FORM 10-KSB
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

  [X] 15, ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
       OF 1934 [Fee Required]

       For the fiscal year ended: 12/31/96
                                  ---------
                                       OR

  [ ] 15,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: 0-14039

                         AMERICAN GENERAL VENTURES, INC.
               ---------------------------------------------------
              (Exact name of Small Business Company in its charter)

                Annual Report Pursuant to Section 13 or 15 (d) of
                       the Securities Exchange Act of 1934


            NEVADA                                   11-2714721
 ------------------------------                  ----------------
(State or other jurisdiction of                   (I.R.S. Employer
incorporation or organization)                   Identification No.)

 3650 AUSTIN BLUFFS PARKWAY SUITE 138
     Colorado Springs, Colorado                          80918
---------------------------------------                 --------
(Address of principal executive offices)               (Zip Code)


                Registrant telephone number, including area code:
                                 (719) 548-1616


Securities registered pursuant to
Section 12(b) of the Act:                            None


Securities registered pursuant to
Section 12(g) of the Act:                        Common Stock, $.001 par value



Check whether the Registrant  (l) has filed all reports  required to be filed by
Section  13 or 15(d) of the  Securities  and  Exchange  Act of 1934  during  the
preceding  12  months  (or for such  shorter  periods  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
                                        ---      ---


Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of the  Company's  knowledge,  in  definitive  proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [x]

<PAGE>


The Company's revenues for its most recent fiscal year. $1,397,850.

As of December 31,  1996,  the market  value of the  Company's  voting $.001 par
value common stock held by non-affiliates of the Company was $499,770.

The number of shares  outstanding of Company's only class of common stock, as of
December 31, 1996 was 9,200,000 shares of its $.001 par value common stock.

Check  whether the Issuer has 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  x   No
                                                  ---     ---
No documents are incorporated into the text by reference.

Transitional Small Business Disclosure Format (check one) Yes     No  x
                                                              ---    --- 










                                       2

<PAGE>
                         AMERICAN GENERAL VENTURES, INC.
                                   FORM l0-KSB
                                     PART I

ITEM 1   BUSINESS


     (a) General Development of Business

     (a)  (1) The  original  purpose  of the  Registrant  was to seek  potential
business  ventures,  which in the opinion of the  management  of the  Registrant
would  provide a profit for the  Company.  Such  involvement  would be either as
acquisition of existing  businesses or the  acquisition of assets to establish a
subsidiary business for the Company.

     On January 22, l986,  the  Registrant  signed a letter of intent with Aspen
Medical Diagnostics,  Inc. and Neuro Medical,  Inc., both Utah Corporations,  to
acquire all of the stock of both of those  companies in exchange  for  1,000,000
shares of the common stock of the Registrant to the  shareholders of each of the
acquired companies or a total of 2,000,000 shares.  Both Companies acquired were
in the business of establishing medical diagnostic facilities.

     On September  11,  1987,  the  Registrant  acquired all of the stock of ACI
Micro Systems, Inc., a Colorado Corporation.  ACI Micro Systems, Inc. was in the
business of manufacturing and selling micro computers.

     In January 1991,  the Registrant  incorporated  Your  ATTACHE(C),  a wholly
owned  subsidiary.  Your ATTACHE  develops and sells  licenses of powerful  high
speed computer  systems that provides a mutually  beneficial  communication  and
interaction  medium between  suppliers and consumers.  ATTACHE is not active and
had no revenues in 1996.

     The Registrant  has not been  involved,  during the year ended December 31,
l996, in any bankruptcy, receivership or similar proceedings.

     (a)(2)      Not applicable.

     (b) Financial Information About Industry segments

     The Registrant has engaged in a single line of business since September 11,
1987, when the Registrant acquired ACI Micro Systems.  The Registrant engages in
the business of manufacturing computers, software development,  computer related
training and sales of computers and computer accessories.

     (C) Narrative Description of Business

     (c)(1)(i)  The  Registrant  on January 29,  l986,  acquired  100 percent of
outstanding stock of Neuro-Medical,  Inc. (Neuro) and Aspen Medical Diagnostics,
Inc. (Aspen), both Utah corporations. The letter of intent for said purchase was


                                       3

<PAGE>


executed on the 22nd day of January,  l986. In exchange,  the Registrant  issued
1,000,000 of its restricted shares to the stockholders of Aspen and 1,000,000 of
its restricted shares to the stockholders of Neuro.

     The business of Neuro and Aspen was to establish  and operate  neurological
diagnostic  centers that provide diagnostic testing for physicians and others in
the medical  community.  The Registrant makes available to the medical community
the latest neurological  testing and assessment  equipment.  The officers of the
Registrant  for the past  eight  years have used the Brain  Electrical  Activity
Mapping System (BEAM) which was developed at Harvard  University Medical School.
The officers of the  Registrant  selected  the BEAM system  because they believe
that this system represents a significant advancement over alternative equipment
and will greatly expand the effectiveness of neurological testing in the overall
treatment of patients.  However,  the technology has faced  resistance  from the
medical  community  which  has had a  negative  impact  upon the  growth  of the
Registrant. The Registrant ceased to operate its BEAM centers in 1993.

CURRENT OPERATIONS

     The  Registrant  continues to operate ACI Micro  Systems,  Inc.,  (ACI),  a
Colorado Corporation, that manufactures and sells computers and accessories. ACI
also provides computer training and software development and rentals.

     In September  1995, ACI entered into an agreement with Goodwill  Industries
of Colorado  Springs  and the State of Colorado to train 17 of their  clients in
the Registrant's  NewStart  program.  The Goodwill clients were unwed mothers on
welfare. The NewStart program is geared to identify and train welfare recipients
in a workplace environment to be computer assemblers. Upon successful completion
of the training  course,  the Registrant hires the trainee and removes them from
the welfare rolls.  The Registrant plans to expand its NewStart program in other
cities and within private industry.

     In August 1995, ACI received a national vendor number from Wal-Mart Stores,
Inc.  authorizing  the Registrant to sell computers and  accessories in 1,989 of
their retail stores and 245 of their  supercenters.  One of the reasons Wal-Mart
agreed to purchase  computers  from the  Registrant  was because of its NewStart
program.  The NewStart program trains welfare  recipients to assemble  computers
and ACI hires the successful trainee. The NewStart program reverses the trend of
the  welfare  recipient  costing  the  government  $14,000  a year to one who is
earning at least  $15,000 per year and  contributing  to society.  Wal-Mart is a
community oriented company with a philosophy to buy "Made in America" products.

     The ACI computer uses  non-integrated  circuitry and tower-style cases with
extra bays that allows true  upgradability.  The ACI  computer can grow with the

                                       4

<PAGE>



consumer's needs. ACI provides local upgrades,  service and tech support. As ACI
expands outside  Colorado  Springs,  the Registrant plans to acquire or contract
with existing  computer retail stores to provide  upgrades,  service and support
within the area of expansion.

     By December 31, 1996,  ACI had its product in 70 Wal-Mart  retail stores in
Colorado, New Mexico, Kansas, Nebraska, Iowa, Oklahoma and Missouri.

     ACI received a second vendor number from Wal-Mart Stores, Inc. allowing the
Company to sell its products through Wal-Mart's  interactive world wide web site
(www.Wal-Mart.com).  On June 26, 1997,  ACI had seven lines of computer  systems
available to be purchased through Wal-Mart's on-line server.

PROPOSED OPERATIONS

     The Registrant through its wholly owned subsidiary ACI Micro Systems,  Inc.
plans to  concentrate it sells through  Wal-Mart's  world wide web site. ACI has
seven computer lines presently on Wal-Mart's web site and expects it will have a
"build your own computer" web page on-line through  Wal-Mart by the end of July,
1997.  ACI plans to expand into  Wal-Mart's  retail  stores by selecting  retail
outlets  meeting  specific  demographics.  The  expansion  is  limited  due  the
Registrant's limited resources.

     To increase its profit margins,  the Registrant plans to acquire a computer
component  distribution company. The distribution company should increase profit
margins on most computer  components by eight to ten percent. A letter of intent
has been signed between ACI and Nextel Micro. The acquisition is to be completed
when  sufficient  funds have been raised by the  Registrant.  The  Registrant is
attempting to raise short term capital through a 505 private placement.

THE ACI MICRO COMPUTER SYSTEMS

     ACI Micro Systems,  Inc.,  manufactures  non-integrated  circuitry computer
systems  that  allows  true  upgradability.   ACI  has  a  retail  store  and  a
manufacturing  plant  in  Colorado  Springs,  CO.  By  using  three  shifts  the
manufacturing plant has the capacity of assembling 15,000 computers per month.

REVENUES

     During the fiscal year ending  December 31, 1996, the  Registrant,  through
its subsidiary,  ACI, generated  operating revenues of $1,397,850.  In 1995, the
Registrant had $985,979 in operating revenues.

     In 1996,  the  Registrant  had  revenues of  $1,397,850  with a net loss of
($723,911)  compared with a gain in 1995 of $120,381.  The loss for 1996 yielded
($0.08) per share loss  compared to a gain of $0.01 per share in 1995.  Revenues
of $1,397,850 for 1996 were up 42 percent from the revenues in 1995 of $985,979.


                                       5

<PAGE>


The  increase in  revenues  was in part due to the sales of $975,940 to Wal-Mart
compared to sales of  $255,000 in 1995 to  Wal-Mart.  Revenues  are  expected to
continue to increase into 1997 because of new marketing strategies in Wal-Mart's
retail  outlets and,  even more so,  because the  Registrant  is now selling its
products through Wal-Mart's web site on the Internet.

     (c)(1)(ii)     Not applicable.

     (c)(1)(iii)    Not applicable.

     (c)(1)(iv)     Not applicable.

     (c)(1)(v)      The Registrant's business is not considered seasonal.

     (c)(1)(vi)     The  Registrant's  working  capital  of  ($45,484)  (current
                    assets  less  current  liabilities)  is not  sufficient  for
                    moderate  growth.  Major  expansion will require  additional
                    capital.  The  Registrant  is  pursuing  several  avenues to
                    obtain  additional  financing.  The  Registrant is presently
                    offering  units of common  shares and  warrants of its stock
                    through a private  placement.  The Registrant has been given
                    assurance  that an  investor  group  with $83  million  will
                    purchase its Wal-Mart purchase orders. Therefore capital for
                    inventory is not likely needed.  The Registrant plans to use
                    the  money it  raises  through  the  private  placement  for
                    general and administrative  expenses,  specifically salaries
                    and marketing, until profits from sales meet these needs.

     (c)(1)(vii)    Not applicable.

     (c)(1)(viii)   As of December 31, l996, the Registrant was able to fill all
                    orders and did not have any backlog orders.

     (c)(1)(viii)   Not applicable.

     (c)(1)(ix)     Not applicable.

     (c)(1)(x)      COMPETITION. The Registrant's ACI training and manufacturing
                    operations faces stiff  competition  from existing  computer
                    manufacturers. The Registrant has met the competition in the
                    past with its niche in the computer industry. ACI is able to
                    produce  computers in America and still be competitive  with
                    computers  built  in  foreign  countries.  The  Registrant's
                    computers  are not  only  built  in  America  but  they  are
            

                                        6

<PAGE>

                    assembled  by  previous  welfare  recipients  who have  been
                    trained and hired by ACI. This method of producing computers
                    gives the Registrant a competitive edge to resellers such as
                    Wal-Mart  whose  philosophy  mirrors  the  Registrants'.  In
                    addition  to  "Made  in  America"  the  Registrant  provides
                    Wal-Mart computers with non-integrated circuitry that allows
                    true upgradability and local service and support. ACI places
                    its computers in Wal-Mart stores based upon demographics and
                    the location of the store.  For example,  the Grand Junction
                    Wal-Mart store draws from a population of about 150,000, has
                    a college and does not have competition from large retailers
                    such as Best  Buy  and  Circuit  City.  The  Grand  Junction
                    Wal-Mart  store  sold  more  than  200  ACI  computers  in a
                    two-month  period.  Some  Wal-Mart  stores sell only the ACI
                    computer.  ACI  will  likely  be the  only  "build  your own
                    computer" on Wal-Mart's web page.

     (c)(1)(xi)     Since its  inception,  the Registrant has spent $193,370 for
                    company-sponsored  research  and  development  of  the  Your
                    ATTACHE concept.

     (c)(1)(xii)    Compliance   with  federal,   state  and  local   provisions
                    regulating the discharge of materials  into the  environment
                    or otherwise  relating to the protection of the  environment
                    will have no material  effect on the  capital  expenditures,
                    earnings and competitive position of the Registrant.

     (c)(1)(xiii)   The Registrant  employs a total of eight persons:  One Chief
                    Executive Officer,  one  Secretary/Treasurer,  one full time
                    Accountant, and five technicians and/or assemblers.

     (d)            Not   applicable   since  the   Registrant  had  no  foreign
                    operations or export sales during fiscal year l995.

ITEM 2    PROPERTIES

          The Registrant,  and ACI, currently occupy  approximately 2,000 square
          feet at 3650  Austin  Bluffs  Parkway,  suite 138,  Colorado  Springs,
          Colorado  and a 4400  square foot  manufacturing  plant at 1065 Elkton
          Drive,  Colorado  Springs,  Colorado.  The Registrant is paying $1,810
          plus  utilities  for rent for the Austin  Bluffs  space and $2485 plus
          utilities  for the Elkton  Drive space each  month.  The lease for the
          Austin  Bluffs  space will  continue  until May l, l999 and the Elkton

                                       7

<PAGE>


          Drive space will continue  until January 1997.  The Registrant has two
          five year  options  on the  Austin  Bluffs  space  and two three  year
          options on the Elkton Drive space.

ITEM 3    LEGAL PROCEEDINGS

          The  Registrant  knows  of  no  litigation   pending,   threatened  or
          contemplated, or unsatisfied judgments against the Registrant, nor any
          proceedings  to which the  Registrant  is a party that will  adversely
          affect the company.

ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          On April 12, 1995, the majority of the shareholders voted to authorize
          management  to  reverse  the  shares  of common  stock 10 to one.  The
          majority of the shareholders also voted to capitalize the Registrant's
          subsidiaries  to be the same as the  Registrants.  That is,  ACI Micro
          Systems  and Your  ATTACHE  each have  900,000,000  common  shares and
          8,000,000 preferred shares authorized.

                                     PART II

ITEM 5     MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
           MATTERS

     (a)(1)(i)      The principal market on which the Registrant's  common stock
                    is traded is on the  over-the-counter  bulletin  board.  Its
                    symbol is AMGV.

     (a)(1)(ii)     Not applicable.

     (a)(1)(iii)    Since January l986, the  Registrant's  stock has been traded
                    on the over  the-counter  market.  The range of high and low
                    bid  quotations  for the  Registrant's  common stock for the
                    quarters in l996 is  provided  below.  The  over-the-counter
                    market quotations reflect inter-dealer prices without retail
                    markup,  markdown  or  commissions  and may not  necessarily
                    represent actual transactions.

                                  High Bid            Low Bid
                                  --------            -------

 1/1/96 -- 3/31/96                 $.37                 $.05

 4/1/96 -- 6/30/96                 $.75                 $.31

 7/1/96 -- 9/31/96                 $.68                 $.37

l0/1/96 -- 12/31/96                $.50                 $.18

                                       8

<PAGE>


     (a)(1)(iv)     Not applicable.

     (a)(1)(v)      Not applicable.

     (a)(2)         Not applicable.

     (b)(2)         The approximate number of record holders of the Registrant's
                    common stock on March 15, 1997 was 1150.

     (b)(2)         Not applicable.

     (c)(1)         The  Registrant  has paid no  dividends  with respect to its
                    common stock.  There are no contractual  restrictions on the
                    Registrant's present or future ability to pay dividends.

     (c)(2)         Not  applicable  since the  Registrant  has not had earnings
                    that  indicate  an  ability  to  pay  cash  dividends.   The
                    Registrant   does  not  expect  to  pay   dividends  in  the
                    foreseeable future.


ITEM 6     MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
           OF OPERATIONS

     LIQUIDITY AND CAPITAL RESOURCES

     The ratio of current assets to current liabilities for year ending December
31, 1996 is .87 compared to 11.2 for 1995.  Actual working  capital for the year
ended December 1996 was ($45,484) compared to $279,164 at December 31, 1995. The
decrease in working capital was primarily due to an increase in liabilities that
came from  increases  in  expenses  and the return of product.  The  increase in
expenses  was due to the  cost of the  Registrant's  rapid  expansion  into  new
Wal-Mart  stores.  The number of Wal-Mart stores that the Registrant  placed its
product grew from eight stores in 1995 to 70 stores in 1996.

     The Registrant believes that its anticipated funds raised through a private
placement and a purchase order financing  arrangement are sufficient to meet its
cash requirements for major growth in the year ahead.

     The Registrant currently has no commitments for capital expenditures.

RESULTS OF OPERATIONS

     The Registrant's primary business and source of revenue is derived from the
sales of its wholly owned subsidiary ACI Micro Systems,  Inc. The Registrant had
a net loss of ($723,911) for the year ended December 31, 1996 compared to a gain
of $74,020 for the year ended December 31, 1995.

                                       9

<PAGE>


     Revenues  from  overall  operations  for the year ended  December  31, 1996
increased by $411,871 or 42 percent over the year ended  December 31, 1995.  The
increase in sales was primarily due to the  Registrants  expansion  from selling
its product in eight Wal-Mart stores to 70 stores by years end.

     Cost of sales as a percentage  of sales for ACI was 98 percent  compared to
70 percent for the cost of sales in 1995.  The increase in the percentage of the
cost of goods was due to Wal-Mart returning unsold computers.  While returns due
to  defective  product is  minimal,  ACI has a  guaranteed-sale  provision  with
Wal-Mart  and  agrees to take back  unsold  computers  at the  original  invoice
amount.  The vast  fluctuation  in  prices of  computer  components  causes  the
percentage of the cost of goods to rise if the  computers  are returned  several
months after they are originally purchased.

     The Registrant has taken provisions to avoid  guaranteed-sale  returns. ACI
no longer continues to automatically accept orders from all Wal-Mart stores. The
store must meet specific  demographics  and commit to a  standardized  marketing
plan before ACI will accept an order for  computers.  The  demographics  must be
similar to the Wal-Mart  store in Grand  Junction,  Colorado  that sold over 200
computers in two months.  Wal-Mart on the average sells nine computers per month
per  store.  The Grand  Junction  Wal-Mart  store  draws  from a  population  of
approximately  150,000 including  students from a State operated  college.  They
train their electronic managers to demonstrate the features on the computers and
advertise  computers with the local media. The Grand Junction Wal-Mart store won
a regional sales contest by applying the above tactics.  They beat out 120 other
Wal-Mart stores by selling the ACI computer.

     Secondly,  ACI has  implemented  a "build  your own"  computer  within  the
electronic  department of some Wal-Mart  stores.  The customer may select from a
variety of computer  components  and have a customized  computer built for them.
Before the  computer  is built,  it is bought and paid for by the  consumer  and
therefore nullifies the guaranteed-sale problem.

     The third and most  encouraging  provision  in  eliminating  the problem of
guaranteed-sale  returns,  is the  Registrants  new  association  with  Wal-Mart
Online.  ACI has received a second vendor agreement from Wal-Mart  Stores,  Inc.
that  provides  the  Registrant  the  ability to sell its  computers  world wide
through  Wal-Mart's web site.  ACI presently has seven  computer  configurations
available through  Wal-Mart's web site and expects to have its customized "build
your  own"  computer  web page up and  running  by the end of July  1997.  These
computers are sold to the consumer before they are built,  therefore  nullifying
the guaranteed-sale problem.

                                       10

<PAGE>


     Selling,  general  and  administrative  expenses  were 50  percent of Sales
compared  with 23  percent in 1995.  The  increase  was mainly due to  increased
expenses  incurred by the rapid  expansion of doing business with eight Wal-Mart
stores in 1995, to 70 stores by the end of 1996.


ITEM 8   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Financial  statements  and  supporting  schedules  reporting  supplementary
financial  information are listed in the Index to Financial  Statements filed as
part of this Form l0-KSB.

ITEM 9   DISAGREEMENTS OF ACCOUNTING AND FINANCIAL   DISCLOSURE

     Not applicable.


                                    PART III

ITEM 10   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF
          THE REGISTRANT

          (a) Identification of Directors.


                            Position held                    Dates of
Name                       with Registrant       Age         Service
--------------------------------------------------------------------------------

Steven H. Walker       President, Chair          58          l985-l997
                       of the Board, Director

Christopher S. Walker  Secretary-Treasurer       27          1996-1997
                       Director

     (b) Identification of Executive Officers

                            Position held                     Dates of
Name                       with Registrant      Age           Service
--------------------------------------------------------------------------------
Steven H. Walker         President, Chair        58          l985-l997
                         of the Board

Christopher S. Walker    Secretary-Treasurer     27          l996-1997

     (c) Identification of Certain Significant Employees. 

        Not applicable.

          No other officer or director of the Registrant,  including controlling
          shareholders, is related to any other such person.


                                       11

<PAGE>


     (e)(1) The business  experience of the Registrant's  officers and directors
            is as follows:

STEVEN H. WALKER, (58), has been President and Chair of the Board of the Company
since  January  l986 and has  been  Vice  President  and  Chair of the  Board of
Neuro-Medical,  Inc.  and  President  and  Chair of the  Board of Aspen  Medical
Diagnostics,  Inc.  since  1983 and  1984  respectively.  He is also a  licensed
psychologist who has been in private practice since l973. He is a past president
of the El Paso  County  Psychological  Society.  He  received  a Ph.D.  from the
University of Wyoming in l972.

CHRISTOPHER S. WALKER, (27), has been  Secretary/Treasurer and a director on the
Board since August 12, 1996.  He has been an employee of  Registrant  since 1988
and has held positions of Director of Marketing and Chief Operating Officer. Mr.
Walker received a Bachelor of Science degree in Business Administration from the
University  of  Northern  Colorado  in 1990.  Mr.  Walker  was  instrumental  in
acquiring the Wal-Mart accounts.

     (e)(2) Not applicable

     (f) Not applicable

     (g) Not applicable.

ITEM II   MANAGEMENT REMUNERATION

     (a)(l) Cash compensation for the fiscal year ended December 31, l995.

Name of individual      Capacities   Cash salaries           Cash bonuses
or number in group      in which       and fees              and deferred
                        served                               compensation
--------------------------------------------------------------------------------
Steven H. Walker        President     $63,000                  10% of net
                                                               profits

Christopher W. Walker    COO          $26,400

All officers and/or Directors
as a Group (two persons)              $89,400                  10% of net
                                                               profit

     (a)(2) Bonuses and deferred compensation.

Name of individual             Capacities            Deferred Compensation.
--------------------------------------------------------------------------------
Steven H. Walker               President                  10% of net profit

     (b)(1) Compensation pursuant to Plans.

     The Registrant has no  retirement,  pension or profit sharing  covering its
officers and directors and does not  contemplate  implementing  any such plan at
this time.

                                       12

<PAGE>


     (b)(2) Pension Table. Not applicable.

     (b)(3) Alternative Pension Plan Disclosure.    Not applicable.

     (b)(4) Stock Option and Stock Purchase right plans.        Not applicable.

     (c) Other compensation       Not applicable.

     (d) Compensation of Directors.

     (d)(l) Standard Arrangements.  The Board of Directors shall not receive any
            fee for serving as directors.


     (d)(2) Other arrangements.       None.

     (e) Termination of employment and change of control arrangements.     None.

ITEM 2 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

     (a)  Security  Ownership  of Certain  Beneficial  Owners as of December 31,
l995.

Title of class        Name and address of          Amount and      Percent
                      beneficial owner             Nature of
                                                   beneficial       class
                                                   Ownership
--------------------------------------------------------------------------------
Common Stock         Steven H. Walker              5,563,400         60.5%
$.001 par value      3650 Austin Bluffs Parkway
                     Colorado Springs, CO

Common Stock         Christopher S. Walker           304,800          3.3%
$.001 par value
Common Stock         All officers and              5,868,200         63.8%
$.001 par value      directors as a group

     (c) Changes in control. none

ITEM   13   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     (a) Transactions With Management and Others.

                                       13

<PAGE>


      Steven H. Walker,  President and CEO receives cash salaries and consulting
fees totaling $63,000 per annum plus 10% of the net profit before taxes.

                                     PART IV

ITEM 14   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a)  The following  documents are filed apart of this Report of the Company
          immediately following the signature page.

1.   Financial Statements

     Report of Certified Public Accountants

     Balance Sheets - December 31, 1996

     Statements of Operations - Years ended December 31, 1996, and 1995.

     Statement of  Stockholders'  Equity - Years ended  December  31, 1996,  and
     1995.

     Statements of Cash Flows - Years ended December 31, 1996, and 1995.

     Notes to Financial Statements

2.   Financial Statement schedules required to be filed immediately follow Item
     14 of this Form 10-KSB

                                       14

<PAGE>


                                   SIGNATURES

     Pursuant to the  requirements of Section 13 or 15 (d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                       AMERICAN GENERAL VENTURES, INC.


                                       By: /S/  STEVEN H. WALKER
                                           ------------------------------------ 
                                           Steven H. Walker
                                           President/CEO
Date:

     Pursuant to the  requirements  of the  Securities and Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
registrant and in the capacities and on the dates indicated.

Date:  July 7, 1997                             /S/  STEVEN H. WALKER
      -----------------                         --------------------------------
                                                Steven H. Walker, President
                                                Director

Date:  July 7, 1997                             /S/  CHRISTOPHER S. WALKER
     ------------------                         --------------------------------
                                                Christopher S. Walker, Secretary
                                                Treasurer, Director



                                       15

<PAGE>




                          INDEPENDENT AUDITOR'S REPORT



Board of Directors and Shareholders
American General Ventures, Inc.


We have audited the  consolidated  balance sheet of American  General  Ventures,
Inc.  as of  December  31,  1996,  and the related  consolidated  statements  of
operations,  changes  in  stockholders'  equity,  and cash flows for each of the
years in the two year period ended December 31, 1996. These financial statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audit.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining on a test basis,  evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above, present
fairly,  in all material  respects,  the financial  position of American General
Ventures,  Inc. as of December 31, 1996,  and the results of its  operations and
cash flows for each of the years in the two year period ended December 31, 1996,
in conformity with generally accepted accounting principles.




                                        Winter, Scheifley & Associates, P.C.
                                        Certified Public Accountants

Englewood, Colorado
May 22, 1997





                                       16

<PAGE>


American General Ventures, Inc. 
Consolidated Balance Sheet
December 31, 1996

Current assets:
                                                           -----------
  Cash                                                     $    23,984
  Accounts receivable, trade                                    19,551
  Inventory                                                    167,987
  Prepaid expenses                                               2,000
                                                           -----------
      Total current assets                                     213,522

Property and equipment, at cost, net of
  accumulated depreciation of $27,454                           70,089

Goodwill, net of amortization of $22,795                        24,971
                                                           -----------
                                                           $   308,582
                                                           ===========
                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------
Current liabilities:
 Current portion of long-term debt                         $     8,083
  Accounts payable                                             174,231
  Accrued salaries, officers                                    98,075
  Customer deposits                                             39,000
  Accrued interest - related party                              25,729
  Accrued expenses, other                                        8,948
                                                           -----------
      Total current liabilities                                354,066

Notes payable - shareholders                                   429,672
Long-term debt                                                  35,496
Commitments and contingencies (Note 9)

Stockholders' equity:
 Preferred stock, no stated value
   8,000,000 shares authorized,
  no shares issue and outstanding                                 --
 Common stock, $.001 par value,
  900,000,000 shares authorized,
  9,200,000 shares issue and outstanding                         9,200
 Additional paid-in capital                                  1,702,099
 Accumulated deficit                                        (2,221,951)
                                                           -----------
                                                              (510,652)
                                                           -----------
                                                           $   308,582
                                                           ===========
See accompanying notes to consolidated financial statements

                                       17

<PAGE>


American General Ventures, Inc.
Consolidated Statement of Operations
Years Ended December 31, 1996 and 1995

                                                        1996            1995
                                                    ----------------------------

                                                    ----------------------------
Sales                                               $ 1,397,850      $   985,979
Cost of sales                                         1,365,308          721,372
                                                    ----------------------------
Gross profit                                             32,542          264,607

Other costs and expenses:
 General and administrative                             701,032          187,709
                                                    ----------------------------
Income (loss) from operations                          (668,490)          76,898

Other income and (expense):
 Interest and dividend income                              --              2,148
 Realized gain on sale of investments                      --              7,335
 Other income                                              --             34,000
 Interest expense - related party                       (25,729)            --
 Interest expense                                       (29,692)            --
                                                    ----------------------------
                                                        (55,421)          43,483
                                                    ----------------------------

Income (loss) before income taxes                      (723,911)         120,381
Provision for income taxes                                 --               --
                                                    ----------------------------

  Net income (loss)                                 $  (723,911)     $   120,381
                                                    ============================


Earnings (loss) per share:
 Net income (loss)                                  $     (0.08)     $      0.01
                                                    ============================

 Weighted average shares outstanding                  9,200,000        8,300,000
                                                    ============================











See accompanying notes to consolidated financial statements.


                                       18

<PAGE>


American General Ventures, Inc.
Consolidated Statement of Changes in Stockholders'
Equity
Years Ended December 31, 1996 and 1995
<TABLE>
<CAPTION>

                                                             
                                     Common Stock         Additional
                                -----------------------    Paid -in     Accumulated
                                  Shares       Amount       Capital      (Deficit)       Total
                                ------------------------------------------------------------------

<S>                               <C>         <C>           <C>           <C>            <C>        
Balance, December 31, 1994      8,000,000   $     8,000   $ 1,664,299   $(1,618,421)   $    53,878

Shares issued for services      1,200,000         1,200        37,800          --           39,000

Net income for the year              --            --            --         120,381        120,381
                                ------------------------------------------------------------------
 Balance, December 31, 1995     9,200,000         9,200     1,702,099    (1,498,040)       213,259

Net (loss) for the year              --            --            --        (723,911)      (723,911)
                                ------------------------------------------------------------------
Balance, December 31, 1996      9,200,000         9,200     1,702,099    (2,221,951)      (510,652)

</TABLE>






See accompanying notes to consolidated financial statements.

                                                       19

<PAGE>

American General Ventures, Inc.
Consolidated Statements of Cash Flows
Years Ended December 31, 1996 and 1995
<TABLE>
<CAPTION>

                                                                      1996                    1995
                                                                   ----------------------------------
<S>                                                                 <C>                     <C>      
Net income (loss)                                                   $(723,911)              $ 120,381
  Adjustments to reconcile net income (loss) to net
   cash provided by (used in) operating activities:
   Depreciation and amortization                                       12,255                   5,980
   Stock issued for services                                             --                    38,999
   Realized (gains) losses on marketable securities                      --                    (9,768)
   Unrealized (gains) losses on marketable securities                    --                      --
Changes in assets and liabilities:
    (Increase) decrease in accounts receivable                        112,097                (127,994)
    (Increase) decrease in inventory                                    2,929                 (78,134)
    (Increase) decrease in prepaid expenses                             2,024                   3,618
    (Increase) decrease in other assets                                 4,874                  (2,450)
    Increase (decrease) in customer deposits                           39,000                    --
    Increase (decrease) in related party accruals                     123,804
    Increase (decrease) in accounts payable and
        accrued expenses                                              155,756                     753
                                                                    ---------------------------------
       Total adjustments                                              452,739                (168,976)
                                                                    ---------------------------------
  Net cash (used in)
   operating activities                                              (271,172)                (48,595)
                                                                    ---------------------------------

Cash flows from investing activities:
   Acquisition of plant and equipment                                  (1,740)                (29,084)
   Liquidation of marketable securities                                  --                    70,209
                                                                    ---------------------------------
Net cash (used in) investing activities                                (1,740)                 41,125
                                                                    ---------------------------------

                                                                    ---------------------------------
Cash flows from financing activities:
   Increase in bank overdraft                                            --                     1,666
   Repayment of long-term debt                                         (3,085)
   Increase in officer loans                                          299,981                    --
                                                                    ---------------------------------
  Net cash provided by
   financing activities                                               296,896                   1,666
                                                                    ---------------------------------

                                                                    ---------------------------------
Increase (decrease) in cash                                            23,984                  (5,804)
Cash and cash equivalents,
 beginning of period                                                     --                     5,804
                                                                    ---------------------------------
Cash and cash equivalents,
 end of period                                                      $  23,984               $    --
                                                                    =================================
     
See accompanying notes to consolidated financial statements.

                                              20
</TABLE>

<PAGE>


                                                                      
American General Ventures, Inc.
Consolidated Statements of Cash Flows
Years Ended December 31, 1996 and 1995
<TABLE>
<CAPTION>

                                                                                1996              1995
                                                                             ------------------------------

Supplemental cash flow information:
<S>                                                                          <C>                 <C>    
   Cash paid for interest                                                    $   1,803           $    --
   Cash paid for income taxes                                                $   --              $    --

Non-cash investing and financing activities:
   Assets acquired by issuance of long-term debt                             $46,664             $    --








See accompanying notes to consolidated financial statements.

                                                      21

</TABLE>

<PAGE>


                         American General Ventures, Inc.
                   Notes to Consolidated Financial Statements
                                December 31, 1996


Note 1. Organization and Summary of Significant Accounting Policies.
        -----------------------------------------------------------

The  Company  was  incorporated  in Nevada in November  1984.  The  consolidated
financial  statements  include the  accounts of the Company and its wholly owned
subsidiary, ACI Micro Systems, Inc., a manufacturer and distributor of computers
and related products,  which was acquired on September 11, 1987. All significant
inter-company  items  have  been  eliminated  in  consolidation..   The  Company
distributes  its products  through a retail outlet in Colorado  Springs,  CO and
through a national retail chain in the southwestern United States.

     Inventory:
Inventory is valued at the lower of cost or market on a first-in first-out basis
and consists  primarily  of raw  materials  and  finished  goods of the computer
business.

     Property, Plant and Equipment:
Property,  plant and  equipment are recorded at cost and are  depreciated  based
upon estimated  useful lives using the  straight-line  method.  Estimated useful
lives range from 3 to 5 years for  furniture and fixtures and from 5 to 10 years
for equipment.

     Earnings Per Share:
Per share  amounts are based on the  weighted  average  number of common  shares
outstanding. Common stock equivalents are not considered in years when operating
losses are incurred as their effect would be anti-dilutive.

     Revenue Recognition:
Revenue is  recognized  at the time the product is  delivered  or the service is
performed. Revenue related to long term service contracts is recognized on a pro
rata  basis  over the term of the  contract.  Provision  for sales  returns  are
estimated based on the Company's historical return experience.

     Intangible Assets:
Intangible assets consist of goodwill related to the acquisition of a subsidiary
company.  Goodwill  is being  amortized  using the  straight  line method over a
period of 20 years.

      Cash:
For purposes of the  statement of cash flows,  the Company  considers all highly
liquid debt instruments  purchased with a maturity of three months or less to be
cash equivalents.

      Estimates:
The preparation of the Company's  financial  statements  requires  management to
make estimates and assumptions that affect the amounts reported in the financial
statements  and  accompanying  notes.  Actual  results  could  differ from these
estimates.  The Company made sales to its major customer,  see Note 10, on terms
which  include a  guaranteed  right of return.  At December 31, 1996 the Company
accrued $39,000 related to anticipated returns.

     Advertising costs:
Advertising  costs are charged to operations  when the  advertising  first takes
place.  Advertising  costs charged to operations were $15,554 and $7,818 in 1996
and 1995, respectively.


                                       22

<PAGE>


     Fair value of financial instruments
The  Company's  short-term  financial  instruments  consist  of  cash  and  cash
equivalents,  accounts and loans  receivable,  and payables  and  accruals.  The
carrying amounts of these financial instruments  approximates fair value because
of their short-term  maturities.  Financial instruments that potentially subject
the Company to a  concentration  of credit risk consist  principally of cash and
accounts  receivable,  trade.  During the year the Company did not maintain cash
deposits at financial  institutions  in excess of the $100,000  limit covered by
the Federal  Deposit  Insurance  Corporation.  The Company has a major customer,
(see Note 10) the loss of which could have a material  negative  impact upon the
Company.  The Company does not hold or issue  financial  instruments for trading
purposes  nor  does it hold  or  issue  interest  rate or  leveraged  derivative
financial instruments

     Stock-based Compensation
The Company  adopted  Statement  of Financial  Accounting  Standard No. 123 (FAS
123), Accounting for Stock-Based Compensation beginning with the Company's first
quarter of 1996.  Upon  adoption of FAS 123,  the Company  continued  to measure
compensation expense for its stock-based  employee  compensation plans using the
intrinsic value method  prescribed by APB No. 25, Accounting for Stock Issued to
Employees.  No stock based  compensation was paid by the Company during the year
ended December 31, 1996.


Note 2.  Inventory.
         ---------

Inventory at December 31, 1996 consists of the following:

         Raw materials                   $    102,555
         Finished goods                        65,432
                                         ------------
                                         $    167,987
                                         ============


Note 3.  Property, Plant and Equipment.
         -----------------------------

Property, plant and equipment consists of the following at December 31, 1996

         Office furniture and equipment       $    50,879
         Vehicles                                  46,664
                                             ------------
         Less accumulated depreciation           (27,454)
                                             -----------
                                             $    70,089
                                             ===========



Depreciation  charged to  operations  was $9,867 and $3,642 for the years  ended
December 31, 1996 and 1995 respectively.  Vehicles are pledged as collateral for
the underlying purchase financing contracts, see Note 8.


Note 4.  Goodwill.
         --------

Amortization of goodwill amounted to $2,388 for each of the years ended December
31, 1996 and 1995 and was computed  using the straight line method over a twenty
year  period.  Goodwill  recorded  by the Company  represents  the excess of the
purchase of ACI Micro Systems, Inc. over the net assets acquired.



                                       23

<PAGE>


Note 5.  Stockholders' Equity.
         --------------------

During the year ended December 31, 1995 the Company issued  1,200,000  shares of
its  restricted  common  stock for  services  provided by its  president  and an
employee.  The shares were valued at 1/2 of the bid price ($.0325 per share) for
the  Company's  common stock upon  reestablishment  of the public market for the
stock during January 1996.


Note 6. Income Taxes.
        ------------

The Company has not provided  for income  taxes for the year ended  December 31,
1996 due to an operating loss.

     A reconciliation of federal income taxes computed at statutory rates to the
provision for income taxes is as follows at December 31, 1995:

          Taxes computed at statutory  rates (34%)             $   40,930
          Utilization of net operating
           loss carryforward                                      (40,930)
                                                               ----------
          Provision for income taxes                           $     --
                                                               ==========

The Company has net  operating  loss  carryforwards  available to offset  future
taxable income of approximately $2,215,000.  Such carryforward amounts expire in
years beginning in 2002 as follows:

                         2002                             $214,000
                         2003                             $233,000
                         2004                             $353,000
                         2005                             $190,000
                         2007                             $140,000
                         2008                             $280,000
                         2009                             $ 81,000
                         2011                             $724,000

The Company does not anticipate the utilization of these net operating losses in
the near future and has established a valuation allowance for the full amount of
deferred tax asset ($707,000)  estimated to arise therefrom.  The reserve amount
decreased by  approximately  $44,000 during the year ended December 31, 1995 and
increased by approximately $246,000 during the year ended December 31, 1996.


Note 7. Related Party Transactions.
        --------------------------

The Company is obligated to compensate its president at the rate of $63,000 plus
10% of pre tax profits per annum effective January, 1992.

During  1992 the  balance  due for cash  advances  and  deferred  salary  to the
Company's  president was converted to an unsecured note with interest at 10% per
annum due in installments  through August, 2000. The balance on this note was at
$129,691   December  31,  1996.   The  Company  was  unable  to  meet  repayment
requirements  during 1995 and 1996 and the Company's  president elected to forgo
interest  on the note for the year ended  December  31,  1995.  The  Company has
accrued interest of $12,969 for the year ended December 31, 1996.


                                       24

<PAGE>


During  the  year  ended  December  31,  1995,  the  Company's   president  made
approximately  $210,000 of working  capital  advances to the Company  which were
repaid in full at year end.

During the year ended  December 31, 1996,  the Company's  president made working
capital  advances to the Company of $44,781 and assumed  personal  liability for
funds advanced to the Company pursuant to a line of credit with a bank amounting
to $255,200.


Note 8. Long-term debt
        --------------

During the year ended  December 31, 1996,  the Company  entered into two vehicle
purchase contracts which provide for monthly repayments  aggregating $968 though
2001.  The  contracts  bear  interest  at 8.5% per annum and are  secured by the
Company's  vehicles.  Aggregate  amounts due under the  contracts  are $8,083 in
1997, $8,827 in 1998, $9,639 in 1999, $10,526 in 2000 and $6,504 in 2001.


Note 9. Commitments and contingencies
        -----------------------------

Operating leases

The Company  leases its  facilities  under an operating  leases  through May 31,
1999. Minimum future rentals payable under the leases are as follows:


                       Year                               Amount
                       ----                               ------

                       1997                              $ 17,574
                       1998                                18,453
                       1999                                 7,875
                                                         --------
                                                         $ 43,902
                                                         ========

Rent  expense  amounted to $52,843 and $20,920 for the years ended  December 31,
1996 and 1995, respectively.

The Company began  factoring  certain of accounts  receivable on a full recourse
basis during  September  1996. At December 31, 1996 the Company had  uncollected
accounts  receivable  transferred  to the factor  amounting  to $85,824  and had
received  gross proceeds from the factor  amounting to $736,961  during the year
ended December 31, 1996.

Note 10.  Sales to major customers
          ------------------------

During the year ended December 31, 1996, the Company  recorded revenue for goods
or services provided to client companies that comprise greater than 10% of total
revenues as follows:

          Wal-Mart  Stores, Inc.                       $975,940

During the year ended December 31, 1995, the Company  recorded revenue for goods
or services provided to client companies that comprise greater than 10% of total
revenues as follows:

          Wal-Mart  Stores, Inc.                        $254,863
          DC Private Industry Council                   $169,000



                                       25