AMERI-FIRST FINANCIAL GROUP INC
10QSB, 2000-11-20
NON-OPERATING ESTABLISHMENTS
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                                   FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C. 20549


             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


For the quarter ended:         September 30, 2000

Commission file number:        000-28453

                        Ameri-First Financial Group, Inc.
        -----------------------------------------------------------------
             (exact name of registrant as specified in its charter)

        Nevada                                                      84-0849132
----------------------                                           ---------------
(State of Incorporation)                                           (IRS ID No.)


                4514 Cole Avenue, Suite 806, Dallas, Texas            75205
               --------------------------------------------        ----------
               (Address of principal executive offices)            (Zip code)

Registrant's telephone number, including area code: 214-599-9050

Check whether the  registrant  filed all  documents  and reports  required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court. Yes [ ] No [ ].


Shares of common stock outstanding at September 30, 2000:

                                   15,230,262


<PAGE>

                                TABLE OF CONTENTS



PART I - FINANCIAL INFORMATION                                      Page Number


         Item  1.     Financial Statements                              1 - 7

         Item  2.     Managements's Discussion and Analysis
                      of Financial Condition and Results of
                      Operations                                          8


PART II - OTHER INFORMATION                                               9



<PAGE>

<TABLE>

<CAPTION>

                        AMERI-FIRST FINANCIAL GROUP, INC.

                           CONSOLIDATED BALANCE SHEETS
                    September 30, 2000 and December 31, 1999

                                     ASSETS
                                     ------
                                                              Sept 30, 2000   Dec 31, 1999
                                                              -------------   ------------
<S>                                                           <C>             <C>
CURRENT ASSETS:
    Cash and cash equivalents                                 $          0    $          0
    Commission and other receivables                               390,900         349,368
    Deposits with clearing organizations                           100,000         221,319
    Securities owned                                             1,070,000         711,225
    Investment receivable                                          205,000
    Prepaid expenses                                               108,611         100,539
                                                              ------------    ------------
        Total current assets                                  $  1,874,511    $  1,382,451

PROPERTY AND EQUIPMENT:
    Property - real estate (net of $1,336,722 depreciation)     40,180,651               0
    Furniture and fixtures                                         182,068          23,224
    Vehicles                                                             0          97,437
    Computer system                                                 12,758          10,512
                                                              ------------    ------------
    Total property and equipment                                40,375,477         131,173
    Accumulated depreciation                                    (1,346,618)        (12,191)
                                                              ------------    ------------
        Total property and equipment, net of depreciation       39,028,859         118,982

OTHER ASSETS:                                                      (11,207)
    Goodwill (net of $4,214 amortization)                          164,319
    Deposits                                                     1,000,000
    Other assets                                                   149,900          11,500
                                                              ------------    ------------
        Total other assets                                       1,303,012          11,500

TOTAL ASSETS                                                  $ 42,206,382    $  1,512,933
                                                              ============    ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------
LIABILITIES
    Bank overdraft                                            $          0    $     12,142
    Accounts payable and accrued expenses                          571,093         575,240
    Payable to clearing organizations                                  662         735,750
    Payable to hotel operator                                      173,787
    Current portion of notes payable                                                14,441
                                                              ------------    ------------
        Total current liabilities                                  745,542       1,337,573

LONG TERM LIABILITIES
    Notes payable                                               22,692,601       1,255,280
                                                              ------------    ------------

TOTAL LIABILITIES                                               23,438,143       2,592,853

STOCKHOLDERS' EQUITY
    Common stock, $0.001 par value                                  15,230           4,706
    Additional paid-in-capital                                  28,625,950       8,138,559
    Retained deficit                                            (9,872,941)     (9,223,185)
                                                              ------------    ------------
        Total Stockholders' Equity                              18,768,239      (1,079,920)
                                                              ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                    $ 42,206,382    $  1,512,933
                                                              ============    ============

</TABLE>

                                        1

<PAGE>

                        AMERI-FIRST FINANCIAL GROUP, INC.

                      CONSOLIDATED STATEMENT OF OPERATIONS
                 Three months ended September 30, 2000 and 1999

                                             Three months    Three months
                                                ended           ended
                                            Sept 30, 2000   Sept 30, 1999
                                            -------------   -------------

Revenue                                     $   1,231,341   $      66,084

Operating expenses:
    Selling expenses                               15,918          19,845
    Operating expenses                          1,445,627
    Depreciation and amortization               1,340,770
    General and administrative                    286,781         207,043
                                            -------------   -------------
        Total Operating Expense                 3,089,096         226,888

                                            -------------   -------------
Net operating income                           (1,857,755)       (160,804)

Other income (expense):
    Other income                                   55,781
    Interest income                                14,545             566
    Interest expense                             (181,653)        (10,458)
                                            -------------   -------------

Net income                                     (1,969,082)       (170,696)
                                            =============   =============



Weighted average shares outstanding            11,784,382       4,706,114
                                            =============   =============

INCOME (LOSS) PER SHARE                            ($0.17)         ($0.04)
                                            =============   =============




                                        2

<PAGE>

<TABLE>

<CAPTION>

                        AMERI-FIRST FINANCIAL GROUP, INC.

            STATEMENT OF STOCKHOLDERS' EQUITY AND ACCUMULATED DEFICIT
                    December 31, 1999 to September 30, 2000

                                                 Common               Paid In     Accumulated
                                         Shares         Amount        Capital       Deficit         Total
                                      -----------    -----------    -----------   -----------    -----------
<S>                                   <C>            <C>            <C>           <C>            <C>
Balance,
       December 31, 1999                4,706,114          4,706      7,584,976    (9,223,165)    (1,633,483)

Shares issued for 100% of
       Ameri-First Securities Corp.     1,890,002          1,890        943,154                      945,044

Shares issued for 100% of
       Itronics Comm. Corp.                50,000             50                                          50

Paid in capital by shareholder                                          261,173                      261,173

Shares issued for hotel
       properties                       4,500,000          4,500     16,452,901                   16,457,401

Net income - three months:
        ended March 31, 2000                                                          389,509        389,509
        ended June 30, 2000                                                           929,797        929,797

                                      -----------    -----------    -----------   -----------    -----------
Balance
        June 30, 2000                  11,146,116         11,146     25,242,204    (7,903,859)    17,349,491

Shares issued for:
       Services                           150,000            150         14,850                       15,000
       Purchase hotel properties          448,718            449        699,551                      700,000
       Debt - related party             2,434,000          2,434      1,670,396                    1,672,830
       Deposit on purchase of
                 broker dealers         1,051,428          1,051        998,949                    1,000,000

Net income - three months:
        ended September 30, 2000                                                   (1,969,082)    (1,969,082)

                                      -----------    -----------    -----------   -----------    -----------
Balance
        September 30, 2000             15,230,262         15,230     28,625,950    (9,872,941)    18,768,239
                                      ===========    ===========    ===========   ===========    ===========

</TABLE>



                                        3

<PAGE>

<TABLE>

<CAPTION>

                        AMERI-FIRST FINANCIAL GROUP, INC.


                      CONSOLIDATED STATEMENT OF CASH FLOWS
                 Three months ended September 30, 2000 and 1999

                                                                            Three months    Three months
                                                                               ended           ended
                                                                           Sept 30, 2000   Sept 30, 1999
                                                                           -------------   -------------
<S>                                                                        <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                                                 ($1,969,082)      ($170,696)
    Adjustments to reconcile net loss to net
            cash (used) by operating activities:
                Items not requiring cash - depreciation and amortization       1,340,770
                                       issue stock for services                   15,000          23,000
                (Increase) decrease in current assets                          1,031,200         (50,452)
                Increase (decrease) in current liabilities                      (171,560)         37,431
                (Increase) decrease in other assets                              (58,346)
                                                                           -------------   -------------
NET CASH (USED) BY OPERATING ACTIVITIES                                          187,982        (160,717)

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of fixed assets                                                  (6,305,151)              0
    Disposal of fixed assets (net)
                                                                           -------------   -------------
NET CASH FROM INVESTING ACTIVITIES                                            (6,305,151)              0

CASH FLOWS FROM FINANCING ACTIVITIES:
    Sale of common stock
    Issuance of common stock for assets                                          700,000
    Issuance of common stock for debt                                          1,672,830
    Capital contributed by shareholder                                                           164,600
    Increase (decrease) in notes payable                                       3,742,172
                                                                           -------------   -------------
NET CASH FROM FINANCING ACTIVITIES                                             6,115,002         164,600

                                                                           -------------   -------------

NET INCREASE IN CASH                                                             ($2,167)  $       3,883

CASH, BEGINNING OF PERIOD                                                         (9,051)        (12,132)
                                                                           -------------   -------------

CASH, END OF PERIOD                                                             ($11,218)        ($8,249)
                                                                           =============   =============

</TABLE>

                                        4

<PAGE>

                        Ameri-First Financial Group, Inc.

                 (Formerly Itronics Communications Corporation)

                   Notes to Consolidated Financial Statements
                               September 30, 2000

(1)      Summary of Significant Accounting Policies and Practices

         (a) General
             -------
         Ameri-First  Financial Group,  Inc. and  subsidiaries  (the Company) is
engaged in investment  banking and  securities  business.  In January 2000,  the
Company  purchased  Ameri-First  Securities,  Inc.,  an NASD  registered  broker
dealer.

         (b) Principles of Consolidation
             ---------------------------
         The consolidated  financial statements include the financial statements
of  Ameri-First  Financial  Group,  Inc.  and  its  related  subsidiaries.   All
significant intercompany balances have been eliminated in consolidation.

         (c) Cash Equivalents
             ----------------
         For purposes of the consolidated  statements of cash flows, the Company
considers all highly liquid debt instruments  with original  maturities of three
months or less to be cash equivalents.

         (d) Revenue Recognition
             -------------------
         Revenue  is  recognized  upon  shipment  of  product.   Allowances  for
estimated  returns  and  discounts  are  provided  when the  related  revenue is
recorded.

         (e) Inventories
             -----------
         Inventories  are  stated  at the  lower  of  cost  or  market.  Cost is
determined using the first-in, first-out method.

         (f) Property and Equipment
             ----------------------
         Property and  equipment are stated at cost.  Depreciation  of plant and
equipment is calculated on the  straight-line  method over the estimated  useful
lives of the assets.

         (g) Income Taxes
             ------------
         Income taxes are accounted  for under the asset and  liability  method.
Deferred  tax  assets  and   liabilities  are  recognized  for  the  future  tax
consequences   attributable  to  differences  between  the  financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
bases and operating loss and tax credit  carryforwards.  Deferred tax assets and
liabilities  are measured  using enacted tax rates  expected to apply to taxable
income in the years in which  those  temporary  differences  are  expected to be
recovered  or settled.  The effect on deferred tax assets and  liabilities  of a
change in tax rates is  recognized  in income in the period  that  includes  the
enactment date.



                                        5

<PAGE>


                        Ameri-First Financial Group, Inc.

                 (Formerly Itronics Communications Corporation)

                   Notes to Consolidated Financial Statements
                               September 30, 2000


(2)      Summary of Significant Accounting Policies and Practices (con't)

         (h) Income (loss) per Share
             -----------------------
         Basic net  income  (loss)  per share is based on the  weighted  average
number of actual  shares  outstanding  during the  period.  Options to  purchase
common stock are included in the calculation of income (loss) per share provided
their impact is not dilutive. As of September 30, 2000, no stock option plan was
in place,  and  therefore,  no stock  options or other common  stock  equivalent
instruments have been issued.

(2)      Acquisitions

         In January 2000, the Company purchased 100% of the outstanding stock of
Ameri-First  Securities,  Inc.  for the  issuance of  1,890,002  shares of newly
issued  restricted  common  stock..  The  acquisition  was  accounted  for  as a
purchase.

         In March 2000, the Company  purchased 100% of the outstanding  stock of
Itronics  Communications  Corporation for the issuance of 50,000 shares of newly
issued  restricted  common  stock..  The  acquisition  was  accounted  for  as a
purchase.

         In June 2000, the Company  purchased  five hotels.  In August 2000, the
         Company purchased three hotels.

(3)      Notes Payable to Shareholders

Notes payable to  shareholders  at September 30, 2000 consist of the  following:
Various notes payable to shareholder, principal due on demand, interest at 10%
  due monthly, secured by equipment and receivables of the Company.  $ 1,255,000




                                        6

<PAGE>

                        Ameri-First Financial Group, Inc.

                 (Formerly Itronics Communications Corporation)

                   Notes to Consolidated Financial Statements
                               September 30, 2000


(4)      Income Taxes

As of June 30, 1999 and 1998, the Company has Federal tax loss  carryforwards of
approximately $9,000,000 and $196,000 respectively.

The future tax benefits of the net operating  loss  carryforwards  have not been
recognized  since their  realization is dependent upon the Company's  ability to
generate future earnings.

Due to the uncertainty of the Company's ability to generate future earnings, the
Company has  established  offsetting  deferred  tax assets  (generated  from the
aforementioned tax loss carryforwards) and related valuation allowances.





                                        7

<PAGE>

Item 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.


         The  Company is  engaged  in the  securities  business  and  investment
banking and through its subsidiary,  Ameri-First  Securities,  Inc.,  which is a
full service NASD registered broker/dealer.

         The Company's  liquid  position at September  30, 2000 was  $1,987,683,
which represented a decrease of $1,289,165 over the prior quarter.  Most of this
increase  came  from  the  stock  it  received   from  an   investment   banking
transaction(s) whose market value at June 30, 2000 was $1,800,000.  The increase
in the working capital position  represents an increase of 184%. The income also
was $0.14 per share  which  compares  to prior  periods  when  there was  always
losses.

         In the quarter ended  September 30, 2000, the Company  purchased  three
hotels for which it paid  $34,000,000.  This amount was paid with $450,000 cash,
$17,262,000  in assumed debt and issued 448,718 newly issued  restricted  common
stock of the company. Under the agreement of purchase, HomeGate Corporation will
operate the hotels for a management fee.

         The Company is currently negotiating the sale of its hotels at a profit
and plans to concentrate on its securities and investment banking business.





                                        8

<PAGE>

PART II.     OTHER INFORMATION


Item  1.     Legal Proceedings.

                The Company is not involved in any legal proceedings.

Item  2.     Changes in Securities.

                Registrant has made no changes in its securities.

Item  3.     Defaults Upon Senior Securities.

                Registrant has no senior securities and accordingly no defaults.

Item  4.     Submission of Matters to a Vote of Security Holders.

                No matters were presented to a vote of security holders.

Item  5.     Other Information.

                None.

Item 6.      Exhibits and Reports on Form 8-K.

                None.



                                        9

<PAGE>

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                        Ameri-First Financial Group, Inc.
                                        ---------------------------------
                                        (Registrant)


                                        BY:  /s/ Jeffrey Bruteyn
                                            -----------------------------
                                                Jeffrey Bruteyn
                                        Its:    President

DATE:   November 17, 2000
        Dallas, Texas




                                       10



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