UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
COMMISSION FILE NUMBER 0-12666
AMERICAN FINANCIAL HOLDING, INC.
(Exact name or registrant as specified in charter)
DELAWARE 87-0458888
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
225 SOUTH 200 WEST, SUITE 302, FARMINGTON, UTAH 84025
(Address of principal executive offices)
(801) 451-9580
(Registrant's telephone number, including area code)
(Former name, former address, and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
The Company had 4,279,449 shares of common stock, par value
$0.01 per share, issued and outstanding as of August 8, 1997.
ITEM 1. FINANCIAL STATEMENTS
This report on Form 10-QSB For the interim period ended March 31,
1997, of American Financial Holding, Inc. (The (The "Company"), is being
filed in August 1997, substantially after its due date. This report shoudl
be read in conjunction with other periodic reports reporting events occurring
after December 31, 1996. Such other periodic reports and the information
set forth therein should be read in conjunction with the Company's annual
report on Form 10-KSB, which contains information as of December 31, 1996,
and this quarterly report on Form 10-KSB unless otherwise indicated.
The consolidated condensed financial statements included
herein have been prepared by the Company without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. However, in the opinion of
management, all adjustments (which include only normal recurring accruals)
necessary to present fairly the financial position and results of operations
for the periods presented have been made. These consolidated condensed
financial statements should be read in conjunction with the financial
statements and notes thereto included in the Company's annual report on
Form 10-KSB for the year ended December 31, 1996.
AMERICAN FINANCIAL HOLDING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
MARCH 31, DECEMBER 31,
1997 1996
---------- ----------
<S> <C> <C>
CURRENT ASSETS
Cash $ 308,587 $ 361,113
Marketable securities available for sale 65,050 78,641
Commissions receivable 31,784 127,136
Note receivable - related party 170,216 167,194
Prepaid lease - 12,649
Interest receivable 7,732 6,487
---------- ----------
TOTAL CURRENT ASSETS 583,369 753,220
---------- ----------
PROPERTY AND EQUIPMENT
Automobiles 61,649 90,417
Equipment 58,734 58,734
Furniture and fixtures 22,133 22,133
---------- ----------
142,516 171,284
Less: accumulated depreciation (67,792) (80,941)
---------- ----------
NET PROPERTY AND EQUIPMENT 74,724 90,343
---------- ----------
OTHER ASSETS
Investment in real estate - 107,584
Net deferred tax asset 195,560 195,560
Deposits and other assets 31,866 37,860
---------- ----------
TOTAL OTHER ASSETS 227,426 341,004
---------- ----------
TOTAL ASSETS $ 885,519 $1,184,567
========== ==========
<FN>
See the accompanying notes to condensed consolidated financial
statements.
</FN>
</TABLE>
AMERICAN FINANCIAL HOLDING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(UNAUDITED)
<TABLE>
LIABILITIES AND STOCKHOLDERS' DEFICIT
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
---------- ----------
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 139,533 $ 120,074
Commissions payable 31,784 127,136
Short-term borrowings 12,633 20,471
Accrued liabilities 343,927 318,348
Income taxes payable 256,641 256,641
Preferred dividends payable 43,462 34,868
Current portion of long-term debt 480,131 517,765
---------- ----------
TOTAL CURRENT LIABILITIES 1,308,111 1,395,303
---------- ----------
LONG-TERM DEBT, net of current portion 398,421 405,071
---------- ----------
MINORITY INTEREST (preferred stock in
consolidated subsidiary) 231,986 344,552
---------- ----------
STOCKHOLDERS' DEFICIT
Common stock - $.01 par value; 20,000,000
shares authorized, 4,279,449and 4,279,449
issued and outstanding, respectively 42,794 42,794
Additional paid-in capital 7,336,908 7,358,451
Stockholders' notes receivable, net of reserve
of $869,255 and $869,255, respectively - -
Unrealized loss on marketable securities (19,160) (6,150)
Accumulated deficit (8,413,541) (8,355,454)
---------- ----------
TOTAL STOCKHOLDERS' DEFICIT (1,052,999) (960,359)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 885,519 $1,184,567
========== ==========
<FN>
See the accompanying notes to condensed consolidated financial
statements.
</FN>
</TABLE>
AMERICAN FINANCIAL HOLDING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
1997 1996
---------- ----------
<S> <C> <C>
COMMISSION REVENUE $ 724,260 $1,070,772
COMMISSION EXPENSE 592,429 901,800
---------- ----------
GROSS PROFIT 131,831 168,972
GENERAL AND ADMINISTRATIVE EXPENSE 226,039 358,994
---------- ----------
LOSS FROM OPERATIONS (94,208) (190,022)
OTHER INCOME (EXPENSE)
Interest income 57,373 55,740
Interest expense (12,658) (2,167)
---------- ----------
LOSS BEFORE INCOME TAXES (49,493) (136,449)
INCOME TAX PROVISION - 4,000
---------- ----------
LOSS BEFORE MINORITY INTEREST (49,493) (140,449)
MINORITY INTEREST, PREFERRED DIVIDEND OF SUBSIDIARY 8,594 12,082
---------- ----------
NET LOSS $ (58,087) $ (152,531)
========== ==========
NET LOSS PER COMMON SHARE $ (0.01) $ (0.03)
========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 4,279,449 4,233,909
========== ==========
<FN>
See the accompanying notes to condensed consolidated financial
statements.
</FN>
</TABLE>
AMERICAN FINANCIAL HOLDING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN CASH
FOR THE THREE MONTHS
ENDED MARCH 31,
1997 1996
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (58,087) $ (140,449)
Adjustments to reconcile net loss to
net cash provided by (used in) operating
activities:
Depreciation and amortization 3,323 8,348
Write off of stockholders' notes receivable 105,656 91,340
Interest accrued on to shareholders' notes
receivable (54,400) (46,230)
Interest accrued on to notes payable - -
Changes in current assets and liabilities 56,442 50,837
Other 1,013 -
---------- ----------
Net cash provided by (used in)
operating activities 53,947 (36,154)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in stockholders' notes receivable (51,256) (40,377)
Purchase of equipment - (636)
Purchase of real estate held for investment - (113,389)
Proceeds from sale of real estate 109,800 -
Purchase of marketable securities (100,000) -
Proceeds from sale of marketable securities 108,918 -
---------- ----------
Net cash provided by financing activities 67,462 (154,402)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock - 31,495
Principal payments on short-term borrowings
and long-term debt (39,826) (2,287)
Redemption of minority interests (112,566) -
Other (21,543) -
---------- ----------
Net cash provided by financing activities (173,935) 29,208
---------- ----------
NET DECREASE IN CASH (52,526) (161,348)
CASH AT BEGINNING OF PERIOD 361,113 988,904
---------- ----------
CASH AT END OF PERIOD $ 308,587 $ 827,556
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ 12,658 $ 2,167
========== ==========
<FN>
See the accompanying notes to condensed consolidated financial
statements.
</FN>
</TABLE>
AMERICAN FINANCIAL HOLDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1--CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying condensed consolidated financial statements have
been prepared by the Company, and are not audited. All adjustments
necessary for fair presentation have been included, and consist
only of normal recurring adjustments. These financial statements
are condensed and, therefore, do not include all disclosures
normally required by generally accepted accounting principles.
These statements should be read in conjunction with the Company's
most recent annual report on Form 10-KSB. The financial position and
results of operations presented in the accompanying financial
statements are not necessarily indicative of the results to be
generated for the remainder of 1997.
NOTE 2--REDEMPTION OF MINORITY INTEREST
During January and February 1997, the Company paid approximately
$112,000 to redeem 8,500 shares of preferred stock of its
subsidiary, Triad Financial Systems, Inc. Annual dividend
requirements on the remaining 35,807 preferred shares outstanding
are $34,375 and are payable semi-annually in cash and additional
shares of preferred stock at the semi-annual rate of $0.24 per
share in cash and $0.24 per share in preferred shares computed at
$12.00 per share.
NOTE 3--SALE OF INVESTMENT IN REAL ESTATE AND VEHICLES
The investment in real estate was sold during the first quarter of
1997 for approximately $109,800 resulting in a gain of $2,216. The
Company also sold vehicles at approximately their carrying value of
$12,296. The proceeds were used to pay the remaining balance due on
related notes payable secured by the vehicles in the amount of
approximately $12,000.
NOTE 4--BUSINESS CONDITION
The Company has suffered cumulative losses of $8,413,541, through
March 31, 1997, and has a working capital deficiency of $724,742
and a capital deficiency of $1,052,999 as of March 31, 1997. In
addition, the Company is negotiating alternative arrangements for
the settlement of certain long-term notes payable. These conditions
raise substantial doubt about the Company's ability to continue as
a going concern. The accompanying condensed consolidated financial
statements do not include any adjustments relating to recoverability
and classification of assets or the amount or classification of
liabilities that may result from the outcome of this uncertainty.
Management of the Company is seeking additional financing from third-
party investors which may possibly require reorganizing the corporate
structure of the Company, and may possibly require separation of
American Financial Holding, Inc. from its subsidiaries. If successful
in obtaining sufficient financing, Management desires to acquire small
insurance companies with profitable operations and growth potential.
Although there is no assurance that these plans will be accomplished,
Management has recently held discussions with representatives of a
potential investor regarding a plan whereby the investor is considering
providing financing to the Company, conditioned on Management's
ability to close a purchase of an insurance company. The Company has
not identified an acquisition target nor have any commitments been
made to acqurie an insurance company. The first phase of the potential
financing agreement would be in the amount of $1,000,000, and if
successful, the second and third phases thereof would be in larger
amounts. There is no assurance that this or any other plan will be
completed, or that the Company can obtain profitable operations,
continue as a going concern or satisfy its liabilites.
NOTE 5--NOTE RECEIVABLE RELATED PARTY
During the year ended December 31, 1996, Mr. Raymond Punta purchased
a condominium from the Company for $102,955. In addition, the Company
advanced Mr. Punta approximately $58,000 of additional funds. In
return for the real estate and cash. Mr. Punta signed a promissory
note for $161,151. The note bears interest at 7.5% per annum and was
payable to the Company by June 30, 1997, or sooner if the condominium
were sold by Mr. Punta prior to that date. The balance of the note
receivable, including interest, was approximately $170,000 as of
March 31, 1997. Mr. Punta sold the condominium during July 1997
for approximately $162,000. At that time, Mr. Punta repaid the
Company approximately $107,000, but the remaining $63,000 due
on the note receivable currently remains unpaid.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
THE COMPANY'S ABILITY TO CONTINUE AS A GOING CONCERN - SHORTAGE OF
WORKING CAPITAL AND CONTINUING LOSSES
The Company has extremely limited working capital, no credit lines,
and insufficient revenue to meet its operating requirements. For the
three months ended March 31, 1997 and 1996, the Company suffered net
losses applicable to common stockholders of $58,087 and $152,531,
respectively, and, as of march 31, 1997, had an accumulated deficit of
$8,413,541. At March 31, 1997, the Company had a stockholders' deficit
of $1,053,000. The Company expects that it will continue to incur operating
losses and that its accumulated deficit will increase. During 1997, the
Company has continued to use the cash of its reinsurance subsidiary,
AF Reinsurance, to fund its operationg, investing, and financing
activities. The principal source of cash from outside sources has been
receipts from the sale of real estate. All of the foregoing raise
substantial concerns respecting the ability of the Company to continue
as a going concern.
The Company's operating plan for the balance of 1997 and into 1998
is dependent upon the receipt of additional funding from equity financing.
The Company did not have any net proceeds from the sale of common stock
during the first quarter of 1997. Cash inflows were inadequate to offset
cash required for other financing activities, including redemption of Triad
Preferred Stock, advances to shareholders, and principal payments on
borrowings. The Company proposes to undertake an organization restructuring
which management believes will enhance the ability of the Company to
obtain equity of from $1 million to $5 million to fund the activation of
its reinsurance subsidiary and expansion of marketing which, together
with proceeds from the financing, should enable the Company to continue.
Prior to implementing any organizational restructuring, it will be
necessary for the Company to obtain interim funds to pay related legal,
accounting, and other expenditures. There can be no assurance that any
required initial funding can be obtained for any of the foregoing or that
the Company will be able to continue.
The consolidated financial statements do not include any adjustments
relating to recoverability and classification of asset carrying amounts or
the amount and classification of liabilities if the Company were unable to
continue as a going concern.
CONTINGENCIES
AF Reinsurance is required by the Arizona Department of Insurance to
maintain combined capital and surplus of at least $150,000 in order to
maintain its reinsurance charter. The Company obtained an aggregate of
$864,000 in initial capital and surplus for AF Reinsurance, consisting of
$439,000 in net proceeds from the sale of 8% Payable in Cash and In Kind
Cumulative Convertible Preferred Stock of Triad ("Triad Preferred Stock")
and $425,000 in proceeds from a subordinated surplus debenture issued to
Mass General.
At March 31, 1997, AF Reinsurance had accounts receivable from Triad
and AFH of $619,000. Those entities used the proceeds from such advances to
pay $224,000 to redeem Triad Preferred Stock from APL as discussed below,
to pay interest on the subordinated surplus debenture held by Mass General,
and for general and administrative expenses, including advances to officers
and directors of AFH. The resulting $619,000 in inter-corporate advances is
not an admitted asset for purposes of determining AF Reinsurance's capital
and surplus under the requirements of the Arizona Department of Insurance.
However, the Company believes that AF Reinsurance still meets the applicable
capital and surplus requirements of the Arizona Department of Insurance.
On June 6, 1997, the Arizona Department of Insurance entered a
suspension order suspending the certificate of authority of AF Reinsurance
for its failure to file by March 31, 1997, its annual statement of financial
condition and pay the related fees. The Company intends to file the required
reports and pay the required fees and penalties during the third quarter
of 1997 and expects that its certificate of authority will be reinstated.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash requirements of $52,526 for the first quarter of 1997
were provided by cash balances at the beginning of the year, principally cash
proceeds from debt and equity financings completed by Triad in 1995, from
operating activities and from the proceeds from the sale of real estate. For
the three months ended March 31, 1997, the Company experienced positive cash
flow from operating activities of $54,000 compared with negative cash flow
from operating activities of $36,154 in the same period of 1996. The increased
cash flow from operating activities in 1997 as compared to 1996 was
principally due to the lower operating loss in 1997 due to decreased general
and administrative expenses, as discussed below.
Investing activities provided cash of $67,000 in1997 as compared to the
use of $154,000 in 1996. The largest components of the Company's investing
activities in 1997 consisted of $51,000 loaned to shareholders which was
offset by the proceeds from the sale of real estate in the amount of $109,800.
During the first quarter of 1997, the Company's financing activities
used cash of $174,000, consisting principally of $112,000 used to redeem
Triad Preferred Stock and $40,000 for principal payments on short- and
long-term borrowings.
At March 31, 1997, the Company had notes and open accounts receivable of
$3,193,401 due from officers, directors and stockholders of the Company. In
1993, Management recorded a reserve of $869,255 against those portions of the
stockholders' notes receivable that had not previously been expensed for
financial reporting purposes. The Company has expensed for financial reporting
purposes the remaining $2,324,146 of the notes receivable in each period as
compensation expense to certain officers and directors. Of this amount,
$105,656 and $91,340 was expensed in the three months ended March 31, 1997 and
1996, respectively. However, these individuals are obligated under the
promissory notes to repay the entire stated principal of the loans.
During the three months ended March 31, 1997 and 1996, the Company
recognized $54,400 and $46,230 respectively, of interest income related to
these notes receivable. The interest income was not paid by the shareholders
but was added to the balance of the notes receivable. The Company does not
expect that payments under these notes will provide capital during the next 12
months.
CAPITAL REQUIREMENTS
The Company believes that the remaining capitalization of AF Reinsurance
is sufficient for the subsidiary to begin operations, although the Company is
seeking additional funding in order to launch new product introduction and
marketing expansion and, in general, to form a broader base for planned
activities. In addition to funding for AF Reinsurance, the Company would
benefit from additional funds to cover accrued liabilities and accounts
payable inasmuch as most of the Company's $1,308,000 current liabilities were
past due at March 31, 1997, to pay ongoing operating losses, and to provide
funds for additional marketing by Income Builders.
By activating AF Reinsurance, the Company desires to continue to expand
its marketing organization and acquire additional insurance company assets.
The Company will require additional equity or debt capital to fund this
expansion, and there can be no assurance that such funding will be available
on terms viable to the Company.
As of March 31, 1997, Triad had issued an outstanding 35,807 shares of
Triad Preferred Stock with a liquidation preference of $12 per share, or an
aggregate of $429,684, and AF Reinsurance had outstanding $425,000 in
principal amount of surplus debentures, bearing interest at 7.66% per annum,
due quarterly, with annual principal payments of $42,500 due annually,
commencing September 30, 1996. All interest payments required through December
31, 1996, have been paid. The Company tendered the September 30, 1996,
principal payment of $42,500, but the payment was not deposited and the
Company and mass General are discussing extended repayment terms. The Company
expects to continue to utilize proceeds from these surplus debentures, which
form a portion of the surplus of AF Reinsurance, to pay the principal portion
of the amount due in the future.
The Company has issued a promissory note aggregating $340,000 at
December 31, 1996, bearing interest at 8% (12% after default) and due five
days after demand, but in any event, by March 31, 1997. This note is currently
in default, but the Company does not expect that collection efforts will be
commenced as long as the payee, in its sole discretion, concludes that the
Company is making substantial progress toward obtaining sufficient financing
to pay the note. This note is secured by a pledge of officer and director
notes payable to the Company which aggregated approximately $2,606,000 at
December 31, 1995.
Inasmuch as the 1995 offering of Triad preferred Stock was not
successful in obtaining the amount of funding anticipated, the Company has
been unable to launch its product introduction and marketing effort and has
been using the cash proceeds from that offering and from the related sale of a
surplus debenture to meet the Company's cash requirements, as discussed above.
Therefore, the Company is exploring other financing alternatives, including
the sale of additional equity securities. net proceeds from such funding would
be utilized to fund marketing expansion and related new product introduction,
to increase the surplus of AF Reinsurance, to cover ongoing general and
administrative expenses (including payments to executive officers and
directors), and perhaps to reduce the outstanding Triad surplus debenture or
to redeem Triad preferred Stock. There can be no assurance that any of the
Company's efforts to obtain additional funding will be successful or that the
Company will be able to continue.
American Financial Holding, Inc. intends to separate its Triad
reinsurance activities, Income Builders, and currently inactive American
Financial Marketing from the holding company parent. There can be no assurance
as to whether any such organizational restructuring will be pursued, whether
it will be implemented, or the business or financial effects thereof.
CERTAIN UNCERTAINTIES
American Financial Holding, Inc. and Triad have sold securities in
reliance on exemptions from registration under the Securities Act and
applicable state securities laws. Management believes that the Company
has materially complied with the requirements of the applicable exemptions.
However, since compliance with these exemptions is highly technical, it is
possible that the Company could be faced with certain contingencies based
on civil liabilities resulting from the failure to meet the terms and
conditions of such exemptions, which could have a material adverse impact
on the Company's financial condition. Neither AFH nor Triad has received
any demand from any shareholder requesting a return of his investment,
damages, or other remedies in connection with the purchase of securities
by such shareholder.
RESULTS OF OPERATIONS
Commission revenue for the three months ended March 31, 1997 decreased
$346,000, or 32.3%, to $724,000 from $1,070,000 during 1996. The 1997
decrease is due to the absence of special marketing incentive programs
which were available during the previous period when the underwriter of
the Company's principal annuity products conducted an aggressive sales
incentive program. As investors shifted from fixed-yield annuities to
equities in 1997, industry-wide annuity sales generally declined. Low
interest rates continue into 1997. Commission expense declined $310,000,
or 34.3%, to $592,000 in the first quarter of 1997 as compared to $902,000
in 1996. This fluctuation reflects ordinary variations in the commission
schedule of various products, the age and other demographics of policy
purchasers, the size of individual annuity and insurance policies sold,
the commission schedules of the individual insurance agents selling
particular policies, and similar factors, which will likely continue to
fluctuate in the future.
Gross profit of $132,000 in the first quarter of 1997, or 18.2% of
commission revenue, is a decline from the $169,000 in gross profit in 1996,
equivalent to 15.8% of commission revenue. This improvement in the gross
profit percentage in 1997 is due to the foregoing factors and may not be
indicative of the gross profit that may be expected in future periods.
General and administrative expenses decreased $133,000 or 37.0%, to
$226,000 in the first quarter of 1997 as compared to $359,000 in 1996. The
1997 decrease is due to the recognition of an expense of $105,000 in 1997
compared to $91,000 in 1996 in stockholder notes receivable based on
management's determination that the ultimate collectibility of such notes was
uncertain and other declines in expenses. Total other income (expense)
decreased $87,000, or 63.7%, in 1997 to $50,000 as compared to $136,000 in
1996. The principal component of other income (expense) in both years,
($54,000 in 1997 and $46,000 in 1996), consisted of interest accrued on
notes and open accounts receivable from executive officers and directors.
As a result of the foregoing, the Company's loss before income taxes
decreased $87,000 or 63.7%, to $49,000 in the first three months of 1997 as
compared to $136,000 in 1996. After income tax provision and preferred stock
dividend, the net loss applicable to common stockholders decreased $94,000 or
61.9% to $58,000 in the first quarter of 1997, or a loss of $0.01 per share on
a weighted average of 4,279,000 shares issued and outstanding, as compared to
$152,800 in 1996, or a loss of $0.03 on a weighted average of 4,233,909 shares
outstanding.
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
None
(b) Reports on Form 8-K
During the quarter ended March 31, 1997, the Company filed the
following reports on Form 8-K:
Date of Event Reported Item(s) Reported
January 22, 1997 Item 5. Other Events
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN FINANCIAL HOLDING, INC.
(Registrant)
Dated: September 16, 1997 By:/s/ Kenton L. Stanger,President
(Chief Financial and Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet as of March 31, 1997 and statements of operations for the three months
ended March 31, 1997, and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 308,587
<SECURITIES> 65,050
<RECEIVABLES> 209,732
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 583,369
<PP&E> 142,516
<DEPRECIATION> 67,792
<TOTAL-ASSETS> 885,519
<CURRENT-LIABILITIES> 1,308,111
<BONDS> 630,407
0
0
<COMMON> 42,794
<OTHER-SE> (1,095,793)
<TOTAL-LIABILITY-AND-EQUITY> 885,519
<SALES> 724,260
<TOTAL-REVENUES> 724,260
<CGS> 592,429
<TOTAL-COSTS> 226,039
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,658
<INCOME-PRETAX> (49,493)
<INCOME-TAX> 0
<INCOME-CONTINUING> (49,493)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (49,493)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
