UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, DC 20549





Form 10-K/A





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





For the
fiscal year ended December
31, 2017





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





For the transition
period of
 to





Commission File Number 000-25958





CAPITAL FINANCIAL HOLDINGS, INC. (The Company)


(Exact name of registrant as specified in its charter)





North Dakota
45-0404061(State or other jurisdiction of incorporation or
organization)
(IRS Employer Identification No.)





1821 Burdick Expressway W.


Minot, North Dakota 58701


(Address of principal executive offices)





701.837.9600


(Registrant’s telephone number, including area
code)





Securities registered pursuant to Section 12(b) of the
Act:


None





Securities registered pursuant to Section 12(g) of the
Act:


Common
Stock; $.0001 par value





Indicate by check
mark if the registrant is a well-known seasoned issuer, as defined
in Rule 405 of the Securities Act. ☐ Yes ☒ No





Indicate by check
mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. ☐ Yes ☒
No





Indicate by check
mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. ☒
Yes ☐ No





Indicate by check
mark whether the registrant has submitted electronically and posted
on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of
Regulation S-T during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such
files). ☒ Yes ☐ 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. ☐





Indicate
by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated
filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange
Act.





Large
accelerated filer
☐

Accelerated
filer
☐Non-accelerated
filer
☐

Smaller
reporting company
☒





Indicate by check
mark whether the registrant is a shell company (as defined by Rule
12b-2 of the Act). ☐ Yes ☒ No





The
aggregate market value of voting and non-voting common equity held
by non-affiliates of the Registrant as of March 30, 2018 was
$529,100, based on the last reported sale price. For purposes of
this calculation, the Registrant has assumed that its board of
directors, executive officers and holders of greater than five
percent of the Registrant’s shares are
affiliates.





On
March 15, 2018, there were 1,241 shares of the issuer’s
common equity outstanding.





References
in this Annual Report on Form 10-K to the “Company”,
“CFH”, “we”, “us”,
“its” or “our” includes the subsidiary,
unless the context indicates otherwise.





Documents
Incorporated by Reference: Portions of the Company’s
definitive Proxy Statement for the Annual Meeting of Shareholders
to be held on August 8, 2018, are incorporated by reference in
certain sections of Part III.





EXPLANATORY NOTE





Capital
Financial Holdings, Inc. (the “Company” or the
“Registrant”) hereby amends its Annual Report on Form
10-K for the year ended December 31, 2017 to include the
information required by Part III. This Form 10-K/A does not attempt
to modify or update any other disclosures set forth in the original
Annual Report on Form 10-K, except as required to reflect the
additional information included in Part III of this Form
10-K/A.














PART III





Item 10.
Directors, Executive Officers And Corporate Governance





The
following table sets forth information concerning management of our
Company as of the date of filing of this report.





Name

Age

PositionGordon
Dihle

62

Chief
Executive Officer, President, DirectorCharlene
Fowler

38

Chief
Financial Officer and Secretary





Resumes





Gordon Dihle – Mr. Dihle received a B.S. in Accounting
and Business Administration, Summa Cum Laude (1976) at Dickinson
State University, Dickinson, ND, and earned a J.D. with distinction
at the University of North Dakota (1980) in Grand Forks, ND. Mr.
Dihle is a CPA licensed with the state of North Dakota, a member of
the AICPA, and an attorney licensed with the state of Colorado. Mr.
Dihle has been employed as an attorney and has been principal of
Corporate Legal, LLC in Centennial Colorado since 1996 and was
concurrently employed at Spencer Edwards, Inc., a securities
brokerage firm from 2002 until November 2013 in various capacities
as a general and financial principal. Mr. Dihle has been the Chief
Executive Officer of the Company since May 22, 2017, a Director and
Chairman of the Board of the Company since November 7, 2013, and
had previously acted as general counsel for the Company from
September 2009 until February 2011. Previously, Mr. Dihle served as
a Director and President of Capital Natural Resources, Inc., a
former subsidiary of the Company. Mr. Dihle also serves as in house
legal counsel to the Company.





Charlene Fowler – Ms. Fowler was appointed the Chief
Financial Officer and Secretary of the Company effective November
15, 2018. Ms. Fowler had been employed as the Corporate Accountant
for the Company since March 2018, and was previously the Corporate
Accountant and HR Analyst for the Company from 2010 through 2012.
From 2013 to 2018, Ms. Fowler was employed with unaffiliated
entities as an Accounting Assistant, Compliance Program Analyst and
Guest Service Manager in Minot, North Dakota, Lynchburg, Virginia
and Minot, North Dakota, respectively.





Director Independence





The market where the Company is listed does not have listing rules
which requires the Company to have a board comprised of a majority
of independent directors or separate committees comprised of
independent directors. We use the definition of “independence”
under the NASDAQ Rules, as applicable
and as may be modified or supplemented from time to time and the
interpretations thereunder, to determine if the members of our
Board are independent. . Moreover, the Company falls within the
definition of a “Controlled Company” under NASDAQ Rule
4530(c)(5). In making this determination, our Board considers,
among other things, transactions and relationships between each
director and his immediate family and us, including those reported
in this Proxy Statement under the caption “Certain Relationships
and Related Transactions.” The purpose of this review is to determine whether
any such relationships or transactions are material and, therefore,
inconsistent with a determination that the directors are
independent. On the basis of such review and its understanding of
such relationships and transactions, our Board has determined that
none of our Board members is an independent
director.





The
Board of Directors will continually assess its size, structure and
composition, taking into consideration its current strengths,
skills and experience, and the requirements and strategic direction
of the Company. As required,
The Board of Directors will seek out and recommend suitable
candidates for consideration as members of the Board of
Directors.





Board Committees





Audit Committee





The
Company’s Audit Committee is presently composed of Gordon
Dihle, who does not meet the independence requirements of the
national securities exchanges or national securities associations
with respect to audit committee membership. As discussed above, the
Company is not listed on a national securities exchange, but is
listed on the OTC Link LLC market, which has no requirement
mandating its listing companies to have independent directors.
However, also as discussed above, the Company has adopted (and
identified) with the NASDAQ Market’s definition of
“independence.” As also identified above, the Company
is a Controlled Company and is therefore exempt from the
requirements of NASDAQ Rule 4530 which requires members of the
audit committee be independent. The Audit Committee oversees the
external audit coverage, including the annual nomination of the
independent accountants, reviews accounting policies and policy
decisions, reviews the financial statements, including interim
financial statements and annual financial statements, together with
auditor’s opinions, inquiries about the existence and
substance of any significant accounting accruals, reserves or
estimates made by management, meets privately with the independent
accountants to discuss all pertinent matters and reports to the
Board regarding its activities. The Audit Committee held four
regular meetings in 2017.





The
Board has determined with the assistance of our outside counsel
that Gordon Dihle, Chairman and sole member of the Audit Committee,
shall be the “audit
committee financial expert” as such term is defined in
Item 407(d)(5)(ii) of Regulation S-K adopted by the
SEC.





The
Audit Committee has adopted a formal, written charter, which was
amended and adopted on June 23, 2016. The charter specifies the
scope of the Audit Committee’s responsibilities and how it
should carry out those responsibilities. The charter also outlines
the Audit Committee’s pre-approval policies and procedures
that require the Audit Committee to review and approve, in advance,
fees proposed to be charged to the Company by the auditors for each
audit and non-audit service. The Audit Committee Charter must be
filed every three years and will be refiled in 2019.





2





Audit Committee Related Party Transaction Policy and
Procedures





It is
the policy of the Board of Directors of the Company that all
related party transactions shall be submitted for review to the
Company’s Audit Committee in accordance with the
Company’s Related Party Transaction Policy and Procedures.
The Board has determined that the Audit Committee is best suited to
review all related party transactions.





Report of Audit Committee





The
Audit Committee met to review the audited financials for the fiscal
year ended December 31, 2017, with members of management and the
independent accountants. The independent accountants discussed with
the Audit Committee new accounting policies, management’s
judgments and use of accounting estimates in the preparation of the
financial statements and significant audit adjustments. Annually,
the independence of the auditors is discussed and the auditors
provide information regarding their independence required by
Independence Standards Board No. 1, as may be modified or
supplemented.





As of
the date of this report we do not have a Compensation Committee, a
Corporate Governance Committee, and a Nominating Committee, but
expect to form such Committees in the near future. Thus, there is a
potential conflict of interest in that our directors have the
authority to determine issues concerning management compensation,
in essence their own, and audit issues that may affect management
decisions. We are not aware of any other conflicts of interest with
any of our executives or directors.





There
are no family relationships among any of our officers or
directors.





Involvement in Certain Legal Proceedings





To our
knowledge, except as disclosed below none of our directors and
executive officers have been involved in any of the following
events during the past ten years:





1.
any
bankruptcy petition filed by or against such person or any business
of which such person was a general partner or executive
officer;2.
any
conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor
offenses);3.
being
subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him from or
otherwise limiting his involvement in any type of business,
securities or banking activities or to be associated with any
person practicing in banking or securities
activities;4.
being
found by a court of competent jurisdiction in a civil action, the
SEC or the Commodity Futures Trading Commission to have violated a
Federal or state securities or commodities law, and the judgment
has not been reversed, suspended, or vacated;5.
being
subject of, or a party to, any Federal or state judicial or
administrative order, judgment decree, or finding, not subsequently
reversed, suspended or vacated, relating to an alleged violation of
any Federal or state securities or commodities law or regulation,
any law or regulation respecting financial institutions or
insurance companies, or any law or regulation prohibiting mail or
wire fraud or fraud in connection with any business entity;
or6.
being
subject of or party to any sanction or order, not subsequently
reversed, suspended, or vacated, of any self-regulatory
organization, any registered entity or any equivalent exchange,
association, entity or organization that has disciplinary authority
over its members or persons associated with a member.





Section 16(a) Beneficial Ownership Reporting
Compliance





Section
16(a) of the Securities Exchange Act of 1934, as amended, requires
that the Company’s directors and executive officers file
initial reports of ownership and reports of changes in ownership
with the Securities and Exchange Commission. Directors and
executive officers are required to furnish the Company with copies
of all Section 16(a) forms they file. Based solely upon a review of
the copies of such forms furnished to the Company and written
representations from the Company’s directors and executive
officers, all Section 16(a) filing requirements were met for the
fiscal year ended December 31, 2017, with the exception that John
Carlson failed to file an exit Form 5 within 45 days of the
Company’s fiscal year end reporting disposition of shares
held by him, directly and beneficially, during the Company’s
2017 fiscal year and to report the termination of his reporting
obligations under Section 16.





3





CODE OF ETHICS





A code
of ethics relates to written standards that are reasonably designed
to deter wrongdoing and to promote:





●
 Honest and ethical
conduct, including the ethical handling of actual or apparent
conflicts of interest between personal and professional
relationships;





●
 Full, fair,
accurate, timely and understandable disclosure in reports and
documents that are filed with, or submitted to, the SEC and in
other public communications made by an issuer;





●
 Compliance with
applicable governmental laws, rules and regulations;





●
 The prompt internal
reporting of violations of the code to an appropriate person or
persons identified in the code; and





●
 Accountability for
adherence to the code.





The
Board has adopted a code of ethics for the principal executive
officer, principal financial officer, controller and all persons
performing similar functions. The code of ethics is designed to
deter wrongdoing and to promote honest and ethical conduct, the
avoidance of conflict of interest, full and accurate disclosure and
compliance with all applicable laws, rules and regulations. The
code of ethics is available on the Company’s website at
www.capitalfinancialholdings.com.





Item 11. Executive Compensation





The
following table sets forth information concerning all cash and
non-cash compensation awarded to, earned by or paid to our CEO and
our most highly compensated executive officers in 2016 and 2017. We
did not then have an established policy to provide compensation to
members of our Board of Directors for their services in that
capacity, although we may choose to adopt a policy in the
future.





Summary Compensation Table







Name and
Principal Position
Year
Salary
($)
Bonus
($)
Stock
Awards
($)
Option
Awards
($)
Nonequity
Incentive Plan Compensation
($)
Nonqualified
Deferred
Compensation
Earnings
($)
All Other
Compensation ($)(1)
Total
($)John R. Carlson,
Director and CEO of CFH; President and CCO of CFS(2)
2017
$106,026
$–
$0
$0
$0
$0
$3,009
$109,0352016
$132,080
$3,569
$0
$0
$0
$0
$39,970
$175,619Elizabeth A. Colby,
Director, CFO & Corporate Secretary of CFH
2017
$74,016
$–
$0
$0
$0
$0
$5,789
$79,8052016
$70,500
$10,084
$0
$0
$0
$0
$3,885
$84,470Gordon Dihle,
Chairman of the Board and CEO of CFH(2)
2017
$96,000
$0
$0
$0
$0
$0
$7,212
$103,2122016
$96,000
$0
$0
$0
$0
$0
$5,395
$101,395





(1)
 All other
compensation includes settlement proceeds, representative
commissions, employer paid life insurance premiums and employer
matched 401K contributions.


(2)
 John R. Carlson
resigned from all positions he held at the Company and its
subsidiaries effective as of May 22, 2017 and Gordon Dihle was
appointed as CEO of CFH on that date.





4





Outstanding Equity Awards at Fiscal Year-End





None.





Director Compensation





The
table below shows Director Compensation for 2017.





Director Compensation





Name
Fees Earned or
Paid in Cash ($)
Stock
Awards
($)
Option
Awards
($)
Non-Equity
Incentive Plan Compensation
($)
Nonqualified
Deferred
Compensation Earnings
($)
All Other
Compensation
($)
Total
($)Gordon
Dihle
$0
$0
$0
$0
$0
$0
$0John R.
Carlson
$0
$0
$0
$0
$0
$0
$0Elizabeth
Colby
$0
$0
$0
$0
$0
$0
$0





Gordon
Dihle, Chairman of the Board, and John R. Carlson and Elizabeth
Colby received no cash compensation for the year 2017 for their
service as directors of the Company. Board members were reimbursed
for their expenses associated with attendance at meetings or
otherwise incurred in connection with the discharge of their duties
as directors of the Company.





Equity Compensation Plans





As of
the date of this Report we do not have any equity compensation plan
but may adopt one or more in the future.





5





Item 12. Security Ownership Of Certain Beneficial Owners And
Management And Related Stockholder Matters





The
following table sets forth certain information regarding the
ownership of Common Stock as of the date of this Report, by (i)
each person known to us to own more than 5% of our outstanding
Common Stock as of the date of this Report, (ii) each of our
directors, (iii) each of our executive officers, and (iv) all of
our directors and executive officers as a group.  Unless
otherwise indicated, all shares are owned directly and the
indicated person has sole voting and investment power.





Name Of Beneficial Owner Or Identity Of Group
Amount And Nature Of Beneficial Ownership (5)
As Of December 31, 2018
Percentage Of Outstanding Shares(6)John
Carlson(2)
0
*Gordon
Dihle(1)
693(7)
55%Elizabeth
Colby(3)
0
*Charlene
Fowler(4)
0
*Executive officers
and directors as a group (4 persons)
693
55%


___________________


* Less
than 1% owned.





(1)
 Officer and/or
Director of the Company.


(2)
 Mr. Carlson
resigned as an Officer and Director of the Company on May 22,
2017.


(3)
 Ms. Colby resigned
as an Officer and Director of the Company on February 23,
2018.


(4)
 Ms. Fowler was
appointed as Chief Financial Officer and Secretary of the Company
on November 15, 2018.


(5)
 Unless otherwise
indicated in the footnotes to this table, the listed beneficial
owner has sole voting power and investment power with respect to
such shares.


(6)
 For each executive
officer or director included in the table, percentage of
outstanding shares is calculated by dividing the number of common
shares beneficially owned by such officer or director by the 1,241
common shares the Company outstanding on December 31, 2018 and the
number of shares that each officer or director had the right to
acquire within 60 days of the record date. This percentage assumes
the exercise of outstanding options or warrants and conversion of
preferred shares.


(7)
 Includes 53 shares
held directly by Mr. Dihle, 97 shares held in Mr. Dihle’s IRA
account, 188 shares held by Antelope Creek Realty & Energy
Services, Inc., an entity controlled by Mr. Dihle, and 353 shares
held by the Dihle Chattel Trust.





6





Item 13. Certain Relationships and Related Transactions, and
Director Independence





There were no related party transactions that are required to be
disclosed pursuant to Regulation S-K promulgated under the
Securities Act of 1933, as amended.





Director Independence





The market where the Company is listed does not have listing rules
which requires the Company to have a board comprised of a majority
of independent directors or separate committees comprised of
independent directors. We use the definition of “independence”
under the NASDAQ Rules, as applicable
and as may be modified or supplemented from time to time and the
interpretations thereunder, to determine if the members of our
Board are independent. . Moreover, the Company falls within the
definition of a “Controlled Company” under NASDAQ Rule
4530(c)(5). In making this determination, our Board considers,
among other things, transactions and relationships between each
director and his immediate family and us, including those reported
in this Proxy Statement under the caption “Certain Relationships
and Related Transactions.” The purpose of this review is to determine whether
any such relationships or transactions are material and, therefore,
inconsistent with a determination that the directors are
independent. On the basis of such review and its understanding of
such relationships and transactions, our Board has determined that
none of our Board members is an independent
director.





The
Board of Directors will continually assess its size, structure and
composition, taking into consideration its current strengths,
skills and experience, and the requirements and strategic direction
of the Company. As required,
The Board of Directors will seek out and recommend suitable
candidates for consideration as members of the Board of
Directors.





Item 14. Principal Accounting Fees and Services





Audit and Non-Audit Fees





During
the fiscal year ended December 31, 2016, Hein & Associates, LLP
(“Hein &
Associates”), the Company’s former independent
auditors and principal accountant, billed the Company the fees set
forth below. During the fiscal year ended December 31, 2017, Dave
Banerjee, CPA, An Accountancy Corporation (“Dave Banerjee”), the
Company’s independent auditors and principal accountant,
billed the Company the fees set forth below. The Audit Committee
has considered and determined that the provision of the non-audit
services rendered to the Company by Dave Banerjee during the
Company’s fiscal year 2017 was compatible with maintaining
the independence of Dave Banerjee.





The
following table presents fees for professional audit services
rendered by Hein & Associates for the audit of the
Company’s annual financial statements for the year ended
December 31, 2016, and fees for professional audit services
rendered by Dave Banerjee for the audit of the Company’s
annual financial statements for the year ended December 31, 2017,
and fees billed for other services rendered by Hein &
Associates and Dave Banerjee.





2017
2016Audit
Fees(1)
$45,835
$112,893Audit-Related
Fees(2)
$0
$2,000All Other
Fees
$0
$0


______________________





(1)
 Audit Fees consist
of fees for professional services rendered for the audit of the
Company’s financial statements and review of financial
statements included in the Company’s quarterly reports and
services normally provided by the independent auditor in connection
with statutory and regulatory filings or engagements.


(2)
 Audit-related fees
are fees principally for professional services rendered for the
annual review of Capital Financial Services, Inc., related to the
filing of the SIPC assessment form.





7








SIGNATURES





In
accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant has caused this amendment to the report to be signed on
its behalf by the undersigned, thereunto duly
authorized.





CAPITAL
FINANCIAL HOLDINGS, INC.Date: March 21,
2019
By:
/s/ Gordon
DihleGordon
DihleChief Executive
Officer(Principal
Executive Officer)Date: March 21,
2019
By:
/s/
Charlene
FowlerCharlene
FowlerChief Financial
Officer(Principal
Financial Officer)





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





Date
Signature
& TitleDate: March 21,
2019
By:
/s/ Gordon
DihleGordon Dihle,
Director, Interim Chief Executive
OfficerDate: March 21,
2019
By:
/s/
Charlene
FowlerCharlene Fowler,
Chief Financial Officer








8