FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

(Mark One)
[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934.

         For the quarterly period ended January 31, 1997

         OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934.

         For the transition period from _________ to _________

         Commission file number 333-9583

                    AMERICAN INTERNATIONAL CONSOLIDATED INC.
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                                     76-0145668
 -------------------------------             -----------------------------------
 (State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)

       14603 Chrisman, Houston, Texas                    77039
   --------------------------------------               --------
  (Address of principal executive offices)             (Zip Code)

                                 (281) 449-9000
               --------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not Applicable
               ---------------------------------------------------
              (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     No X                        (Although the  registrant has filed all
                                    required reports, it has been subject to the
                                    filing  requirements  only  since  March 13,
                                    1997.)

As of April 30, 1997,  the Registrant had  outstanding  2,900,100  shares of its
common stock, par value $.001.



<PAGE>



                    AMERICAN INTERNATIONAL CONSOLIDATED INC.

                                    FORM 10-Q

                     FOR THE QUARTER ENDED JANUARY 31, 1997

                                      INDEX
                                      -----

                                                                      Page No.

Part I -- FINANCIAL INFORMATION

Item 1.  Financial Statements

         Condensed Consolidated Balance Sheets as of
           April 30, 1996 and January 31, 1997 (unaudited)...............3

         Condensed Consolidated Statements of Operations
           for each of the three months and nine months
           ended January 31, 1996 and 1997 (unaudited)...................4
         
         Condensed Consolidated Statements of Cash Flows
           for each of the nine months ended
           January 31, 1996 and 1997 (unaudited).........................5

         Notes to Condensed Consolidated Financial Statements............7

Item 2.  Management's Discussion and Analysis of Financial
            Condition and Results of Operations.........................11

Part II -- OTHER INFORMATION

Item 5.  Other Information..............................................14

Item 6.  Exhibits and Reports on Form 8-K...............................14



                                        2

<PAGE>

<TABLE>
<CAPTION>

                                     PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
        ---------------------                               

                                  AMERICAN INTERNATIONAL CONSOLIDATED INC.
                                                AND SUBSIDIARIES


                                   Condensed Consolidated Balance Sheets

                                                                                     
                                                                        April 30,        January 31,
                                                                          1996               1997
                                                                       -----------       -----------
                                                                                         (unaudited)
                                             ASSETS
                                             ------
Current assets:
<S>                                                                    <C>               <C>        
    Cash                                                               $   265,949       $   168,880
    Accounts receivable:
       Contracts, less allowance for
         doubtful accounts                                               4,874,421         4,087,725
       Employee                                                             26,543            13,323
    Costs and estimated earnings in excess of
       billings on uncompleted contracts                                   645,420           973,523
    Other current assets                                                   131,725           335,231
                                                                       -----------       -----------
          Total current assets                                           5,944,058         5,578,682
                                                                       -----------       -----------

Property and equipment, net                                              1,185,841         1,190,147
Other assets                                                               216,184           431,419
                                                                       -----------       -----------

          Total assets                                                 $ 7,346,083       $ 7,200,248
                                                                       ===========       ===========


                             LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                             ----------------------------------------------
Current liabilities:
    Note payable to financial institutions                             $      --         $      --
    Notes payable to stockholders, net of discount                            --             199,998
    Current portion of long-term debt and capital
       lease obligation                                                    552,264         2,240,546
    Accounts payable                                                     3,826,207         5,401,016
    Accrued payroll and related expenses                                   108,970            72,703
    Billings in excess of costs and estimated
       earnings on uncompleted contracts                                   261,319           257,167
    Other current liabilities                                              358,524           256,648
                                                                       -----------       -----------
          Total current liabilities                                      5,107,284         8,428,078
                                                                       -----------       -----------

Long-term debt, net of current portion                                   2,400,005           319,483
Capital lease obligation, net of current portion                            22,287            38,732
Other liabilities                                                           37,000            37,000
                                                                       -----------       -----------

          Total liabilities                                              7,566,576         8,823,293

Contingencies (Note 5)
Stockholders' equity (deficit):
    Preferred stock, $1.00 par value; 1,000,000 shares
       authorized; none issued                                                --                --
    Common stock, $.001 par value; 20,000,000 shares
       authorized; 2,400,000 shares issued and outstanding                   2,400             2,900
       at April 30, 1995 and 1996; and 2,900,100 issued
       and outstanding at January 31, 1997
    Additional paid-in capital                                             145,755         1,395,505
    Accumulated deficit                                                   (368,648)       (3,021,450)
                                                                       -----------       -----------
          Total stockholders' equity (deficit)                            (220,493)       (1,623,045)
                                                                       -----------       -----------

          Total liabilities and stockholders' equity (deficit)         $ 7,346,083       $ 7,200,248
                                                                       ===========       ===========





          See accompanying Notes to these Condensed Consolidated Financial Statements
</TABLE>

                                                 3


<PAGE>
<TABLE>
<CAPTION>




                                          AMERICAN INTERNATIONAL CONSOLIDATED INC.
                                                      AND SUBSIDIARIES



                                        Condensed Consolidated Statements of Operations


                                                Three Months Ended January 31   Nine Months Ended January 31
                                                ----------------------------    ----------------------------
                                                    1996            1997            1996            1997
                                                ------------    ------------    -----------     -----------
                                                (Unaudited)      (Unaudited)    (Unaudited)      (Unaudited)


<S>                                             <C>             <C>             <C>             <C>         
Contract revenue                                $  7,685,720    $  7,507,469    $ 23,266,620    $ 25,595,976
Contract cost                                      6,057,381       7,414,187      20,016,257      23,657,827
                                                ------------    ------------    ------------    ------------
    Gross profit                                   1,628,339          93,282       3,250,363       1,938,149

Selling, general and
    administrative                                   779,673         980,680       2,617,681       3,040,784

Provision for doubtful
   accounts                                           17,520          18,608          52,547         272,400

Other income (expense):
    Interest and other
       financing costs                               (64,934)        (66,523)       (158,179)       (225,999)

    Private placement
        financing costs                                 --           (99,999)           --        (1,205,248)
    Interest income and
       other, net                                    (66,880)         85,055         (54,642)        153,480
                                                ------------    ------------    ------------    ------------

Income (loss) before federal
    income taxes                                     699,332        (987,473)        367,314      (2,652,802)

Federal income tax (expense)
    benefit                                             --              --              --              --
                                                ------------    ------------    ------------    ------------

Net income (loss)                               $    699,332    $   (987,473)   $    367,314    $ (2,652,802)
                                                ============    ============    ============    ============

Net income (loss) per share                     $        .24    $       (.34)   $        .13    $       (.91)
                                                ============    ============    ============    ============

Weighted average common
    shares outstanding                             2,900,100       2,900,100       2,900,100       2,900,100
                                                ============    ============    ============    ============

                         See accompanying Notes to these Condensed Consolidated Financial Statements
</TABLE>

                                                         4

<PAGE>
<TABLE>
<CAPTION>
                                   AMERICAN INTERNATIONAL CONSOLIDATED INC.
                                               AND SUBSIDIARIES


                                 Condensed Consolidated Statements of Cash Flows


                                                           Nine Months Ended January 31
                                                       -----------------------------------
                                                          1996                    1997
                                                       -----------             -----------
                                                       (unaudited)             (unaudited)
Cash flows from operating activities:                     
<S>                                                    <C>                     <C>         
    Net income (loss)                                  $   367,314             $(2,652,802)
    Adjustments to reconcile net income
       (loss) to net cash provided by
       (used in) operating activities:
       Fair value of common stock
          issued in connection with
          private placement financing                         --                 1,050,249
       Depreciation and amortization                       128,440                 122,035
       (Increase) decrease in:
          Receivables, net                              (1,909,806)                799,916
          Costs and estimated earnings
              in excess of billings on
              uncompleted contracts                       (302,043)               (328,103)
          Other current assets                             (50,937)               (203,506)
       Increase (decrease) in
          Accounts payable                               2,052,933               1,574,809
          Billings in excess of costs and
              estimated earnings                           163,832                  (4,152)
          Other current liabilities                        (98,435)               (138,143)
       Other, net                                          (39,606)               (105,173)
                                                       -----------             -----------
          Net cash provided by (used
              in) operating activities                     311,692                 115,130

Cash flows from investing activities:
    Capital expenditures                                  (134,418)                 (4,306)
    Proceeds from sale of investments                       (5,000)                   --
                                                       -----------             -----------
          Net cash used in investing
              activities                                  (139,418)                 (4,306)

Cash flows from financing activities:
    Net borrowings (payments) under
       receivables factoring agreements                   (407,678)                   --
    Proceeds from notes payable to
       stockholders                                           --                   300,000
    Issuance of long-term debt                                --                      --
    Principal payments on long-term
       debt, capital leases and other
       notes payable                                      (309,996)               (375,795)
    Other                                                     --                  (132,098)
    Distributions to stockholders                             --                      --
                                                       -----------             -----------
          Net cash used in
              financing activities                        (717,674)               (207,893)
                                                       -----------             -----------

Net increase (decrease) in cash                           (545,500)                (97,069)

Cash, beginning of period                                  628,979                 265,949
                                                       -----------             -----------

Cash, end of period                                    $    83,579             $   168,880
                                                       ===========             ===========


            See accompanying Notes to these Condensed Consolidated Financial Statements

</TABLE>
                                                    5

<PAGE>
<TABLE>
<CAPTION>
                                          AMERICAN INTERNATIONAL CONSOLIDATED INC.
                                                      AND SUBSIDIARIES





                                  Condensed Consolidated Statements of Cash Flows, Continued


                                                               Nine Months Ended January  31,
                                                               -------------------------  ---
                                                            1996                       1997
                                                        ------------                 -----------
                                                        (unaudited)                  (unaudited)
Supplemental disclosures:

<S>                                                     <C>                            <C>     
    Interest paid                                       $      158,179                 $155,760
    Equipment and vehicles acquired
       in exchange for long-term debt                   $         --                   $   --
    Advances to stockholders
       converted to compensation                        $         --                   $   --
    Land acquired in exchange for long-
       term debt                                        $         --                   $   --
    Trade payable converted to
       long-term debt                                   $         --                   $   --
    Equipment acquired under
        capital leases                                  $                              $ 56,320
                                                        ==============                 ========



         See accompanying Notes to these Condensed Consolidated Financial Statements

</TABLE>
                                                 6

<PAGE>




                    AMERICAN INTERNATIONAL CONSOLIDATED INC.
                                AND SUBSIDIARIES





              Notes To Condensed Consolidated Financial Statements



NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
         ------------------------------------------------

Organization:  The accompanying  consolidated  financial  statements include the
accounts  of  American  International  Consolidated,   Inc.  (AIC),  a  Delaware
corporation,  and its wholly-owned subsidiaries:  C.H.O.A.  Construction Company
and L. Campbell Construction,  Inc., which is currently inactive. Effective July
26, 1996, the Company changed its name from American International  Construction
Inc. to American International Consolidated,  Inc. Effective April 30, 1994, the
Company  acquired  all of the  outstanding  shares of AIC  Management,  Inc.,  a
corporation  wholly owned by the  stockholders  of the Company,  for $1,015,000,
consisting  of 75,000 shares of the  Company's  common  stock,  with an assigned
value of $44,000, and liabilities assumed totalling $971,000.  This acquisition,
which was accounted for under the purchase method of accounting, gave rise to no
goodwill.  The results of operations of AIC Management,  Inc., are included with
those  of the  Company,  beginning  on May  1,  1994.  In  June  1994,  American
International  Construction , Inc., a Texas corporation,  formed AIC, a Delaware
corporation,  as a  wholly-owned  subsidiary.  Subsequent  to  this,  the  Texas
corporation  was merged  into the  Delaware  corporation  in a reverse  tax-free
exchange.  All  significant  intercompany  balances and  transactions  have been
eliminated in consolidation.

The Company is primarily  engaged in the design and erection of metal  buildings
for use as self-storage,  commercial and cold storage facilities and fabrication
of  metal  building   components.   The  Company  also   participates  in  major
construction projects as a general contractor.

The  condensed  consolidated  balance  sheet  as of  January  31,  1997  and the
consolidated  statements of operations and cash flows for the nine month periods
ended January 31, 1996 and 1997 were taken from the Company's  books and records
without audit. However, in the opinion of management,  such information includes
all  adjustments  (consisting  only of  normal  recurring  accruals),  which are
necessary  to  properly   reflect  the   financial   position  of  the  American
International Consolidated, Inc. and Subsidiaries as of January 31, 1997 and the
results of their operations for the three and nine months ended January 31, 1996
and 1997 and their cash flows for the nine  months  ended  January  31, 1996 and
1997.  The results of  operations  for the  interim  periods  presented  are not
necessarily indicative of the results to be expected for the year.

NOTE 2 - HISTORICAL OPERATIONS
         ---------------------

The Company  experienced  substantial losses prior to fiscal 1995 and during the
nine months ended January 31, 1997 which has resulted in an accumulated  deficit
of $3,021,450 at January 31, 1997. The Company's ability to continue to fund its
future  operating  and capital  needs is dependent  upon its ability to continue
profitable  operations and to generate adequate cash flows from operations.  For
the year ended April 30, 1996, the Company reported net income of $351,570, cash
flow from  operations  of $644,898  and an  increase  in its working  capital to
$836,774  as a result of  converting  $2,400,000  of trade  accounts  payable to
long-term  debt. For the  nine-month  period ended January 31, 1997, the Company
incurred a net loss of  $2,652,802,  of which  $1,205,248  represented  non-cash
costs  associated with the Company's bridge  financing,  positive cash flow from
operations of $115,130, and a negative working capital of $2,849,396,  primarily
as a result of the  classification  of the entire balance of the note payable to
supplier in current liabilities.



                                       7


<PAGE>

                    AMERICAN INTERNATIONAL CONSOLIDATED INC.
                                AND SUBSIDIARIES





              Notes To Condensed Consolidated Financial Statements



NOTE 3 - CONSTRUCTION ACCOUNTS

Costs and billings on uncompleted contracts consists of the following:
<TABLE>
<CAPTION>

                                                                             January  31,
                                                                 ---------------------------------
                                                                     1996                  1997
                                                                 ------------          ------------

<S>                                                              <C>                   <C>         
    Costs incurred on uncompleted contracts                      $ 13,310,848          $ 16,840,982

    Estimated earnings on uncompleted contracts                     2,229,518             1,568,147
                                                                 ------------          ------------
                                                                   15,540,366            18,409,129
    Less:  Billings to date                                       (15,180,334)          (17,692,773)
                                                                 ------------          ------------

                                                                 $    360,032          $    716,356
                                                                 ============          ============
    Included in the Company's consolidated
       balance sheet under the following captions:
       Costs and estimated earnings in excess of
          billings on uncompleted contracts                      $  1,011,678          $    973,523
       Billings in excess of costs and estimated
          earnings on uncompleted contracts                          (651,646)             (257,167)
                                                                 ------------          ------------

                                                                 $    360,032          $    716,356
                                                                 ============          ============


NOTE 4 - CONTRACTS RECEIVABLE

Contracts receivable consisted of the following:

                                                                  April 30,            January 31,
                                                                    1996                  1997
                                                                ------------          ------------

       Completed contracts                                      $  1,458,204          $    485,390
       Uncompleted contracts                                       3,158,551             2,661,189
       Retainage                                                     337,523             1,023,234
                                                                ------------          ------------
                                                                   4,954,278             4,169,813
       Less allowance for doubtful accounts                          (79,857)              (82,088)
                                                                ------------          ------------

                                                                $  4,874,421          $  4,087,725
                                                                ============          ============

</TABLE>

                                                        8



<PAGE>

                    AMERICAN INTERNATIONAL CONSOLIDATED INC.
                                AND SUBSIDIARIES





              Notes To Condensed Consolidated Financial Statements


NOTE 5 - CONTINGENCIES
         -------------

The owner of one of the Company's construction projects has disputed some of the
costs charged to a job which was completed in the fourth quarter of fiscal 1996.
The Company settled this dispute during November 1996 for $125,000, resulting in
a reduction in amounts due from this owner by $200,000 during the second quarter
of fiscal 1997.

Additionally,  the Company is involved in various other claims and legal actions
arising in the ordinary  course of business.  In the opinion of management,  the
ultimate disposition of these matters will not have a material adverse effect on
the  Company's  consolidated  financial  condition,   liquidity  or  results  of
operations.


NOTE 6 - INCENTIVE STOCK OPTION PLAN
         ---------------------------

The Company has a Stock Option Plan (the Option Plan)  pursuant to which options
to  purchase  200,000  shares of the  Company's  common  stock may be granted to
officers and employees of the Company or its  subsidiaries and to other persons.
As of January 31, 1997, no stock options had been granted pursuant to the Option
Plan.


NOTE 7 - INITIAL PUBLIC OFFERING
         -----------------------

The Company  has  registered  for the sale of a minimum of 700,000  shares and a
maximum  of 800,000  shares of common  stock,  and a minimum  of  700,000  and a
maximum of 800,000  common  stock  purchase  warrants  with the  Securities  and
Exchange  Commission  as part of an initial  public  offering.  Each  warrant is
exercisable  to purchase one share of common stock at an exercise price of $5.00
per share. The Company intends to offer these securities  through an underwriter
on a "best efforts basis". If the offering is consummated,  the underwriter will
receive  underwriters'  warrants to purchase  one share of common stock for each
ten shares sold in the offering  and one warrant for each ten  warrants  sold in
the  offering,  with each warrant  exercisable  at 165% of the initial  offering
price for a period of four years  beginning  twelve  months after the  effective
date of the  registration  statement  concerning  the offering.  The Company has
granted  registration  rights  with  respect  to the common  stock and  warrants
underlying the underwriters' warrants.


NOTE 8 -  GOING CONCERN
          -------------

The Company's year to date loss,  which includes a non-cash charge of $1,205,000
related to the Company's private placement of securities in July 1996, increased
from  approximately  $1,665,000  for the six months  ended  October  31, 1996 to
$2,653,000 for the nine months ended January 31, 1997. This increase of $988,000
included  a  non-cash  charge  of  $100,000  related  to the  Company's  private
placement of securities in July 1996 and the remainder  resulted  primarily from
the erosion of gross margins on contracts  which were in progress at January 31,
1997. As a result of these  additional  losses,  the Company's  working  capital
position and ability to generate  sufficient  cash flows from operations to meet
its operating and capital requirements has further  deteriorated.  These matters
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern without a substantial infusion of equity capital. The Company believes


                                        9


<PAGE>




                    AMERICAN INTERNATIONAL CONSOLIDATED INC.
                                AND SUBSIDIARIES





              Notes To Condensed Consolidated Financial Statements


NOTE 8 -  GOING CONCERN (continued)
          -------------

that it will be  successful  in removing  the threat  concerning  its ability to
continue as a going  concern by adhering to closer and stricter  scrutiny of its
contract bids and utilizing the estimated  minimum net proceeds of approximately
$2.9  million  from  the  proposed  best  efforts  public  offering  to  achieve
profitability  through  lower  interest and bonding  costs and expanded  volume.
There is no assurance these results will occur even if the proposed best efforts
public offering is consummated.  If this does not occur, the Company will pursue
other  sources  of  financing,  but there is no  assurance  any other  source of
financing will be available.
















                                       10

















                                     





<PAGE>


Item 2. Management's  Discussion And Analysis Of Financial Condition And Results
        Of Operations
        ------------------------------------------------------------------------

Results Of Operations

Nine Months Ended January 31, 1997 Compared With Nine Months
Ended January 31, 1996
------------------------------------------------------------

     For the nine months ended January 31, 1997, the Company reported a net loss
of $2,653,000,  or $.91 per share, on revenues of $25,596,000,  as compared with
net income of $367,000,  or $.13 per share,  on revenues of $23,267,000  for the
nine  months  ended  January 31,  1996.  The  increase in net loss is  primarily
attributable  to the  following:  (a) the Company  recorded a one-time  non-cash
charge of  $1,205,000  for private  placement  costs;  (b) the  Company's  gross
margins decreased approximately $1,312,000 for the period ended January 31, 1997
as compared with the same period of the prior year; and (c) the Company incurred
an expense of $200,000 as a provision for doubtful  accounts  resulting from its
agreement to settle a disputed  account  receivable  by accepting  $200,000 less
than the full value of the account.

     The total  margins  decreased  from 14.0% to 7.6% when  comparing  the nine
months ended January 31, 1996 with the nine months ended January 31, 1997.  This
decreased margin is attributable  primarily to the metal building division which
earned revenues of $12.3 million with a margin of 2.0% for the nine months ended
January 31, 1997 as compared with earned  revenues of $6.3 million with a margin
of 12.4% for the nine months ended January 31, 1996.

     The mini-warehouse division margins decreased to 12.4% on revenues of $12.5
million for the nine months ended  January 31, 1997 as compared  with margins of
14.5% on revenues of $16.1  million for the nine months ended  January 31, 1996.
The Thermal  Systems  division  earned  revenues of $.7 million  with margins of
18.7% for the nine months ended  January 31, 1997 as compared  with  revenues of
$.8 million with margins of 14.8% for the comparable period in 1996.

     Selling,  general and  administrative  expenses as a percentage of revenues
increased to 11.9% for the nine months ended  January 31, 1997 as compared  with
11.3% for the nine months ended January 31, 1996. This increase in percentage is
primarily a result of increasing  insurance  expenses.  The Company  anticipates
that, to the extent that revenues  continue to increase in the future,  of which
there  is no  assurance,  selling,  general  and  administrative  expenses  will
increase at a lower rate.

     Interest expense  increased $68,000 from $158,000 for the nine months ended
January 31, 1996 to $226,000  for the nine months ended  January 31, 1997.  This
increase  is the  result  of the  conversion  of  non-interest-bearing  accounts
payable to interest-bearing Notes Payable to Supplier effective in April 1996.

     The Company's  contract backlog as of January 31, 1997 was $18.7 million as
compared with $11.1 million as of January 31, 1996, an increase of $7.6 million,
which  is  attributable  to a $3.6  million  increase  in the  backlog  for  the
mini-warehouse construction division, a $2.8 million increase in the backlog for
the metal building  manufacturing  division, and a $1.2 million increase for the
thermal systems division.

     The Company  currently  estimates that its  operations for the  three-month
period from February 1997 through April 1997 resulted in a loss of approximately
$130,000. Although the Company had anticipated  profitable  operations  for  the


                                       11

<PAGE>


February-April  1997 period, it experienced  unusual and unseasonable heavy rain
and other  inclement  weather  which  hampered a number of its projects for more
than 20 days.  Without  the work  stoppages  caused  by  these  unusual  weather
conditions,  the Company believes it would have been profitable for the February
through April 1997 period.

     As of April  30,  1997,  the  Company's  backlog  was  approximately  $18.0
million. The Company believes that, barring unforeseen  occurrences,  it will be
profitable  during  the  three-month  period  from May  through  July 1997 as it
proceeds to work on its backlog.

Quarter Ended January 31, 1997 Compared With Quarter Ended January 31, 1996
---------------------------------------------------------------------------

     For the quarter ended January 31, 1997, the Company  reported a net loss of
$987,000,  or $.34 per share,  on revenues of  $7,507,000  as compared  with net
income of $699,000, or $.24 per share, on revenues of $7,686,000 for the quarter
ended January 31, 1996.  These losses result primarily from recognition that the
currently  estimated gross margin on a number of contracts is substantially less
than had been estimated at the time of the bid and is substantially less than is
necessary to maintain  profitable  operations.  These contracts were erroneously
estimated by a salesperson,  and erroneously  approved by the general manager of
the   Company's   metal   building   manufacturing   division;   and  errors  in
underestimating  costs were not  discovered  until after the Company had entered
into the contracts and had commenced the  respective  projects.  The Company has
terminated  the  employment of the  salesperson  that prepared and submitted the
bids for,  and the  general  manager  overseeing,  a  majority  of the  projects
representing  the negative and below average gross margins  incurred  during the
November 1996-January 1997 period.

     The total margins decreased significantly to margins of 1.2% on revenues of
$7,507,000  for the quarter  ended  January 31, 1997 as compared with margins of
21.1% on revenues of $7,686,000  for the quarter  ended January 31, 1996.  These
decreased margins are attributable primarily to the metal building manufacturing
division  which  recognized  negative  gross  margins of (5.9%) on  revenues  of
$3,497,000 for the 1997 quarter as compared with margins of 20.1% on revenues of
$2,069,000 for the 1996 quarter.  The  mini-warehouse  division's  total margins
decreased  15.1% to margins of 6.7% on  revenues of  $3,792,000  for the quarter
ended  January 31, 1997 as compared  with gross  margins of 21.8% on revenues of
$5,113,000 for the quarter ended January 31, 1996. The thermal systems  division
increased  its gross  margins  2.7% to 20.5% on  revenues  of  $218,000  for the
quarter  ended  January  31,  1997 as  compared  with gross  margins of 17.8% on
revenues of $503,000 for the quarter ended January 31, 1996.

     Selling,  general and  administrative  expenses as a percentage of revenues
increased to 13.1% for the quarter ended January 31, 1997 as compared with 10.1%
for the quarter ended January 31, 1996. This increase is primarily attributed to
an increase in  insurance  expense  for the  quarter  ended  January 31, 1997 as
compared with the quarter ended January 31, 1996.

     Interest expenses increased $2,000 to $67,000 for the quarter ended January
31, 1997 as compared with $65,000 for the quarter ended January 31, 1996.

     Other Income for the quarter ended January 31, 1997 was $85,000 as a result
of earning additional income from previously completed contracts.  This compares
to other  Expenses  being  incurred of $66,000 for the quarter ended January 31,
1996.


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<PAGE>


     The  Company's  contract  backlog at January 31, 1997 was $18.7  million as
compared to $11.1  million as of January 31, 1996,  an increase of $7.6 million,
which  is  attributable  to a $3.6  million  increase  in the  backlog  for  the
mini-warehouse construction division, a $2.8 million increase in the backlog for
the metal building  manufacturing  division, and a $1.2 million increase for the
thermal systems division.

Liquidity And Capital Resources

     As of January 31, 1997,  the Company had current  assets of $5,579,000  and
current  liabilities of $8,428,000 which represents  negative working capital of
$2,849,000.  Working  capital  decreased  $3,686,000  as compared with April 30,
1996.  As of April 30, 1996 the Company had  current  assets of  $5,944,000  and
current  liabilities of $5,107,000,  which represents a positive working capital
of $837,000.  The $3,686,000 decrease in working capital is primarily the result
of including  the entire  balance of the Note  Payable to Supplier  amounting to
$2,201,000,  as a current  liability.  The  balance of the  decrease  in working
capital is attributed to the loss incurred from  operations  for the nine months
ended January 31, 1997 of $1,448,000.

     As of January 31, 1997,  the Company's  cash balance  decreased  $97,000 as
compared  with the  balance  at April  30,  1996.  This  decrease  is  primarily
attributable to the Company's  utilizing  available cash to reduce notes payable
and  capital  lease  obligations  by  $376,000  and  costs  associated  with the
Company's initial public offering.

     The  Company's  net cash  flow is  materially  affected  by the  timing  of
payments of accounts  payable,  other amounts owed,  and  collection of accounts
receivable.  The Company's  cash flow from  operations for the nine months ended
January  31, 1997  decreased  $197,000  as a result of the  Company's  loss from
operations,  which was  partially  offset by an increase in accounts  payable of
$1,575,000.

     As a result of its operating losses, the Company's working capital position
and  ability to  generate  sufficient  cash flows  from  operations  to meet its
operating and capital requirements has further deteriorated. These matters raise
substantial  doubt about the  Company's  ability to continue as a going  concern
without a substantial  infusion of equity capital.  The Company believes that it
will be successful in removing the threat  concerning its ability to continue as
a going concern by adhering to closer and stricter scrutiny of its contract bids
and utilizing the estimated  minimum net proceeds of approximately  $2.9 million
from its proposed best efforts public offering to achieve  profitability through
lower  interest  and bonding  costs and expanded  volume.  There is no assurance
these  results will occur even if the proposed best efforts  public  offering is
consummated.  If this does not occur,  the Company will pursue other  sources of
financing,  but there is no  assurance  any other  source of  financing  will be
available.



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<PAGE>

                          PART II -- OTHER INFORMATION

Item 5.  Other Information:  Disclosure Regarding Forward Looking Statements

Forward-Looking Statements

This Form 10-Q  includes  "forward-looking  statements"  within  the  meaning of
Section 27A of the  Securities Act Of 1933, as amended (the  "Securities  Act"),
and  Section  21E of the  Securities  Exchange  Act Of  1934,  as  amended  (the
"Exchange  Act").  All  statements  other than  statements  of  historical  fact
included in this Form 10-Q,  including  without  limitation the statements under
"ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS"  and the notes to the  Financial  Statements  located  elsewhere
herein regarding the Company's  financial position and liquidity,  the amount of
and its  ability  to make  debt  service  payments,  its  strategies,  financial
instruments,  and other matters,  are forward-looking  statements.  Although the
Company  believes  that  the  expectations  reflected  in  such  forward-looking
statements are reasonable,  it can give no assurance that such expectations will
prove to have been correct. Important factors that could cause actual results to
differ materially from the Company's expectations  ("Cautionary Statements") are
disclosed in this Form 10-Q including without limitation in conjunction with the
forward-looking  statements included in this Form 10-Q and in Exhibit 99 to this
Form 10-Q. All written and oral forward-looking  statements  attributable to the
Company or persons acting on its behalf subsequent to the date of this Quarterly
Report are expressly qualified in their entirety by the Cautionary Statements.
 
Item 6.  Exhibits And Reports On Form 8-K

         (a)      Exhibits.
                  
                  Exhibit 27.  Financial Data Schedule.
                  Exhibit 99.  Disclosure Regarding Forward Looking Statements.

         (b)      Reports on Form 8-K.

                  No reports on Form 8-K were filed by the Registrant during the
                  quarter ended January 31, 1997.



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<PAGE>


                                   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 INTERNATIONAL CONSOLIDATED INC.


Date:  May 1, 1997                  By: /s/ Jim W. Williams
                                        ----------------------------------------
                                        Jim W. Williams, Principal Financial
                                        Officer, Vice President/Finance



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