[DESCRIPTION]    COVER

      U. S. Securities and Exchange Commission
                  Washington, D.C.  20549
                         FORM 10 KSB

(X) ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES   
    EXCHANGE ACT OF 1934
         For the fiscal year ended December 31, 1995

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

 For the transition period from  ____________  to _____________

              Commission File Number:  0 19154  

             AMERICAN ASSET MANAGEMENT CORPORATION
         (Name of small business issuer in its charter)

        NEW JERSEY                            22 2902677
(State or other jurisdiction)   (IRS Employer Identification No.)
incorporation or organization)

150 MORRISTOWN ROAD, BERNARDSVILLE, NEW JERSEY         07924
   (Address of principal executive offices)         (Zip  Code)

Issuer's telephone number, including area code:   (908)  766-1701 
 
Securities registered under Section 12(b) of the Exchange 
Act: None

Securities registered under Section 12(g) of the Exchange Act:

                    NO PAR VALUE COMMON STOCK
                         (Title of Class)

CL. B COM. STOCK PURCHASE WTS.     CL. C COM. STOCK PURCHASE WTS.
      (Title of Class)                      (Title of Class)

Check whether the issuer (1) 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 report(s), and (2) has been subject to such
filing requirements for the past 90 days. Yes ____    No _X_      

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 registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.   ( X )

For the year ended December 31, 1995, the issuer's revenues were
$1,001,865.

As of December 1, 1996 the aggregate market value of the issuer's
voting stock held by non-affiliates computed by reference to the
average bid and asked prices of such stock, was $771,219.

As of December 1, 1996 the issuer has 936,104 shares of its no
par value common stock issued and outstanding.

Documents incorporated by reference:   None

Transitional Small Business Disclosure Format: Yes ___  No _X_

<PAGE>
[DESCRIPTION]    10KSB REPORT


                                 PART I

ITEM 1.  BUSINESS

GENERAL

     American Asset Management Corporation (the "Company"),
conducts its business through two wholly-owned subsidiaries,
Capital Financial Corp.("Capital"), a licensed mortgage banking
company in New Jersey and American Asset Development Corporation
("Development"), which is engaged in the development of
residential real estate for sale in New Jersey. Unless otherwise
indicated, all references to the Company in this report include
the Company and its subsidiaries.

     At a Special Meeting of Shareholders of the Company on
February 13, 1995, the shareholders approved amendments to the
Company's certificate of incorporation to effect a one-for-five
reverse stock split of its outstanding Common Stock and to
provide for an authorized capital of 10,000,000 shares of Common
Stock, no par value, and 2,000,000 shares of Preferred Stock, no
par value.  As of December 1, 1996, no preferred shares have been
issued.  Unless otherwise indicated, all share and per share
amounts have been restated to retroactively reflect the reverse
split which was effected on February 21, 1995. 

HISTORY OF THE COMPANY

     The Company was incorporated on July 1, 1988 to engage in
real estate financing and investing.  In October 1988, the
Company became a limited partner of Murray Hill Estates at
Franklin, L.P. ("Murray Hill"), a New Jersey limited partnership
established for the purpose of acquiring a property located in
Hunterdon County, New Jersey and developing and selling
residential building lots.  Subsequent to becoming a limited
partner, the Company made first mortgage loans to Murray Hill
and in January 1990, was elected successor general partner of
Murray Hill for the purpose of obtaining subdivision approvals
necessary to develop property owned by Murray Hill.  In February
1992, Murray Hill received preliminary approval for the
subdivision of the property into eleven lots including a
lot containing the original farmhouse and fieldstone barn.  

In July 1992, the Company formed Development which acquired
substantially all of the assets of Murray Hill in exchange for an
aggregate of 29,600 shares of Common Stock of the Company and the
assumption of all of the liabilities of Murray Hill.

     In July 1989, the Company formed American Asset Mortgage
Corporation ("Mortgage") to provide mortgage banking services in
New Jersey.  Mortgage, which subsequently received its license to
operate as a New Jersey mortgage banker in March 1990, initially
limited its operations to investing in short term loans secured
by first mortgages.  In December 1991, Mortgage also began
operating as a mortgage broker by receiving fees for assisting
borrowers to secure mortgages from third party investors.  

     In July 1991, the Company acquired all of the outstanding
stock of Capital, a New Jersey licensed mortgage banking company,
for $140,000.  The Company continued to operate Capital and
Mortgage as separate mortgage banking subsidiaries until June
1992, when Capital was merged with and into Mortgage and the name
of the surviving subsidiary was changed to Capital Financial
Corp. 

BUSINESS - CAPITAL FINANCIAL CORP.

     The Company, through Capital, is primarily engaged in
mortgage banking activities which involves the origination and 
sale of residential first mortgage loans collateralized by one to
four family homes.  The Company's service area is the State of
New Jersey and to date, its revenues have primarily consisted of
loan origination fees and interest received on mortgage loans
made primarily for the construction of single family residences. 
Capital acts either as a "banker" or as a "banker acting as a
broker".  When acting as a banker, Capital closes loans in its
own name.  When acting as a broker, Capital does not make
mortgage loans or close loans in its own name, but receives
compensation at closing from the borrower for assisting in
obtaining a mortgage from a third party investor (purchaser of
the mortgage) and/or from the investor for referring the loan to
such investor.

     Capital originates mortgage loans through direct
solicitation of borrowers by its own sales force, through media
advertising in its service area and through referrals from
mortgage bankers, credit unions, real estate brokers, accountants
and attorneys.  Borrowers submit loan applications which are
processed by the Company's loan processors who conduct credit
checks, arrange for the property to be appraised and submit 
fully processed loan application packages to potential investors
for final approval and commitment.  After an investor commits to
purchase the loan, the Company either uses it's warehouse line of
credit, discussed below, to fund and close the loan or has the
loan funded by the investor,  ("table funding"). The loan
documentation is then prepared and, in most cases, the loan is
closed in Capital's name. 
     The Company generally sells its loans on a loan-by-loan
basis to mortgage investors, primarily savings banks.  The
Company estimates that generally 85% of its loan applications
close within 90 days from the date of application.  During 1995,
the Company sold 57, 32 and 23 of its 223 loans (25.6%, 14.3% and
10.3%), to three investors, which include two savings banks and
one mortgage banker.  The Company believes that there are
numerous other investors to which the Company could readily sell
its loans if, for any reason, it was unable to sell its loans to
the above investors.  As of December 1, 1996, the Company had
agreements with approximately 30 investors, to which the
Company may sell its loans or refer applications to. 

     In March 1995, the Company received a commitment for a
$5,000,000 warehouse line of credit from a mortgage warehouse
lender which provides the Company with a facility to borrow funds
secured by originated residential mortgage loans which will be
temporarily warehoused and then sold.  The warehouse line of
credit is also secured by the personal guarantees of the
Company's President and Executive Vice President.  The Company
will borrow only against takeout commitments issued by qualified
investors pre-approved for purchase by the investor.   By using
the warehouse funds instead of table funding, the Company has
generally been able to receive more favorable pricing from its
investors which the Company believes has made it more competitive
in the market place.  The Company began using its warehouse line
of credit during May 1995.  The interest rate charged to the
Company on borrowed warehouse funds outstanding is variable at 1
1/2% over the prime lending rate.

       As a result of substantially higher mortgage interest
rates, the mortgage refinancing market which reached a three year
peak in December 1994, collapsed as the incentive to or ability
of homeowners to refinance existing mortgages was reduced or
eliminated again in 1995.  Since Capital had historically
obtained a large majority of its loan originations from mortgage
refinancings, the increased level of mortgage rates severely
impacted Capital's ability to generate new loan applications,
which had a material adverse effect on the Company's revenues. 

     In an effort to reduce its dependence on mortgage
refinancings, in January 1995, the Company hired three
individuals, which included a Senior Vice President/Sales Manager
who had 25 years experience in mortgage banking and opened two
branch offices.  During September 1995, the Company closed and
sold the two branch offices to an unaffiliated entity, as the
amount of expenses attributed to these offices greatly exceeded
revenues.  The branch office leases and equipment leases were
also assumed by the entity and the Company was reimbursed for
leasehold improvements it made to each branch office.  

     In March 1996, the Company hired a Senior Vice
President/Sales Manager with 11 years of mortgage banking
experience to expand its commissioned sales personnel and to
assist management in expanding the Company's relationships with
sources of additional mortgage loan applications.

       In July 1996, the Company entered into an agreement with
an individual, who has 10 years of mortgage banking experience
and is a  licensed mortgage banker, to operate a mortgage banking
sales office in Toms River, New Jersey.  The individual is
responsible to supervise three mortgage originators, is the
manager of the office and also functions in a sales capacity as a
mortgage originator.  He is personally responsible and liable to
pay for all direct business expenses attributable to his office
with the exception of sales commissions on closed loans and his
personal group medical insurance which the Company provides. 

     In October 1996, the Company entered into an agreement to
offer its mortgage products on an electronic network system
("Network") of thirty one mortgage bankers which originate
applications through a real estate broker branch office system
located throughout New Jersey.  The applications  are forwarded
to Capital for processing and closing.  The Company has agreed to
compensate the Network of originators with a set commission
percentage based on closed loans originated by the Network.  The
Company believes it is one of approximately twelve lenders which
offer mortgage products through this system.  There can be no
assurance the Company will be successful in this relationship as
it faces intense competition from the other lenders it competes
with for this business, many of which have greater resources and
experience than the Company.  As of December 1, 1996, the Company
has 41 mortgage  loans  in process from the  Network aggregating 
over $6 3/4 million out of a total of $21 1/4 million currently
being processed. 

BUSINESS - AMERICAN ASSET DEVELOPMENT CORPORATION

     In May 1992, American Asset Development Corporation
("Development") was incorporated as a New Jersey corporation to
acquire Murray Hill, obtain final subdivision approval, complete
physical improvements to the property and sell the lots.  The
principal asset acquired by Development from Murray Hill in July
1992, was approximately 40 acres of undeveloped land located in
Franklin Township, Hunterdon County, New Jersey.  In connection
with the acquisition of Murray Hill, Development assumed an
existing liability of a loan payable to Development's parent
company which was secured by a first mortgage on the property in
the principal amount of $667,575 as of June 1, 1992.  Subsequent
to the acquisition, the Company transferred the mortgage
receivable in the amount of $675,326 to Capital.  Development
continued to seek final subdivision approval from authorities,
which was received in October 1993, subject to completing certain
improvements or by posting performance bonds or a letter of
credit  in lieu thereof.

     In August 1994, the Company received a commitment from a
commercial bank for two lines of credit aggregating $700,000,
consisting of a $250,000 site improvement loan and a $450,000
revolving line of credit to finance construction of up to three
residences in the subdivision.  The site improvement loan which
closed in November 1994, is secured by a first mortgage on the
development and is also secured by the personal guarantees of the
Company's President and Executive Vice President.  As of November
30, 1996 the Company had not utilized the construction line of
credit, nor does it intend to.  The interest rate on the site
improvement loan is the bank's prime interest rate plus 1% and is
payable monthly.  The  loan matured on November 30, 1996 and the
Company is seeking to refinance the loan through a different
commercial lending institution.  In October 1996, the Company
received a commitment from a commercial lending institution to
refinance this loan, however, there can be no assurance the
Company will be successful in obtaining the funds for refinancing
under this commitment or from any other lending institution. 

     At December 31, 1995, the Company had utilized $228,248 of
the $250,000 site improvement loan for which the interest rate
was 10%.  At November 30, 1996, the interest rate on the loan was
10 1/4% and the balance of site improvement borrowing remained at
$228,248.  During the third and  fourth quarter of 1995, the
majority of the physical improvements were made to the property. 
The Company estimates the balance of the improvements will be
made during the fourth quarter of 1996 through the second quarter
of 1997. 

     In February 1995, the Company entered into a revised
contract  of sale for the lot containing an uninhabitable
farmhouse and a fieldstone barn for $148,000, of which payments
of $10,000 have been received.  At closing, the Company is to
receive an additional $5,000 and has agreed to provide the
purchaser a one-year interest only first mortgage in the amount
of $133,000 at 9 1/2%.   The Company anticipates transferring
title to the purchaser in the fourth quarter of 1996 or first
quarter of 1997 subsequent to the Company filing its final
subdivision map with the county after posting the required letter
of credit or performance bond with the municipality. 

     In March 1995, the Company entered into a contract to sell
one three (3) acre building lot for $125,000, of which a down
payment of $25,000 was received.  Under the terms of the
contract, the Company agreed to finance $100,000 of the purchase
price for six months, without interest, to be secured by a first
mortgage and personal note on the lot securing the buyers
obligation to the Company. The Company anticipates transferring
title to the purchaser of this lot in the first quarter of 1997
upon the Company's completion of municipal requirements. 

     In May 1995, the Company agreed to sell an additional five
and one half (5 1/2) acre building lot to the same individual it
contracted to sell a lot to during March 1995,  for the sum of
$100,000. The Company received a nonrefundable deposit of
$50,000.  In December 1995, the Company received a letter from
the individual requesting to void the most recent contract and to
transfer the $50,000 deposit to the March contract making a total
deposit on the 3 acre lot $75,000 with a balance due the Company
of $50,000 at closing of title.  During January 1996, the Company
consented to the request.

       On August 4, 1995, the Company closed on a $100,000 line
of credit secured by a second mortgage on land the Company owns
in Hunterdon County, New Jersey.  The line of credit was also
secured by the personal guarantee of the Company's President. 
The term of the loan was for six months at 10% interest.  In
addition, the Company has issued to the lenders an aggregate of
20,000 shares of Common Stock, with registration rights, as an
inducement to secure the credit line which the Company used as
additional working capital.  The loan was repaid in full in
January 1996. 

     In January 1996, the Company entered into a contract to sell
a real estate development corporation, 5 building lots which
range in size from 3 to 5 1/2 acres for a total purchase price of
$487,500.  The Company received a $250,000 nonrefundable deposit
which entitles the purchaser to receive deeds to two building
lots and the deed to a third lot once the balance of $42,500 is
paid to the Company and when the Company is legally able to
transfer title to the lots.

     In August 1996, an agreement was entered into between the
Company and a general contractor, who is an affiliate of the
Company, regarding the building of single family residences on
lots owned by Development.  According to the terms of the
agreement, any general contracting contracts Development
negotiates with third parties on lots contained in the property,
will be done for the benefit of Development by the contractor and
for which the contractor will receive a fee of $5,000 per home.

     In August 1996, the Company received a request, from the
purchaser under the January 1996 contract for the 5 building
lots, to assign one of the 5 lots to a third party.  The
assignment called for a payment from the new buyer to the
original contracted buyer of $2,500 and the balance of $97,500 to
the Company for the lot.  In September 1996, the Company agreed
to the assignment.  In October 1996 the Company, through Capital
committed to provide a construction/permanent mortgage loan to
the new buyer and in November 1996 a building permit was issued
to the purchaser under contract to construct a single family
residence.  An affiliate of the Company is acting as site manager
for the construction of this house.  The affiliate company is
majority owned by a director of the Company.  The Company expects
to close title to this lot during the first quarter of 1997.  


     In August 1996, the Company entered into a contract to sell
one 3 acre building lot for $110,000 of which a down payment of
$11,000 was received.  The contract was amended in September 1996
to provide for cancellation and the return of the buyers deposit
in the event the Company is unable to transfer title on a fully
approved single family building lot.  In addition, during
September 1996 the Company, through Capital, agreed to provide
the buyer of this lot with a Construction/Permanent mortgage
loan.  As of December 1, 1996 the buyers have not commenced work
on the house since local zoning laws provide that any building
permits beyond one will only be available to the Company after
the Company files its final maps.  The Company expects to close
title to this lot during the first quarter of 1997.

       In October 1996, the Company received approval of and
accepted a commitment issued by a commercial bank for  a
construction mortgage financing line of credit in the amount of
$550,000.  The loan commitment provides a letter of credit in the
amount of $111,583 which the Company plans on assigning and
depositing in escrow with municipal authorities to guarantee the
township adequate funds to complete the balance of required site
improvements if the Company fails to complete the required
improvements.  The mortgage loan further provides $430,417 which
shall be used for refinancing the current mortgage loan on the
property, funds to complete the balance of required site
improvements and provides an interest reserve.  The loan is due
one year from the closing date, except for the letter of credit
which may be extended for an additional one year period.  The
mortgage loan is further secured by the personal guarantees of
the Company's President and Executive Vice President.  There can 
be no assurance that the Company will be successful in closing
this loan,  however, the Company plans on doing so in the fourth
quarter of 1996. 

SEASONALITY

     The mortgage banking industry and the sale of building lots
is generally subject to seasonal trends which reflect the pattern
of new home construction and resales of existing homes.  These
sales typically peak during the spring and summer seasons and
decline to lower levels in the late fall and winter seasons. 

COMPETITION

     The market for mortgage based financing is highly
competitive.  The Company competes with numerous entities,
primarily savings institutions, commercial banks, insurance
companies and other mortgage bankers, many of which have more
experience in mortgage based lending and have substantially
greater financial and other resources than the Company. 
Competitive factors include the ability to offer competitive
interest rates, various types of loan programs and services
provided.  With respect to its real estate activities, generally,
and the development and sale of Murray Hill property,
specifically, the Company competes with other real estate
developments and sellers of individual homes. 

GOVERNMENT REGULATION AND ENVIRONMENTAL LAWS

     The Company's mortgage origination activities are subject to
a variety of regulations, including but not limited to, the Equal
Credit Opportunity Act, Federal Truth-In-Lending Act and the Real
Estate Settlement Procedures Act and the regulations promulgated
thereunder which prohibit discrimination and require the
disclosure of certain basic information to applicants concerning
credit terms and settlement costs.  Additionally, pursuant to the
regulations adopted by the State of New Jersey, the State has the
right to conduct financial and regulatory audits of loans under
its jurisdiction and to determine compliance with state
disclosure requirements and usury laws.  If the Company decides
to expand its operations into other states, it is anticipated
that it will have to obtain the necessary permits and/or licenses
before it can commence operations in such states.  There can be
no assurance that the Company will be able to obtain such permits
and/or licenses in any state which the Company may plan to
operate. 
 
       The Company  is responsible for Murray Hill's compliance
with Federal, State and local regulations concerning protection
of the environment, including but not limited to, the New Jersey
Fresh Water and Wetlands Act, soil erosion, sedimentation and
storm water management controls, various stream encroachment
regulations and local health department and zoning regulations. 
The Company believes it has complied with all necessary material
regulations. 
     Amendments to existing regulations and statutes, changes in
regulatory policies, adoption of new statutes and regulations
applicable to the Company and the Company's need to comply with
additional regulations should the Company expand into other
jurisdictions could materially adversely affect the Company's
business in the future.

EMPLOYEES

     As of December 1, 1996, the Company has twenty two
employees,  of which four were executives, six were employed in
the processing of mortgage loans and other clerical positions and
twelve were loan officers.  None of the Company's employees are
covered by collective bargaining agreements and the Company
believes that its relations with its employees are satisfactory.


ITEM 2.  DESCRIPTION OF PROPERTIES

     The Company's executive offices occupy approximately 700
square feet of a total area of approximately 2,800 square feet of
office space it shares with Capital Financial Corp. and is
located in Bernardsville, New Jersey.  The 2,800 sq. ft. office
is leased from an unaffiliated third party pursuant to a lease
which expires in March 1999 and provides for a monthly rental of
approximately $4,317.  During 1995 the executive office space
rent was $2,036 per month and Capital's monthly rent was $4,550
for a total monthly rent of $6,586.  Management believes that
there is ample alternative office space in the area for
comparable rent should the Company be required to relocate its
office at the expiration of the lease term.

     As described in ITEM 1, "Business of American Asset
Development Corporation", the Company owns approximately 40 acres
of land in Franklin Township, Hunterdon County, New Jersey, for
which the Company in October 1993, received final approval to
subdivide into 11 lots including a lot with an existing
uninhabitable farmhouse and a fieldstone barn.  

ITEM 3.  LEGAL PROCEEDINGS

     In March 1993, an action was commenced against the Company,
its  President, Richard G. Gagliardi, and the brokerage firms of
G. K. Scott &  Co., Inc. and L. C. Wegard & Co., Inc. in the
Supreme Court of the State of New York, Queens County, by two
individuals who invested a total of $250,000 in the Company's
1989 private offering of common stock (the "1989 Offering").  The
plaintiffs alleged that, in connection with their investments in
the 1989 Offering, certain of the defendants misrepresented or
failed to disclose certain material facts concerning the Company
and the 1989 Offering.  The plaintiffs are seeking damages
against the parties, including compensatory damages of $1,000,000
and punitive damages of $5,000,000.  The Company and its
President subsequently moved to dismiss the complaint, and, by
Order dated January 10, 1994, the Court dismissed with prejudice
the motion filed by the Company and Mr. Gagliardi and dismissed
with prejudice the claims of unjust enrichment and conversion
contained in the complaint and dismissed the plaintiffs' breach
of contract claims with leave to amend.  On February 25, 1994,
plaintiffs filed an amended complaint containing allegations
similar to the original breach of contract allegations, which the
Company again moved to dismiss.  In August 1994, the Court
reaffirmed its dismissal of the unjust enrichment and conversion
claims but allowed the breach of contract and fraud claims to
proceed.  The Company and Mr. Gagliardi intend to appeal the
Court's failure to dismiss the breach of contract and fraud
claims and to seek dismissal of plaintiffs' amended breach of
contract claims at the appropriate time.  The Company believes
that the claims are totally without merit and intends to continue
to vigorously defend the action. 

     In June 1993, an action entitled Herzfeld & Ruben, P.C. v.
Richard Gagliardi was filed in New York Supreme Court - New York
County.  Herzfeld & Ruben, P.C. claimed that Richard Gagliardi,
President of the Company, owed such law firm $108,550.49 for
legal fees and disbursements incurred in connection with work 
allegedly performed by such firm.  The Company was not named as a
defendant in the action but a substantial part of the disputed
services were alleged to be for the benefit of the Company.  A
settlement was reached in January 1995, which provided for
Herzfeld & Ruben, P.C. to receive $42,500 in periodic
installments from  January 1995 to July 1996.  The Company's
Board of Directors approved the settlement of the dispute and in
as much as the claims of the plaintiff related to services
allegedly performed by the plaintiff on behalf of the Company,
agreed that the Company would pay the amount owned Herzfeld &
Ruben, P.C.  All payments required by the settlement were made by
July 31, 1996.

     As is customary in mortgage banking, the Company advances
funds to certain loan officers against commissions to be earned. 
By agreement, such advances are to be repaid by commissions
earned by the loan officer.  The Company is currently undertaking
collection proceedings against loan officers no longer employed
by the Company and who received advances in excess of commissions
earned.  

     The Company does not believe, however there can be no
assurance, that any litigation to which the Company is currently
subject is likely to have a material adverse effect on the
consolidated financial condition of the Company or its
subsidiaries.

ITEM 4.  SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS

     The Company did not submit any matters to a vote of its
security holders during the fourth quarter of the year ended
December 31, 1995. 

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     In December 1995, the Company approved the extension of the
Company's Class B and Class C Common Stock Purchase Warrants
until January 29, 1997.  Both were to expire on January 29, 1996. 

MARKET INFORMATION

     At a Special Meeting of Shareholders of the Company on
February 13, 1995, the shareholders approved, among other things,
an amendment of the Company's certificate of incorporation to
effect a combination of the Company's issued and outstanding
shares of Common Stock on the basis that each five shares of
Common Stock then outstanding was converted into one share of
Common Stock (the "reverse split").  The prices of the Company's
Common Stock listed below have been adjusted to reflect the
reverse split which was effected on February 21, 1995.  

     The Company's Common Stock is traded in the over-the-counter
market and was quoted on the National Association of Securities
Dealers, Inc. Automated Quotation System ("Nasdaq") SmallCap
Market under the symbol "AAMC" from April 22, 1991 to December 7,
1994, when the Company's securities were delisted from the Nasdaq
SmallCap Market due to the Company's inability to comply with
Nasdaq's maintenance criteria.

     The following table sets forth, for the period indicated,
the range of the high and low prices for the Company's Common
Stock as reported by Nasdaq through December 7, 1994 and since
December 8, 1994, the OTC Bulletin Board.  Nasdaq prices
represent actual sales transactions, while OTC Bulletin Board
prices reflect inter-dealer quotations, both of which are without
mark-up, mark-down or commission. 

                     1995 PRICES FOR THE QUARTER ENDED

          March 31        June 30         Sept. 30       Dec. 31
         High   Low      High   Low      High   Low    High   Low
Common
Stock   2.25   1.50    1.50   1.00     1.625   1.00   1.25   0.75

                     1994 PRICES FOR THE QUARTER ENDED

          March 31        June 30         Sept. 30       Dec. 31
         High   Low      High   Low      High   Low    High   Low
Common
Stock  5.625  4.375    4.375  1.563     3.75  2.188  2.188   1.25 

HOLDERS

     The number of record holders of the Company's Common Stock
was approximately 125 as of November 15, 1995.  The Company
believes that, in addition, there are in excess of 300 beneficial
owners of its Common Stock whose shares are held in "street
name". 

DIVIDENDS

     To date, the Company has not paid any cash dividends on its
Common Stock.  The payment of dividends, if any, in the future is
within the discretion of the Board of Directors and will depend
upon the Company's earnings.  The Company's Board does not intend
to declare any dividends in the foreseeable future, but instead
intends to retain all earnings, if any, for use in the Company's
business operations.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - THE YEAR ENDED DECEMBER 31,
1995 COMPARED TO THE YEAR ENDED DECEMBER 31, 1994

     Revenues for the year ended December 31, 1995 were
$1,001,865 compared to $1,038,719 for the year ended December 31,
1994, a decrease of $36,854 or 3.5%.  The decrease was
attributable to a decrease in origination fees of $70,208 which
was partially offset by an increase in application fees of
$10,934, an increase in mortgage interest income of $22,420,
primarily of Capital.  The decrease in revenues is primarily
attributable to lower than expected profit margins and to a
lesser extent the lack of refinancings during 1995, as a result
of substantial increases in mortgage interest rates throughout
1994 which continued into 1995.  As a result, Capital closed 224
residential mortgage loans in the principal amount of
approximately $41,262,902 in 1995 compared to 263 loans in the
principal amount of approximately $40,400,000 in the prior year,
a decrease in number of 14.8% and an increase in amount of
$862,902 or approximately 2.1%.  At December 31, 1995, the
Company had approximately $4,567,000 of mortgage loan
applications in process compared to approximately $4,700,000 at
December 31, 1994, a decrease of 2.8%.  

     Total selling, general and administrative expenses
("SG&A")for the year ended December 31, 1995 were $1,834,072, an
increase of $190,156 or 11.6% from the $1,643,916 incurred in the
prior year.  The increase in SG&A was the result of increased
salaries and benefits of $222,640 or 38.8% partially offset by
decreases in employee commission costs of $31,022 or 11.5% and
decreases in other expenses of $142,462 or approximately 17.8%
and a special charge in 1995 of $141,000 to adjust the carrying
value of land and development cost to estimated net realizable
value.  Expressed as a percentage of revenues, SG&A increased to
183% in 1995 from 158.3% in 1994, reflecting expenses  increasing
at a faster rate than the Company's ability to increase revenues. 

     No provision for state income taxes was made in 1995 and
1994.

     As a result of the foregoing, the Company incurred a net
loss from operations of $822,663 ($0.90/share) for the year ended
December 31, 1995 compared to a net loss of $595,698
($0.65/share) in the prior year, an increase of $226,965 or 38.1%
which includes other income of $9,544 in 1995 and $9,499 in 1994. 

LIQUIDITY AND CAPITAL RESOURCES

     The Company's capital resources during the year ended
December 31, 1995, have been derived from revenues generated by
its mortgage banking operations and to a lesser extent, interest
received on mortgages outstanding.  Substantial increases in
expenses related to the recruitment and salaries and/or
commissions of executive, sales personnel and clerical staff
associated with the Company's opening and maintaining of two
branch offices from January 1995 until September 1995.  The
Company's cash position has continued to deteriorate in 1995 and
the Company has been dependent on loans from the Company's
President, directors and third parties; proceeds of partial
payments received upon execution of contracts for sale of
building lots, and the deferment of certain executive officers
compensation and director fees in order to obtain and preserve
sufficient cash to continue its operations.  On December 31, 1995
the Company had a working capital deficit of $1,016,268 vs. a
working capital deficit of $168,887 on December 31, 1994.  The
increased expenses without benefit of a proportionate increase in
revenues have caused the Company to implement significant changes
in its operations including, but not limited to,  closing its
Summit and Freehold, New Jersey branch offices and eliminating
the expenses associated with maintaining these offices and to
replace substantially all of its former loan officers with new
originators of mortgage loans.  In addition, in July 1996,
Capital opened a new mortgage banking branch office in Toms
River, New Jersey, hired an experienced mortgage executive
officer who is responsible for the operating expenses of the
office excluding commissions which the Company will pay on closed
loans only, and began hiring  experienced loan officers to staff
the new office.  The Company also recruited and hired loan
originators to work from its main office in Bernardsville, New
Jersey. 

     As a result of the Company's implemented operational plan
described above, loans in process have increased from 28 loans
with a principal amount of approximately $4,700,000 as of
December 31, 1994, to 69 loans aggregating approximately
$15,200,000 at March 24, 1995, increases of 146.4% and 223.4%,
respectively and as of November 15, 1996, the Company had 130
loans in process with a principal amount of approximately
$21,275,000.  However, since the Company estimates that 85% of
its loans in process will close approximately 90 days from date
of application, the Company will continue to incur losses until
such time, if ever, that future revenues are sufficient to offset
operating costs.

     The Company estimates that it will require additional
capital over the next three months in order to meet its cash
requirements and successfully implement its operational plans. 
As a result, the Company is seeking additional capital including
an infusion of noncollateralized loans, the sale of additional
equity in the Company and the issuance of debt collateralized by
the real estate project in Hunterdon County, New Jersey. 
However, there can be no assurance that the Company will be able
to obtain additional capital on terms acceptable to the Company.  

     In the event the Company's plans change, its assumptions
change or prove to be inaccurate due to unanticipated expenses,
delays, problems or otherwise, the Company could be required to
seek additional financing beyond the amounts currently estimated
to be needed to meet its capital requirements.

       As of December 31, 1995, the Company had cash and cash
equivalents of $274,354 compared to $212,239 at December 31,
1994, an increase of $62,115.  The increase was primarily
attributable to net cash used in operating activities of
$454,480, offset by net cash provided by investing activities of
$86,267 and net cash provided by financing activities of
$430,328.  Net cash used in operating activities was the result
of the net loss of $822,663 and increase in mortgage loans
receivable of $658,426, decrease in deferred income of $2,801,
gain on sale of fixed assets of $5,699 and a reserve for bad
debts of $42,668, partially offset by cash provided by operating
activities which included depreciation and amortization of
$24,174, an allowance for net realizable value of $141,000 and
decreases in notes receivable of $2,404, prepaid and other assets
of $59,099, and increases in accounts payable and accrued
expenses of $211,350 and warehouse loans payable of $639,750. Net
cash provided by investing activities consisted of increases in
land and development costs of $277,243, purchases of fixed assets
for $19,666, sale of fixed assets of $25,176 and proceeds from
lot deposits of $358,000.

     Cash was provided by financing activities through proceeds
from loans payable of $277,080 and through proceeds of a mortgage
in the amount of $153,248 payable to a bank under a site
improvement loan which provides for the Company to borrow up to
an aggregate amount of $250,000 as discussed below. 

     In October 1993, the Company received final subdivision
approval by municipal authorities on the Company's real estate
development in Hunterdon County, New Jersey, known as Murray Hill
Estates.  As a condition of receiving final approval and prior to
completing the sale of any lots, the Company will be required to
complete certain improvements to the property or post performance
bonds or letter of credit in lieu thereof.  In August 1994, the
Company received a commitment from a commercial bank for two
lines of credit aggregating $700,000, consisting of a $250,000
site  improvement loan and a $450,000 revolving line of credit
to finance construction of up to three residences in the
subdivision.  The site improvement loan which closed in November
1994, is secured by a first mortgage on the development and is 
also secured by the personal guarantees of the Company's
President and Executive Vice President.  As of December 1, 1996
the Company had not utilized the construction line of credit, nor
does it intend to.  The interest rate on the site improvement
loan is the bank's prime interest rate plus 1% and is payable
monthly.  The term of the loan is November 30, 1996.  At December
31, 1995, the Company had utilized $228,248 of the $250,000 site
improvement loan for which the interest rate was 10%.  At
November 30, 1996, the interest rate on the loan was 10 1/4% and
the balance of site improvement borrowing remained at $228,248. 
During the third and fourth quarter of 1995, the majority of the
physical improvements were made to the property.  The Company
estimates the balance of the improvements will be installed from
the fourth quarter of 1996 through the second quarter of 1997.  

     At December 31, 1995, the Company had executed contracts of
sale amounting to $1,040,500 for ten of eleven lots, which
related to the Company's real estate activities.  The Company had
collected $358,000 as down payments on the related contracts. 
Subsequent to December 31, 1995, a contract for three lots was
voided and the related deposit of $28,000 was returned.


     In October 1996, the Company received approval of and
accepted a commitment issued by a commercial bank for  a
construction mortgage financing line of credit in the amount of
$550,000.  The loan commitment provides a letter of credit in the
amount of $111,583 which the Company plans on assigning and
depositing in escrow with municipal authorities to guarantee the
township adequate funds to complete the balance of required site
improvements as outlined by the municipal engineer, as provided
by code if the Company as developer fails to complete the
improvements.  The mortgage loan further provides $430,417 which
shall be used for refinancing the current mortgage loan on the
property, funds to complete the balance of required site
improvements and provides an interest reserve.  The loan is due
one year from the closing date, except for the letter of credit
which may be extended for an additional one year period.  The
mortgage loan is further secured by the personal guarantees of
the Company's President and Executive Vice President.  There can
be no assurance that the Company will be successful in closing
this loan,  however, the Company plans on doing so in the fourth
quarter of 1996. 

ITEM 7.  FINANCIAL STATEMENTS

     This information appears in a separate section of this
report following Part III.


                                 PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

                                          POSITION WITH
      NAME                AGE              THE COMPANY
Richard G. Gagliardi      50          Chairman of the Board,
                                      President and Chief
                                      Executive Officer

Lynn K. Gagliardi         39          Executive Vice President,
                                      Secretary and Director

Robert J. DiQuollo        49          Director
Bernard Gitlow            70          Director
Theodore P. Rica, Jr.     34          Director

     RICHARD G. GAGLIARDI has been Chairman, President and Chief
Executive Officer of the Company since its inception on July 1,
1988.  Mr. Gagliardi was employed as a Registered Representative
at the investment banking firm of L. C. Wegard & Co., Inc.
("Wegard") from October 1989 to September 1991, and served as a
Vice President of Wegard from October 1989 to July 1991.

     LYNN K. GAGLIARDI has been Secretary and a director of the
Company since its inception and Executive Vice President from
July 1992.  From October 1989 to June 1991, Ms. Gagliardi served
as Assistant Operations Manager and a Registered Representative
of Wegard.  Lynn K. Gagliardi is the wife of Richard G.
Gagliardi.

     ROBERT J. DIQUOLLO has been a director of the Company since
June 1996 to serve out the term of the board seat left vacant by
the resignation of William P. Dunn, IV.  Since August 1988, Mr.
DiQuollo has owned and operated his certified public accounting
firm of R. J. DiQuollo & Co.  From August 1988 to present, he
also is a principal and Vice President of Brinton Eaton
Associates, a financial management company.  From September of
1989, Mr. DiQuollo was a founder and director of Growth Financial
Corp. and its subsidiary Growth Bank until the corporation was
sold in January 1996, to Hudson United Bank, a commercial lending
institution.

     BERNARD GITLOW has been a director of the Company since June
1993.  He has been Executive Vice President of Victor Kramer,
Co., Inc. a consulting company in the laundry and linen supply
industry since August 1990.  Since January 1988, Mr. Gitlow has
also served as a consultant to the linen supply, laundry and dry
cleaning industry. 
     THEODORE P. RICA, JR. has been a director of the Company
since August 1995 to serve out the term of the board seat left
vacant by the resignation of B. R. Wienke.  He has been employed
by Pitney Bowes since 1984 as a salesman of office equipment and
self employed as a builder of single family homes in New Jersey
since September 1985.

     Directors are elected for one-year terms to serve until the
next annual meeting of shareholders or until their respective
successors are elected and qualified. 

     The executive officers of the Company are elected annually
at the first meeting of the Company's Board of Directors held
after each annual meeting of shareholders. Each executive officer
will hold office until his successor is duly elected and
qualified, until his resignation or until he shall be removed in
the manner provided by in the Company's By-Laws.

SIGNIFICANT EMPLOYEES

     ANGELO PENNISI, 37, has been employed by Capital Financial
Corp. since March 1996 through August 1996 as a Vice President
and Sales Manager.  In August 1996, he became Senior Vice
President of Capital Financial Corp. and is in charge of
secondary marketing, which includes the selling of mortgages to
investors in order to maximize the Company's earnings potential
and oversees the pricing of mortgage loans and mortgage product
lines.  He was Vice President Sales and Marketing for Sterling
National Mortgage Co., Inc. from August 1994 to February 1996 and
Regional Manager and Vice President for Meridian Mortgage
Corporation from July 1987 to August 1994. 

ITEM 10.  EXECUTIVE COMPENSATION

     The following table sets forth for the periods presented the
compensation paid by the Company and its subsidiaries for
services rendered during the fiscal year ended December 31, 1995
to the Company's Chief Executive Officer (the "named executive"). 
No other executive officer of the Company received an annual
salary, bonus or other compensation in excess of $100,000 for the
fiscal year ended December 31, 1995.

                         SUMMARY COMPENSATION TABLE

                            ANNUAL COMPENSATION                   
        
   Name and Principal                      Other Annual
   Position             Year   Salary      Compensation    Total

Richard G. Gagliardi    1995  $ 90,000(1)   $ 6,900 (2)  $ 96,900
Chairman of the Board   1994   114,017(3)    10,113 (3)   124,130
President and Chief     1993    79,887        9,662        89,549
Executive Officer       1992    65,769        7,692        73,461

(1)  Includes $48,462 as accrued back salary not paid to Mr.
Gagliardi as of December 31, 1995.

(2)  Represents the approximate reimbursement cost of an
automobile leased by Mr. Gagliardi for business purposes. 

(3)  Includes additional compensation in the amount of three
percent (3%) of revenues of Capital generated directly from the
origination of mortgage loans (i.e., Application Fees, Commitment
Fees, Fee Income-regular, less any Fees Refunded), commencing
January 1994. The additional compensation to Mr. Gagliardi, which
was $24,017 for the year ended December 31, 1994, was
discontinued as of July 1, 1994.

COMPENSATION OF DIRECTORS

     In 1995, the Company did not compensate its directors for
their services as directors and has not  compensated its
directors for their services as directors through October 1996. 
The Board of Directors, in October 1996, agreed to forego
receiving cash compensation and to receive Common Stock of the
Company in lieu of cash for attendance at the Company's future
Board of Directors and Stockholders meetings.  However, in May
1993, the Company's wholly owned subsidiary, Capital Financial
Corp. began compensating its directors $200 for attending each
board meeting except for the Annual Meeting for which they each
receive $400.  In December 1994, Capital ceased compensating its
directors for attending board meeting.  Pursuant to the Company's
1992 Stock Option Plan (the "Plan"), directors are eligible to
receive non-qualified options, and in addition, directors who are
employees of the Company are also eligible to receive incentive
options. 

STOCK OPTION PLAN

     In July 1992, shareholders of the Company ratified the
adoption by the Board of Directors of the Plan.  The Plan
authorizes the grant of incentive and non-qualified options to
purchase up to 100,000 shares of the Company's Common Stock and
is administered by the Board of Directors.  Only employees of the
Company are eligible to receive incentive stock options pursuant
to the Plan.  As of December 1, 1996, options to purchase 67,000
shares of the Company's Common Stock have been granted pursuant
to the Plan.  During the year ended December 1994, the Company
granted non-qualified options to purchase 3,000 shares of Common
Stock at $3.75 per share to each of Bernard Gitlow and William P.
Dunn, IV, both of whom were Directors of the Company during the
year 1995.  In June 1996, Mr. Dunn resigned as a director of the
Company which is cause for forfeiture of the options, however,
because of Mr. Dunn's past contributions the Company has agreed
to allow Mr. Dunn's options to remain effective.  The exercise
price for all options granted in 1995 was $2.39 and the exercise
price of all options granted to date pursuant to the Plan was
equal to the fair market value of the underlying securities at
date of grant.  No options were exercised during 1995.  As of
December 1, 1996, options to purchase 33,000 shares of the
Company's Common Stock are available for grant under the Plan. 

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

     The following table sets forth certain information as of
December 1, 1996, based on information obtained from the persons
named below, with respect to the beneficial ownership of shares
of Common Stock by (i) each person known by the Company to be the
beneficial owner of more than five percent of the outstanding
shares of Common Stock, (ii) the named executive, (iii) each of
the Company's directors and (iv) all directors and executive
officers as a group:

<PAGE>
     Shares of Common Stock have been adjusted for the
one-for-five reverse split effected February 21, 1995. 

                            AMOUNT AND NATURE      PERCENTAGE  OF
NAME AND ADDRESS  OF           BENEFICIAL            OUTSTANDING
BENEFICIAL OWNER (1)         OWNERSHIP  (2)        SHARES  OWNED

Richard G. Gagliardi          500,579 (3)              53.5%
Lynn K. Gagliardi              10,000 (4)               1.1%
Theodore P. Rica, Jr.          20,567 (5)               2.2%
Robert J. DiQuollo             20,000 (6)               2.1%
Bernard Gitlow                  6,426 (7)                *

All directors and executive 
officers as a group (five persons)       557,572 (5)(6)(7)       
58.9%

* less than 1%
---------------------------------
(1)  The address of each of the beneficial owners identified is
150 Morristown Road, Suite 108, Bernardsville, New Jersey 07924.

(2)  Unless otherwise noted, the Company believes that all
persons named in the table have sole voting and investment power
with respect to all shares of Common Stock beneficially owned by
them.

(3)  Does not include shares beneficially owned by Lynn K.
Gagliardi, Mr. Gagliardi's wife, as to which he disclaims
beneficial ownership.

(4)  Does not include shares owned by Richard G. Gagliardi, Ms.
Gagliardi's husband, as to which she disclaims beneficial
ownership.

(5)  Includes 20,000 shares of Common Stock which may be
purchased by Mr. Rica upon exercise of immediately exercisable
options.

(6)  Represents 20,000 shares of Common Stock which may be
purchased by Mr. DiQuollo upon exercise of immediately
exercisable options.

(7)  Includes 3,426 shares of Common Stock which may be purchased
by Mr. Gitlow upon exercise of immediately exercisable warrants.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     As of December 31, 1995, the Company had borrowed from
various stockholders, including but not limited to Alice E.
Gagliardi, Mr. Gagliardi's mother, 2 directors and 2 officers of
the Company, in the amount of $277,080 as outlined in NOTE 10 -
RELATED PARTIES of the financial statements. 

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

(a)(1)  FINANCIAL STATEMENT
                                                        PAGE NO.

Report of Independent Accountants                          F-1
Consolidated Balance Sheet - December 31, 1995             F-2
Consolidated Statements of Operations -  
 for the years ended December 31, 1995 and 1994            F-3
Consolidated Statements of Changes In Stockholders' 
 Equity - for the years ended December 31, 1995 and 1994   F-4
Consolidated Statements of Cash Flows - for the years
 ended December 31, 1995 and 1994                          F-5
Notes to Consolidated Financial Statements             F-6 - F-12

<PAGE>
<AUDIT-REPORT>      INDEPENDENT AUDITORS' REPORT

To the Stockholders of
AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES

We have audited the accompanying consolidated balance sheet of
AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES as of
December 31, 1995 and the related consolidated statements of
operations, changes in stockholders' equity, and cash flows for
the year 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 audit.  The consolidated financial statements of AMERICAN
ASSET MANAGEMENT CORPORATION and its Subsidiaries as of December
31, 1994 were audited by other auditors whose report dated March
7, 1995, expressed an unqualified opinion on those statements.

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

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the
consolidated financial position of AMERICAN ASSET MANAGEMENT
CORPORATION AND SUBSIDIARIES as of December 31, 1995 and the
results of their operations and their cash flows for the year
then ended in conformity with generally accepted accounting
principles.

As discussed in Note 13 to the consolidated financial statements,
the Company is involved in litigation relating to the Company's
1989 private offering of common stock.  The outcome of the
litigation cannot presently be determined.  Accordingly, no
provision for any liability that may result upon adjudication has
been made in the accompanying consolidated financial statements.


Paramus, New Jersey                  RD Hunter & Company LLP
June 27, 1996, Except for Note 15    Certified Public Accountants
which is as of August 28, 1996


                              F-1
<PAGE>
<PAGE>
  AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES  Exh. A
                     Consolidated Balance Sheet
                         December 31, 1995

     ASSETS

Current Assets:
  Cash and cash equivalents                        $  274,354
  Notes receivable                                     34,254
  Mortgage loans receivable                           658,426
  Prepaid and other current assets                     55,926
               Total current assets                $1,022,960


Land and development costs                          1,490,386

Furniture and equipment, at cost, less
  accumulated depreciation                             23,384

OTHER ASSETS:
  Intangible assets                                     2,407
  Rent security deposits                                3,048
  Commission advances                                  11,770
               Total other assets                      17,225

           TOTAL:                                  $2,553,955

     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable and accrued expenses            $  375,733
  Liability for land development costs                160,417
  Loans payable                                       277,080
  Lot deposits                                        358,000
  Warehouse loans payable                             639,750
  Mortgage payable                                    228,248
               Total current liabilities            2,039,228

STOCKHOLDERS' EQUITY
  Common stock, no par value; 10,000,000 
  shares authorized; 916,119 shares issued
  and outstanding                                   2,434,325
  Additional paid-in capital                          234,207
  Accumulated deficit                              (2,150,805)
               Total stockholders' equity             514,727

           TOTAL:                                  $2,553,955


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

                                F-2

<PAGE>
  AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES   Exh. B
              Consolidated Statements of Operations
                   December 31, 1995 and 1994



                                             1995         1994
REVENUES:
  Mortgage origination fees              $  853,984   $  924,192
  Application fees                           93,210       82,276
  Mortgage interest income                   54,671       32,251
               Total revenues             1,001,865    1,038,719



SELLING, GENERAL & ADMINISTRATIVE EXPENSES
  Salaries and benefits                     795,804      573,164
  Commissions                               239,372      270,394
  Other expenses                            657,896      800,358
  Special charge                            141,000           -
               Total selling, general
                & administrative
                expenses                  1,834,072    1,643,916

LOSS FROM OPERATIONS                       (832,207)    (605,197)


Other Income                                   9,544       9,499

LOSS BEFORE PROVISION FOR INCOME TAXES      (822,663)   (595,698)

Provision for income taxes                       -           -

NET LOSS                                    (822,663)   (595,698)


NET LOSS PER COMMON SHARE                   $  (0.90)   $  (0.65)



WEIGHTED AVERAGE NUMBER OF SHARES OF
  COMMON STOCK OUTSTANDING                   916,119      921,187





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



                             F-3 

<PAGE>
  AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES   Exh. C
Consolidated Statements of Changes in Stockholders' Equity
                 December 31, 1995 and 1994




                                    ADDITIONAL
                    COMMON STOCK     PAID-IN   ACCUMULATED
                   SHARE    AMOUNT   CAPITAL    DEFICIT     TOTAL
 
BALANCE, 
12/31/93: 925,126.8  $2,491,864  $ 231,207  $(732,444) $1,990,627

Cancellation
 of common
 stock in
 connection 
 with the 
 stock dis-
 tribution   (7.8)       (39)        -            -          (39)


Cancellation
 of common 
 stock in
 connection 
 with stock
 reac-
 quisition  (5,000)   (48,750)       -             -     (48,750)


Cancellation
 of common 
 stock in 
 connection
 with debt
 collection (4,000)   (8,750)        -             -      (8,750)


NET LOSS FOR 
 YEAR ENDED
 1994           -         -          -    


Balance, 
 12/31/94  916,119  2,434,325   231,207    (1,328,142)  1,337,390


Net loss for 
 year ended 
  1995          -         -          -      (822,663)   (822,663)


BALANCE, 
12/31/95   916,119  2,434,325  231,207    (2,150,805)    514,727




(The accompanying notes are an integral part of these financial
 statements)

                            F-4



<PAGE>
   AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES   Exh D
           Consolidated Statements of Cash Flows
                 December 31, 1995 and 1994

                                            1995         1994
CASH FLOWS FROM OPERATING ACTIVITES: 
  Net loss                              $  (822,663) $  (595,698)
  ADJUSTMENTS TO RECONCILE 
   NET LOSS TO NET CASH USED IN
   OPERATING ACTIVITIES:
    Depreciation and amortization            24,174       37,469
    Gain on sale of fixed assets             (5,699)          -
    Reserve for bad debts                   (42,668)          -
    Allowance for net realizable value      141,000           -
  CHANGES IN ASSETS AND LIABILITIES:
  (INCREASE) DECREASE IN:
    Notes receivable                          2,404       18,995
    Mortgage loans receivable              (658,426)     263,750
    Fees and interest receivable                 -        35,796
    Prepaid and other assets                 59,099       32,867
  INCREASE (DECREASE) IN:     
    Commissions payable                          -       (29,721)
    Accounts payable & accrued expenses     211,350       52,248
    Deferred income                          (2,801)     (27,569)
    State income taxes payable                   -        (4,943)
    Warehouse loans payable                 639,750           -
    Net cash used in operating activities  (454,480)    (216,806)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Sale of fixed assets                       25,176           -
  Purchase of fixed assets                  (19,666)      (1,853)
  Increase in land & development costs     (277,243)     (70,555)
  Proceeds from lot deposits                358,000           -
    Net cash provided by (used in)
     investing activities                    86,267      (72,408)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Repurchase of common stock                     -        (5,039)
  Proceeds from mortgage payable to bank    153,248       75,000
  Proceeds from loans payable               277,080           -
    Net cash provided by 
     financing activities                   430,328       69,961

Net increase (decrease) in cash              62,115     (219,253)

Cash and cash equivalents,
  at beginning of year                      212,239      431,492

CASH & CASH EQUIVALENTS, AT END OF YEAR  $  274,354   $  212,239
Supplemental non-cash financing activities:  See Note 12
(The accompanying notes are an integral part of these financial
statements)
                             F-5


<PAGE>
 AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES   Exh. E
        Notes to Consolidated Financial Statements        Page 1
                December 31, 1995 and 1994

Note 1 - SIGNIFICANT ACCOUNT POLICIES:

AMERICAN ASSET MANAGEMENT CORPORATION (the "Company") and its
subsidiaries are engaged in mortgage banking and real estate
financing and development.  The Company's mortgage banking
subsidiary is a licensed mortgage banker in the State of New
Jersey.  The real estate project involves a parcel of land being
developed for subdivision and sale.

A.  PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of
American Asset Management Corporation and its wholly-owned
subsidiaries.  All material intercompany accounts and
transactions have been eliminated.

B.  CONCENTRATION, SIGNIFICANT RISKS AND USE OF ESTIMATES

The Company's lending is primarily concentrated in the New Jersey
market.

During 1995, the Company sold, 57, 32 and 23 of its 223 closed
loans (25.6%, 14.3% and 10.3%), to three investors, which
included two savings banks and one mortgage broker.

The Company receives all of its funds for mortgage banking
activities from one mortgage warehouse.

In preparing financial statements in conformity with generally
accepted accounting principles, management makes estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities
at the date of the financial statements, as well as the reported
amounts of revenues and expenses during the reporting period. 
Actual results could affect those estimates.

C. FIXED ASSETS AND DEPRECIATION

Fixed assets are stated at cost.  Depreciation is computed by
using the straight line method over the estimated useful lives of
3 years for computer equipment and 5 years for furniture and
equipment, for both financial reporting and income tax purposes.

D.  MORTGAGE LOANS RECEIVABLES

Mortgage loans receivable are held for sale and are reported at
the lower of cost, or market value.  The method used to determine
this amount is the individual loan amount.  At December 31, 1995,
cost approximates the market value of such loans.
                             F-6

E.  INTANGIBLE ASSETS                                      Exh. E
                                                           Page 2
Goodwill and organization costs are both amortized on the
straight-line basis over a period of five years.

F.  FEE INCOME

Fee income resulting from the Company's mortgage banking
activities is recognized when a financing occurs.  The Company's
application fees for processing mortgage applications and
commitment fees for committing to fund a loan are recorded when
the fees are received.

G.  INCOME TAXES

Deferred taxes are provided on temporary differences between the
financial reporting and income tax basis of assets and
liabilities based on enacted tax rates and the expected effect on
future cash flows for income taxes.

H.  STATEMENTS OF CASH FLOWS

For purposes of the statements of cash flows, the Company
considers all highly liquid debt instruments purchased with an
original maturity of three months or less to be cash equivalents.

I.  LOSS PER SHARE

Loss per share amounts are based on the weighted average number
of shares outstanding.  No effect has been given to shares
issuable for outstanding options and warrants as the effect would
be antidilutive.

J.  RESERVE FOR BAD DEBTS

A reserve for bad debts has been provided for on all commission
advances turned over for collection.  The reserve at December 31,
1995 was $18,037.

K.  RECLASSIFICATIONS

Certain reclassifications to the 1994 financial statements have
been made for consistency with the 1995 presentation.

NOTE 2 - FIXED ASSETS:

Fixed assets at December 31, 1995 consist of:

     Computer equipment                            $ 37,966
     Furniture and fixtures                          19,291
     Office equipment                                37,413
                                                     94,670
     Less, Accumulated depreciation                  71,286
           NET FIXED ASSETS                        $  23.38

                          F-7
<PAGE>                                                     Exh. E
                                                           Page 3
Depreciation expense was $19,508 and $18,917 for the years ended
December 31, 1995 and 1994 respectively.

NOTE 3 - INTANGIBLE ASSETS:

Intangible assets at December 31, 1995 consist of:

     Goodwill                                      $ 86,370
     Organization costs                              46,715
                                                    133,085
     Less, Accumulated amortization                 130,678

           NET INTANGIBLE ASSETS                   $  2,407

Amortization expense was $4,666 and $18,553 for the years ended
December 31, 1995 and 1994, respectively.

NOTE 4 - LAND AND DEVELOPMENT COSTS:

Land and development costs are comprised of an investment in
capitalized loans of $675,000 to acquire the land, issuance of
148,000 shares of common stock in 1992 with a fair market value
of $259,000 to acquire the minority interest and development
costs incurred of $697,386, less an allowance of $141,000 to
reduce the carrying amount to estimated net realizable value as
of December 31, 1995.

NOTE 5 - MORTGAGE LOANS RECEIVABLE:

On March 3, 1995, the Company received a commitment for a
$5,000,000 warehouse line of credit from a mortgage warehouse
lender.  Funds from this line of credit are lent to borrowers
once an investor (usually a bank) has agreed to purchase the
mortgage.  These funds are secured by residential mortgage loans. 
The line of credit is repaid by the investor at the time of the
closing.  As of December 31, 1995, three loans had yet to be
closed, resulting in a warehouse loan payable of $639,750 and a
mortgage loan receivables of $658,426.  All three loans were
closed in the first quarter of 1996.

NOTE 6 - LOT DEPOSITS:

At December 31, 1995, the Company had executed contracts of sale
amounting to $1,040,500 for ten of eleven lots, which related to
the Company's real estate activities.  The Company had collected
$358,000 as down payments on the related contracts.  Subsequent
to December 31, 1995, a  contract for three lots was voided and
the related deposit of $28,000 was returned (See Note 15).  The
contracts are anticipated to close during 1996.
                           F-8

<PAGE>                                                     Exh. E
                                                           Page 4
NOTE 7 - MORTGAGE PAYABLE

During November, 1994, the Company obtained a site improvement
loan of $250,000 from a commercial bank, which is evidenced by a
note and collateralized by a mortgage creating a valid first lien
on the Company's real estate development.  The loan is also
collateralized by a personal guaranty of the Company's President
and Executive Vice President.  Interest is charged at a rate
equal to the bank's prime rate plus 1% per annum (floating) for
the term of the loan, which is payable no later than November 30,
1996.  As of December 31, 1995, the mortgage payable was $228,248
with an interest rate of 9.75%.  The Company is in the process of
obtaining new financing.

In addition, during August 1994 the Company obtained from the
bank a $450,000 revolving line of credit to be used in financing
construction loans of $150,000 each for the construction of one
model home and two single family residences.  No advances will be
made unless there is an executed contract of sale for each
residence.  Pursuant to the agreement between both parties, at no
time shall there be more than three $150,000 construction loans
outstanding under the line of credit, which was not utilized as
of December 31, 1995 and expires on August 31, 1996 unless
renewed at the sole discretion of the bank.  All borrowings
will be evidenced by a note which will be collateralized by a
mortgage and the personal guarantees of the Company's President
and Executive Vice President, creating a second lien on the
Company's real estate development.

NOTE 8 - INCOME TAXES

The Company has deferred tax assets of $828,000 at December 31,
1995 arising from net operating loss ("NOL") carryforwards of
$1,884,000 which expire between 2001 and 2010.  The Company's
valuation allowance increased from $502,000 at December 31, 1994
to $828,000 at December 31, 1995 due to the uncertainty of future
utilization of the Company's NOL carryforwards.

NOTE 9 - STOCKHOLDERS' EQUITY:

Through a public offering in April 1991, the Company sold 150,878
units (unadjusted), each unit consisting of three shares of
common stock, one Class A Common Stock Purchase Warrant, one
Class B Common Stock Purchase Warrant and one Class C Common
Stock Purchase Warrant.  Net proceeds of the offering were
$1,089,821.

Each Class A Warrant entitled the holder to purchase one share of
common stock at an exercise price of $17.50 until January 29,
1994, when the unexercised warrants expired.  Each Class B
Warrant entitles the holder to purchase .20941 share of common
stock at an exercise price of $19.10 per whole share until
January 29, 1997.  Each Class C Warrant entitles the holder to
purchase .20977 share of common stock at an exercise price of
$21.45 per whole share until January 29, 1997.  No fractional
shares will be issued upon exercise of the Class B and C 

                            F-9
<PAGE>                                                     Exh. E
                                                           Page 5
Warrants.  The Company may redeem the warrants at $0.10 each upon
30 days written notice, providing the closing bid price of the
common stock shall have exceeded $25.00 per share to ten
consecutive days preceding the date of such notice.

On February 20, 1995, the Company filed amendments to its
certificate of incorporation to effect a one-for-five reverse
stock split of the outstanding common stock and to provide for an
authorized capital consisting of 10,000,000 shares of common
stock, no par value, and 2,000,000 shares of preferred stock, no
par value.  Unless otherwise indicated, all share and per share
amounts have been restated to retroactively reflect the reverse
stock split.

NOTE 10 - RELATED PARTIES:

A.  Notes receivable as of December 31, 1995 included a $28,084
demand note with interest at 8% and payable monthly from the
Company's former Chief Financial Officer.

B.  Loans payable as of December 31, 1995 included the following
related party demand notes:
                                                     ANNUAL
                                                    INTEREST
          RELATED PARTY               AMOUNT          RATE

       Stockholders                  $ 246,191         12%
       Chief Executive Officer       $  30,889         12%

C.  Included in accrued expenses as of December 31, 1995 are back
salaries owed to the Chief Executive Officer and the Vice
President for $48,462 and $21,538, respectively.

NOTE 11 - COMMITMENTS

The Company has entered into various operating lease agreements
for office space and office equipment.  The leases expire
periodically through October 1999.

The future minimum rental commitments under noncancelable
operating leases are as follows:

           YEAR                                  AMOUNT

           1996                                 $ 56,557
           1997                                   55,857
           1998                                   52,625
           1999                                   13,392
                          TOTAL:                $178,431

Rental costs under operating leases amounted to $126,740 and
$85,290 for the years ended December 31, 1995 and 1994,
respectively.
                           F-10
<PAGE>                                                     Exh. E
                                                           Page 6
NOTE 12 - CONSOLIDATED STATEMENTS OF CASH FLOWS:

Supplemental non-cash activities:

In May 1994, the Company reacquired and cancelled 5,000 shares
for $5,000, which were originally issued for $48,750 and
recognized as goodwill in connection with the purchase of a
subsidiary in July 1991.

In October 1994, the Company reacquired and cancelled 4,000
shares with a fair market value of $8,750 in connection with a
bad debt collection on a collateralized demand note of $13,000.

Cash paid during the year for:
                                                 1995      1994

          Income taxes                        $     -   $  5,124

          Interest                            $ 65,781  $     -

NOTE 13 - LITIGATION:

In March 1993, an action was commenced against the Company, its
President and the brokerage firms of G. K. Scott & Co., Inc. and
L. C. Wegard & Co., Inc. in the Supreme Court of the State of New
York, Queens County.  The complaint, which claimed fraud, unjust
enrichment, conversion, breach of fiduciary duty and breach of
contract, was brought by two individuals who invested a total of
$250,000 in the Company's 1989 private offering of common stock
(the "1989 Offering").  The plaintiffs alleged that, in
connection with their investments in the 1989 Offering, certain
of the defendants misrepresented or failed to disclose certain
material facts concerning the Company and the 1989 Offering.  The
plaintiffs sought damages against the parties, including
compensatory damages of $1,000,000 and punitive damages of
$5,000,000.  The Company and its President subsequently moved to
dismiss the complaint, and, by order dated January 10, 1994, the
Court dismissed with prejudice the claims with leave to amend. 
On February 25, 1994, plaintiffs filed as an amended complaint
containing allegations similar to those in the original complaint
and purporting to amend their original breach of contract
allegations.  In August 1994, the court reaffirmed its dismissal
of the unjust enrichment and conversion claims but allowed the
breach of contract and fraud claims to proceed.  Outside counsel
for the Company has advised that at report date they cannot offer
an opinion as to the probable outcome. 

In February 1995, a settlement was reached with a law firm
utilized by the President of the Company, for unpaid legal fees
and disbursements related to services allegedly performed for the
benefit of the Company.  The settlement provides that the
plaintiff will receive, over an eighteen month period, payments
aggregating $42,500.  All required payments have been made to  
                          F-11

<PAGE>                                                     Exh. E
                                                           Page 7
date.  At December 31, 1995, a balance of $21,666 is still due
and is reflected in accounts payable and accrued expenses on the
Company's balance sheet.

In the ordinary course of its business, the Company is from time
to time subject to litigation.  The Company does not believe that
any litigation to which the Company is currently subject is
likely to have a material effect on the consolidated financial
condition of the Company and its subsidiaries.

NOTE 14 - SPECIAL CHARGE:

In 1995, the Company recorded a special charge of $141,000 for a
provision to adjust the carrying value of land and development
costs to estimated net realizable value.  The provision was based
on a review of the sales price per sales contracts and the costs
of land and development incurred and anticipated for
improvements.  As the total anticipated costs exceeded the
anticipated sales price, an allowance was provided to reduce the
carrying amount to the estimated net realizable value.

NOTE 15 - SUBSEQUENT EVENTS:

In May of 1996, a contract for the sale of three lots for
$280,000 was voided, at the request of the buyer and the related
deposit of $28,000 was returned.

In August of 1996, an agreement was entered into between the
Company's  real estate development subsidiary and a general
contractor regarding the building of single family residences on
lots owned by the subsidiary.  According to the terms of the
agreement, any general contracting contracts the contractor
receives on the property owned by the subsidiary will be done for
the benefit of the subsidiary and for which the contractor will
receive a fee of $5,000 per home.


                                    F-12
</AUDIT-REPORT>


<PAGE>

(b)  CURRENT REPORTS OF FORM 8-K

     The Company did not file any reports on Form 8-K during the
last quarter of the year ended December 31, 1995.

(c)     EXHIBITS

      *3.1(a) Certificate of Incorporation as Amended
    ***3.1(b) Amendment to Certificate of Incorporation filed
                February 1995
      *3.2    By-Laws
      *4.3    Form of Warrant Agreement between the Company and
                Continental Stock Transfer and Trust Company, as
                Warrant Agent
    **10.5    1992 Stock Option Plan
      10.6    Lease agreement for Capital Financial -
                Bernardsville, NJ
      21      Subsidiaries of the Company
      22      Financial Data Schedule - For SEC Use Only

_________________________

  * Incorporated by reference to the corresponding exhibits in 
    the Company's Registration Statement of Form S-1 (SEC File
    No. 33-34145).

 ** Incorporated by reference to the corresponding exhibit in the
    Company's Form 10-KSB for the year ended December 31, 1992.

*** Incorporated by reference to the corresponding exhibit in the
    Company's Form 10-KSB for the year ended December 31, 1994.



<PAGE>
                                  SIGNATURES

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

                            AMERICAN ASSET MANAGEMENT CORPORATION
                                       (Registrant)



                 12/2/96                 Richard G. Gagliardi
                  Date                      (Signature)


     In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.





                 12/2/96                 Richard G. Gagliardi
                  Date                      (Signature)




                 12/2/96                 Lynn K. Gagliardi
                  Date                      (Signature)


______________________
Robert J. DiQuollo            Director


______________________ 
Theodore P. Rica, Jr.         Director



______________________
Bernard Gitlow                Director


<PAGE>
                                 EXHIBIT INDEX



    EXHIBIT NO.                      DESCRIPTION

     10.6       Lease agreement for Capital Financial,
                Bernardsville, NJ

     21         Subsidiaries of the Company




<PAGE>
                                                   Exhibit No. 21


                          SUBSIDIARIES OF THE COMPANY




                                                 JURISDICTION
   NAME                                        OF INCORPORATION


American Asset Development Corporation            New Jersey

Capital Financial Corp.                           New Jersey