SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                AMENDMENT NO. 1
                                       TO
                                  FORM 10-KSB


[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       AND EXCHANGE ACT OF 1934 [FEE REQUIRED]
       For the fiscal year ended December 31, 1996

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
       For the transition period from ________ to ________

                         Commission file number 0-17129


                      CLARK MELVIN SECURITIES CORPORATION
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Delaware                                              52-0749204
-------------------------------                             -------------------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation  or organization)                             Identification No.)

170 Jennifer Road, Suite 270, Annapolis, Maryland                       21401
-------------------------------------------------                     ----------
(Address of principal executive offices)                              (Zip Code)

Registrant's telephone number, including area code  410-841-6422
                                                    ------------

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

         Securities registered pursuant to Section 12(g) of the Act:
                               Units
                               Common Stock, $.01 par value
                               Common Stock Purchase Warrants
                               ------------------------------
                                       (Title of Class)


<PAGE>



                  Indicate by check mark  whether the  registrant  (1) has filed
all  reports  required  to be filed  by  Section  13 or 15(d) of the  Securities
Exchange  Act of 1934 during the  preceding  twelve  months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes  X    No
                                                              ---      ---

                  Indicate  by check mark if  disclosure  of  delinquent  filers
pursuant to Item 405 of Regulation S-K is not contained herein,  and will not be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]

                  The  aggregate  market  value of the  Common  Stock,  $.01 par
value,  held by  non-affiliates  of the  registrant as of February 28, 1997, was
$86,218.

                  The number of shares of the  registrant's  Common Stock,  $.01
par value, outstanding as of February 28, 1997, was 18,523,096.

                      DOCUMENTS INCORPORATED BY REFERENCE

                                      None








                                       2


<PAGE>


Item 8.  Financial Statements and Supplementary Data.
-------  --------------------------------------------
                                                                            Page
                                                                            ----

REPORT OF INDEPENDENT CERTIFIED
  PUBLIC ACCOUNTANTS..........................................................4

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION ...............................5

CONSOLIDATED STATEMENTS OF EARNINGS...........................................6

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'

  EQUITY......................................................................7

CONSOLIDATED STATEMENTS OF CASH FLOWS.........................................8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS...................................10



                                       3

<PAGE>




                REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTS
                -----------------------------------------------

Board of Directors
Clark Melvin Securities Corporation

We have audited the accompanying  consolidated statements of financial condition
of Clark Melvin Securities  Corporation and subsidiaries as of December 31, 1996
and 1995 and the  related  consolidated  statements  of  operations,  changes in
stockholders'  equity and cash  flows for each of the three  years in the 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 audits.

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 and per share data
and ratios 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 Clark  Melvin
Securities Corporation and subsidiaries as of December 31, 1996 and 1995 and the
results of its  operations and its cash flows for each of the three years in the
period ended December 31, 1996, in conformity with generally accepted accounting
principles.


Grant Thornton LLP

Baltimore, Maryland
January 23, 1997



                                       4

<PAGE>


                      Clark Melvin Securities Corporation
                                and Subsidiaries

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                  December 31,

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                      ASSETS                                                       1996                1995
                                                                             -----------------  -----------------
<S><C>
Cash                                                                             $   405,195        $    265,243
Receivables
   Brokers and dealers                                                               129,376             201,123
   Advisory fee                                                                      300,000                   -
   Employee advances                                                                  20,984              15,990
   Other                                                                              79,489              74,763
Deposit with clearing broker                                                         100,000             125,979
Other                                                                                 55,008              27,430
Office equipment and leasehold improvements, net
   of accumulated depreciation and amortization of
   $271,073 ($327,879 in 1995)                                                        32,148              54,426
                                                                                 -----------        ------------

              Total assets                                                       $ 1,122,200        $    764,954
                                                                                 ===========        ============

      LIABILITIES AND STOCKHOLDERS' EQUITY

Payable to clearing broker                                                       $    12,317        $      6,095
Accounts payable and accrued liabilities                                             397,762             227,369
                                                                                 -----------        ------------
              Total liabilities                                                      410,079             233,464

COMMITMENTS AND CONTINGENCIES                                                              -                   -

STOCKHOLDERS' EQUITY
   Preferred stock                                                                   145,000             145,000
   Common stock                                                                      185,231             185,231
   Additional paid-in capital                                                      2,888,028           2,888,028
   Accumulated deficit                                                            (2,471,138)         (2,651,769)
   Treasury stock, at cost                                                           (35,000)            (35,000)
                                                                                 -----------        ------------

              Total stockholders' equity                                             712,121             531,490
                                                                                 -----------        ------------

              Total liabilities and stockholders' equity                         $ 1,122,200        $    764,954
                                                                                 ===========        ============
</TABLE>

   The accompanying notes are an integral part of these financial statements.



                                       5

<PAGE>



                      Clark Melvin Securities Corporation
                                and Subsidiaries

                      CONSOLIDATED STATEMENTS OF EARNINGS

                            Years ended December 31,

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                                    1996                1995                1994
                                                                -----------          ----------          ----------
<S><C>
Revenues:
    Principal transactions                                      $  488,535          $1,128,470           $  850,036
    Commissions                                                  1,063,243             717,477              734,740
    Advisory and fee income                                        724,825             306,472              653,048
    Interest and other income                                      300,977             150,395              213,482
                                                                ----------          ----------           ----------

           Total revenues                                        2,577,580           2,302,814            2,451,306

Expenses:
    Compensation and benefits                                    1,411,957           1,384,134            1,440,221
    Clearing and exchange fees                                     201,082             164,157              142,590
    Occupancy and equipment rental                                 271,123             307,547              357,558
    Communications                                                 185,780             200,116              234,701
    Business development                                           101,033              73,358              136,756
    Interest                                                         5,916               2,687               16,180
    Other                                                          209,727             161,913              395,670
                                                                ----------          ----------           ----------

           Total expenses                                        2,386,618           2,293,912            2,723,676
                                                                ----------          ----------           ----------

           EARNINGS (LOSS)                                      $  190,962          $    8,902           $ (272,370)
                                                                ==========          ==========           ==========

Earnings (loss) per common share                                $      .01          $        -           $     (.01)
                                                                ==========          ==========           ==========
</TABLE>

   The accompanying notes are an integral part of these financial statements.



                                       6

<PAGE>


                      Clark Melvin Securities Corporation
                                and Subsidiaries

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                              1996, 1995 and 1994

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                   Preferred Stock      Common Stock
                                  ----------------     ---------------      Paid-in    Accumulated  Treasury  Subscription
                                  Shares    Amount     Shares   Amount      Capital     (Deficit)     Stock    Receivable    Total
                                  --------  -------- ---------- --------  ----------  ------------  ---------  ---------- ---------
<S><C>
Balance at January 1, 1994         260,000  $260,000 17,332,536 $173,326  $2,815,767  $(2,361,227)  $ (1,906)  $(239,357) $ 646,603
    Subscriptions collected              -         -          -        -           -            -          -     113,139    113,139
    Common stock issued                  -         -  1,195,460   11,954      74,118            -          -           -     86,072
    Retirement of common stock
        held in treasury                 -         -     (4,900)     (49)     (1,857)           -      1,906           -          -
    Preferred stock dividend             -         -          -        -           -      (14,593)         -           -    (14,593)
    Acquisition of preferred
        stock for treasury               -         -          -        -           -            -   (115,000)          -   (115,000)
    Retirement of preferred stock (115,000) (115,000)         -        -           -            -    110,000           -     (5,000)
    Net loss                             -         -          -        -           -     (272,370)         -           -   (272,370)
                                  --------  -------- ---------- --------  ----------  -----------    -------   ---------  ---------
Balance at December 31, 1994       145,000   145,000 18,523,096  185,231   2,888,028   (2,648,190)    (5,000)   (126,218)   438,851
    Subscriptions collected              -         -          -        -           -            -          -     126,218    126,218
    Preferred stock dividend             -         -          -        -           -      (12,481)         -           -    (12,481)
    Net earnings                         -         -          -        -           -        8,902          -           -      8,902
    Acquisition of preferred
        stock for treasury               -         -          -        -           -            -    (30,000)          -    (30,000)
                                  --------  -------- ---------- --------  ----------  -----------    -------   ---------  ---------
Balance at December 31, 1995       145,000   145,000 18,523,096  185,231   2,888,028   (2,651,769)   (35,000)          -    531,490
    Preferred stock dividend             -         -          -        -           -      (10,331)         -           -    (10,331)
    Net earnings                         -         -          -        -           -      190,962          -           -    190,962
                                  --------  -------- ---------- --------  ----------  -----------    -------   ---------  ---------
Balance at December 31, 1996       145,000  $145,000 18,523,096 $185,231  $2,888,028  $(2,471,138) $ (35,000)  $       -  $ 712,121
                                  ========  ======== ========== ========  ==========  ===========  =========   =========  =========
</TABLE>

   The accompanying notes are an integral part of these financial statements




                                       7

<PAGE>



                      Clark Melvin Securities Corporation
                                and Subsidiaries

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                            Years ended December 31,

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
<S><C>
Increase (decrease) in cash                                              1996               1995              1994
                                                                      ----------         ---------         ---------

Cash flows from operating activities
    Net earnings (loss)                                               $ 190,962          $   8,902        $(272,370)
    Adjustments to reconcile net earnings (loss) to
       net cash provided by operating activities:
           Depreciation and amortization                                 27,361             44,652           51,701
           Changes in operating assets:
                Receivables
                    Clearing broker deposit                              25,979            (25,979)               -
                    Brokers and dealers                                  71,747           (147,872)         292,177
                    Employee advances                                    (4,994)             9,661          (14,540)
                    Other                                              (304,726)           (64,058)           9,701
                Firm trading securities                                       -              4,800           (4,784)
                Other assets                                            (27,578)             8,380           (1,421)
                Payable to clearing broker                                6,222             (5,188)          (6,082)
                Securities sold short                                         -                  -         (107,950)
                Accounts payable and accrued
                    liabilities                                         170,393            124,022           (3,983)
                                                                      ---------          ---------        ---------

                        Net cash provided by (used in)
                            operating activities                        155,366            (42,680)         (57,551)

Cash flows from investing activities
    Purchases of office equipment and leasehold
        improvements                                                     (5,083)           (10,936)         (35,856)
                                                                      ---------          ---------        ---------
</TABLE>



                                       8

<PAGE>


                      Clark Melvin Securities Corporation
                                and Subsidiaries

                 CONSOLIDATED STATEMENTS OF CASH FLOWS (con't)

                            Years ended December 31,

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
                                                                          1996               1995              1994
                                                                       ---------          ---------          --------
<S><C>
Cash flows from financing activities
    Collections on subscriptions receivable                                   -            126,218           113,139
    Acquisition of treasury stock                                             -            (30,000)         (115,000)
    Proceeds from issuance of common stock                                    -                  -            84,166
    Payment of dividends on preferred stock                             (10,331)           (12,481)          (14,593)
    Other                                                                     -                  -            (3,094)
                                                                       --------          ---------         ---------
                      Net cash (used in) provided by
                          financing activities                          (10,331)            83,737            64,618
                                                                       --------          ---------         ---------
                      NET INCREASE (DECREASE)
                          IN CASH                                       139,952             30,121           (28,789)

Cash at beginning of year                                               265,243            235,122           263,911
                                                                       --------          ---------         ---------

Cash and at end of year                                                $405,195          $ 265,243         $ 235,122
                                                                       ========          =========         =========


SUPPLEMENTAL DISCLOSURE OF CASH
    FLOW INFORMATION

      Cash paid during the year for interest                           $  5,916          $   2,687         $  16,180
                                                                       ========          =========         =========


SUPPLEMENTAL DISCLOSURE OF
    NONCASH INVESTING AND
    FINANCING ACTIVITIES

        Retirement of common stock held in
            treasury                                                   $      -          $       -         $   1,906
</TABLE>

   The accompanying notes are an integral part of these financial statements




                                       9

<PAGE>



                      Clark Melvin Securities Corporation
                                and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1996, 1995 and 1994



NOTE 1 - DESCRIPTION OF BUSINESS

         Clark Melvin Securities Corporation (Clark Melvin) is incorporated in
      the State of Delaware.  Clark Melvin is registered as both a broker/dealer
      in securities  and an  investment  adviser with the  Securities  and
      Exchange Commission.  In this  capacity,  it executes  principal
      transactions  and performs  underwriting  and  investment  banking
      services.  Clark  Melvin conducts  business  primarily  with its  clearing
      broker on behalf of its customers and for its own proprietary  accounts.
      Clark Melvin's customers are primarily located in the mid-Atlantic region
      and in Puerto Rico.

         The consolidated financial statements include the accounts of Clark
      Melvin and its wholly-owned subsidiaries,  CineFund Management Corporation
      (Cine) and CMS Credit  Corporation  (CMS)  (collectively  "the  Company").
      Clark Melvin  conducts the primary  business of the Company.  Cine is
      engaged in the management of Puerto Rico investment funds for which Clark
      Melvin acts as the underwriting agent. CMS is inactive at December 31,
      1996.

         All material  intercompany  balances and  transactions  are  eliminated
      in consolidation.

         In the normal course of its business, the Company may enter into
      financial transactions where the risk of potential loss due to changes in
      the market (market risk) or failure of the other party to the  transaction
      to perform (credit risk) exceeds the amounts recorded for the transaction.
      The nature of these risks, if any, are described in the footnotes.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         In accordance with industry  practice,  the  Company  records  customer
      transactions  on a settlement date basis which is generally three business
      days after the trade date. Revenues and expenses on a trade date basis are
      not materially  different from revenues and expenses on a settlement  date
      basis. The Company is exposed to risk of loss on these transactions should
      customers or brokers  become unable to meet the terms of their  contracts.
      As a  result,  the  Company  may have to  purchase  or sell the  financial
      instruments at prevailing market prices.



                                       10

<PAGE>


                      Clark Melvin Securities Corporation
                                and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

                        December 31, 1996, 1995 and 1994



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

         Firm trading and investment  securities are carried at market
      quotations. Changes in unrealized  appreciation or depreciation of such
      securities are reflected in the statement of operations with interest and
      other income.

         In the normal  course of  business,  the Company's  customers  may sell
      securities  short. The Company's policy is to obtain cash or securities as
      collateral for customers' short positions.  Subsequent market fluctuations
      may  require  the  Company  to  obtain  additional   collateral  from  the
      customers.

         Office equipment and leasehold  improvements are recorded at cost.
      Office equipment is depreciated  using  accelerated  methods over useful
      lives of five  to  seven  years.   Leasehold  improvements  are  amortized
      on  the straight-line method over the lesser of the estimated economic
      useful life of the improvements or the remaining term of the lease.
      Included in other assets are organization  expenses of $800 in 1996 and
      1995,  respectively, which have been amortized over 60 months on the
      straight-line method.

         In 1996, Clark Melvin acquired a noncontrolling 50% interest in Irurena
      Management Company  (Irurena).  This investment is accounted for under the
      equity  method.  The  Company's  proportionate  share of the net income of
      Irurena is included in the accompanying consolidated financial statements.
      The net assets and revenue of Irurena  were not  material at December  31,
      1996.

         The earnings or loss per share of common stock is  calculated  by
      dividing the net  earning  or  loss,  adjusted  for the  preferred  stock
      dividend requirement,  by the weighted average number of common shares
      outstanding during the year (18,523,096 in 1996 and 1995, and 17,853,375
      in 1994). The effect  of  assuming  exercise  of  warrants   outstanding
      has  not  been considered  because the market  price of the common stock
      obtainable  has never been higher than the exercise price.



                                       11

<PAGE>


                      Clark Melvin Securities Corporation
                                and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

                        December 31, 1996, 1995 and 1994


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

         In preparing  financial statements  in conformity with General Accepted
      Accounting Principles (GAAP), management is required to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      the  disclosure of contingent  assets and  liabilities  at the date of the
      financial statements and revenue and expenses during the reporting period.
      Actual results could differ from these estimates.

NOTE 3 - RELATED PARTY TRANSACTIONS

         Major stockholders are also officers of the Company.  Compensation
      expense for the Chairman of the Executive Committee (resigned December,
      1995) was approximately  $178,800 and $119,300 in 1995 and 1994,
      respectively based primarily on commissions earned as a broker of the
      Company.  The President and CEO, also a major  stockholder,  earned
      compensation of approximately $133,000,  $117,000 and $135,800 in 1996,
      1995 and 1994,  respectively.  A significant portion of his compensation
      was based on commissions earned.

         A member of the  Board  of Directors  is a  partner of a law firm  that
      provides  legal  services to the Company.  Fees incurred for such services
      provided  during 1994 were  approximately  $20,000.  No fees were  charged
      subsequently.


NOTE 4 - ADVISORY FEE RECEIVABLE

         Effective  October 29, 1996, the Company earned a $300,000 advisory fee
      from a customer for services  rendered in connection with the modification
      of the  customer's  mortgage loan with the U.S.  Department of Housing and
      Urban Development (HUD).

         The Company  holds a promissory  note for the amount of the fee payable
      by its  customer  and  expects  payment  upon  final  approval  by HUD of
      the transaction documentation.



                                       12

<PAGE>



                      Clark Melvin Securities Corporation
                                and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

                        December 31, 1996, 1995 and 1994


NOTE 5 - PAYABLE TO CLEARING BROKER

         Substantially  all of the clearing  and depository  operations for  the
      Company's  proprietary  transactions  are performed by a clearing  broker.
      Amounts due the clearing  broker at December  31, 1996 and 1995  represent
      fees for services provided.

         The Company has agreed to indemnify the clearing  broker for losses it
      may sustain as a result of the failure of the  Company's  customers to
      satisfy their  obligations  in  connection  with  securities
      transactions.  As of December  31,  1996,  no  customers of the Company
      held short or unsecured positions.


NOTE 6 - COMMITMENTS

         The Company conducts operations in two facilities. One lease which
      expires in July, 2001, is renewable at the market rental.  The other lease
      expired in March,  1996;  the Company  continues  payment at the lease
      rate.  Rent expense  was  $160,757,  $153,467  and  $161,412  in 1996,
      1995 and 1994, respectively. The minimum annual rental commitments through
      the end of the present  lease term is  approximately  $59,000  in 1997,
      $61,400 in 1998, $63,800 in 1999, $66,400 in 2000 and $33,800 in 2001.

         The Company leased for $20,400 in 1994 certain office furniture  from a
      company owned by a relative of a major shareholder.


NOTE 7 - STOCKHOLDERS' EQUITY

         The authorized shares of capital stock were as follows:

      o  Preferred stock, cumulative,  $1.00 par value, callable;  authorized
         1,000,000 shares.

      o  Common stock, $.01 par value; authorized 40,000,000 shares.



                                       13

<PAGE>


                      Clark Melvin Securities Corporation
                                and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

                        December 31, 1996, 1995 and 1994



NOTE 7 - STOCKHOLDERS' EQUITY - Continued

         The preferred stock is callable at par. Dividends at the annual rate of
      1% over the  prime  rate,  as  determined  on the date of  payment,  are
      paid quarterly.  Substantially  all  outstanding  preferred  shares are
      held by related parties.

         In January 1989 the Board of Directors  adopted a key employee
      restricted stock award plan and a stock option plan.  The vesting period
      is two years from the date of grant with one half of the shares vesting
      after the first year. The market value of grants is charged to
      compensation  expense over the periods in which the employees are
      providing the related services.  As of December  31, 1996,  twenty-two
      employees  had been granted  1,500,000 shares in the aggregate.

         Under the stock option plan, a total of 250,000 shares of common stock
      may be purchased  by certain key  employees  and  directors.  Incentive
      stock options and  non-qualified  stock  options may be granted  under the
      plan. Discounts from options  granted at exercise  prices that are less
      than the market  value of the common  stock at the date of grant are
      amortized  to compensation  expense over the period in which the employees
      are providing the related services.  Options granted and outstanding under
      this plan are not material at December 31, 1996.

         In 1994, the Company approved a separate stock option plan for its
      President and in May 1994,  granted  options for 1,752,500  shares of
      common stock at $.05 a share. These options expire after five years.

         No options were granted, exercised,  forfeited or canceled in 1996 or
      1995 for either plan.

         At December 31, 1994, the Company had outstanding  1,391,260  common
      stock purchase warrants that were exercisable at $.10 per share through
      July 22, 1995 (in treasury  2,500 at December 31,  1994).  These  warrants
      expired without being exercised.



                                       14

<PAGE>



                      Clark Melvin Securities Corporation
                                and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

                        December 31, 1996, 1995 and 1994


NOTE 7 - STOCKHOLDERS' EQUITY - Continued

         Subscriptions  receivable  arose from the sale of common stock in 1991
      for four notes  receivables  of $100,000,  each maturing in 1991 through
      1994, plus interest at 7%. A subscription  for an additional  $500,000 of
      common stock was rescinded during 1993. In accordance with SEC accounting
      rules, subscriptions  receivable have been shown as a reduction in
      stockholders' equity. All subscriptions receivable had been collected as
      of December 31, 1995.


NOTE 8 - INCOME TAXES

         The Company has adopted  Statement of Financial  Accounting  Standards
      No. 109, "Accounting for Income Taxes".  Temporary differences between
      amounts reported  for  financial  reporting  purposes  and income tax
      purposes are insignificant.  The  deferred  tax asset  related  to the
      Company's  loss carryforwards  amounts to approximately  $683,000 and
      $751,000 at December 31,  1996 and  1995,  respectively.  The full  amount
      of this  asset  was reserved.

         Net operating loss carryforwards for income tax purposes are
      approximately $1,816,000 and expire between years 2005 and 2009.

      Reconciliation of income taxes:

<TABLE>
<CAPTION>
                                                                           1996              1995              1994
                                                                        ---------         ---------         ---------
<S><C>
         Federal statutory income tax rate                                    34%               34%               34%
                                                                        ========          ========          ========

         Income taxes (benefit) at statutory rate                       $ 82,500          $ 14,790          $(92,606)

         Effect of net operating loss carryforward
             deferred (utilized)                                         (82,500)          (14,790)           92,606
                                                                        --------          --------          --------

         Income tax                                                     $      -          $      -          $      -
                                                                        ========          ========          ========
</TABLE>



                                       15

<PAGE>



                      Clark Melvin Securities Corporation
                                and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

                        December 31, 1996, 1995 and 1994


NOTE 9 - NET CAPITAL REQUIREMENTS

         As a registered broker dealer and member of the National Association of
      Securities  Dealers,  Inc.,  the Company is subject to the  Securities and
      Exchange  Commission Uniform Net Capital Rule (Rule 15c3-1) which requires
      the  maintenance  of minimum net capital.  As applied to the Company,  the
      Rule requires minimum net capital of $100,000.

         As of December 31, 1996 the Company had net capital of $216,326, which
      was $116,326 in excess of its requirement.


NOTE 10 - CONCENTRATION OF CREDIT RISK - CASH

         The Company maintains its cash accounts in one financial institution in
      Maryland. At times, cash balances may exceed federally insured limits. The
      Company has not  experienced  any losses in such  account and believes the
      Company is not exposed to a significant credit risk.


NOTE 11 - PENDING LITIGATION

         The Company is considering  pursuing arbitration  proceedings against a
      former  broker  in its  Puerto  Rico  office  as a result  of  losses  and
      complaints from certain clients regarding  unauthorized  trading. In 1994,
      the Company charged  approximately  $154,000 against earnings for this and
      another  unrelated  claim as  nonrecurring  expenses  that are included in
      other expenses in the statement of operations.

         Three customers  have filed  suits  claiming  damages  of  $542,000  in
      connection  with  these  allegations.  The  actual  trading  loss  to  the
      plaintiffs aggregated  approximately $184,000. One other party's claim was
      dismissed  because the  plaintiff had executed an  arbitration  agreement.
      That individual has not filed an arbitration claim and suffered no trading
      loss.



                                       16

<PAGE>



                      Clark Melvin Securities Corporation
                                and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

                        December 31, 1996, 1995 and 1994


NOTE 11 - PENDING LITIGATION - Continued

         Management  believes it has meritorious  defenses and will prevail
      against all parties.  However,  in the interest of  conservatism,  it has
      provided additional reserves of $10,000 and $33,000 in 1996 and 1995,
      respectively against the litigation and costs associated with these suits.





                                       17

<PAGE>


                                    PART III

Item 10. Directors and Executive Officers.
-------- ---------------------------------

                  The Board  consists of five  directors  elected to hold office
until the next  annual  meeting  of  stockholders  and until  the  election  and
qualification  of a  successor.  Certain  information  regarding  the  Board  of
Directors is set forth below.

                  AURELIO EMANUELLI,  58 has served as a director of the Company
since September 1990. He has been a partner in the law firm of Fiddler, Gonzalez
and Rodriquez,  specializing  in real estate law, since 1974. Mr.  Emanuelli was
the  founder  of the  Puerto  Rico  Association  of  Notaries  and  Real  Estate
Practitioners,  and is a graduate of the Wharton School and University of Puerto
Rico School of Law.

                  JAMES FINN,  53, has served as a director of the Company
since  September  1990.  He has been Vice  President  of  Marketing of Plaza
Provision Company since 1975.

                  GUILLERMO  L.  MARTINEZ,  59, has served as a director  of the
Company  since  September  1990.  He is the  founder and has served as Chairman
of the Board of General Computer  Corporation,  a computer data base services
company,  since 1970. He also serves as Chairman of the Board of Casa Cavanagh
and President and Chairman of the Board of G. C. Group, Inc.

                  CESAR A.  MONTILLA,  JR.,  56, has served as  Chairman  of the
Board,  President and Chief  Executive  Officer of the Company  since  September
1990.  He served as  managing  director  of Kidder  Peabody  Co.,  Incorporated,
supervising  Miami, the Caribbean and South America,  from April 1981 to October
1989. Mr.  Montilla was the managing  director of Merrill Lynch Capital  Markets
from October 1989  to  May  1990.  He served as  Chairman of the  Board  of  The
Securities  Corporation  of  Puerto  Rico,  the  Commonwealth  of Puerto  Rico's
only native investment banking corporation, from 1973 to 1980.

                  JOAQUIN RODRIGUEZ, 54, has served as a director of the Company
since  November  1996.  He  holds  both a  Bachelor  and a  Master  of  Business
Administration  degree, and a Juris Doctor degree. He is the CEO and Chairman of
the Board of Centro  Medico del Turabo,  Inc. and HIMA since their  inception in
1978. Prior  to that he was a  Vice President of The  Securities Corporation  of
Puerto Rico for approximately  eight months.  From November 1976 to January 1978
he was the Executive Director of the Puerto Rico Land Authority.

Committees of the Board - Board Meetings
----------------------------------------

                  The Board of Directors has an Audit  Committee  consisting of
Messrs.  Finn and  Martinez.  The Board of Directors  does not currently have a
nominating or compensation committee.





                                       18
<PAGE>

                  The  Audit   Committee   is  primarily   concerned   with  the
effectiveness  of  the  audits  of the  Company  by  the  Company's  independent
certified public accountants. Its duties include:  recommending the selection of
independent  accountants;  reviewing  the scope of audits  conducted by them, as
well as the results of their audits; and reviewing the organization and scope of
the Company's  internal system of accounting and financial  controls.  The Audit
Committee met twice during 1996.

                  The Board of Directors  met three times during 1996.  With the
exception of Mr.  Rodriguez who was appointed as a director in November 1996, no
director  attended  fewer than 75% of the total  number of meetings of the Board
and of the Committee of which he was a member during 1996.




                                       19

<PAGE>


Item 11. Executive Compensation.
-------- -----------------------

Summary Compensation Table
--------------------------

                  The  following  table sets forth certain  summary  information
concerning  compensation  paid or accrued by the  Company to or on behalf of the
chief executive officer and each executive officer whose total annual salary and
bonus exceeded $100,000, with respect to 1996, 1995 and 1994.

                  Name and
                  Principal
                  Position          Year           Salary(1)($)        Bonus($)
                  ---------         ----           ------------        --------
                  Cesar A.          1996             $136,206          $   --
                  Montilla,
                  Chairman of       1995             $ 86,993          $   --
                  the Board,
                  President and     1994             $135,000          $   --
                  Chief Executive
                  Officer

(1)      Mr. Montilla's  salary includes  commissions paid to Mr. Montilla as an
investment  representative  of $102,606 for 1996,  $56,993 for 1995 and $105,000
for 1994.

Item 12. Security Ownership of Certain Beneficial Owners and Management.
-------- ---------------------------------------------------------------

         The following table sets forth  information  regarding the ownership of
Common Stock of the Company as of March 31,1997 by (i) all stockholders known by
the Company to beneficially  own more than 5% of the Common Stock,  (ii) each of
the  directors  and nominees for director and (iii) all  executive  officers and
directors as a group.

                                            Amount and
Directors and                               nature of beneficial     Percent
Nominees for Director:                      ownership(1)             of class
----------------------                      --------------------     --------
Aurelio Emanuelli................              289,997                   1.6
James Finn.......................              217,483                   1.2
Guillermo L. Martinez............              434,996                   2.3
Cesar A. Montilla, Jr............            3,462,387 (2)(3)           18.7
Joaquin Rodriguez................                   --                    *

All directors and executive
officers as a group (5 persons)              4,404,863 (3)              23.8




                                       20

<PAGE>

Principal Stockholders:
-----------------------
Hector Gonzalez (4)..............            5,801,293                  31.3
El Pentagono (5).................            1,449,887                   7.8

--------------------------
*        Less than one percent.

(1)      Except as otherwise noted, all shares indicated are held with sole
         investment and voting power.

(2)      The address of Mr. Montilla is Banco Popular Center, 14th Floor, Hato
         Rey, Puerto Rico  00918.

(3)      Includes an option to purchase  1,752,500  shares of Common Stock at an
         exercise  price of $.05 per share granted to Mr.  Montilla in May 1994.
         The option is currently exercisable and expires on May 29, 1999.

(4)      The address of Mr. Gonzalez is G.P.O. Box 4744, San Juan, Puerto Rico.

(5)      The address of El Pentagono is Atalayo D-11, La Arboleda, Guaynabo,
         Puerto Rico.

Item 13. Certain Relationships and Related Transactions.
-------- -----------------------------------------------

         Major   stockholders   are  also  officers  of  the  Company  and  earn
compensation  from  salary and  commissions.  During  1996,  Cesar A.  Montilla,
Chairman of the Board, President and Chief Executive Officer, earned $102,606 in
commissions on securities transactions.

                                    PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
-------- -----------------------------------------------------------------

(a)      The following documents are filed as a part of this report:

1.       The following report and financial statements have been included under
Item 8 of this Report:

     Consolidated Report of Independent Certified Public Accountants

     Consolidated Statements of Financial Condition

     Consolidated Statements of Earnings

     Consolidated Statements of Changes in Stockholders' Equity



                                       21


<PAGE>

     Consolidated Statements of Cash Flows

     Notes to Consolidated Financial Statements

The schedules to the  financial  statements  for which  provision is made in the
accounting regulations of the Commission are not applicable, not required or the
information  is  included  in the  financial  statements  or notes  thereto  and
therefore have been omitted.

3.       Exhibits

         3.1.1             Certificate of Incorporation of the Company
                           (incorporated by reference to Exhibit 3.1 filed with
                           Registration  Statement on Form S-18 (No.
                           33-20106A)).

         3.1.2             Certificate of Correction to the Certificate of
                           incorporation of the Company,  dated May 18, 1989
                           (incorporated by reference to Exhibit 3.1.2 filed
                           with Form 10-K for the year ended December 31, 1989).

         3.1.3             Certificate of Amendment to the Certificate of
                           Incorporation of the Company,  dated May 18, 1989
                           (incorporated by reference to Exhibit 3.1.3 filed
                           with Form 10-K for the year ended December 31, 1989).

         3.1.4             Certificate of Designation  dated May 18, 1989
                           (incorporated by reference to Exhibit 3.1.4 filed
                           with Form 10-K for the year ended December 31, 1989).

         3.1.5             Certificate  of  Amendment to  Certificate  of
                           Incorporation  of the Company,  dated  September  27,
                           1990  (incorporated  by  reference  to Exhibit  3.1.5
                           filed with Form 10-K for the year ended  December 31,
                           1990).

         3.2               By-laws of the Company as currently in effect
                           (incorporated by reference to Exhibit 3.2  filed with
                           Registration  Statement on Form S-18 (No.
                           33-20106A)).

         10.1              Agreement  of Lease dated July 24, 1987  between  J.
                           R.  Annapolis  Associates  and Clark  Melvin
                           Financial  Services,  Inc. (incorporated by reference
                           to Exhibit 10.2 filed with Form 10-K for the year
                           ended December 31, 1988).

         10.2              First Amendment of Agreement of Lease dated January
                           15,  1988 between J. R.  Annapolis  Associates and
                           Clark Melvin Financial



                                       22

<PAGE>


                           Services, Inc. (incorporated by reference to Exhibit
                           10.3 filed with Form 10-K for the year ended December
                           31, 1988).

         10.3              Second  Amendment to Lease Agreement dated July 19,
                           1991 by and between J.R.  Annapolis  Associates,
                           Clark Melvin  Financial Services,  Inc.  and the
                           Company  (incorporated  by  reference  to  Exhibit
                           10.3  filed  with Form 10-K for the year  ended
                           December 31, 1991).

         10.4              Agreement of Lease dated March 28, 1991 between
                           Banco Popular de Puerto Rico and the Company
                           (incorporated  by reference to Exhibit 10.4 filed
                           with Form 10-K for the year ended December 31, 1991).

         10.5              Clark Melvin  Securities  Corporation 1989 Stock
                           Option Plan  (incorporated by reference to Exhibit
                           10.4 filed with Form 10-K for the year ended December
                           31, 1989).

         10.6              Clark Melvin  Securities  Corporation  Stock Bonus
                           Plan  (incorporated  by reference to Exhibit 10.5
                           filed with Form 10-K for the year ended December 31,
                           1989).

         10.7              Stock Exchange Agreement dated August 17, 1990 by and
                           among Azimuth Capital  Corporation,  the Azimuth
                           Group, the Company and Lawrence T. Lewis,  III
                           (incorporated  by  reference  to Exhibit  10.6 filed
                           with Form 10-K for the year ended  December 31,
                           1990).

         21.               Subsidiaries of the Company.

         27.               Financial  Data  Schedule  (incorporated  by
                           reference  to Exhibit 27 filed with Form 10-KSB for
                           the year ended  December 31, 1996).

(b)      The Company did not file a report on Form 8-K for the quarter ended
December 31, 1996.



                                       23

<PAGE>


                                   SIGNATURES

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

                                             CLARK MELVIN SECURITIES CORPORATION
                                             -----------------------------------
                                                          (Registrant)
Date: April 15, 1997
                                                  By:/s/Irene M. Harr
                                                     ---------------------------
                                                     Irene M. Harr
                                                     Senior Vice President and
                                                     Chief Financial Officer

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

<TABLE>
<CAPTION>

       Signature                                             Title                                          Date
       ---------                                             -----                                          ----
<S><C>
/s/ Cesar A. Montilla, Jr.                     Chairman, President, Chief                               April 15, 1997
---------------------------                    Executive Officer and Director
Cesar A. Montilla, Jr.                         (Principal Executive Officer)


/s/ Irene M. Harr                              Senior Vice President and Chief                          April 15, 1997
---------------------------                    Financial Officer (Principal
Irene M. Harr                                  Financial and Accounting Officer)


/s/ James Finn                                 Director                                                 April 15, 1997
---------------------------
James Finn

/s/ Aurelio Emanuelli                          Director                                                 April 15, 1997
---------------------------
Aurelio Emanuelli

/s/ Joaquin Rodriguez                          Director                                                 April 15, 1997
---------------------------
Joaquin Rodriguez

/s/ Guillermo L. Martinez                      Director                                                 April 15, 1997
---------------------------
Guillermo L. Martinez
</TABLE>



                                       24

<PAGE>

                                 EXHIBIT INDEX



         3.1.1             Certificate of Incorporation of the Company
                           (incorporated by reference to Exhibit 3.1 filed with
                           Registration  Statement on Form S-18 (No.
                           33-20106A)).

         3.1.2             Certificate of Correction to the Certificate of
                           incorporation of the Company,  dated May 18, 1989
                           (incorporated by reference to Exhibit 3.1.2 filed
                           with Form 10-K for the year ended December 31, 1989).

         3.1.3             Certificate of Amendment to the Certificate of
                           Incorporation of the Company,  dated May 18, 1989
                           (incorporated by reference to Exhibit 3.1.3 filed
                           with Form 10-K for the year ended December 31, 1989).

         3.1.4             Certificate of Designation  dated May 18, 1989
                           (incorporated by reference to Exhibit 3.1.4 filed
                           with Form 10-K for the year ended December 31, 1989).

         3.1.5             Certificate of Amendment to Certificate of
                           Incorporation of the Company,  dated September 27,
                           1990 (incorporated by reference to Exhibit 3.1.5
                           filed with Form 10-K for the year ended December 31,
                           1990).

         3.2               By-laws of the Company as currently in effect
                           (incorporated by reference to Exhibit 3.2  filed with
                           Registration  Statement on Form S-18 (No.
                           33-20106A)).

         10.1              Agreement of Lease dated July 24, 1987 between J.R.
                           Annapolis  Associates  and Clark  Melvin Financial
                           Services,  Inc. (incorporated by reference to Exhibit
                           10.2 filed with Form 10-K for the year ended December
                           31, 1988).

         10.2              First Amendment of Agreement of Lease dated January
                           15,  1988 between J.R.  Annapolis  Associates and
                           Clark Melvin Financial Services, Inc. (incorporated
                           by reference to Exhibit 10.3 filed with Form 10-K for
                           the year ended December 31, 1988).

         10.3              Second  Amendment to Lease Agreement dated July 19,
                           1991 by and between J.R.  Annapolis  Associates,
                           Clark Melvin  Financial Services,  Inc.  and the
                           Company  (incorporated  by  reference  to  Exhibit
                           10.3  filed  with Form 10-K for the year ended
                           December 31, 1991).


<PAGE>


         10.4              Agreement of Lease dated March 28, 1991 between
                           Banco Popular de Puerto Rico and the Company
                           (incorporated  by reference to Exhibit 10.4 filed
                           with Form 10-K for the year ended December 31, 1991).

         10.5              Clark Melvin  Securities  Corporation 1989 Stock
                           Option Plan  (incorporated by reference to Exhibit
                           10.4 filed with Form 10-K for the year ended December
                           31, 1989).

         10.6              Clark Melvin  Securities  Corporation  Stock Bonus
                           Plan  (incorporated  by reference to Exhibit 10.5
                           filed with Form 10-K for the year ended December 31,
                           1989).

         10.7              Stock Exchange Agreement dated August 17, 1990 by and
                           among Azimuth Capital  Corporation,  the Azimuth
                           Group, the Company and Lawrence T. Lewis,  III
                           (incorporated  by  reference  to Exhibit  10.6 filed
                           with Form 10-K for the year ended  December 31,
                           1990).

         21.               Subsidiaries of the Company.

         27.               Financial  Data  Schedule  (incorporated  by
                           reference  to Exhibit 27 filed with Form 10-KSB for
                           the year ended  December 31, 1996).