UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   Form 10-KSB

(Mark one)

X    ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
     1934

                   For the fiscal year ended December 31, 2000

     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

         For the transition period from ______________ to _____________


                         Commission File Number: 0-28453

                        Ameri-First Financial Group, Inc.
         ---------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

       Delaware                                                75-2610236
------------------------                                 -----------------------
(State of incorporation)                                (IRS Employer ID Number)

            6060 N. Central Expressway, Ste. 560 #7, Dallas, TX 75206
            ---------------------------------------------------------
                    (Address of principal executive offices)

                                 (214) 800-2842
                            -------------------------
                           (Issuer's telephone number)


          Securities Registered under Section 12(b) of the Exchange Act

Title of each Class                    Name of Each Exchange on which Registered
      None                                             None

          Securities registered Under Section 12(g) of the Exchange Act
                        Common Stock, $0.00001 Par Value


Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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 NoX

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  management'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. [ ]

State issuer's revenues for its most recent fiscal year: $4,110,871

State the  aggregate  market  value of the voting  stock held by  non-affiliates
computed by reference  to the price at which the stock was sold,  or the average
bid and asked  prices of such stock,  as of a specified  date within the past 60
days: $-0-(stock is not quoted).

As of October 4, 2002 the issuer had 2,327,262  shares of common stock issued
and outstanding.


<PAGE>

PART 1

Item 1. Description of the Business

Background.   On  September  27,  1996,   Ameri-First  Financial  Group,  Inc.'s
predecessor  company  incorporated  under the laws of  Nevada  under the name of
U-Bake Pizza,  Inc. On March 20, 1998,  U-Bake Pizza,  Inc.  changed its name to
Oregon Outerwear,  Inc. On May 18, 1998, Oregon Outerwear, Inc. changed its name
to Pacific Sports Holdings,  Inc. Pacific Sports Holdings, Inc. began trading on
the OTC Bulletin Board on or about April 7, 1998.

On March 30, 1998 Pacific Sports Holdings,  Inc. acquired 100% of SouthBay Golf,
Inc.  in a tax-free  reorganization  and  exchange  of common  shares of Pacific
Sports Holdings, Inc. SouthBay Golf, Inc.,a Nevada corporation, was incorporated
on March 11, 1998. On March 31, 1998,  Pacific Sports  Holdings,  Inc.  acquired
Mardock, Inc. a sportswear, corporate logo and promotional accessories business.
Due to Mardock's  consistent history of losses,  Mardock,  Inc. was sold back to
Mardock's founder on April 30, 1999. Pacific Sports Holdings,  Inc. acquired 70%
of Outback  Apparel Group,  Inc. on May 12, 1998 and an additional 15% ownership
on  August  14,  1998.   Outback  Apparel  Group,  Inc.,  a  Nevada  corporation
incorporated on May 12, 1998.

SouthBay Golf, Inc. arranged for the  manufacturing,  and designed and sold golf
clubs,  golf bags and head covers under the exclusive  worldwide license for the
Head Golf  brand  name,  and on a  non-exclusive  basis  hats,  towels,  gloves,
umbrellas and other  accessories.  The Company  operated  this business  under a
trademark licensing agreement with Head Sport AG dated April 1, 1998.

Outback Apparel Group,  Inc.  arranged for the  manufacturing,  and designed and
sold  swimwear,  active wear and  T-shirts  under the  exclusive  North  America
license for the Spark brand name.  The Company  operated this  business  under a
trademark  licensing agreement with Spank Sport International of Australia dated
May 31, 1998.

Results  from the golf and swimwear  subsidiaries  were  disappointing,  and, in
March 1999, Pacific Sports Holdings, Inc. discontinued operations.

On May 3, 1999, the Company entered into an agreement  whereby it would exchange
what was then 5,500,000  (Notes  1,100,000  post-split) of its common shares for
Series A Preferred  Shares of Tahoe Air Corp.,  convertible into 50.0001% of the
then issued and outstanding shares of common stock of the airline.

On August 26, 1999,  the Company  changed its name to Tahoe Pacific  Corporation
and on August 27, 1999 authorized a reverse stock split of 1 for 5.

Tahoe Air  Corp.,  a Nevada  corporation,  was  formed in 1996 to  operate a new
scheduled  airline  to  select  west  coast  cities  from the South  Lake  Taho,
California  airport.  On June 25, 1999 Tahoe Air Corp. began providing daily jet
service from South Lake Taho (TVL) to Los Angeles (LAX) and San Jose (SJC).  The
airline was unable to  demonstrate  sufficient  demand for its  service,  and on
November 22, 1999 suspended flight operations.

In anticipation of acquiring certain assets of Ameri-First Financial Corporation
on January 10, 2000, the Company changed its name to Amer-First Financial Group,
Inc. On February 7, 2000, the Company acquired Ameri-First Financial Corporation
for what was then 4,500,000 shares of its Common Stock.

In March 2000,  the Company  entered into an  Agreement  and Plan of Merger with
Itronics Communications  Corporation,  a Delaware corporation,  whereby Itronics
was the  surviving  corporation  and changed its name to  Ameri-First  Financial
Group,  Inc. In  connection  with an Agreement and Plan of  Reorganization,  the
Ameri-First  shareholders  exchanged 4,706,114 shares or 100% of the Ameri-First
shares,  for  4,706,114  shares of Itronics  Communications  Corporation,  which
changed its name to Ameri-First Financial Group.

In approximately  May 2000, the former  management of the Registrant  determined
that it would be in the best interest of the Registrant for it to become a hotel
owner for investment  purposes.  The  Registrant  began  negotiations  with HMGT
Management  Corporation,  a Delaware  corporation  engaged in the  management of
hotels,  and  Wilkerson  Consulting,  Inc.,  a Nevada  corporation  acting as an
acquisition agent for parties desiring to purchase hotels. The principals of the
aforementioned corporations are as follows:
<PAGE>

HMGT Management Corporation (subsequently merged into Homegate Corporation which
later changed its name to Covenant Financial Corporation)

     Gary W. Bell                                President/Director
     C. Keith Wilkerson II                       Vice-President/Director
     Keith Newton                                Secretary/Treasurer/Director
     Majority  owned  (84%) by  Wilkerson  Consulting,  Inc.,  of which  Charles
     Wilkerson is the beneficial owner.

     Wilkerson Consulting, Inc.
     Charles K. Wilkerson                        President/Secretary/Treasurer/
                                                                        Director
     Kathy Wilkerson                             Vice-President
     Wholly owned by the Wickliffe Trust

     Wickliffe Trust
     C. Keith Wilkerson II                      Trustee
     Charles K. Wilkerson                       Primary Beneficiary

     Following the negotiations  with HMGT Management  Corporation and Wilkerson
Consulting,  Inc.,  two  separate  agreements  were  reached to  facilitate  the
Registrants  investment  in hotel  properties.  On June 9,  2000 the  Registrant
entered into an Exclusive Agency Agreement with Wilkerson  Consulting,  Inc. The
pertinent terms of the Exclusive Agency Agreement were as follows:


1.   The  Registrant  had a five day right of first  refusal to (a) purchase any
     hotel or motel to be sold by an entity that is owned by,  controlled by, or
     associated with Charles K.  Wilkerson,  and (b) purchase any hotel or motel
     placed under  contract by Charles K.  Wilkerson or any entity that is owned
     by, controlled by, or associated with Charles K. Wilkerson; and

2.   For all hotels and motels  purchased by the  Registrant,  a consulting  fee
     would be paid to Wilkerson Consulting, Inc. as set forth below:

     1.   2% of the purchase price of the property in cash; and

     2.   Common stock of the  Registrant  (restricted  under Rule 144) equal in
          value to 2% of the purchase  price of property,  with the value of the
          stock to be based on the  published  "Bid"  price of the  Registrant's
          stock as of the day prior to closing of the property.

On June 15, 2000, the Registrant entered into a Hotel/Motel Management Agreement
with HMGT Management Corporation.  Under the terms of the Hotel/Motel Management
Agreement,  HMGT  Management  Corporation  would  manage all hotels owned by the
Registrant, or its subsidiaries, in the future and would be paid a percentage of
the gross revenue received by the hotels.

Acquisition of Five (5) Homegate Hotels

     On June 28, 2000, Ameri-First Holdings, Inc. ( a wholly owned subsidiary of
the  Registrant)  closed the  purchase  of five (5) hotels  from VPS I, L.P.,  a
Delaware  limited  partnership.  The hotels were  located in Irving,  Texas (one
hotel),  San Antonio,  Texas (two  hotels),  Amarillo,  Texas (one hotel) and El
Paso, Texas (one hotel). VPS I, L.P. is a limited partnership having HMGT

<PAGE>

Properties,  Inc. as its  general  partner  and AQW  Corporation  as its limited
partner. The principals of the aforementioned entities were as follows:


 HMGT Properties, Inc., a Texas corporation
          Gary W. Bell                                President/Director
          C. Keith Wilkerson II                       Vice-President/Secretary/
                                                              Treasurer/Director
          Wholly owned by Amerand Corporation

 AQW Corporation, a Texas corporation
          Gary W. Bell                                President/Director
          C. Keith Wilkerson II                       Vice-President/Secretary/
                                                      Treasurer/Director
          Wholly owned by Amerand Corporation

 Amerand Corporation, a Delaware corporation
          Gary W. Bell                                President/Director
          Charles K. Wilkerson                        Vice-President/Director
          Owned 50% by Gary W. Bell and 50% by Wickliffe Trust

     The purchase  price of the five hotels was  $34,000,000.00.  The Registrant
paid the price by (a) assuming  approximately  $17,600,000.00 in debt secured by
all five  hotels,  (b) the  issuance of  4,500,000  shares of the common  stock,
restricted by Rule 144, of the Registrant, and (c) the payment of $250,000.00 in
cash.  In  addition,   the  Registrant  purchased  the  accounts  receivable  by
transferring  66,000 free trading shares of Integrated  Technology  Group,  Inc.
(ITGI) to VPS I, L.P. The price of the hotels was determined by prior management
to be an accurate  valuation of the property based on VPS I, L.P.'s asking price
and the information  provided by the VPS I, L.P. In connection with the purchase
of these hotels, the Company issued 4,500,000 shares of Company common stock and
paid  $250,000  to VPS I,  L.P.,  but the debt was not  paid and the  shares  of
Integrated Technology Group, Inc. were never transferred.


     Pursuant to the Exclusive Agency Agreement with Wilkerson Consulting, Inc.,
the   aforementioned   purchase   obligated  the  Registrant  to  pay  Wilkerson
Consulting, Inc. $1,360,000.00 ($680,000 in cash, $680,000 in stock). As payment
for this obligation,  and for pre-payment of future obligations,  the Registrant
and Wilkerson  Consulting,  Inc. entered into a Stock Purchase Agreement wherein
the Registrant  agreed to re-purchase  800,000 shares of the common stock of the
Registrant  at a price  of  $2.00  per  share.  The  shares  were to be owned by
Wilkerson Consulting,  Inc. pursuant to payments made under the Exclusive Agency
Agreement.  No payments were made to Wilkerson Consulting and no shares of stock
were issued to Wilkerson Consulting pursuant to the above mentioned agreement.

     Wilkerson  Consulting  received a note for  $1,800,000  from the Company in
consideration  for amounts  due  Wilkerson  Consulting  for  management  fees in
connection with managing the five hotels as well as finders fees associated with
the  acquisitions  of such hotels.  The note was settled in January 2001 for the
issuance of 1,000,000 shares of Company common stock.  Prior to this issuance of
Company common stock, the Company affected a 1 for 25 reverse stock split.

Events Subsequent to Settlement Agreement

     Subsequent to the execution of the Settlement  Agreement,  the  Registrant,
its subsidiaries  and prior  management  failed and refused to make the required
payments under the terms of the Promissory Note. The five (5) hotels  previously
owned by the  Registrant  were managed and owned by The Tour Group,  Inc.  whose
principals are listed below:

<PAGE>

         The Tour Group, Inc.

           Gary W. Bell                                President/Director
           C. Keith Wilkerson II                       Vice-President/Secretary/
                                                                        Director
           Owned 50% by Gary W. Bell and 50% by C. Keith Wilkerson II


      The five Homegate hotels have been foreclosed upon.

     In December  2000,  the  Registrant,  by and through its former  president,
Jeffrey Bruteyn,  informed the principals of The Tour Group,  Inc. and Wilkerson
Consulting,  Inc.  that  there  was no  money to  perform  an audit or to do the
necessary work to comply with the disclosure  requirements for a public company.
Therefore,  in the interest of itself as a  shareholder,  and in the interest of
the other  shareholders,  Wilkerson  Consulting,  Inc.  proposed  an  additional
settlement agreement.

     The  Registrant  agreed to enter into a series of  agreements  wherein  the
following would take place:

1.   The Registrant would perform a 1-for-25 reverse split of its common stock;

2.   Wilkerson  Consulting,  Inc. would be issued 1,000,000  post-reverse  split
     shares of the  Registrant's  common  stock in exchange  for  releasing  the
     Registrant  from  its  liability  on  the  Promissory   Note   ($1,800,000)
     effectuated to settle the aforementioned lawsuit.

3.   That the current officers and directors of the Registrant would resign; and

4.   Given that the securities  subsidiary,  Ameri-First  Securities,  Inc., was
     losing money and in danger of defaulting  on its net capital  requirements,
     it was in the best  interest of the  Registrant  to sell the  subsidiary to
     Jeffrey Bruteyn. Therefore, the Registant entered into an agreement wherein
     the stock of  Ameri-First  Securities,  Inc.  was  transferred  to  Jeffrey
     Bruteyn for $10.00 and an  agreement of Jeffrey  Bruteyn to  indemnify  the
     Registrant from any  liabilities  arising from the operation of Ameri-First
     Securities, Inc.

The above agreements were signed to be effective as of December 22, 2000.

Current management was elected in March 2001.

Business of the Issuer

Ameri-First's future lied in the investment in Ameri-First Financial Corporation
and its wholly owned subsidiary Ameri-First Securities Corporation.  Ameri-First
Securities was a member of the National Association of Securities Dealers,  Inc.
and engaged in the investment  banking and  securities  brokerage  business.  In
December 2000, our former CEO resigned and received al1 investments  held by the
Company.

The Company's  business  strategy is to utilize its  securities to purchase real
estate properties and manage them as well. In March 2000, the Company acquired 5
hotel  properties  and began  managing  and  operating  hotels.  The hotels were
foreclosed upon in December 2000 by a financial  institution and the Company now
has no operations and is seeking acquisitions or merger candidates.

The  acquisition  plan is not limited to a certain  type of  property,  class of
hotel or a particular price range.  Each property is evaluated  individually and
will be  carefully  researched  prior to  acquisition.  In  general,  the  hotel
properties  will need to be refinanced and a renovation and  repositioning  plan
will be implemented upon acquisition.  Depending on the property, the renovation
and  repositioning  plan  will be a six  month to five  year  plan and will cost
between five (5%) and fifty (50%) percent of the purchase  price.  The funds for
renovation and  repositioning  will be derived from either the hotel earnings or
through the refinancing of the property.
<PAGE>

Subsequent to acquisition,  the goal of new management is to transform  acquired
properties  into a source  of  earnings  and to create  equity  in the  property
through management.  Management seeks to provide high quality service to guests,
a  fiscally   responsible   approach  to  costs  and  the  implementation  of  a
concentrated marketing effort to drive occupancy rates.

Item 2.  Description of Property

The Company has no property. The Company maintains its office at 6060 N. Central
Expressway,  Suite 560 #7, Dallas,  TX 75206,  which it shares with  Hospitality
Plus where Keith Newton,  the Company's  Secretary and  Treasurer,  serves as an
officer,  and which is owned by the Wickliffe Trust, of which Charles  Wilkerson
is the  beneficial  owner.  The  Company  does  not pay any rent for use of such
property.

Item 3.  Legal Proceedings.

The Company is not a party to any material pending litigation nor is it aware of
any threatened legal proceeding.

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

No matters were  submitted to securities  holders during the year ended December
31, 2000.

PART II

Item 5.  Market for Common Equity and Related Stockholder Matters

The Company's common stock was traded in the National  Association of Securities
Dealers OTC Bulletin Board "OTCBB" under the symbol "AMFS".  The following table
sets forth the high and low  closing bid prices for the  periods  indicated,  as
reported by the OTCBB.

                          Closing Bid                 Closing Ask
                     High             Low         High          Low
                     ----             ----        ----          ---
1998
1st Quarter           6.25            5.625        6.25        5.625
2nd Quarter           4.25             2.50       4.875         2.50
3rd Quarter           3.00             1.25       3.125        1.505
4th Quarter           2.75             1.50        3.00        2.125

1999
1st Quarter           8.75           4.6875        8.75         5.00
2nd Quarter           8.75           4.6875        9.00        4.875
3rd Quarter           3.75            1.875        4.00         2.00
4th Quarter           3.90             .125        4.00          .25

2000
1st Quarter         5.3125             4.50       5.375         3.75

                          Closing Price
                      High             Low
2nd Quarter           4.13             1.26
3rd Quarter           1.81             1.09
4th Quarter           1.44              .19


<PAGE>

These  quotations are  inter-dealer  prices  without retail markup,  markdown or
commissions, and may not necessarily represent actual transactions.

As of September 25, 2002, there were 240 shareholders of record of the Company's
common stock.

The Company has never paid cash dividends. The Board of Directors of the Company
currently  anticipates  that it will retain all  available  funds for use in the
operation of the business and does not  anticipate  paying and cash dividends in
the foreseeable future.

The stock transactions  below have been retroactively  adjusted to reflect the 1
for 25 reverse stock split.

In May 1999, the Company issued 44,000 shares of common stock in connection with
the acquisition of Tahoe which transaction was valued at $3,655,000.  We believe
that this transaction was exempt from  registration  pursuant to Section 4(2) of
the  Securities  Act of 1933  as the  recipient  had  sufficient  knowledge  and
experience  in financial  and business  matters that it was able to evaluate the
merits and risks of an investment in the Company,  and since the transaction was
non-recurring and privately negotiated.

The Company completed a private placement in June 1999 pursuant to which it sold
5,233 shares of its voting  common stock for a total of $850,301.  In connection
with the private placement  Ameri-First incurred direct costs of the offering of
$128,539. The net proceeds were $721,762.

In  December  1999,  the  Company  issued  31,376  shares  of  common  stock for
consulting  services  valued at  $1,508,486  or the fair  value of the  services
provided.  The Company  believes the  transaction  was exempt from  registration
pursuant to Section 4(2) of the Securities Act of 1933.

In December  1999,  the Company  issued  1,200 shares of common stock for assets
valued at  $30,000.  The  Company  believes  the  transaction  was  exempt  from
registration pursuant to Section 4(2) of the Securities Act of 1933.

In March 2000,  the Company  issued  50,000 shares of common stock in connection
with the merger between  Itronics  Communications  Corporation  and  Ameri-First
Financial Group. We believe that this  transaction was exempt from  registration
pursuant to Section  4(2) of the  Securities  Act of 1933 as the  recipient  had
sufficient  knowledge and  experience in financial and business  matters that it
was able to evaluate the merits and risks of an investment  in the Company,  and
since the transaction was non-recurring and privately negotiated.

In March 2000,  the Company  issued  75,600 shares of common stock in connection
with the  acquisition of assets from  Ameri-First  Financial  Securities,  which
transaction was valued at $945,045.  We believe that this transaction was exempt
from registration  pursuant to Section 4(2) of the Securities Act of 1933 as the
recipient  had  sufficient  knowledge  and  experience in financial and business
matters  that it was able to evaluate the merits and risks of an  investment  in
the  Company,   and  since  the  transaction  was  non-recurring  and  privately
negotiated.

In June 2000, the Company issued 180,000 shares of common stock to VPS I, L.P in
connection  with the  acquisition  of five  hotels  which  stock  was  valued at
$16,457,401.  We believe  that this  transaction  was exempt  from  registration
pursuant to Section  4(2) of the  Securities  Act of 1933 as the  recipient  had
sufficient  knowledge and  experience in financial and business  matters that it
was able to evaluate the merits and risks of an investment  in the Company,  and
since the transaction was non-recurring and privately negotiated.

In September  2000,  the Company issued 84,306 shares of common stock to various
individuals  in  consideration  for  services  rendered.  We  believe  that this
transaction  was  exempt  from  registration  pursuant  to  Section  4(2) of the
Securities Act of 1933 as the recipients had sufficient knowledge and experience
in financial  and  business  matters that it was able to evaluate the merits and
risks  of an  investment  in  the  Company,  and  since  the  transactions  were
non-recurring and privately negotiated.

In September  2000,  the Company  issued  97,360  shares of common stock to Hess
Capital,  LLC for payment of debt and  interest of  $1,672,830.  We believe that
this  transaction was exempt from  registration  pursuant to Section 4(2) of the
Securities Act of 1933 as the recipient had sufficient  knowledge and experience
in financial  and  business  matters that it was able to evaluate the merits and
risks  of  an  investment  in  the  Company,   and  since  the  transaction  was
non-recurring and privately negotiated.

<PAGE>

In September 2000, the Company issued 59,959 shares of common stock to Southeast
International  for deposits on property  valued at  $1,700,000.  We believe that
this  transaction was exempt from  registration  pursuant to Section 4(2) of the
Securities Act of 1933 as the recipient had sufficient  knowledge and experience
in financial  and  business  matters that it was able to evaluate the merits and
risks  of  an  investment  in  the  Company,   and  since  the  transaction  was
non-recurring and privately negotiated.

Item 6. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

Caution Regarding Forward-Looking Information

This annual report contains certain  forward-looking  statements and information
relating  to the  Company  that  are  based on the  beliefs  of the  Company  or
management as well as assumptions made by and information currently available to
the Company or management.  When used in this document,  the words "anticipate,"
"believe,"  "estimate," "expect" and "intend" and similar  expressions,  as they
relate  to  the   Company  or  its   management,   are   intended   to  identify
forward-looking  statements.  Such  statements  reflect the current  view of the
Company regarding future events and are subject to certain risks,  uncertainties
and assumptions, including the risks and uncertainties noted. Should one or more
of these risks or uncertainties  materialize,  or should underlying  assumptions
prove incorrect,  actual results may vary materially from those described herein
as anticipated,  believed,  estimated,  expected or intended.  In each instance,
forward-looking  information  should be considered in light of the  accompanying
meaningful cautionary statements herein.

Results of Operations, Liquidity and Capital Resources

Overview

The Company seeks to purchase real estate properties and manage them as well. At
December 31, 2000, the Company did not own or manage any real estate properties.

Comparison of Operating Results For the Year Ended December 31, 2000 Compared to
the Year Ended December 31, 1999

The  Company's  revenues  increased by $4,067,030 or 9,277% from $43,841 for the
year ended December 31, 1999 to $4,110,871 for the year ended December 31, 2000.
The increase in revenues  resulted from the  acquisition of the five hotels that
were acquired in June of 2000 and foreclosed upon in December 2000.

Operating expenses,  general and administrative  expenses,  and selling expenses
increased by $3,394,924 of 147% from  $2,612,788 for the year ended December 31,
1999 to  $6,007,712  for the year ended  December  31,  2000.  The  increase  in
operating expenses, general and administrative expenses and selling expenses was
due to the increased operations of the Company.

Depreciation  expense  increased from $0 for the year ended December 31, 1999 to
$2,690,655 for the year ended  December 31, 2000.  The increase in  depreciation
was due to the  depreciation on the hotel  properties and its other property and
equipment.

For the year ended December 31, 2000, the Company recorded a loss on investments
and other assets of $2,770,000 a decrease of $915,955 from a loss of investments
and other assets of $3,685,955 for the year ended December 31, 1999. The loss on
investments and other assets during the year 2000 was associated with the former
chief  executive  officer  taking the  assets of  Ameri-First  Securities,  Inc.
resulting  in a loss of  $1,070,000,  and  deposits  made in  Company  stock for
acquisition that never closed resulting in a loss of $1,700,000.

Settlement  expense was $1,800,000 for the year ended December 31, 2000 compared
to settlement expense of $0 for the year ended December 31, 1999. The settlement
expense was due to a settlement  with  Wilkerson  Consulting  whereby  Wilkerson
Consulting  received a note for $1.8 million which note was later converted into
1,000,000  shares of Company common stock following the 1:25 reverse stock split
resulting in Wilkerson Consulting becoming the Company's majority stockholder.

<PAGE>

Loss on  repossessed  assets  increased  $12,909,352  from $762,479 for the year
ended December 31, 1999 to $13,671,831 for the year ended December 31, 2000. The
increase in loss on  repossessed  assets was due to the  foreclosure on the five
hotels by a financial institution in December 2000.

The Company's loss from operations increased $15,811,946 or 225% from $7,017,381
for the year ended December 31, 1999 to $22,829,327  for the year ended December
31, 2000. The increased net loss resulted  principally from operating  expenses,
depreciation expenses, settlement expenses and loss on repossessed assets.

Net loss  increased  from  $7,145,507  for the year ended  December  31, 1999 to
$23,127,488 for the year ended December 31, 2000.

Net loss per share  increased  from $1.99 per share for the year ended  December
31, 1999 to $2.19 per share for the year ended December 31, 2000.

As of December 31, 2000, the Company had an accumulated deficit of $32,350,653.

Liquidity and Capital Resources

For the year ended December 31, 2000, the Company did not generate positive cash
flow from its operations.  The hotel operations did not generate sufficient cash
flow to pay the obligations of the Company. Therefore, the hotel properties were
foreclosed upon.

As of December 31, 2000, the Company had no assets and a working capital deficit
of $1,099,764.

Wilkerson  Consulting  is paying the  Company's  expenses on an as needed basis.
There can be no assurance  that Wilkerson  Consulting  will continue to fund the
Company's  operations as well as its ongoing legal and accounting  expenses.  In
addition,  there can be no  assurance  that any new capital will be available to
the Company or that adequate  funds for the Company's  operations,  whether from
financial  markets,  or other  arrangements  will be available when needed or on
terms satisfactory to the Company. The Company has no commitments from officers,
directors or affiliates to provide funding. The failure of the Company to obtain
adequate additional financing may require the Company to delay, curtail or scale
back  some  or all of its  operations.  Any  additional  financing  may  involve
dilution of the Company's then-existing shareholders.

There can be no assurances that the Company will be able to either (1) achieve a
level of revenues adequate to generate sufficient cash flow from operations;  or
(2)  obtain  additional  financing  through  either  private  placement,  public
offerings  and/or bank  financing  necessary  to support the  Company's  working
capital  requirements.  To the extent  that  funds  generated  from any  private
placements,  public  offerings  and/or bank  financings  are  insufficient,  the
Company will have to raise additional working capital. No assurance can be given
that additional financing will be available,  or if available,  will be on terms
acceptable to the Company.  If adequate  working  capital is not available,  the
Company may not renew its operations.

The  Company's  auditor has  expressed  substantial  doubt  about the  Company's
ability to continue as a going concern.

Item 7.  Financial Statements

The required  financial  statements  are included in this document  beginning on
page F-1.

Item 8.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosures

     S.W. Hatfield,  Certified Public Accountant,  of Dallas,  Texas audited the
Registrant's  financial  statements at and for the year ended December 31, 1999,
and the opinion of S.W.  Hatfield was not  qualified in any manner.  For certain
business  reasons,  the Board of Directors of the  Registrant  has chosen not to
engage S.W. Hatfield to audit the Registrant's  financial  statements at and for
the year ended December 31, 2000. The  auditor-client  relationship  between the
Registrant and S.W. Hatfield has ceased.

     During  the  Registant's  relationship  with S.W.  Hatfield,  there were no
disagreements  between  the  Registrant  and  S.W.  Hatfield  on any  matter  of
accounting principles or practices,  financial statement disclosure, or auditing
scope or  procedure.  In  addition,  there  were no  disagreements  between  the
Registrant  and  S.W.  Hatfield  on  any  matter  of  accounting  principles  or
practices,  financial statement disclosure, or auditing scope and procedures for
the  December  31,  1999  financial  statements.  Further,  there  have  been no
disagreements  between  the  Registrant  and the S.W.  Hatfield on any matter of
accounting principles or practices,  financial statement disclosure, or auditing
scope and procedures for December 31, 1999 to the present.
<PAGE>

     On August 27, 2002, the  Registrant  engaged Malone & Bailey PLLC as it its
independent  accountants for the fiscal years ended December 31, 1999,  December
31, 2000 and  December  31,  2001.  During the most  recent  fiscal year and any
subsequent interim period prior to engaging Malone & Bailey, the Company did not
consult with Malone & Bailey  regarding either (i) the application of accounting
principals to a specified transaction, either completed or proposed; or the type
of audit opinion that might be rendered on the Company's  financial  statements;
or (ii) any matter  that was either the  subject  matter of a  disagreement  (as
defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or
a reportable event (as defined in Item 304(a)(1)(v) of Regulation S-K). Malone &
Bailey PLLC has reviewed the  disclosure  required by Item 304(a)  before it was
filed with the  Commission  and has been provided an  opportunity to furnish the
Company  with  a  letter   addressed  to  the  Commission   containing  any  new
information,  clarification  of the Company's  expression  of its views,  or the
respects in which it does not agree with the  statements  made by the Company in
response  to Item  304(a).  Malone & Bailey PLLC did not furnish a letter to the
Commission.

Item 9. Directors. Executive Officers, Promoters and Control Persons; Compliance
        with Section 16(a) of the Exchange Act.

The  directors  and  officers of the Company are listed  below with  information
about their respective backgrounds.

 Name                            Age          Position
------                          -----        ----------
Gary Bell                        33          President and Director
Keith D. Newton                  35          Secretary, Treasurer and Director
C. Keith Wilkerson, II           33          Vice President and Director

Directors are elected to serve until the next annual meeting of the shareholders
of the  Company or until  their  successors  have been  elected  and  qualified.
Officers  will hold their  positions at the pleasure of the board of  directors,
absent  any  employment  agreement,   of  which  none  currently  exists  or  is
contemplated.  The directors and officers will devote full time to the Company's
affairs on an "as needed" basis,  which,  depending on the circumstances,  could
amount to as little as two hours per month,  or more than forty hours per month,
but more than  likely will fall within the range of five to ten hours per month.
Gary Bell,  Keith D. Newton,  C. Keith Wilkerson,  II and Charles  Wilkerson are
related parties.

Gary Bell has served as the  President  and Director of the Company  since March
2001.  Mr. Bell has served as the Secretary and Treasurer  since June 2001.  Mr.
Bell has served as the Secretary and Treasurer of  Inn-Vestors,  Inc. since July
2002.  From May 1998 through  June 2001,  Mr. Bell served as the  President  and
Chief Executive Officer of Amerand  Corporation.  From November 1993 through May
1998, Mr. Bell served as the President and Chief  Executive  Officer of Nature's
Landscape,   Inc.  Mr.  Bell  is  educated  in  business  management  and  being
self-employed  for the  majority of his working  career,  he has  developed  the
skills which the Company  believes are necessary to analyze an investment and to
evaluate its  reparation and  renovation  needs to be a successful  asset to the
Company's portfolio.

Keith D.  Newton has served as the  Secretary,  Treasurer  and  Director  of the
Company since March 2001.  Mr. Newton has served as the President of Hospitality
Plus since April 2000.  Mr.  Newton has served as the  President and Director of
Inn-Vestors,  Inc.  since July 2002.  From February 1997 through April 2000, Mr.
Newton served as a Sales Manager with Borders. Mr. Newton received his education
in business administration and management from McNeese State University, and has
experience  in retail  management  including  regional  representation  for fine
retailers. Being familiar with budgets and the financial concerns of high volume
sales and  operations,  Mr.  Newton  has  assumed  the role of  supervising  and
managing the Company's finances.

<PAGE>

C. Keith Wilkerson,  II has served as Vice President and Director of the Company
since March 2001.  Mr.  Wilkerson  established a company that  provides  project
management  services to hotel  developers and  investors,  assisting in high-end
hotel construction,  renovation, and installation.  Mr. Wilkerson is a decorated
veteran of the  United  States  Air  Force,  and has earned a Masters  Degree in
Educational  Administration from Faith Baptist College.  After leaving the armed
forces of the United  States,  the next five years of his work  experience  were
spent teaching and coaching at the collegiate level.  Through a series of events
Mr.  Wilkerson was recruited by two separate  hotelier's and has a distinguished
operational record in the managing of upscale hotel properties.

No  director  or officer  of the  Company  has been  convicted  in any  criminal
proceeding  (excluding  traffic  violations)  or is the  subject  of a  criminal
proceeding which is currently proceeding.  No director or officer of the Company
is the subject of any legal proceeding  involving the Company or the performance
of his duties as such director or officer.

Compliance with Section 16(a) of the Exchange Act

Section  16(a) of the Exchange Act requires the Company's  directors,  executive
officers and persons who own more than ten percent of a registered  class of the
Company's equity  securities  ("10%  holders"),  to file with the Securities and
Exchange  Commission  (the "SEC")  initial  reports of ownership  and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Directors,  officers and 10% holders are required by SEC  regulation  to furnish
the Company with copies of all of the Section  16(a)  reports  they file.  Based
solely on a review of reports furnished to he Company or written representations
from the Company's directors and executive officers during the fiscal year ended
December  31, 2000,  all Section  16(a) filing  requirements  applicable  to its
directors, officers and 10% holders for such year were complied with.

Item 10.  Executive Compensation

The Company currently pays no compensation to its officers and directors and has
paid no compensation  in any amount or of any kind to its executive  officers or
directors  for the fiscal year ended  December 31, 2000.  During the fiscal year
ended  December  31,  1999,  the  Company  issued  150,000  shares to Jeffrey M.
Gardiner,  its Former President and Assistant  Secretary,  in consideration  for
services rendered.  James V. Moodhe received a salary of $240,000 for the fiscal
year ended December 31, 1998.

Item 11.  Security Ownership of Certain Beneficial Owners and Management.

The following  information  table sets forth certain  information  regarding the
Company's common stock owned on September 25, 2002 by (1) any person  (including
any "group") who is known by the Company to own beneficially more than 5% of its
outstanding Common Stock, (2) each director and executive  officer,  and (3) all
executive officers and directors as a group.

Name and Address(1)                   Shares Owned               Percentage
-------------------                  ---------------            -------------

Gary Bell                             80,000(2)                  3.4%

Keith Newton                          80,000(2)                  3.4%

C. Keith Wilkerson, II                80,000(2)                  3.4%

Janaxral Desri                        268,000                    11.5%

Covenant Financial Corporation        80,000                     3.4%

Wilkerson Consulting                  1,337,160 (3)(4)           57.5%

Charles Wilkerson                     1,337,160 (4)              57.5%

Wickliffe Trust                       1,337,160                  57.5%


<PAGE>


Executive Officers and Directors as         240,000                    10.3%
a group (three persons)

(1)  Business  Address is 6060 North Central  Expressway,  Suite 560 #7, Dallas,
     Texas 75206, with the exception of Janaxral Desri whose business address is
     13663 Jupiter, Suite 401, Dallas, Texas 75238.

(2)  Gary Bell,  Keith  Newton  and C. Keith  Wilkerson,  II are  affiliates  of
     Covenant  Financial  Corporation due to their positions as officers of such
     corporation.

(3)  Wilkerson  Consulting,  which  is  owned  by the  Wickliffe  Trust,  is the
     majority stockholder of Covenant Financial Corporation.

(4)  Wilkerson  Consulting.  is  owned by  Wickliffe  Trust,  of which C.  Keith
     Wilkerson, II, Kristin Newton, and Cara Adams serve as trustees and whereby
     Charles Wilkerson and Katherine Wilkerson are the beneficiaries.

Item 12.  Certain Relationships and Related Transactions.

In March 2000, the Company acquired the assets of Ameri-First  Securities,  Inc.
for 75,600 shares of common stock from Jeffrey  Bruteyn,  the  Company's  former
chief executive officer.

In November,  2000,  Jeffrey  Bruteyn,  the  Company's  former  chief  executive
officer,  entered  into a  settlement  agreement  with the  Company  whereby Mr.
Bruteyn paid the Company $10 and returned  75,600 shares of Company common stock
to the Company for cancellation in  consideration  for the assets of Ameri-First
Securities.

The Company had a note  payable  with  Wilkerson  Consulting,  of which  Charles
Wilkerson and Katherine  Wilkerson are the  beneficiaries,  for $1,800,000.  The
note was received in settlement of amounts due  Wilkerson  Consulting,  Inc. for
management  services with the hotels as well an amount due for a finders fee for
the  purchase  of the  hotels.  The note was due on or before  May 1,  2002.  In
January  2001,  following a 1 for 25 reverse  stock  split,  the Company  issued
1,000,000 shares to Wilkerson  Consulting in consideration for settling the note
payable.  Wilkerson  Consulting  became the majority  shareholder of the Company
upon completion of this transaction.

In January 2001,  Wilkerson Consulting received 257,160 shares of Company common
stock from Jeffrey  Bruteyn,  the Company's former chief executive  officer,  as
part of a settlement agreement between the parties.

Hospitality  Plus,  a company  owned by the  Wickliffe  Trust of which C.  Keith
Wilkerson,  II,  Kristin  Newton,  and Cara Adams serve as trustees  and whereby
Charles  Wilkerson is the beneficiary,  has provided office space to the Company
without charge.

Wilkerson  Consulting is owned by Wickliffe  Trust, of which C. Keith Wilkerson,
II,  Kristin  Newton,  and Cara Adams  serve as  trustees  and  whereby  Charles
Wilkerson  is the  beneficiary,  is paying the  expenses of the Company on an as
needed basis.

The officers and directors are involved in other  business  activities  and most
likely will become involved in other business  activities in the future, many of
which may involve a conflict of interest.

Item 13.  Exhibits and Reports on Form 8-K.

(a)  Financial Statements and Exhibits

     Financial  Statements:  The following financial statements are submitted as
     part of this report:

                                                                   Page
                                                                  ------
     Report of Independent Certified Public Accountants            F-2
     Balance Sheets - December 31, 1999 and 1998                   F-3
     Consolidated Statements of Income and Comprehensive Income
       Years Ended December 31, 1999 and 1998                      F-5
     Consolidated Statements of Changes in Shareholders' Equity
       Years Ended December 31, 1999 and 1998                      F-6


<PAGE>

     Consolidated Statement of Cash Flows
       Years Ended December 31, 1999 and 1998                      F-7
     Notes to Consolidated Financial Statements                    F-8

   Exhibits
     10.1 Exclusive Agency Agreement with Wilkerson Consulting
     10.2 Hotel/Motel Management Agreement with HMGT Corporation

   (b) Reports on Form 8-K
     March 23, 2000 - Acquisition of Itronics Communications Corporation by
     Ameri-First Financial Group, Inc. for $100,000 cash and 50,000 shares of
     restricted, unregistered shares of common stock of Ameri-First Financial
     Group, Inc.

                                   SIGNATURES

In accordance with Section 13 and 15(d) of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, on the 4th day of October, 2002.

Dated: October 4, 2002                  AMERI-FIRST FINANCIAL GROUP, INC.


                                           by: /s/ Gary Bell
                                              -----------------------------
                                              Gary Bell
                                              President and Director

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

/s/Gary Bell                                               October 4, 2002
-------------------
Gary Bell
President and Director,
(Principal Executive Officer)


/s/ Keith D. Newton                                        October 4, 2002
-------------------
Keith D. Newton
Secretary, Treasurer and Director


/s/ C. Keith Wilkerson, II                                 October 4, 2002
--------------------
C. Keith Wilkerson, II
Vice President and Director

<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors
   Ameri-First Financial Group, Inc.
   Dallas, Texas

We have audited the accompanying  balance sheet of Ameri-First  Financial Group,
Inc.  as of  December  31,  2000,  and the  related  statements  of  operations,
stockholders' equity, and cash flows for each of the two years then ended. These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial  position of Ameri-First  Financial Group,
Inc. as of December 31,  2000,  and the results of its  operations  and its cash
flows  for each of the two years  then  ended,  in  conformity  with  accounting
principles generally accepted in the United States.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial statements,  the Company has incurred losses through December 31, 2000
totaling  $22,182,446  and  $7,145,507  and at  December  31, 2000 had a capital
deficit of $1,849,711.  The Company will require  additional  working capital to
develop its business  until the Company  either (1) achieves a level of revenues
adequate  to  generate  sufficient  cash flows from  operations;  or (2) obtains
additional  financing  necessary  to support its working  capital  requirements.
These conditions raise substantial doubt about the Company's ability to continue
as a going  concern.  Management's  plans  in  regard  to this  matter  are also
described in Note 2. The  accompanying  financial  statements do not include any
adjustments that might result from the outcome of these uncertainties.


Malone & Bailey, PLLC
Houston, Texas
www.malone-bailey.com


August 11, 2002


<PAGE>


                        AMERI-FIRST FINANCIAL GROUP, INC.
                                  BALANCE SHEET
                                December 31, 2000

Assets                                                                  $   -
                                                                  ============

       LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
  Accounts payable                                                   $ 20,000
  Accrued expenses                                                     29,711
  Current portion of long-term debt                                 1,050,052
                                                                  ------------
                                                                  ------------
    Total current liabilities                                       1,099,763
                                                                  ------------

Long-term debt                                                        749,948

Commitments

STOCKHOLDERS' EQUITY (DEFICIT):
Common stock, $.00001 par value, 25,000,000 shares
  Authorized, 611,870 shares issued and outstanding                         6
Additional paid in capital                                         29,555,891
Accumulated deficit                                               (31,405,608)
                                                                  ------------
  Total Stockholders' Equity (Deficit)                             (1,849,711)
                                                                  ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                    $   -
                                                                  ============

              See accompanying summary of accounting policies and
                         notes to financial statements

<PAGE>

                        AMERI-FIRST FINANCIAL GROUP, INC.
                            STATEMENTS OF OPERATIONS
                 For the Years Ended December 31, 2000 and 1999

                                                   2000              1999
                                                ------------    -----------
Revenues                                        $4,110,871         $ 43,841

Operating Expenses:
  Operating expenses                             2,890,627                -
  General and administrative                     2,953,246        2,313,599
  Selling expenses                                 163,839          299,189
  Depreciation expense                           2,690,655                -
  Loss on investments and other assets           1,824,955        3,685,955
  Settlement expense                             1,800,000                -
  Loss on repossessed assets                    13,671,831          762,479
                                               ------------    -------------
                                               ------------    -------------
                                                25,995,153        7,061,222
                                               ------------    -------------

Loss from operations                           (21,884,282)      (7,017,381)
                                               ------------    -------------

Other income (expense):
  Other income                                      55,781                -
  Interest expense                                (391,364)        (128,126)
  Interest income                                   37,422                -
                                               ------------    -------------
                                                  (298,161)        (128,126)
                                               ------------    -------------

                                               ------------    -------------
Net loss                                      $(22,182,443)     $(7,145,507)
                                               ============    =============

Net loss per share:
                                               ------------    -------------
  Net loss basic and diluted                      $ (52.98)        $ (49.68)
                                               ============    =============

Weighted average shares outstanding:
  Basic and diluted                                418,726          143,834
                                               ============    =============

              See accompanying summary of accounting policies and
                          notes to financial statements
<PAGE>

                        AMERI-FIRST FINANCIAL GROUP, INC.
                  STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                 For the Years Ended December 31, 2000 and 1999
<TABLE>


                                                              Additional paid
                                     Common stock               in capital            Accum.
                                                                                     Deficit               Total
                              -----------------------------  -----------------  -------------------
                                 Shares          Amount
                              --------------  -------------  -----------------  -------------------  ------------------
<S>                           <C>             <C>             <C>                 <C>                 <C>

Balances,
  December 31, 1998              106,436           $  1        $ 1,470,676          $ (2,077,658)         $ (606,981)

Issuance of common stock
  in connection with
  acquisition of Tahoe            44,000              1          3,654,999                    -            3,655,000

Issuance of common stock
  for services                    31,376              -          1,508,486                    -            1,508,486

Issuance of common stock
  for cash                         5,233              -            721,762                    -              721,762

Issuance of common stock
  for assets                       1,200              -             30,000                    -               30,000

Expenses paid by
  shareholders                         -              -            203,757                    -              203,757

Net loss                               -              -                  -            (7,145,507)         (7,145,507)
                              ------------  -------------  -----------------  -------------------  ------------------
Balances,
  December 31, 1999              188,245              2          7,589,680            (9,223,165)         (1,633,483)

Issuance of common stock
  in connection with
  reverse merger                   2,000              -                 50                    -                   50

Issuance of common stock
  for services                    84,306              1          1,874,760                    -            1,874,761

Issuance of common stock
  in connection with
  acquisition of assets           75,600              1            945,044                    -              945,045

Issuance of common stock
  in connection with
  acquisition of 5 hotels        180,000              2         16,457,399                    -           16,457,401

Issuance of common stock
  for payment of debt             97,360              1          1,672,829                    -            1,672,830

Issuance of common stock
  for deposits on
  property                        59,959              -          1,700,000                    -            1,700,000

Common stock received in
  connection with sale of
  assets back to former
  CEO and retired                (75,600)            (1)          (945,044)                  -              (945,045)

Expenses paid by
  Shareholders                         -              -            261,173                    -              261,173

Net loss                               -              -                  -           (22,182,443)        (23,127,488)
                              ------------  -------------  -----------------  -------------------  ------------------
Balances,
  December 31, 2000              611,870            $ 6        $29,555,891          $(31,405,608)        $(1,849,711)
                              ============  =============  =================  ===================  ==================
</TABLE>


<PAGE>

                        AMERI-FIRST FINANCIAL GROUP, INC.
                            STATEMENTS OF CASH FLOWS
                      For the Years Ended December 31, 2000
<TABLE>


                                                            2000             1999
                                                        -------------    ------------
<S>                                                     <C>              <C>

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                $(22,182,443)    $(7,145,507)
Adjustments to reconcile net deficit to cash
  used by operating activities:
    Depreciation and amortization                          2,690,655          23,835
    Common stock issued for services                       1,874,761       1,508,486
    Loss on repossessed assets and investments            15,496,786       3,685,955
    Expenses paid by shareholder                             261,173         203,757
    Settlement expenses                                    1,800,000               -
Net change in:
  Prepaid assets and other                                   112,938         (25,438)
  Accounts payable and accrued expenses                     (149,493)        228,189
                                                     ---------------    -------------

CASH FLOWS USED IN OPERATING ACTIVITIES                      (95,623)     (1,520,723)
                                                     ---------------    -------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Proceeds from sale of assets                                95,427               -
  Capital expenditures                                   (22,023,250)              -
                                                     ---------------    -------------

CASH FLOWS PROVIDED BY (USED IN) INVESTING
  ACTIVITIES                                             (21,927,823)              -
                                                     ---------------    -------------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable                              22,023,250          795,905
Sale of common stock, net                                         -          721,762
                                                     ---------------    -------------

CASH FLOWS PROVIDED BY FINANCING ACTIVITIES              22,023,250        1,517,666
                                                     ---------------    -------------

NET INCREASE (DECREASE) IN CASH                                (196)          (3,057)
Cash, beg. of period                                            196            3,253
                                                     ---------------    -------------
Cash, end of period                                            $   -          $  196
                                                     ===============    =============

SUPPLEMENTAL CASH FLOW INFORMATION
  Interest paid                                                   -                -
  Income taxes paid                                               -                -

NONCASH TRANSACTIONS:
Acquisition of hotels for common stock                 $ 16,457,401                -
Acquisition of investments for common stock               $ 945,045                -
Issuance of common stock for debt                        $1,672,830                -
Loss on foreclosure of hotel properties and
  settlement of mortgage note payable to a
  financial institution                                $ 13,671,831                -

</TABLE>

              See accompanying summary of accounting policies and
                          notes to financial statements

<PAGE>

                        AMERI-FIRST FINANCIAL GROUP, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF ACCOUNTING POLICIES

Nature of business

Ameri-First Financial Group, Inc.  ("Ameri-First") was incorporated in September
1996 in California.  Ameri-First  was engaged in providing  private and publicly
traded companies with investment  banking services.  In March 2000,  Ameri-First
acquired 5 hotel properties and began managing and operating hotels.  The hotels
were foreclosed upon in December 2000 by a financial institution and Ameri-First
now has no operations and is seeking acquisition or merger candidates.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities at the date of the balance  sheet.  Actual results could differ from
those estimates.

Cash Equivalents

Cash  equivalents  include highly  liquid,  temporary  cash  investments  having
original  maturity dates of three months or less. For reporting  purposes,  such
cash  equivalents  are stated at cost plus accrued  interest which  approximates
fair value.

Investments

Ameri-First holds minority equity investments in companies. Ameri-First accounts
for these minority investments under the cost method.  Certain investments carry
restrictions  on immediate  disposition.  Investments  in public  companies with
restrictions of less than one year are classified as available-for-sale  and are
adjusted to their fair market  value with  unrealized  gains and losses,  net of
tax, recorded as a component of accumulated  other  comprehensive  income.  Upon
disposition of these investments,  the specific identification method is used to
determine  the cost  basis in  computing  realized  gains or  losses,  which are
reported in other  income and  expense.  Declines in value that are judged to be
other than temporary are reported in other income and expense.  During  December
2000, the former CEO resigned and received all investments  held by Ameri-First.
Ameri-First  recorded a settlement  expense of  $1,070,000  which is included in
loss on investments and other assets.

Revenue Recognition

Revenues are recorded as services are performed.  Hotel revenues are recorded in
the period in which occupancy rights are provided to guests and tenants.


<PAGE>

Long-lived Assets

Property and equipment are stated at cost less accumulated  depreciation.  Major
renewals and improvements are capitalized;  minor replacements,  maintenance and
repairs are charged to current operations.  Depreciation is computed by applying
the  straight-line  method  over  the  estimated  useful  lives  of each  asset.
Ameri-First  performs  reviews for the impairment of long-lived  assets whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable.

Income Taxes

The  asset  and  liability  approach  is used to  account  for  income  taxes by
recognizing  deferred tax assets and  liabilities  for the  expected  future tax
consequences of temporary  differences  between the carrying amounts and the tax
bases of assets and liabilities.  Ameri-First  records a valuation  allowance to
reduce the  deferred tax assets to the amount that is more likely than not to be
realized.

Earnings Per Common Share

Basic and  diluted  net loss per share  excludes  dilution  and is  computed  by
dividing net loss by the weighted  average  number of common shares  outstanding
for the period presented

Recent Accounting Pronouncements

Ameri-First  does  not  expect  the  adoption  of  recently  issued   accounting
pronouncements  to have a  significant  impact on the  Ameri-First's  results of
operations, financial position or cash flows.

NOTE 2 - FINANCIAL CONDITION AND GOING CONCERN

Ameri-First  has incurred  losses  totaling  $22,182,443  and $7,145,507 for the
years ended December 31, 2000 and 1999,  respectively  and had a capital deficit
of $1,849,711 at December 31, 2000.  Because of these losses,  Ameri-First  will
require additional working capital to develop business operations.

The Company intends to raise  additional  working capital either through private
placements,  public  offerings  and/or bank  financing  or will seek a merger or
acquisition candidate.

There are no assurances  that  Ameri-First  will be able to either (1) achieve a
level of revenues adequate to generate sufficient cash flow from operations;  or
(2)  obtain  additional  financing  through  either  private  placement,  public
offerings  and/or bank  financing  necessary  to support  Ameri-First's  working
capital  requirements.  To the extent  that  funds  generated  from any  private
placements, public offerings and/or bank financing are insufficient, Ameri-First
will have to raise additional  working  capital.  No assurance can be given that
additional  financing  will be  available,  or if  available,  will be on  terms
acceptable  to  Ameri-First.  If  adequate  working  capital  is  not  available
Ameri-First may not renew its operations.

These  conditions raise  substantial  doubt about the  Ameri-First's  ability to
continue  as a going  concern.  The  financial  statements  do not  include  any
adjustments  relating to the recoverability and classification of asset carrying
amounts or the amount and  classification of liabilities that might be necessary
should Ameri-First be unable to continue as a going concern.
<PAGE>

NOTE 3 - ACQUISITIONS AND DIVESTITURES

In June 2000, Ameri-First consummated its acquisition of VPS I, L.P., a Delaware
limited  partnership and ac1quired 5 hotels located in Irving,  Texas (one), San
Antonio,  Texas  (two),  Amarillo,  Texas (one) and El Paso,  Texas (one) for an
aggregate  purchase  price of  approximately  $34 million.  The  purchase  price
consisted  of  $17,600,000  in cash  and  the  issuance  of  180,000  shares  of
Ameri-First  common  stock  valued  at  $16,457,401.   In  connection  with  the
acquisition,   Ameri-First   entered  into  a  note  payable  with  a  financial
institution for  $17,600,000.  This acquisition was accounted for as a purchase.
The unaudited pro forma  information  for 2000 as if Ameri-First and VPS I, L.P.
had been combined as of the beginning of 2000 included revenue and a net loss of
$36.4 billion and $275 million, respectively, and basic and diluted earnings per
common share of $0.16 each.

The  following  presents  the  unaudited  pro forma  results  of  operations  of
Ameri-First  for  the  years  ended  December  31,  2000  and  1999,  as if  the
acquisition of VPS I, L.P. had occurred on January 1, 1999:

                                                      Years Ended December 31,
                                                    ----------------------------
                                                      2000             1999
                                                    -----------     ------------
Pro forma revenues                                  $6,313,000      $ 4,118,000
Pro forma operating income                        $(21,653,000)     $(6,690,000)
Pro forma net loss                                $(22,589,000)     $(7,898,000)
Pro forma basic and diluted net loss per share         $ (1.80)         $ (0.98)

During March 2000,  Ameri-First  acquired the assets of Ameri-First  Securities,
Inc. for 75,600 shares of common stock or $945,045.

Ameri-First's  CEO resigned and received the assets in a settlement  for $10 and
returned  75,600  shares of common  stock.  Ameri-First  recorded  a loss on the
transaction  of  $124,955.  The  returned  75,600  shares of common  stock  were
subsequently retired by Ameri-First.

During the year ended December 31, 2000  Ameri-First had issued 59,958 shares of
common stock as deposits in  connection  with the  acquisition  of 2 properties.
Ameri-First  did not close either  transaction and recorded a loss of $1,700,000
which is  included  in loss on  deposits  and  investments  for the  year  ended
December 31, 2000.

In May 1999,  Ameri-First  acquired a 50.01%  interest in Tahoe Air  Corporation
("Tahoe")  for 44,000 shares of common stock valued at  $3,655,000.  Ameri-First
determined  there was no value in Tahoe and wrote off the  amount.  The loss was
recorded during the year ended December 31, 1999 for $3,685,955.

NOTE 4 - REVERSE MERGER

On March 22, 2000,  Ameri-First  entered  into merger  agreement  with  Itronics
Communications Corporation and exchanged 100% of its shares for 4,706,114 shares
of Itronics or 99% of Itronics.  In connection with the merger Itronics  changed
its name to Ameri-First  Financial  Group,  Inc..  For accounting  purposes this
transaction will be treated as an acquisition of Itronics and a recapitalization
of  Ameri-First.  This  tax-free  transfer  is  pursuant  to section  351 of the
Internal Revenue Code of 1986 as amended. Ameri-First is the accounting acquirer
and the results of its operations carry over.
<PAGE>

Since Itronic's balance sheet is insignificant, a pro-forma consolidated balance
sheet is not presented here.

NOTE 5 - LOSS ON FORECLOSURE

In December 2000, a financial institution foreclosed upon the 5 hotel properties
that were in default. Ameri-First had failed to make the payments. In connection
with the  foreclosure  Ameri-First  recorded a loss of $13,671,831  for the year
ended December 31, 2000. Ameri-First has no remaining assets or operations as of
December 31, 2000.

NOTE 6 - LONG-TERM DEBT

Ameri-First has a note payable with Wilkerson  Consulting,  Inc. for $1,800,000.
The note is unsecured  and bears  interest at 10%. The note was due May 1, 2002.
The note was received in settlement of amounts due  Wilkerson  Consulting,  Inc.
for  management  services with the hotels as well as an amount due for a finders
fee for the purchase of the hotels. The note is payable in monthly  installments
of $108,103  including accrued interest.  No payments were made on this note. In
connection  with  the  issuance  of the  note  payable  Ameri-First  recorded  a
settlement expense of $1,800,000 for the year ended December 31, 2000.

The note  payable was  settled in January  2001 for the  issuance  of  1,000,000
shares of common stock. Prior to this issuance the Board of Directors authorized
a 1 for  25  reverse  stock  split  in  January  2001.  As a  result,  Wilkerson
Consulting, Inc. became the majority shareholder of Ameri-First.

Ameri-First  had a mortgage note payable with a financial  institution  that was
secured by 5 hotel  properties.  Ameri-First  was delinquent on its payments and
the properties  were foreclosed upon in December 2000. A loss of $13,671,831 was
recorded in connection with the foreclosure.

NOTE 7 - INCOME TAXES

For the period  from  inception  through  December  31,  2000,  Ameri-First  has
incurred net losses and, therefore,  has no tax liability.  The net deferred tax
asset  generated  by  the  loss  carry-forward  has  been  fully  reserved.  The
cumulative  net operating loss  carry-forward  is  approximately  $29,606,000 at
December 31, 2000, and will expire in the years 2013 through 2020.

Deferred income taxes consist of the following at December 31,:

                                                          2001
                                                     --------------
    Long-term:
      Deferred tax assets                              $10,066,000
      Valuation allowance                              (10,066,000)
                                                     --------------
                                                             $   -
                                                     ==============

In January 2001,  Ameri-First  had a change in ownership,  which has resulted in
Ameri-First's  net  operating  loss  carryforwards   being  subject  to  certain
utilization limitations in the future.
<PAGE>

NOTE 8 - SHAREHOLDERS EQUITY

Common Stock:

In  December  2000,  Ameri-First  issued  84,306  shares  of  common  stock  for
consulting  services  valued at  $1,874,761  or the fair  value of the  services
provided.

In September 2000, Ameri-First issued 59,959 shares of common stock as a deposit
for 2 property  acquisition valued at $1,700,000 or the market price at the date
of the  deposit.  Ameri-First  never  closed on either of the  transactions  and
recorded the amount as a loss.

In  September  2000,  Ameri-First  issued  97,360  shares  of  common  stock for
shareholder debt including accrued interest of $1,672,830.

In June 2000,  Ameri-First  issued  180,000 shares of common stock in connection
with  the  acquisition  of 5  hotel.  See  Note  3 for  more  discussion  on the
acquisition.

In March 2000,  Ameri-First  issued 2,000  shares of common stock in  connection
with the reverse  merger with  Itronics.  See Note 4 for more  discussion on the
acquisition.

In March 2000, Ameri-First acquired the assets of Ameri-First  Securities,  Inc.
for 75,600 shares of common stock or $945,045. See Note 3 for more discussion on
this  purchase.  In December 2000,  Ameri-First  sold back the assets to Jeffrey
Bruteyn,  the former CEO, and  received  the common stock back and  subsequently
retired  those  shares.   Ameri-First   recorded  a  loss  of  $124,955  on  the
transaction.

In  December  1999,  Ameri-First  issued  31,376  shares  of  common  stock  for
consulting  services  valued at  $1,508,486  or the fair  value of the  services
provided.

In December  1999,  Ameri-First  issued  1,200 shares of common stock for assets
valued at $30,000 or the fair value of the assets acquired.

Ameri-First completed a private placement in June 1999 pursuant to which it sold
5,233 shares of its voting  common stock for a total of $850,301.  In connection
with the private placement  Ameri-First incurred direct costs of the offering of
$128,539. The net proceeds were $721,762.

In May 1999, Ameri-First issued 44,000 shares of common stock in connection with
the acquisition of Tahoe. See Note 3 for more discussion on the acquisition.

In December,  2000,  the Board of Directors  authorized a 1 for 25 reverse stock
split of the Ameri-First's common stock. The financial statements as of December
31, 2000 have been retroactively adjusted to reflect the effect of this change.

NOTE 9 - RELATED PARTY TRANSACTIONS

After the foreclosure of the 5 hotel  properties,  Ameri-First  neither owns nor
leases any real or personal  property.  An officer has provided  office services
without  charge.  Such costs are  immaterial  to the  financial  statements  and
accordingly are not reflected herein. The officers and directors are involved in
other business activities and most likely will become involved in other business
activities in the future. If a specific business  opportunity becomes available,
such persons may face a conflict of interest. A Company policy for handling such
a conflict has not yet been formulated.

<PAGE>

NOTE 10 - CONSULTING AGREEMENT

Ameri-First   entered  into  an  agreement  with  Wilkerson   Consulting,   Inc.
("Wilkerson")  and agreed to pay  Wilkerson  2% of the  purchase  price of hotel
acquisitions in cash and 2% in common stock.  Also, HMGT Management  Corporation
would manage each property owned by Ameri-First. Ameri-First never paid the fees
due under this  agreement and  satisfied the  obligation by issuing a promissory
note for  $1,800,000,  which was  converted  to a majority  ownership in January
2001.