herein and the Holder of this Warrant, by his acceptance
hereof, consents to and agrees to be bound by and to comply with all the
provisions of this Warrant Certificate, including, without limitation, all the
obligations imposed upon the Holder hereof by Sections 2 and 5 hereof. In
addition, the Holder of this Warrant Certificate, by accepting the same,
agrees that the Company may deem and treat the person in whose name this
Warrant Certificate is registered on the books of the Company maintained for
such purposes as the absolute, true and lawful owner for all purposes
whatsoever, notwithstanding any notation of ownership or other writing
thereon, and the Company shall not be affected by any notice to the contrary.

(b) No Holder of this Warrant Certificate, as such, shall be
entitled to vote or receive dividends or to be deemed the holder of Shares for
any purpose, nor shall anything contained in this Warrant Certificate be
construed to confer upon any Holder of this Warrant Certificate, as such, any
of the rights of a stockholder of the Company or any right to vote, give or
withhold consent to any action by the Company, whether upon any
recapitalization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise, receive notice of meetings or other action
affecting stockholders (except for notices provided for herein), receive
dividends, subscription rights, or otherwise, until this Warrant shall have
been exercised and the Shares purchasable upon the exercise thereof shall have
become deliverable as provided herein; provided, however, that any such
exercise on any date when the stock transfer books of the Company shall be
closed shall constitute the person or persons in whose name or names the
certificate or certificates for those Shares are to be issued as the record
holder or holders thereof for all purposes at the opening of business on the
next succeeding day on which such stock transfer books are open, and the
Warrant surrendered shall not be deemed to have been exercised, in whole or in
part as the case may be, until the next succeeding day on which stock transfer
books are open for the purpose of determining entitlement to dividends on the
Company's common stock.

4. Shares Underlying Warrants.

The Company convents and agrees that all Shares delivered upon
exercise of this Warrant shall, upon delivery and payment therefor, be duly
and validly authorized and issued, fully paid and nonassessable, and free from
all stamp taxes, liens and charges with respect to the purchase thereof. In
addition, the Company agrees at all times to reserve and keep available an
authorized number of Shares sufficient to permit the exercise in full of this
Warrant.

5. Disposition of Warrants or Shares.

(a) The Holder of this Warrant Certificate and any transferee
hereof or of the Shares issuable upon the exercise of the Warrant Certificate,
by their acceptance hereof, hereby understand and agree that the Warrant, and
the Shares issuable upon the exercise hereof, have not been registered under
either the Securities Act of 1933 ("Act") or applicable state securities laws
("State Acts") and shall not be sold, pledged, hypothecated, donated or
otherwise transferred (whether or not for consideration) except upon the
issuance to the Company of a favorable opinion of counsel or submission to the
Company of such evidence as may be satisfactory to counsel to the Company, in
each such case, to the effect that any such transfer shall not be in violation
of the Act and the State Acts. It shall be a condition to the transfer of this
Warrant that any transferee of this Warrant deliver to the Company his written
agreement to accept and be bound by all of the terms and conditions of this
Warrant Certificate.

(b) The stock certificates of the Company that will evidence the
shares of Common Stock with respect to which this Warrant may be exercisable
will be imprinted with a conspicuous legend in substantially the following
form:

"The securities represented by this certificate have not been registered under
either Securities Act of 1933 ("Act") or applicable state securities laws
("State Act") and shall not be sold, pledged, hypothecated, donated or
otherwise transferred (whether or not for consideration) by the holder except
upon the issuance to the Company of a favorable opinion of its counsel or
submission to the Company of such other evidence may be satisfactory to
counsel of the Company, in each such case, to the effect that any such
transfer shall not be in violation of the Act and the State Acts."

6. Adjustments.

The number of Shares purchasable upon the exercise of each Warrant
is subject to adjustment from time to time upon the occurrence of any of the
events enumerated below:

(a) In case the Company shall: (i) pay a dividend in Shares,
(ii) subdivide its outstanding Shares into a greater number of Shares, or
(iii) combine its outstanding Shares into a smaller number of Shares, the
amount of Shares purchasable upon the exercise of each Warrant immediately
prior thereto shall be adjusted so that the Holder shall be entitled to
receive upon exercise of the Warrant that number of Shares which such Holder
would have owned or would have been entitled to receive after the happening of
such event had such Holder exercised the Warrant immediately prior to the
record date, in the case of such dividend, or the effective date, in the case
of such subdivision or combination. An adjustment made pursuant to this
subsection (a) shall be made whenever any of such events shall occur, but
shall become effective retroactively after such record date or such effective
date, as the case may be, as to Warrants exercised between such record date or
effective date and the date of happening of any such event.

(b) Whenever the number of Shares purchasable hereunder is adjusted
as herein provided, the Company shall cause to be mailed to the Holder in
accordance with the provisions of this Section 6 a notice (i) stating that the
number of Shares purchasable upon exercise of this Warrant have been adjusted,
(ii) setting forth the adjusted number of Shares purchasable upon the exercise
of a Warrant, and (iii) showing in reasonable detail the computations and the
facts, including the amount of consideration received or deemed to have been
received by the Company, upon which such adjustments are based.

7. Loss or Destruction.

Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant Certificate and, in the case
of any such loss, theft or destruction, upon delivery of an indemnity
agreement or bond satisfactory in form, substance and amount to the Company
or, in the case of any such mutilation, upon surrender and cancellation of
this Warrant Certificate, the Company at its expense will execute and deliver,
in lieu thereof, a new Warrant Certificate of like tenor.
8. Survival.

The various rights and obligations of the Holder hereof as set forth
herein shall survive the exercise of the Warrants represented hereby and the
surrender of this Warrant Certificate.

9. Notices.

Whenever any notice, payment of any purchase price, or other
communication is required to be given or delivered under the terms of this
Warrant, it shall be in writing and delivered by hand delivery or United
States registered or certified mail, return receipt requested, postage prepaid
(or similar delivery if outside of the United States), and will be deemed to
have been given or delivered on the date such notice, purchase price or other
communication is so delivered or posted, as the case may be; and, if to the
Company, it will be addressed to the address specified in Section 1 hereof,
and if to the Holder, it will be addressed to the registered Holder at its,
his or her address as it appears on the books of the Company.

FLEX FINANCIAL GROUP, INC.

By:__________________________________________
MICHAEL T. FEARNOW, President

Dated: ________________, 1997

HOLDER:

__________________________________________

Dated: ________________, 1997

<PAGE>
PURCHASE FORM

________________, 19____

TO: FLEX FINANCIAL GROUP, INC.
770 S. Post Oak Lane, Suite 515
Houston, TX 77056

The undersigned hereby irrevocably elects to exercise the attached Class
B Warrant Certificate to the extent of ____________________________ shares of
the Common Stock, $.01 par value, of FLEX FINANCIAL GROUP, INC., and hereby
makes payment of $________________________ in accordance with the provisions
of Section 1 of the Warrant Certificate in payment of the purchase price
thereof.

INSTRUCTIONS FOR REGISTRATION OF STOCK

Name:____________________________________________________________
(please type or print)

Address:_________________________________________________________

_________________________________________________________

Social Security Number:__________________________________________

By______________________________________
Holder

<PAGE>
EXHIBIT 4.2

FORM OF CLASS C COMMON STOCK PURCHASE WARRANT

CLASS C COMMON STOCK PURCHASE WARRANT

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933 (
"ACT") OR APPLICABLE STATE SECURITIES LAWS ("STATE ACTS") AND SHALL NOT BE
SOLD, PLEDGED, HYPOTHECATED, DONATED, OR OTHERWISE TRANSFERRED (WHETHER OR NOT
FOR CONSIDERATION) BY THE HOLDER EXCEPT UPON THE ISSUANCE TO THE COMPANY OF A
FAVORABLE OPINION OF COUNSEL OR SUBMISSION TO THE COMPANY OF SUCH EVIDENCE AS
MAY BE SATISFACTORY TO COUNSEL TO THE COMPANY, IN EACH SUCH CASE, TO THE
EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT AND THE
STATE ACTS.

WARRANT TO PURCHASE ______________ SHARES OF COMMON STOCK

FLEX FINANCIAL GROUP, INC.
(a Texas corporation)
770 S. Post Oak Lane, Suite 515
Houston, Texas 77056

Not Transferable or Exercisable Except
upon Conditions Herein Specified

FLEX FINANCIAL GROUP, INC., a Texas corporation ("Company"), hereby
certifies that __________________________________________, his registered
successors and permitted assigns registered on the books of the Company
maintained for such purposes, as the registered holder hereof ("Holder"), for
value received, the receipt of which is acknowledged, is entitled to purchase
from the Company the number of fully paid and nonassessable shares of Common
Stock of the Company, $ .01 par value ("Shares"), stated above at the purchase
price per Share set forth in Section 1 (b) below ("Exercise Price") (the
number of Shares and Exercise Price being subject to adjustment as hereinafter
provided) upon the terms and conditions herein provided.

1. Exercise of Warrants.

(b) Unless adjusted as otherwise provided herein, the Exercise
Price of each share of Common Stock underlying the Warrant issued hereunder
shall be $10.00. The exercise Price may be adjusted by the Company pursuant to
subsection (d) or (f).

(e) The Company may in its sole discretion call the Warrants at
any time after January 1, 1997, by paying Warrant Holders $.05 per Warrant, if
the shares of Common Stock have traded at $12.00 per share for 30 consecutive
trading days. Notice of the call will be mailed to all Warrant Holders at
least 30 days but no more than 60 days before the date on which the Warrants
have been called.

(f) The Board of Directors retains the right, upon giving
written notice to the Warrant Holders, to reduce the Exercise Price of the
Warrants.

2. Exchange and Transfer of Warrant.

3. Rights and Obligations of Warrant holder.

4. Shares Underlying Warrants.

6. Adjustments.

The number of Shares purchasable upon the exercise of each Warrant
is subject to adjustment from time to time upon the occurrence of any of the
events enumerated below:

7. Loss or Destruction.

8. Survival.

The various rights and obligations of the Holder hereof as set forth
herein shall survive the exercise of the Warrants represented hereby and the
surrender of this Warrant Certificate.

9. Notices.

FLEX FINANCIAL GROUP, INC.

By:__________________________________________
MICHAEL T. FEARNOW, President

Dated: _____________________, 1997

HOLDER:

___________________________________

Dated: _____________________, 1997

<PAGE>

PURCHASE FORM

________________, 19____

TO: FLEX FINANCIAL GROUP, INC.
770 S. Post Oak Lane, Suite 515
Houston, TX 77056

The undersigned hereby irrevocably elects to exercise the attached Class
C Warrant Certificate to the extent of ____________________________ shares of
the Common Stock, $.01 par value, of FLEX FINANCIAL GROUP, INC., and hereby
makes payment of $________________________ in accordance with the provisions
of Section 1 of the Warrant Certificate in payment of the purchase price
thereof.

INSTRUCTIONS FOR REGISTRATION OF STOCK

Name:____________________________________________________________
(please type or print)

Address:_________________________________________________________

_________________________________________________________

Social Security Number:__________________________________________

By______________________________________
Holder

<PAGE>
EXHIBIT 4.5

FORM OF UNIT PURCHASE OPTION

THE REGISTERED HOLDER OF THIS OPTION BY ITS ACCEPTANCE HEREOF, AGREES THAT IT
WILL NOT SELL, ASSIGN, PLEDGE, HYPOTHECATE OR OTHERWISE TRANSFER THIS OPTION
EXCEPT AS HEREIN PROVIDED. THIS OPTION HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR UNDER THE SECURITIES LAWS OF
ANY STATE.

VOID AFTER 5:00 P.M. HOUSTON TIME, December 31, 1996

OPTION AGREEMENT

This Option Agreement (the "Agreement") is dated as of the ______ day of
October, 1995, between FLEX FINANCIAL GROUP, INC., a Texas corporation, with
its principal executive offices located at 770 South Post Oak Lane, Suite 515,
Houston, Texas 77056 ("FLEX") and ___________________________________________,
_
________________ ("________________" and the "Registered Holder").

WHEREAS, the Company and the Registered Holder are parties to an
Agreement, dated _________________________, 1995, between the Company and the
Registered Holder, under which the Holder has subscribed for certain Notes of
the Company and which Agreement provides for the issuance of options to
purchase units of the Company's securities on terms and conditions as more
fully set forth herein; and

WHEREAS, the Company desires to provide for issuance of option
certificates (the "Option Certificates") on such terms and conditions as are
more fully set forth herein, and

NOW, THEREFORE, in consideration of the promises and mutual agreements
hereinafter set forth it is agreed that:

1. Options/Option Certificates. Each Option shall entitle the holder
(the "Registered Holder" or in the aggregate, the "Registered Holders") in
whose name the Option Certificate shall be registered on the books maintained
by the Company to purchase such number of equivalent units of securities
("Option Units" or "Option Shares") offered by the Company in an initial
public offering of its securities at an aggregate offering price of at least
$60,000 pursuant to an effective registration statement filed under the
Securities Act of 1933, as amended ("Act"), that closes prior to June 30, 1996
(the "IPO") Shares"), as determined by dividing the principal amount of Notes
subscribed for by the Registered Holder by the IPO Unit offering price,
subject to modification and adjustment as provided in Section 7. The Option
Certificate representing the right to purchase Option Units shall be executed
by the Chief Executive Officer or President and attested to by the Company's
Secretary or Assistant Secretary and delivered to the Registered Holder upon
execution of this Agreement.

Subject to the provisions of Sections 3, 5 and 6, the Company shall
deliver Option Certificates in required whole number denominations to
Registered Holders in connection with any transfer or exchange permitted under
this Agreement. Except as provided in Section 6 hereof, no Option
Certificates shall be issued except (i) Option Certificates initially issued
hereunder, (ii) Option Certificates issued on or after the initial issuance
date, upon the exercise of any Options, to evidence the unexercised Options
held by the exercising Registered Holder; or (iii) Option Certificates issued
after the initial issuance date upon any transfer or exchange of Option
Certificates or replacement of lost or mutilated Option Certificates.

3. Exercise. Subject to the provisions of Sections 4 and 7, the
Options, when evidenced by a Option Certificate and such other documents as
the Company may require, may be exercised at a price (the "Exercise Price") of
$.50 per Unit (the "Option Exercise Price"). Each Option may be exercised in
whole or in part at any time during the period commencing on the earlier of
the effective date of the IPO or January 1, 1996 and terminating at 5:00 p.m.
Houston, Texas time on December 31, 1996 (the "Termination Date"). Each
Option shall be deemed to have been exercised immediately prior to the close
of business on the date (the "Exercise Date") of the surrender for exercise of
the Option Certificate. The exercise form attached hereto as Exhibit B shall
be executed by the Registered Holder or his attorney duly authorized in
writing and will be delivered to the Company at its corporate office together
with payment to the order of the Company in cash or by official bank or
certified check, of an amount equal to the aggregate Exercise Price, in lawful
money of the United States of America.

Unless Option Units may not be issued as provided herein, the person
entitled to receive the number of Option Units deliverable on such exercise
shall be treated for all purposes as the holder of such Option Units as of the
close of business on the Exercise Date. In addition, the Company shall also,
at such time, verify that all of the conditions precedent to the issuance of
Option Units, set forth in Section 4, have been satisfied as of the Exercise
Date. If any one of the conditions precedent set forth in Section 4 are not
satisfied as of the Exercise Date, the Company shall return the Option
Certificate and pertinent Exercise Price payment to the exercising Registered
Holder or may hold the same until all such conditions have been satisfied.
The Company shall not be obligated to issue any fractional share interests in
Option Units issuable or deliverable on the exercise of any Option or scrip or
cash therefore and such fractional shares shall be of no value whatsoever. If
more than one Option shall be exercised at one time by the same Registered
Holder, the number of full Option Units which shall be issuable on exercise
thereof shall be computed on the basis of the aggregate number of full Option
Units issuable on such exercise

Once the Company has determined that the funds are determined to be
collected, the Company shall notify its common stock transfer agent who shall
cause a common stock share Certificate representing the exercised Options to
be issued. The Company may deem and treat the Registered Holder of the
Options at any time as the absolute owner thereof for all purposes, and the
Company shall not be affected by any notice to the contrary. The Options
shall not entitle the holder thereof to any of the rights of shareholders or
to any dividend declared on the Company' s Common Stock unless the holder
shall have exercised the Options and purchased the Option Units prior to the
record date fixed by the Board of Directors of the Company for the
determination of holders of Common Stock entitled to such dividend or other
right.

4. Reservation of Shares and Payment of Taxes. The Company covenants
that it will at all times reserve and have available from its authorized
Common Stock such number of shares as shall then be issuable on the exercise
of all outstanding Options. The Company covenants that all shares which shall
be so issuable shall be duly and validly issued, fully paid and nonassessable
and free from all taxes liens and charges with respect to such issue.

The Registered Holder(s) shall pay all documentary, stamp or similar
taxes and other governmental charges that may be imposed with respect to the
issuance of the Options, or the issuance, transfer or delivery of the Options
or any shares on exercise of the Options. In the event the shares are to be
delivered in the name other than the name of the Registered Holder of the
Option Certificate, no such delivery shall be made unless the person
requesting the same has paid to the Company the amount of any such taxes or
charges incident thereto,

5. Registration of Transfer. The Option Certificates may be
transferred in whole or in part as provided for herein. Option Certificates
to be transferred shall be surrendered to the Company at its corporate office.
The Company shall execute, issue and deliver in exchange therefor the Option
Certificate or Certificates which the holder making the transfer shall be
entitled to receive.

All Option Certificates so surrendered, or surrendered for exercise or
for exchange in case of mutilated Option Certificates, shall be promptly
canceled by the Company Prior lo due presentment for registration of transfer
thereof. the Company may treat the Registered Holder(s) of any Option
Certificate as the absolute owner thereof (notwithstanding any notations of
ownership or writing thereon made by anyone other than the Company), and the
parties hereto shall not be affected by any notice to the contrary.

6. Loss or Mutilation. On receipt by the Company of evidence
satisfactory as to the ownership of the loss, theft, destruction or mutilation
of any Option Certificate, the Company shall execute and deliver in lieu
thereof, a new Option Certificate representing an equal aggregate number of
Options. In the case of loss, theft or destruction of any Option
Certificates, the individual requesting issuance of a new Option Certificate
shall be required to indemnify the Company in an amount satisfactory to the
Company. In the event an Option Certificate is mutilated, such Certificate
shall be surrendered and canceled by the Company prior to delivery of a new
Option Certificate. Applicants for a new Option Certificate shall also comply
with such other regulations and pay such other reasonable charges as the
Company may prescribe .

7. Adjustment of Exercise Price and Shares. After each adjustment of
the Exercise Price pursuant to this Section 7, the number of shares of Option
Units purchasable on the exercise of such Options shall be the number derived
by dividing such adjusted Exercise Price into the original Exercise Price, The
Exercise Price shall be subject to adjustment as follows:

(a) In the event, prior to the expiration of the Options by exercise
or by their terms, the Company shall issue any shares of its Common Stock as a
share dividend or shall subdivide the number of outstanding shares of Common
Stock into a greater number of shares, then, in either of such events, the
Exercise Price per share of Common Stock purchasable pursuant to the Options
in effect at the time of such action shall be reduced proportionately and the
number of shares purchasable pursuant to the Options shall be increased
proportionately. Conversely, in the event the Company shall reduce the number
of shares of its outstanding Common Stock by combining such shares into a
smaller number of shares, then, in such event, the Exercise Price per share
purchasable pursuant to the Options in effect at the time of such action shall
be increased proportionately and the number of shares of Common Stock at that
time purchasable pursuant to the Options shall be decreased proportionately.
Any dividend paid or distributed on the Common Stock in shares of Common Stock
of the Company shall be treated as a share dividend pursuant to the preceding
sentence. However any dividend paid or distributed on the Common Stock in
securities other than Common Stock of the Company, regardless if exercisable
for or convertible into Common Stock of the Company, shall be treated as a
share dividend pursuant to the penumbra sentence.

(b) In the event the Company, at any time while the Options shall
remain unexpired and unexercised, shall sell all or substantially all of its
property, and thereafter dissolves, liquidates or winds up its affairs, then
provision need be made as part of the terms of any such sale, dissolution,
liquidation or winding up to allow Option holders to exercise all or any
Options held, in order to receive the same kind and amount of any share,
securities or assets as may be issuable, distributable or payable on any such
sale, dissolution, liquidation or winding up with respect to each share of
Common Stock of the Company.

(c) Notwithstanding the provisions of this Section 7, no adjustment
on the Exercise Price shall be made whereby such price is adjusted in an
amount less than $0.00 or until the aggregate of such adjustments shall equal
or exceed $0.00.

(d) No adjustment of the Exercise Price shall be made as a result of
or in connection with: (i) the issuance of Common Stock of the Company
pursuant to options, warrants and share purchase agreements outstanding or in
effect on the date hereof, (ii) the establishment of additional option plans,
common stock purchase warrants or security offerings of the Company, the
modification, renewal or extension of any such plan, warrants or offerings now
in effect or hereafter created, or the issuance of Common Stock on exercise of
any such options or warrants; or (iii) the issuance of Common Stock in
connection with an acquisition or merger of any type .

(e) This Option Agreement shall be incorporated by reference on the
Option Certificates.

Before taking any action which would cause an adjustment reducing the
Exercise Price below the then par value of the shares of Common Stock issuable
upon exercise of the Options, the Company will take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares Of such Common
Stock at such adjusted Exercise Price.

Upon any adjustment of the Exercise Price required to be made pursuant to
Section 7, the Company within thirty (30) days thereafter shall: (i) notify
the Registered Holder of such adjustment setting forth the pertinent Exercise
Price after such adjustment and setting forth in reasonable detail the method
of calculation and the facts upon which such calculation is based; and (ii)
cause to be mailed to each of the Registered Holder(s) of the Option
Certificates written notice of such adjustment.

8. Reduction in exercise Price at Company's Option. In addition to
any adjustments made to the Exercise Price pursuant to Section 7, the
Company's Board of Directors may, in its sole discretion, reduce the Exercise
Price of the Options in effect at any time either for the life of the Options
or any shorter period of time as may be determined by the Company's Board of
Directors, The Company shall notify the Registered Holder of any such
reduction in the Exercise Price.

9. Legend. Each Option Certificate and each certificate for Option
Shares purchased under this Option shall bear a legend as follows unless such
Option or Option Shares have been registered under the Act and the issuance
complies with applicable state securities laws.

"The securities represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of 1933, as
amended (the "Act"). The securities may not be sold, assigned, pledged,
hypothecated or otherwise transferred except pursuant to an effective
registration statement under the Act and in compliance with applicable state
securities laws, or the Company receives an opinion of counsel, satisfactory
to the Company and Company counsel, that such registration is not requited and
that the sale, assignment, pledge, hypothecation or transfer is in compliance
with applicable state securities laws."

10. Transfer. The Registered Holder and each Transferee Holder,
agrees that they shall not sell, assign, pledge, hypothecate or otherwise
transfer the Option or the Option Shares, in whole or in part, except pursuant
to an effective registration under the Securities Act of 1933, as amended (the
"Act") and in compliance with applicable state securities laws, or the Company
receives an opinion of counsel, satisfactory to the Company and Company
counsel, that such registration is not required and that the sale, assignment,
pledge, hypothecation or transfer is in compliance with applicable federal and
state securities laws. In order to make any sale, assignment, pledge or
hypothecation, the transferor must deliver to the Company the assignment form
attached hereto duly executed and completed, together with the applicable
certificate and payment of all transfer taxes, if any, payable in connection
therewith. As to the Option, the Company shall transfer the transferred
Option on the books of the Company and shall execute and deliver a new Option
Certificate of like tenor to the appropriate assignee(s) expressly evidencing
the right to purchase the number of Option Units purchasable thereunder. As to
the Option Shares, the Company shall cause its duly authorized common stock
transfer agent to transfer the common stock being transferred.

11. Registration. If at any time or from time to time, the Company
shall determine to register any of its securities, either for its own account
or the account of a security holder or holders, in a registration statement
covering the sale of Company securities pursuant to an underwritten public
offering, the Company will: (a) promptly give to each Holder a one-time
written notice thereof (which shall include a list of the jurisdictions in
which the Company intends to attempt to qualify such securities under the
applicable blue sky or other state securities laws); and (b) include in such a
one-time registration (and any related qualification under the blue sky laws
or other compliance) and in any underwriting involved therein, all the
Registrable Securities specified in a written request or requests, made within
thirty days after receipt of such written notice from the Company, by any
Holder or Holders. In the event of registration the Company and the Holder(s)
shall execute such documents as may be reasonably required by the Company and
Company counsel to carry out such registration.

(a) Terms of Registration. The Company shall bear all fees and
expenses attendant to registering the Registrable Securities, but the
Holder(s) shall pay any and all underwriting and broker-dealer discounts,
commissions and non-accountable expenses of any underwriter or broker-dealer
selected to sell the Registrable Securities, together with the expenses of any
legal counsel selected by the Holder(s) to represent them in connection with
the sale of the Registrable Securities. The Company shall cause any
registration statement filed pursuant to the demand rights granted hereto to
remain effective for a period of sixteen months from the date of the latest
balance sheet of the audited financial statements contained therein on the
initial effective date of such registration statement.

(b) Restriction on Registration. The Company shall not be obligated
to register the Registrable Securities if such securities may be sold pursuant
to the exemption from registration as provided by Rule 144 as promulgated
under the Act, nor shall the Company be obligated to register the Registrable
Securities in any state in which the principal stockholders, officers,
directors or employees of the Company may in any way be obligated to escrow
any of their shares of Capital Stock of the Company or in a state in which the
Company may be restricted from conducting its business in any way, including
but not limited to, qualifying to do business, become subject to tax, or
restricted from issuing additional securities or incur restrictions on
compensating officers, directors or employees.

(c) Right To Redeem In Lieu of Registration. The Company may in its
sole discretion, and in lieu of registration of the Registrable Securities,
pay to the Holder(s) an amount equal to the amount which would be realized by
the Holder(s) upon sale of the Registrable Securities reduced by the Exercise
Price plus the expenses, fees and broker/dealer commissions which would be
paid by the Holder(s) in the event of registration and sale of the Registrable
Securities. The Company may elect to make such payment upon notice to the
Holder(s) within 30 days of receipt of a notice of Demand Registration

(d) Underwriting. The right of any Holder to registration shall be
conditioned upon such Holder's participation in the underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their securities
through such underwriting shall (together with the Company and the other
holders distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company. Notwithstanding any other
provision of this Section, if the underwriter determines that marketing
factors require a limitation of the number of shares to be underwritten, the
underwriter may impose restrictions on the ability of the Holder to transfer
such securities in a public distribution prior to 180 days after the effective
date of the registration statement relating thereto.

12. Modification of Agreement. The Company and the registered Holder
may by supplemental agreement make any changes or corrections in this
Agreement: (i) that they shall deem appropriate to cure any ambiguity or to
correct any defective or inconsistent provision or mistake or error herein
contained, or (ii) that they may deem necessary or desirable and which shall
not adversely affect the interest of the holders of Option Certificates.
Additionally, except as provided in Sections 7 and 8, no change in the number
or nature of the Option Shares purchasable on exercise of a Option, or
increase of the purchase price therefor shall be made without the consent in
writing of the Registered Holder or Transferee Holder of the Option
Certificate representing such Option, other than such changes as are
specifically prescribed or allowed by this Agreement.

13. Notices. All notices, demands, elections options or requests
(however characterized or described) required or authorized hereunder shall be
deemed sufficient if made in writing and sent by registered or certified mail,
return receipt requested and postage prepaid, or by tested telex, telegram or
cable to the principal office of the addressee, and if to the Registered
Holder or Transferee Holder of an Option Certificate, at the address of such
holder as set forth on the books maintained by the Company.

14. Binding Agreement. This Agreement shall be binding upon and
inure to the benefit of the Company, the Registered Holder, each Transferee
Holder and their respective successors and assigns. Nothing in this Agreement
is intended or shall be construed to confer upon any other person any right,
remedy or claim or to impose on any other person any duty, liability or
obligation.

15. Further Instruments. The parties hereto shall execute and
deliver any and all such other instruments and shall take any and all other
actions as may be reasonably necessary to carry out the intention of this
Agreement.

16. Severability. If any provision of this Agreement shall be held,
declared or pronounced void, voidable invalid, unenforceable or inoperative
for any reason by any court of competent jurisdiction, government authority or
otherwise, such holding, declaration or pronouncement shall not affect
adversely any other provision of this Agreement, which shall otherwise remain
in full force and effect and be enforced in accordance with its terms, and the
effect of such holding, declaration or pronouncement shall be limited to the
territory or jurisdiction in which made.

17. Waiver. All the rights and remedies of either party to this
Agreement are cumulative and not exclusive of any other rights and remedies as
provided by law No delay or failure on the part of either party in the
exercise of any right or remedy arising from the breach of this Agreement will
constitute a waiver of any other right or remedy . The consent of any party
where required hereunder to act or occurrence shall not be deemed to be a
consent to any other action or occurrence.

18. General Provisions. This Agreement shall be construed and
enforced in accordance with, and governed by, the laws of the State of Texas.
This Agreement embodies the entire agreement and understanding between the
parties and supersedes all prior agreements and understandings relating to the
subject matter hereof, and this Agreement may not be modified or amended or
any term or provisions hereof waived or discharged except in writing, signed
by the party against whom such amendment, modification, waiver or discharge is
sought to be enforced The headings of this Agreement are for convenience and
references only and shall not limit or otherwise affect the meaning hereof.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

FLEX FINANCIAL GROUP, INC.

By:_______________________________________

INVESTOR

___________________________________________

<PAGE>
FLEX FINANCIAL GROUP, INC.
Incorporated Under the Laws of the State of Texas

No. A - ______________ Unit Purchase Options

CERTIFICATE FOR UNIT PURCHASE OPTIONS

This Option Certificate certifies that
___________________________________ or registered assigns ("Option Holder"),
is the registered owner of Options (hereinafter referred to as the
"Option(s)") expiring on December 31, 1996 ("Expiration Date"). This Option
entitles the Option Holder to purchase such number of Option Units ("Options")
from FLEX FINANCIAL GROUP, INC., a Texas corporation ("Company"), as
established pursuant to the Option Agreement, at a purchase price of $.50
per Option Unit ("Exercise Price"), commencing on the later of January 1, 1996
or the effective date of the IPO and terminating on the Expiration Date
("Exercise Period"), upon surrender of this Option Certificate with the
exercise form hereon duly completed and executed with payment of the Exercise
Price at the office of the Company being 770 South Post Oak Lane, Suite 515,
Houston, Texas 77056, subject only to the conditions set forth herein and in a
Option Agreement dated as of ____________, 1995 (the "Option Agreement")
between the Company and __________________. The Option Holder may exercise
all or any number of Options. Reference hereby is made to the provisions on
the following pages of this Option Certificate and to the provisions of the
Option Agreement of which are incorporated by reference in and made a part of
this Option Certificate and shall for all purposes have the same effect as
though fully set forth at this place.

Upon due presentment for transfer of this Option Certificate at the
office of the Company, a new Option Certificate or Option Certificates of like
tenor and evidencing, in the aggregate a like number of Options, subject to
any adjustments made in accordance with the provisions of the Option
Agreement, shall be issued to the transferee in exchange for this Option
Certificate subject to the limitations provided in the Option Agreement upon
payment to the Company of any tax or governmental charge imposed in connection
with such transfer

The Option Holder of the Options evidenced by this Option Certificate may
exercise all or any whole number of such Options during the period and in the
manner stated hereon. The Exercise Price shall be payable in lawful money of
the United States of America and in cash or by certified or bank cashier's
check payable to the order of the Company. If, upon exercise of any Options
evidenced by this Option Certificate, the number of Options exercised shall be
less than the total number of Options so evidenced, there shall be issued to
the Option Holder a new Option Certificate evidencing the number of Options
not so exercised. No Option may be exercised after 5:00 P.M. Houston, Texas
Time on the Expiration Date, and any Option not exercised by such time shall
become void, unless extended by the Company.

The securities represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of 1933, as
amended (the "Act"). The securities may not be sold, assigned, pledged,
hypothecated or otherwise transferred except pursuant to an effective
registration statement under the Act and in compliance with applicable state
securities laws, or the Company receives an opinion of counsel, satisfactory
to the Company and Company counsel, that such registration is not required and
that the sale, assignment pledge, hypothecation or transfer is in compliance
with applicable state securities laws.

IN WITNESS WHEREOF, the Company has caused this Option to be signed by
its Chief Executive Officer or President and by its Secretary or Assistant
Secretary, each by an original of his signature, and has caused an original
impression of its corporate seal to be imprinted hereon.
Dated:__________________________, 1995

____________________________ ___________________________
Signature Signature

(Seal) ____________________________
___________________________
Title

KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN OR DESTROYED THE
COMPANY WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE OF A
REPLACEMENT CERTIFICATE.

<PAGE>
FOR VALUE RECEIVED ______________________ HEREBY SELL, ASSIGN AND TRANSFER
UNTO:

PLEASE INSERT SOCIAL SECURITY
OR TAX IDENTIFICATION NUMBER

_______________________________________

___________________________________________________
(Please Print Name and Address)

___________________________________________________

If said number of Options shall not be all the Options evidenced by the
within Option Certificate, the undersigned requests that a new Option
Certificate evidencing the Options not so transferred be issued in the name of
and delivered to:

___________________________________________________
(Please Print Name and Address)

___________________________________________________

___________________________________________________
Dated:______________________________
Signature

NOTICE: The above signature must correspond with the name as written upon the
face of the within Option Certificate in every particular, without alteration
or enlargement or any change whatsoever, or if signed by any other person, the
Form of Assignment thereon must be duly executed and if the certificate
representing the shares or any Option Certificate representing Options not
exercised is to be registered in a name other than that in which the within
Option Certificate is registered, the signature of the holder hereof must be
guaranteed.

Signature Guaranteed:
___________________________________________________________________________

SIGNATURE MUST BE GUARANTEED BY A COMMERCIAL BANK OR MEMBER FIRM OF ONE OF THE
FOLLOWING STOCK EXCHANGES: NEW YORK STOCK EXCHANGE, PACIFIC COAST STOCK
EXCHANGE, AMERICAN STOCK EXCHANGE, OR MIDWEST STOCK EXCHANGE.

EXHIBIT B

FORM OF ELECTION TO PURCHASE

(To be executed by the holder if he desires to exercise
Options evidenced by the within Option Certificate)

TO: FLEX FINANCIAL GROUP, INC.

The undersigned hereby irrevocably elects to exercise __________________
Options, evidenced by the within Option Certificate for, and to purchase
thereunder, ________________ full Option Units issuable upon exercise of said
Options and delivery of $_________________________ and any applicable taxes.

The undersigned requests that certificates for such shares be issued in
the name of:

PLEASE INSERT SOCIAL SECURITY
OR TAX IDENTIFICATION NUMBER

______________________________________

___________________________________________________
(Please Print Name and Address)

___________________________________________________

If said number of Options shall not be all the Options evidenced by the
within Option Certificate, the undersigned requests that a new Option
Certificate evidencing the Options not so exercised be issued in the name of
and delivered to:

___________________________________________________
(Please Print Name and Address)

___________________________________________________

___________________________________________________ Dated:____________________
Signature

Signature Guaranteed:
___________________________________________________________________________

<PAGE>
EXHIBIT 4.6

FORM OF CLASS A COMMON STOCK PURCHASE OPTION

VOID AFTER 5:00 P.M. HOUSTON TIME, December 31, 2000.

OPTION AGREEMENT

This Option Agreement (the "Agreement") is dated as of the ______ day of
__________________, 1995, between FLEX FINANCIAL GROUP, INC., a Texas
corporation, with its principal executive offices located at 770 South Post
Oak Lane, Suite 515, Houston, Texas 77056 ("FLEX") and
_______________________________________,
___________________________________________ ("______" and the "Registered
Holder").

WHEREAS, the Company and the Registered Holder are parties to a
subscription agreement between the Company and the Registered Holder, which
Agreement provides for the issuance of options to purchase common stock of the
Company on terms and conditions as more fully set forth herein; and

WHEREAS, the Company desires to provide for issuance of option
certificates (the "Option Certificates") representing _____________ Options
and the issuance of up to _____________ Option Shares upon the exercise of the
Options on such terms and conditions as are more fully set forth herein, and

NOW, THEREFORE, in consideration of the promises and mutual agreements
hereinafter set forth it is agreed that:

2. Form and Execution of Option Certificates. The Option
Certificates shall be substantially in the form attached hereto as Exhibit A
(the "Option" and the "Option Certificate"). The Option Certificates shall be
dated as of the date of their issuance, whether on initial issuance, transfer
or exchange or in lieu of mutilated, lost, stolen or destroyed Option
Certificates. The Option Certificates shall be originally signed by the
Company's Chief Executive Officer or President, attested to by the Company's
Secretary or Assistant Secretary and embossed with the Company's seal and
shall not be valid for any purpose unless so originally signed and embossed.
3. Exercise. Subject to the provisions of Sections 4 and 7, the
Options, when evidenced by a Option Certificate and such other documents as
the Company may require, may be exercised at a price (the "Exercise Price") of
$.50 per share (the "Option Exercise Price"). Each Option may be exercised in
whole or in part at any time during the period commencing on September 1, 1995
and terminating at 5:00 p.m. Houston, Texas time on December 31, 2000 (the
"Termination Date"). Each Option shall be deemed to have been exercised
immediately prior to the close of business on the date (the "Exercise Date")
of the surrender for exercise of the Option Certificate. The exercise form
attached hereto as Exhibit B shall be executed by the Registered Holder or his
attorney duly authorized in writing and will be delivered to the Company at
its corporate office together with payment to the order of the Company in cash
or by official bank or certified check, of an amount equal to the aggregate
Exercise Price, in lawful money of the United States of America.

Unless Option Shares may not be issued as provided herein, the person
entitled to receive the number of Option Shares deliverable on such exercise
shall be treated for all purposes as the holder of such Option Shares as of
the close of business on the Exercise Date. In addition, the Company shall
also, at such time, verify that all of the conditions precedent to the
issuance of Option Shares, set forth in Section 4, have been satisfied as of
the Exercise Date. If any one of the conditions precedent set forth in
Section 4 are not satisfied as of the Exercise Date, the Company shall return
the Option Certificate and pertinent Exercise Price payment to the exercising
Registered Holder or may hold the same until all such conditions have been
satisfied. The Company shall not be obligated to issue any fractional share
interests in Option Shares issuable or deliverable on the exercise of any
Option or scrip or cash therefore and such fractional shares shall be of no
value whatsoever. If more than one Option shall be exercised at one time by
the same Registered Holder, the number of full Option Shares which shall be
issuable on exercise thereof shall be computed on the basis of the aggregate
number of full Option Shares issuable on such exercise

Once the Company has determined that the funds are determined to be
collected, the Company shall notify its common stock transfer agent who shall
cause a common stock share Certificate representing the exercised Options to
be issued, The Company may deem and treat the Registered Holder of the Options
at any time as the absolute owner thereof for all purposes, and the Company
shall not be affected by any notice to the contrary. The Options shall not
entitle the holder thereof to any of the rights of shareholders or to any
dividend declared on the Company' s Common Stock or Option unless the holder
shall have exercised the Options and purchased the Option Shares prior to the
record date fixed by the Board of Directors of the Company for the
determination of holders of Common Stock entitled to such dividend or other
right.

4. Reservation of Shares and Payment of Taxes. The Company covenants
that it will at all times reserve and have available from its authorized
Common Stock such number of shares as shall then be issuable on the exercise
of all outstanding Options. The Company covenants that all Option Shares
which shall be so issuable shall be duly and validly issued, fully paid and
nonassessable and free from all taxes liens and charges with respect to such
issue.

The Registered Holder(s) shall pay all documentary, stamp or similar
taxes and other governmental charges that may be imposed with respect to the
issuance of the Options, or the issuance, transfer or delivery of the Options
or any Option Shares on exercise of the Options. In the event the Option
Shares are to be delivered in the name other than the name of the Registered
Holder of the Option Certificate, no such delivery shall be made unless the
person requesting the same has paid to the Company the amount of any such
taxes or charges incident thereto,

The Company shall keep transfer books at its corporate office which shall
register Option Certificates and the transfer thereof. On due presentment for
registration of transfer of any Option Certificate at such office, the Company
shall execute and the Company shall issue and deliver to the transferee or
transferees a new Option Certificate or Certificates representing an equal
aggregate number of Options. All Option Certificates presented for
registration of transfer or exercise shall be duly endorsed or be accompanied
by a written instrument or instruments or transferred in a form satisfactory
to the Company and the Company's counsel. The Company may require payment of
a sum sufficient to cover any tax or other government charge that may be
imposed in connection therewith.
All Option Certificates so surrendered, or surrendered for exercise or
for exchange in case of mutilated Option Certificates, shall be promptly
canceled by the Company Prior lo due presentment for registration of transfer
thereof. the Company may treat the Registered Holder(s) of any Option
Certificate as the absolute owner thereof (notwithstanding any notations of
ownership or writing thereon made by anyone other than the Company), and the
parties hereto shall not be affected by any notice to the contrary.

7. Adjustment of Exercise Price and Shares. After each adjustment of
the Exercise Price pursuant to this Section 7, the number of shares of Option
Shares purchasable on the exercise of such Options shall be the number derived
by dividing such adjusted Exercise Price into the original Exercise Price, The
Exercise Price shall be subject to adjustment as follows:

(e) This Option Agreement shall be incorporated by reference on the
Option Certificates.
Before taking any action which would cause an adjustment reducing the
Exercise Price below the then par value of the shares of Common Stock issuable
upon exercise of the Options, the Company will take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares Of such Common
Stock at such adjusted Exercise Price.

"The securities represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of 1933, as
amended (the "Act"). The securities may not be sold, assigned, pledged,
hypothecated or otherwise transferred except pursuant to an effective
registration statement under the Act and in compliance with applicable state
securities laws, or the Company receives an opinion of counsel, satisfactory
to the Company and Company counsel, that such registration is not required and
that the sale, assignment, pledge, hypothecation or transfer is in compliance
with applicable state securities laws."

10. Transfer. The Registered Holder and each Transferee Holder,
agrees that they shall not sell, assign, pledge, hypothecate or otherwise
transfer the Option or the Option Shares, in whole or in part, except pursuant
to an effective registration under the Securities Act of 1933, as amended (the
"Act") and in compliance with applicable state securities laws, or the Company
receives an opinion of counsel, satisfactory to the Company and Company
counsel, that such registration is not required and that the sale, assignment,
pledge, hypothecation or transfer is in compliance with applicable federal and
state securities laws. In order to make any sale, assignment, pledge or
hypothecation, the transferor must deliver to the Company the assignment form
attached hereto duly executed and completed, together with the applicable
certificate and payment of all transfer taxes, if any, payable in connection
therewith. As to the Option, the Company shall transfer the transferred
Option on the books of the Company and shall execute and deliver a new Option
Certificate of like tenor to the appropriate assignee(s) expressly evidencing
the right to purchase the number of Option Shares purchasable thereunder. As
to the Option Shares, the Company shall cause its duly authorized common stock
transfer agent to transfer the common stock being transferred.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

FLEX FINANCIAL GROUP, INC.

BY:_________________________________________

<PAGE>
FLEX FINANCIAL GROUP, INC.
Incorporated Under the Laws of the State of Texas

No. A - ______________ _____________ Class A Common Stock Purchase Options

CERTIFICATE FOR CLASS A COMMON STOCK PURCHASE OPTIONS

This Option Certificate certifies that
___________________________________ or registered assigns ("Option Holder"),
is the registered owner of the above indicated number of Options (hereinafter
referred to as the "Option(s)") expiring on December 31, 2000 ("Expiration
Date"). One (1) Option entitles the Option Holder to purchase one (1) share
of common stock, $.01 par value ("Share"), from FLEX FINANCIAL GROUP, INC., a
Texas corporation ("Company"), at a purchase price of $.50 per share of
Common Stock ("Exercise Price"), commencing on ________ and terminating on the
Expiration Date ("Exercise Period"), upon surrender of this Option Certificate
with the exercise form hereon duly completed and executed with payment of the
Exercise Price at the office of the Company being 770 South Post Oak Lane,
Suite 515, Houston, Texas 77056, subject only to the conditions set forth
herein and in a Option Agreement dated as of _____________________, 1995 (the
"Option Agreement") between the Company and _______________________. The
Option Holder may exercise all or any number of Options. Reference hereby is
made to the provisions on the following pages of this Option Certificate and
to the provisions of the Option Agreement of which are incorporated by
reference in and made a part of this Option Certificate and shall for all
purposes have the same effect as though fully set forth at this place.

Dated:______________________, 1995

______________________________ ______________________________
Signature Signature

______________________________ ______________________________
Title Title

KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN OR DESTROYED THE
COMPANY WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE OF A
REPLACEMENT CERTIFICATE.

<PAGE>
FOR VALUE RECEIVED ______________________ HEREBY SELL, ASSIGN AND TRANSFER
UNTO:

PLEASE INSERT SOCIAL SECURITY
OR TAX IDENTIFICATION NUMBER

______________________________________

___________________________________________________
(Please Print Name and Address)

___________________________________________________

___________________________________________________
(Please Print Name and Address)

___________________________________________________

___________________________________________________ Dated:___________________
Signature

Signature Guaranteed: _______________________________________________________

FORM OF ELECTION TO PURCHASE

(To be executed by the holder if he desires to exercise
Options evidenced by the within Option Certificate)

TO: FLEX FINANCIAL GROUP, INC.

The undersigned hereby irrevocably elects to exercise __________________
Options, evidenced by the within Option Certificate for, and to purchase
thereunder, ________________ full shares of common Stock issuable upon
exercise of said Options and delivery of $_________________________ and any
applicable taxes.

The undersigned requests that certificates for such shares be issued in
the name of:

PLEASE INSERT SOCIAL SECURITY
OR TAX IDENTIFICATION NUMBER

______________________________________

___________________________________________________
(Please Print Name and Address)

___________________________________________________

If said number of Options shall not be all the Options evidenced by the
within Option Certificate, the undersigned requests that a new Option
Certificate evidencing the Options not so exercised be issued in the name of
and delivered to:

___________________________________________________
(Please Print Name and Address)

___________________________________________________

___________________________________________________ Dated:____________________
Signature

Signature Guaranteed:________________________________________________________

<PAGE>
EXHIBIT 5.1

Law Offices of
M. Stephen Roberts
770 S. Post Oak Lane, Suite 515
Houston, Texas 77056
(713) 961-2696
Fax: (713) 961-1148

November 26, 1996

Michael T. Fearnow, President
Flex Acquisitions Corporation
770 S. Post Oak Lane, Suite 515
Houston, TX 77056

Dear Mr. Fearnow:

In connection with

(1) the preparation and filing of a Form S-4 Registration
Statement under the Securities Act of 1933, to be filed by Flex Acquisitions
Corporation for the purpose of registering 80,000 shares of Common Stock;
80,000 Class A Options; 80,000 shares of Common Stock that underlie the Class
A Options; 16,333 Unit Purchase Options ("Bridge Loan Securities"); 16,333
Units that underlie the Unit Purchase Options; 16,333 shares of Common Stock
issuable upon exercise of the Unit Purchase Options; 32,666 Class B Warrants
issuable upon exercise of the Unit Purchase Options; 32,666 shares of Common
Stock that underlie the Class B Warrants issuable upon exercise of the Unit
Purchase Options; 32,666 Class C Warrants issuable upon exercise of the Unit
Purchase Options; 32,666 shares of Common Stock that underlie the Class C
Warrants issuable upon exercise of the Unit Purchase Options; 14,000 Units
consisting of 14,000 shares of Common Stock, 28,000 Class B Warrants and
28,000 Class C Warrants (collectively the "PPM Securities"); 28,000 shares of
Common Stock that underlie the PPM Securities Class B Warrants; 28,000 shares
of Common Stock that underlie the PPM Securities Class C Warrants (all of the
above collectively the "Merger Shares") to be available for a proposed merger
with Flex Financial Group, Inc., a Texas corporation; and 2,000,000 shares of
its Common Stock (the "Shelf Shares") to be used for possible acquisitions of
companies or assets constituting a business; and,

(2) the preparation and filing of a Form SB-2 Registration
Statement under the Securities Act of 1933, to be filed by Flex Acquisitions
Corporation for the purpose of registering up to 100,000 units ("Units")
consisting of 100,000 shares of common stock, par value $.001 per share
("Common Stock"), 200,000 Class B warrants ("Class B Warrants") and 200,000
Class C warrants ("Class C Warrants"), and 400,000 shares of Common Stock that
underlie the Class B and Class C Warrants (all of the above collectively the
"Public Offering Securities"); and of registering a secondary distribution by
American NorTel Communications, Inc. ("American NorTel"), a Wyoming
corporation, of 20,000 shares of Common Stock of the Company presently owned
by American NorTel to its shareholders (the "Spinoff Shares"),

I have acted as counsel to Flex Acquisitions Corporation (the "Company") in
the organization of the Company and the preparation of the SB-2 and S-4
Registration Statements. I advise you that I am familiar with the originals
or copies, certified or otherwise identified to my satisfaction, of documents,
corporate records, or other instruments relating to the incorporation of the
Company, the authorization and the issuance of the Public Offering Securities,
the Merger Shares, the Spinoff Shares, and the Shelf Shares, including the
following:

(a) Certificate of Incorporation of the Company;

(b) By-laws of the Company;

(c) Corporate proceedings and filings reflected in the minutes of the
Company as certified to by the secretary of the Company;

(d) Specimen certificates representing the Public Offering
Securities, the Merger Shares, the Spinoff Shares, and the Shelf Shares; and

(e) The SB-2 and S-4 Registration Statements relating to the Public
Offering Securities, the Merger Shares, the Spinoff Shares, and the Shelf
Shares and to be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended.

Based solely on the foregoing, I am of the opinion that:

(1) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Texas.

(2) The Company has corporate power to conduct the business now being
conducted and is duly authorized and in good standing to do business in the
jurisdiction in which its ownership of property or the conduct of its business
legally requires that authorization.

(3) The Company has an authorized capitalization as set forth in the
Registration Statements, and the Public Offering Securities, the Merger
Shares, the Spinoff Shares, and the Shelf Shares conform to the statements
concerning them in the Registration Statements.

(4) The issuance of the Public Offering Securities, the Merger
Shares, the Spinoff Shares, and the Shelf Shares have been validly authorized.
The Public Offering Securities and the Merger Shares, when issued, will be,
and the Spinoff Shares are, legally issued, fully paid and non-assessable.

(5) No consent, approval, authorization, or other order of any
regulatory authority or third party is legally required for the valid issuance
of the Merger Shares other than the order making effective the registration of
the Merger Shares, which order must be issued by the Securities and Exchange
Commission, and no consent, approval, authorization, or other order of any
regulatory authority or third party if legally required for the valid
distribution of the Spinoff Shares other than the order making effective the
registration or the Spinoff Shares, which order must be issued by the
Securities and Exchange Commission, and other than similar action to be taken
by the state securities regulatory agencies of the various states with respect
to the distribution of Spinoff Shares in such states.

(6) The Agreement of Merger between the Company and Flex Financial
Group, Inc. has been duly authorized by all necessary corporate action of the
Company and of Flex Financial Group, Inc. and is a valid and binding
agreement on the part of the Company and of Flex Financial Group, Inc.,
subject, however, to the approval of their shareholders.

(7) The consummation of the transactions contemplated in the
Registration Statements will not result in a breach of any of the terms and
provisions of, or constitute a default under, any notes, indenture, mortgage,
deed of trust, or other agreement or instrument to which the Company to its
knowledge is now a party, or the Certificate of Incorporation of the Company.

(8) I do not know, and you have advised me that you do not know, of
any legal or governmental proceeding pending or threatened to which the
Company is a party, or of which the property of the Company is the subject, of
a character required to be disclosed in the Registration Statements that is
not disclosed and properly described in this document; and you and I do not
know of any contracts of a character to be disclosed in the Registration
Statement that are not disclosed, filed and properly summarized in such
document.
(9) The Registration Statements and any further amendments and
supplements to these documents made by the Company prior to the effective date
of the Merger described in the Form S-4 Registration Statement comply as to
form in all material respects with the requirements of the Securities Act of
1933, as amended, and the applicable rules and regulations of the Securities
and Exchange Commission. I have no reason to believe that the Registration
Statements contain an untrue statement of a material fact or omit to state any
material fact required to be stated in these documents or necessary to make
the statements in them not misleading.

Very truly yours,

/S/ M. Stephen Roberts
- -------------------------
M. Stephen Roberts

<PAGE>
EXHIBIT 8.1

Law Offices of
M. Stephen Roberts
770 S. Post Oak Lane, Suite 515
Houston, Texas 77056
(713) 961-2696
Fax: (713) 961-1148

November 26, 1996

Michael T. Fearnow, President
Flex Acquisitions Corporation
770 S. Post Oak Lane, Suite 515
Houston, TX 77056

Re: Flex Acquisitions Corporation; merger and spinoff transactions with
Flex Acquisitions Corporation and American NorTel Communications, Inc.

Dear Mr. Fearnow:

In connection with

(1) the preparation and filing of a Form S-4 Registration
Statement under the Securities Act of 1933, to be filed by Flex Acquisitions
Corporation for the purpose of registering 80,000 shares of Common Stock;
80,000 Class A Options; 80,000 shares of Common Stock that underlie the Class
A Options; 16,333 Unit Purchase Options ("Bridge Loan Securities"); 16,333
Units that underlie the Unit Purchase Options; 16,333 shares of Common Stock
issuable upon exercise of the Unit Purchase Options; 32,666 Class B Warrants
issuable upon exercise of the Unit Purchase Options; 32,666 shares of Common
Stock that underlie the Class B Warrants issuable upon exercise of the Unit
Purchase Options; 32,666 Class C Warrants issuable upon exercise of the Unit
Purchase Options; 32,666 shares of Common Stock that underlie the Class C
Warrants issuable upon exercise of the Unit Purchase Options; 14,000 Units
consisting of 14,000 shares of Common Stock, 28,000 Class B Warrants and
28,000 Class C Warrants (collectively the "PPM Securities"); 28,000 shares of
Common Stock that underlie the PPM Securities Class B Warrants; 28,000 shares
of Common Stock that underlie the PPM Securities Class C Warrants (the "Merger
Shares") to be available for a proposed merger with Flex Financial Group,
Inc., a Texas corporation; and 2,000,000 shares of its Common Stock (the
"Shelf Shares") to be used for possible acquisitions of companies or
properties; and,

(2) the preparation and filing of a Form SB-2 Registration
Statement under the Securities Act of 1933, to be filed by Flex Acquisitions
Corporation for the purpose of registering up to 100,000 units ("Units")
consisting of 100,000 shares of common stock, par value $.001 per share
("Common Stock"), 200,000 Class B warrants ("Class B Warrants") and 200,000
Class C warrants ("Class C Warrants")(collectively the "Public Offering
Securities"), 400,000 shares of Common Stock that underlie the Class B and
Class C Warrants, and of registering a distribution by American NorTel
Communications, Inc. ("American NorTel"), a Wyoming corporation, which is the
sole shareholder of the Company, of 20,000 shares of Common Stock of the
Company presently owned by American NorTel to its shareholders (the "Spinoff
Shares"),

I have been asked to express my opinion with respect to certain federal income
tax matters.

I have examined the Form SB-2 Registration Statement, the Form S-4
Registration Statement, corporate proceedings reflected in the minutes of the
Company as certified by the secretary of the Company, an agreement between
Flex Financial and American NorTel effective June 30, 1996, an agreement of
merger between the Company and Flex Financial, and an escrow agreement entered
into on August 21, 1996, by the Company, American NorTel, and Southwest Bank
of Texas, N.A. ("Southwest Bank").

Based upon my examination of the above-described documents, relevant
sections of the Internal Revenue Code of 1986 as amended (the "Code"), and
applicable regulations thereunder, I am of the following opinion:

1. The proposed merger between the Company and Flex Financial
should qualify as a type "A" reorganization under section 368(a)(1) of the
Code. In the event that the Internal Revenue Service attempts to apply the
step transaction doctrine and consider the Company a continuation of Flex
Financial with only a change in name or place of incorporation, it may seek to
characterize the transaction as a type "F" reorganization. In either case,
there should be no recognition of taxable gain or loss to the shareholders of
Flex Financial or to the shareholders of the Company. The Flex Financial
shareholders would have a carryover tax basis and a tacked holding period for
the stock received by them in the Company. Further, Flex Financial would not
recognize any taxable gain or loss, provided its liabilities are not in excess
of the tax basis of its assets.

2. With respect to the income tax effects of the Spinoff, Section
316 of the Code provides that, for purposes of the income tax provisions of
the Code, a dividend is any corporate distribution to shareholders made in the
normal course of business out of earnings and profits. Section 301(c) of the
Code provides that a distribution by a corporation which has no current or
accumulated earnings or profits is not taxable as a dividend. Instead, the
amount of the distribution must first be used to reduce the adjusted basis of
a stockholder's stock and any remaining portion will be treated as capital
gain in the same manner as a sale or exchange of the stock. The distributing
corporation, American NorTel, advises the undersigned that it has no current
or accumulated earnings or profits. Even so, whether is will have earnings
during the distribution tax year cannot be determined until the end of that
tax year. Because American NorTel advises the undersigned that the
distribution is expected to be made from excess capital, the amount of the
distribution to each American NorTel shareholders must first be used to reduce
the adjusted basis of each shareholder's stock, and should the adjusted basis
be reduced to zero, any remaining portion of the value of the distribution
will be treated as capital gain in the same manner as a sale or exchange of
the stock. Should American NorTel determine later that it does have earnings
in the year of the distribution, the distribution would be deemed to be a
dividend to the extent of such earnings and taxed as ordinary income.

3. The basis of the stock in the Company to be received by the
American NorTel shareholders in the distribution is the fair market value of
the property. Section 301(d) of the Code. Fair market value is determined as
of the date of the distribution. Section 301(b)(3). The principal question
raised by the escrow arrangement with Southwest Bank is whether the date of
the distribution occurs when the stock certificates are delivered to Southwest
Bank or, alternatively, later when Southwest Bank delivers the stock
certificates to the American NorTel shareholders. Regulation Section
1.301-1(b) provides that a distribution made by a corporation to its
shareholders is to be included in gross income of the distributees when the
cash or other property is "unqualifiedly made subject to their demands." When
the distribution is in property other than cash, this regulation provides that
the valuation of the property is to be made on the date of distribution
without regard to whether such date is the same as that on which the
distribution is includable in gross income. An example is given in the
regulation of a corporation's distributing a taxable dividend in property on
December 31 which is received by, or unqualifiedly made subject to the demand
of, its shareholders two days later on January 2. In this example, the amount
to be included in the gross income of the shareholders will be the fair market
value of the property on December 31, although such amount will not be
includable in the gross income of the shareholders until January 2 of the next
year.

The important fact concerning the escrow with Southwest Bank is that
the escrow is required by a regulation of the Securities and Exchange
Commission. The distributees of the stock (the American NorTel shareholders)
have full voting rights over the distributed stock, the right to receive
dividends, and the right in certain circumstances to transfer the stock.
American NorTel itself has no right to recall the distribution. The
distributees will have the same type of constructive receipt of the stock as
existed in Carnahan, 21 BTA 893 (1930) (Acq.), and the principles set forth in
--------
Reed v. Commissioner, 723 F. 2d 138 (1st Cir. 1983) would apply in the same
- ----------------------
way and support the determination that the date of distribution is the date
the stock certificates are delivered to Southwest Bank pursuant to the escrow
agreement.

Based on the above, the value of the shares of the Company will be
valued at their fair market value no later than the time the certificates
representing the shares of the Company are received by the escrow agent,
Southwest Bank. Because the delivery of these certificates to Southwest Bank
is to take place before the shareholders of Flex Financial vote on the merger,
and because the outcome of the merger vote is uncertain, American NorTel and
its shareholders may reasonably take the position that the value of the share
of the Company at the time of the distribution is the book value of such
shares on the date of such delivery to Southwest Bank without giving effect to
any increase in book value that might occur should the merger be later
approved and effected.

There is the possibility that the Internal Revenue Service might
successfully argue under the step-transaction or substance-versus-form
doctrines that the delivery of the certificates to Southwest Bank should be
disregarded and the stock valued only when and if the merger is approved. The
concept that might be asserted by the Service would be that the transfer of
stock to Southwest Bank has no independent significance unless the merger is
approved and, therefore, should be disregarded. As stated in Minnesota Tea
-------------
Co. v. Helvering, 302 U.S. 609 (1938), a case in which the shareholders were
- ------------------
obligated to pay over to creditors cash received by the shareholders, "the
preliminary distribution to the stockholders was a meaningless and unnecessary
step in the transmission of the fund to the creditors." However, the
distribution of shares of the Company by American NorTel to its shareholders
does involve a situation where such shareholders will receive something of
significance from American NorTel even if the merger is not consummated,
because the management of the Company will continue to exert efforts to find a
business or property for acquisition by the Company. Accordingly, it would
appear that the step-transaction or substance-versus-form doctrines should not
be applicable. Further, these concepts are ordinarily applied only to
determine the characterization of an entire transaction, not to determine the
time for evaluation of property.

4. American NorTel should undertake to advise its shareholders that it
has no current or accumulated earnings or profits, that the amount of the
distribution must first be used to reduce the adjusted basis of a
shareholder's American NorTel stock and any remaining portion is to be treated
as capital gain in the same manner as a sale or exchange of the stock.
American NorTel should further advise its shareholders what it considers to be
the fair market value of the stock of the Company on the date of the
distribution. Finally, American NorTel should undertake to advise its
shareholders, after the end of American NorTel's taxable year in which the
distribution is made, that it had current earnings during such year, if such
be the case, which would cause it to alter its earlier statement that no part
of the distribution would be taxed as a dividend and as ordinary income.

Yours very truly,

/S/ M. Stephen Roberts
- -------------------------
M. Stephen Roberts

<PAGE>
EXHIBIT 10.2

Flex Financial Group, Inc.
770 S. Post Oak Lane, Suite 515
Houston, Texas 77056

To Whom it May Concern:

In connection with a proposed merger-spinoff transaction pursuant to an
agreement that American NorTel Communications, Inc. ("American NorTel") has
entered into with Flex Financial Group, Inc. ("Flex financial"), we have been
advised that, prior to the merger, Flex Acquisitions Corporation ("Flex
Acquisitions") falls under the requirements of Securities and Exchange
Commission Rule 419 (the "Rule"). Such rule relates to companies known as
"blank check companies." While Flex Acquisitions is not a classic "blank
check company" as envisioned by the Securities and Exchange Commission, we are
advised by counsel that Flex Acquisitions, prior to the merger, falls under
the requirements of Rule 419, and accordingly, it will be necessary to comply
with such rule. The Rule requires that if Flex Acquisitions does not acquire
a business or assets that would constitute a business within eighteen months
after the registration statement becomes effective, the shares of stock of
Flex Acquisitions are not to be let loose into the public market.

Counsel has further advised that a satisfactory way of complying with the
Rule is to have the holders of the majority of the Flex Acquisitions common
stock agree at this time that they will vote to dissolve Flex Acquisitions if
no merger or business acquisition occurs with eighteen months after the
effective date of the registration statement.

Flex Financial Group, Inc. is the holder of a $4,000 Note (convertible,
subordinated, redeemable, unsecured) issued by Flex Acquisitions that is
convertible into 80,000 shares of common stock of Flex Acquisitions,
representing 80% of the outstanding voting shares of the Flex Acquisitions'
Common Stock and having the voting rights to cause a dissolution of the Flex
Acquisitions.

In order to comply with the Rule, Flex Financial Group, Inc. hereby
represents and warrants that, should the proposed merger between Flex
Acquisitions Corporation and Flex Financial not be effected, and should Flex
Acquisitions Corporation not acquire a business or assets that would
constitute a business within eighteen months after the effective date of the
registration statement to be filed with the Securities and Exchange
Commission, it will convert its $4,000 Note according to its terms into common
stock representing 80% of the outstanding voting shares of the Company's
Common Stock and will vote all of the shares, as the sole owner and holder
thereof, to cause a dissolution of Flex Acquisitions Corporation or to comply
with any similar alternative requirement that might be proposed by the
Securities and Exchange Commission to effect compliance with its Rule 419.

Flex Financial Group, Inc.

By: /S/ Michael T. Fearnow
-------------------------
Michael T. Fearnow
President

Dated: November 26, 1996

<PAGE>
EXHIBIT 23.1

Law Offices of
M. Stephen Roberts
770 S. Post Oak Lane, Suite 515
Houston, Texas 77056
(713) 961-2696
Fax: (713) 961-1148

November 26, 1996

Michael T. Fearnow, President
Flex Acquisitions Corporation
770 S. Post Oak Lane, Suite 515
Houston, TX 77056

Dear Mr. Fearnow:

The undersigned is named in Forms SB-2 and S-4 Registration Statements
of Flex Acquisitions Corporation (the "Company"), a Texas corporation, which
registration statements are to be filed with the Securities and Exchange
Commission in connection with:

(1) the registration under the Securities Act of 1933, as amended,
pursuant to the Company's registration statement on Form SB-2 of up to 100,000
units ("Units") consisting of 100,000 shares of common stock, par value $.001
per share ("Common Stock"), 200,000 Class B warrants ("Class B Warrants") and
200,000 Class C warrants ("Class C Warrants"), and 400,000 shares of Common
Stock that underlie the Class B and Class C Warrants (collectively the "Public
Offering Securities"); and a distribution by American NorTel Communications,
Inc., a Wyoming corporation, of 20,000 shares of Common Stock of the Company
to the shareholders of American NorTel Communications, Inc. (the "Spinoff
Shares"); and,

(2) the registration under the Securities Act of 1933, as amended,
pursuant to the Company's registration statement on Form S-4, of a proposed
merger with Flex Financial Group, Inc., a Texas corporation, of 80,000 shares
of Common Stock; 80,000 Class A Options; 80,000 shares of Common Stock that
underlie the Class A Options; 16,333 Unit Purchase Options ("Bridge Loan
Securities"); 16,333 Units that underlie the Unit Purchase Options; 16,333
shares of Common Stock issuable upon exercise of the Unit Purchase Options;
32,666 Class B Warrants issuable upon exercise of the Unit Purchase Options;
32,666 shares of Common Stock that underlie the Class B Warrants issuable upon
exercise of the Unit Purchase Options; 32,666 Class C Warrants issuable upon
exercise of the Unit Purchase Options; 32,666 shares of Common Stock that
underlie the Class C Warrants issuable upon exercise of the Unit Purchase
Options; 14,000 Units consisting of 14,000 shares of Common Stock, 28,000
Class B Warrants and 28,000 Class C Warrants (collectively the "PPM
Securities"); 28,000 shares of Common Stock that underlie the PPM Securities
Class B Warrants; 28,000 shares of Common Stock that underlie the PPM
Securities Class C Warrants (all of the above collectively the "Merger
Shares"); and 2,000,000 shares of Common Stock registered for future
acquisitions ("Shelf Shares").

The capacity in which the undersigned is named in such Registration Statement
is that of counsel to the Company and as a person who has given an opinion on
the validity of the securities being registered and upon other legal matters
concerning the registration or offering of the securities described therein.

The undersigned hereby consents to being named in such Registration
Statement in the capacity therein described.

Yours very truly,

/S/ M. Stephen Roberts
- -------------------------
M. Stephen Roberts

<PAGE>
EXHIBIT 23.6

Flex Acquisitions Corporation:

We consent to the use of our report dated August 5, 1997 for the period ended
July 31, 1997 and 1996 in Amendment No. 2 to Form SB-2 and Amendment No. 2 to
Form S-4 filed on behalf of Flex Acquisitions Corporation.

/S/ Harper & Pearson Company
- ---------------------------------
Harper & Pearson Company
Houston, Texas
September 12, 1997

<PAGE>
EXHIBIT 23.7

Flex Financial Group, Inc.:

We consent to the use of our report dated August 5, 1997, for the period ended
July 31, 1997 and 1996 in Amendment No. 2 to Form SB-2 and Amendment No. 2 to
Form S-4 filed on behalf of Flex Acquisitions Corporation.

/S/ Harper & Pearson Company
- --------------------------------

Harper & Pearson Company
Houston, Texas
September 12, 1997

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