United States
               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, 2003
                                -OR-
( ) 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 of)(IRS Employer Identification No.)
 incorporation or organization)

  1280 ROUTE 46 WEST, PARSIPPANY, NEW JERSEY           07054
   (Address of principal executive offices)         (Zip  Code)

Issuer's telephone number, including area code:   (973) 299-8713

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)

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 X  No __

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, 2003, the issuer's revenues were $2,349,709.
As of March 31, 2004 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 $191,779.

As of March 24, 2003 the issuer has 1,316,989 shares of its no par value
Common Stock issued and 1,316,989 shares outstanding.

Documents incorporated by reference:   None

Transitional Small Business Disclosure Format: Yes ___  No _X_

10KSB REPORT
                                 PART I


ITEM 1.  DESCRIPTION OF BUSINESS

     "Safe Harbor" Statement under the Private Securities Litigation Reform
Act of 1995:  Certain statements and discussions contained in this report are
not based on historical facts and contain forward looking statements that
involve a number of known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the
Company to be materially different from any future results, performance or
achievements expressed or implied by such forward looking statements.  Such
factors include, but are not limited to, those relating to competition, the
ability of the Company to successfully market new mortgage products and
services, the economic conditions in the markets served by the Company, the
possibility of increased interest rates which would adversely affect the real
estate market, the ability to hire and retain key personnel, and other risks
detailed in this report and in the Company's other filings with the Securities
and Exchange Commission.  The words believe, expect, intend, anticipate
and plan and similar expressions identify forward looking statements, readers
are cautioned not to place undue reliance on these forward looking statements,
which speak only as of the date the statement was made.


GENERAL

     American Asset Management Corporation (the "Company"), conducts its
business through its wholly-owned subsidiary, Capital Financial Corp.
("Capital"), a licensed mortgage banking company in New Jersey.  During 2003
the Company, through its American Asset Development Corporation ("Development")
subsidiary, was also engaged in the development and sale of a residential real
estate lot (the "Property") in Hunterdon County New Jersey.  Due to the
Companys sale of the Property in 2003 this area of the Companys business is
no longer being actively pursued.  Unless otherwise indicated, all references
to the Company in this report includes the Company and its subsidiaries.

   The Company was incorporated in the State of New Jersey on July 1, 1988.


BUSINESS DEVELOPMENTS OF 2001, 2002 AND 2003

     Between December 2001 and December 2002, the Company sold an aggregate
of $235,000 of its 10% Cumulative Convertible Participating Preferred Stock
to one of its directors and two non-affiliated accredited investors.

     In January 2002, the Company entered into an agreement with the
principal of a non affiliated New Jersey Limited Liability Corporation
("LLC") to conduct its mortgage banking business.  The Company has licensed
the LLCs office, which is located in Flemington, New Jersey, as a branch
office, with the New Jersey Department of Banking, as well as four
independent contractor mortgage loan solicitors.  For approximately one year
prior to this agreement the Company had been receiving mortgage loan
applications from the associate principal of the LLC.  This office acts as a

                                         2
sales office only and engages in writing mortgage loan applications which are
forwarded to the Companys main office for processing, underwriting and
closing.  The LLC is compensated by the Company based on a percentage basis
when the loan closes.  The LLC and its principal are responsible for all
expenses attributable to this office including compensation of the loan
solicitors.

     On April 5, 2002 the Company moved its offices to Parsippany, NJ.


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.  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
from Capital, the Company either uses its own funds, its warehouse line of
credit as discussed below, to fund and close the loan or has the loan funded
by the investor.  The loan documentation is then prepared and the loan is
closed in Capital's name at which time, if the loan has been funded by the
investor the loan is simultaneously assigned to the investor.  When Capital
closes a loan using its own funds, or its warehouse line of credit, the loan
is delivered to the investor after the loan is closed.

     The Company generally sells its loans on a loan-by-loan basis to mortgage
investors, which are usually savings banks.  The Company estimates that
approximately 90% of its loan applications typically close within 60 days from
the date of application.  During 2003, the Company sold loans to 6 different
investors two of which accounted for 94% of total revenues.  During 2002, the
Company sold loans to 11 different investors, three of which accounted for 70%
of total revenues.  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 March 24, 2004,
the Company had agreements with approximately 12 investors, to which the
Company may sell its loans or refer applications to.




                                     3
     As of December 31, 2003, the Company had a $10,000,000 warehouse line of
credit from a mortgage warehouse lender which provided the Company with a
facility to borrow funds secured by originated residential mortgage loans which
were temporarily warehoused and then sold.  The warehouse line of credit, which
expired on March 31, 2004, was secured by the personal guarantee of the
Companys President.  On March 11, 2004 the Company received approval of a new
$7,000,000 warehouse line of credit, secured by the personal guarantee of the
Companys President, with a commercial lending institution at more favorable
terms to the Company.  On March 22, 2004 the Company commenced utilizing this
new warehouse credit line.  The Company believes that the amount of this new
credit line will be sufficient to meet the Companys mortgage warehouse needs
at present.  The Companys net worth was initially below the minimum net worth
covenant agreed upon with the new mortgage warehouse lender.  The Company has
explained the net worth shortage to the lender which has allowed the amount of
credit line to remain at the $7,000,000 limit.  However, the warehouse lender
has the right to lower the credit line to a maximum of 20 times the net worth
of Capital but to date has not done so.  In March 2004, Capital increased its
net worth in the amount of $100,000 by borrowing $100,000 through the use of
demand notes issued to two directors of the Company.  In the event that the
warehouse lender reduces the amount of the credit line to be in-line with its
lending formulas, the Company believes it would not be initially detrimental to
its business.  The Company also believes that such a reduction in the immediate
future is unlikely.  The Company will borrow under its warehouse line of credit
only against takeout commitments issued by qualified investors who have pre-
approved the loans and committed to purchase the closed loan from the Company.
By using the warehouse funds instead of "table funding", (funding provided by
the investor who purchases the loan from the Company), 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
warehouse line has also allowed the Company to sell loans to investors which do
not table fund and only purchase closed loans from its correspondents, i.e.
Capital.

     The interest rate currently being charged to the Company on borrowed
warehouse funds outstanding is variable between 3/4% and 1 1/2% over the prime
lending rate as quoted by the Wall Street Journal.  As of March 31, 2004, the
Company had outstanding borrowings of $866,698 under the new line of credit and
zero balance borrowed under the former warehouse credit line.

     While the Company generally utilizes a warehouse line of credit for its
daily mortgage loan funding operations, whenever possible the Company employs
its available cash to fund mortgage loans.  When the Company uses its available
cash rather than the warehouse line to fund a loan it generates mortgage
interest income, as well as saves interest costs and other fees associated with
using the warehouse credit line.

     On August 9, 2000 the Company was notified by U.S. Department of Housing
and Urban Development ("HUD") that its approval with the agency as a
non-supervised lender was upgraded to what is commonly referred to as Full
Eagle status.  This approval allows the Company to act in the capacity of a
mortgage banker rather than a mortgage broker to underwrite and close loans
in its own name and HUD will insure these loans without prior approval from
the Company's sponsoring investors, as previously required.  This approval



                                   4
also allows the Company to expand its wholesale product line to include third
party origination of FHA loans through this new delegated underwriting
privilege.  Additionally, this approval allows the Company to be potentially
more competitive in the market place with these types of loans.  The Company
did not file the financial statements of Capital with HUD by the required due
date of March 30, 2004.  HUD allows for a 30 day extension of time after an
approved lender first receives written notice of a filing delinquency to come
into compliance when an annual report is not filed on time.  As of April 12,
2004 the Company had not received written notice of the delinquency from HUD
and expects to file its report in mid-April 2004 which is within HUDs
extension period.

     During 2003 the Company experienced an increase in mortgage refinancings
as a result of a general decrease in mortgage interest rates during the year.
However, as a result of actions taken by Capital since 1994 to implement
other methods of securing purchase loan originations, including those
discussed below, the Company, to a certain extent, has lessened its prior
dependence on mortgage refinancings.  Nevertheless, the Company believes that
a significant increase in mortgage rates would adversely affect its ability to
close both the number of home purchase loans and refinance loans, which would
have an adverse effect on the Companys financial position.

     As part of its efforts to expand its ability to obtain loan originations,
the Company hired a Vice President in September 2003 with approximately ten
years mortgage industry experience. He is responsible for secondary marketing,
wholesale and Internet development and assists in the day-to-day operations of
the Company.

     Since 2000 the Company has primarily focused its efforts in the wholesale
area of mortgage origination and since January 2002 to complement its
wholesale business, utilizing its own retail sales force of loan originators.
The Company decided during the fourth quarter of 2003 to increase its own
retail sales force as part of the Companys efforts to increase its flow of
business.

     In addition to its own sales force, as of March 31, 2004, the Company
estimates that it has approximately 5 wholesale correspondents which also
provide the Company with loan originations on a regular basis.

     During November 2003, a new New Jersey state law took effect which limited
the amount of compensation mortgage bankers, and to a greater extent mortgage
brokers, could receive on certain mortgage loans.  As a direct result of this
new law certain investors the Company sells loans to decided to suspend doing
business within the State of New Jersey.  In addition, the Companys primary
wholesale customer determined that it was in their best interest to transact
their mortgage business as bankers instead of as a broker which has resulted in
a reduction of the amount of business the Company receives from this customer.

The Company hopes that the increase in its own retail sales force will lessen
its dependency on wholesale customers as sources of business.  In this regard,
during February 2004, the Company hired a retail sales manager with over 6
years of mortgage banking experience and as of March 23, 2004 has added 5
additional experienced retail loan officers to its sales staff.



                                       5
     During the first quarter of 2004, the Company instituted strict pricing
guidelines and commission structures to its retail sales force that should
alleviate some of the major retail profitability risks the Company experienced
in the past, although there is no assurance the Company will be successful with
its retail sales force.

     In addition to having a steady flow of loans from a combined wholesale and
retail source, the Company has a goal of selling pools of mortgages, also
referred to as bulk sales, to institutional and other investors rather than
one mortgage loan at a time sales as it presently conducts its business.  The
Company believes it can negotiate greater revenues per mortgage sold by this
pooling method.  The Company believes there are numerous entities that it may
make bulk sales to.  Further, the Company believes, though there can be no
assurance, that through pooling it can increase its retail sales force,
wholesale customers and overall business volume, as a result of being able to
offer more competitive rates and higher compensation to its origination sources
while still increasing its net revenues per loan on a percentage basis.

     There can be no assurance the Company will be successful in its
relationships with wholesale correspondents and retail loan originators 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.

     During the fiscal year ending December 31, 2003, the Company continued
marketing its services to the public through the Internet using its website
home page linked to a major website belonging to a national provider of
mortgage loans and other financial statistics.  The national provider's
website provides the public with the Company's lending programs and interest
rates on a daily basis, in addition to the rates of other lenders that the
Company competes with. As a result of its marketing through the Internet, the
Company has received numerous inquiries which have resulted in mortgage loan
applications and closings from persons seeking mortgage financing.

     During March 2004, the Company modified its website to include sub-prime
credit loans on a brokered basis to borrowers with impaired credit and has
increased its Internet exposure to potential borrowers by linking its website
to a sub-prime lender showcase of a national provider of consumer loan
statistics.  In addition, during the fourth quarter of 2003 the Company
contracted to purchase borrower inquiry leads from a national internet source
that provides potential borrowers with 4 mortgage rate quotes from lenders who
compete with each other for the borrowers mortgage.  The Company also began
accepting credit cards from borrowers for payment of application and commitment
fees in the first quarter of 2004.  The Company continues to be encouraged with
this new source of loan originations and the results of its Internet marketing.

     To date, the number of domestic mortgages originated over the Internet,
Relative to the total mortgage origination market, while small, is still
growing.  Industry wide in 2002, only a small percentage of total mortgage
originations were generated via the Internet and in 2003, the Company saw an
increase in Internet generated business as compared with 2002.  However,
according to certain mortgage banking industry sources, by the year 2005 the
Internet could comprise 25% to 30% of total mortgage originations.  The
Company's marketing strategy is to supplement its current wholesale and retail



                                    6
personal relationship based origination business with marketing conducted over
the Internet.  There can be no assurance that the Company will be successful in
the future in using the Internet as a source of mortgage loan applications.


BUSINESS - AMERICAN ASSET DEVELOPMENT CORPORATION

     Development, which was incorporated in New Jersey in 1992 has been
involved in the development and sale of residential homes and lots on
property located in Hunterdon County, New Jersey.

     In connection with Developments activities in December 1996 Development
closed a construction mortgage financing line of credit in the amount of
$550,000.  The loan also provided a letter of credit in the amount of $111,583
(later reduced to $39,000) which the Company was required to assign and deposit
in escrow with certain municipal authorities in connection with its development
activities. The mortgage loan also provided Development with $430,417 which was
used to refinance a mortgage loan on the property then owned by Development,
funds to complete the balance of required site improvements of the property and
provided an interest reserve.  The letter of credit was cancelled by the
municipality and returned to the bank in December 2003.  The mortgage loan and
the letter of credit were secured by the personal guarantee of the Company's
President and both have since been cancelled as of December 31, 2003.

     During December 2002, the Company borrowed $100,000 on its remaining
building lot through a mortgage and note, with a personal guarantee by the
Companys President, at a 10% rate of interest which was due on July 1, 2003.
On March 21, 2003 the Company sold its remaining building lot in
Hunterdon County, New Jersey for $175,000 and paid in full the mortgage on
the lot including all interest owed.  Accordingly the original mortgage on
the subdivision was also cancelled.

    As required by the Township of Franklin, the Company has deposited $39,000
of the sales proceeds from the March 21, 2003 lot sale in an interest bearing
escrow account to guarantee and replace the letter of credit which was
cancelled and which guaranteed the balance of all improvements to be completed
as required by municipal authorities.  In December 2003, the proceeds of this
account were transferred to the Township of Franklin and will be held as a
deposit until the above mentioned improvements are completed.

     The Company does not expect that Developments operations will be a
significant part of the Companys consolidated business in the future.

SEASONALITY

     The mortgage banking industry and the sale of new homes and 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.






                                    7
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 loans 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.

GOVERNMENT REGULATION AND ENVIRONMENTAL LAWS

     The Company's mortgage origination activities are subject to a variety
of Federal 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 additional state which the Company may plan to operate.

       With respect to its real estate development activities, the Company
is responsible for Development'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 pertaining
to its material real estate development activities.

     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 March 24, 2004, the Company had 16 employees, of whom 3 were
employed as executives or in administrative positions, 2 were employed in
the processing of mortgage loans and other clerical positions, and 11 were
commission sales personnel.  None of the Company's employees are covered by
collective bargaining agreements and the Company believes that its relations
with its employees are satisfactory.






                                      8
ITEM 2.  DESCRIPTION OF PROPERTIES

     The Company's executive offices consist of 2,250 square feet of offices in
a building located in Parsippany, New Jersey and the offices are occupied
pursuant to a 36 month lease which commenced on January 1, 2003 at a rental of
$3,660 per month.  The lease also provides the Company with a 2 year term
renewal option at a monthly rental of $3,880 per month.



ITEM 3.  LEGAL PROCEEDINGS

     During August 2001 the Company and the plaintiff's settled the action
commenced in March 1993 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 in the Company's 1989 private
offering of Common Stock.

     The settlement provides for the Company to receive all 21,019 shares
of the Company's Common Stock owned by the Plaintiffs, in exchange for
payment by the Company of $80,000 in total, payable in equal quarterly
payments, without interest, through September 2004.

     In October 2003, the Company was informed that the 21,019 shares of the
Companys Common Stock, which had been escheated to the State of New York by
the stockholder was sold by the State of New York.  The Company was credited
with the proceeds of the sale in the amount of $11,936.40 and accordingly was
credited towards the balance due in the settlement.  As of March 2004, the
Company has made all payments as provided for in the settlement agreement.

     On March 25, 1999, a derivative action on behalf of two New Jersey
Limited liability companies (the "LLC's") was commenced against certain
defendants, including the Company, its President, the Company's wholly-owned
subsidiaries (collectively, the "Company Defendants"), and one of the
Company's former directors, Theodore P. Rica, Jr. ("Rica") in the Chancery
Division of the Superior Court of New Jersey, Union County.  The plaintiffs
allege that Rica and certain defendants other than the Company Defendants
("non-Company defendants"), misappropriated assets and opportunities of the
LLC's for their own use, engaged in self-dealing with respect to the LLC's,
breached the operating agreements of the LLC's, and converted and embezzled
assets and funds of the LLC's.

     The Company Defendants are alleged to have aided and abetted Rica in
converting the assets of the LLC's by accepting loans and payments from the
LLC's and Rica and repaying the loans to Rica in the form of cash and Company
stock.

     The plaintiffs seek declaratory and injunctive relief against the Company
Defendants; an accounting of (i) all shares of Company stock purchased by Rica
and certain non-Company defendants and (ii) all payments to or from the
Company and Rica and certain non-Company defendants; imposition of a lien or
equitable trust in favor of the LLC's on shares of Company stock issued in
the names of Rica and certain non-Company defendants; and certain unspecified
compensatory and punitive damages, attorneys' fees and costs.

                                       9
     In April 1999, the Court granted a preliminary injunction, which, among
other things, enjoins the Company Defendants from allowing the transfer of any
Company stock held in the name of Rica and certain other non-Company defendants
and directs the Company Defendants to provide an accounting of all such stock.
The Company, while denying any wrongdoing, did not oppose plaintiffs'
application, as it did not adversely impact the Company.

     The case is scheduled for a May 10, 2004 trial.  The plaintiffs demanded a
payment of $588,000 from the Company and related defendants and have currently
reduced their demand to $300,000.  There is no settlement offer currently
pending from the Company.  The Company denies any wrongdoing and believes that
the claims against the Company are without merit and that it has meritorious
defenses and intends to defend the action vigorously.  However, at this time,
the Company cannot predict their ultimate liability, if any that might result
from this action.

     On May 18, 1999, Rica submitted to the Company his resignation from the
Company's Board of Directors.


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, 2003.



                                PART II


ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The Company's Common Stock is traded in the over-the-counter market and
since December 8, 1994, has been quoted on the OTC Bulletin Board of the NASD
under the symbol "AAMC".

    The following table sets forth, for the periods indicated, the range of
the high and low bid prices for the Company's Common Stock as reported by
the OTC Bulletin Board.  OTC Bulletin Board prices reflect inter-dealer
quotations, which do not reflect mark-ups, mark-downs or commissions and
may not represent actual transactions.

                     2003 PRICES FOR THE QUARTER ENDED

          March 31        June 30         Sept. 30       Dec. 31
         High   Low      High   Low      High   Low    High   Low
Common
Stock   0.45  0.40       0.55  0.40      0.40   0.40   0.40   0.40

                     2002 PRICES FOR THE QUARTER ENDED

          March 31        June 30         Sept. 30       Dec. 31
         High   Low      High   Low      High   Low    High   Low
Common
Stock    0.70   0.40     0.70   0.40     0.80   0.40   0.70  0.40

                                     10
HOLDERS

     The number of record holders of the Company's Common Stock was
approximately 125 as of March 22, 2004.  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 Companys earnings and will
also be subject to the rights of any holders of stock, such as the Companys
Cumulative Convertible Participating Preferred Stock, and any other preferred
stock that may be issued that have preference of payment of dividends over
holders of Common Stock.  The Company's Board does not intend to declare any
dividends on the Common Stock in the foreseeable future, but instead intends
to retain all earnings, if any, for use in the Company's business operations.

     See Item 11 for a certain information concerning the Companys equity
compensation plans as of December 31, 2003.




ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICIES

     Estimates and assumptions are required in the determination of mortgage
loans held for sale.  Some of these judgments can be subjective and complex,
and, consequently, actual results may differ from these estimates.  For any
individual estimates or assumptions made by the Company, there may be other
reasonable estimates or assumptions.  The Company believes, however, that given
facts and circumstances, it is unlikely that applying any such other reasonable
judgment would cause a material adverse effect on the Companys consolidated
results of operations, financial position or cash flows for the periods
represented in this section.  The Companys most critical accounting policy is
described below.

     MORTGAGE LOANS HELD FOR SALE - Mortgage loans held for sale represent
mortgage loans originated and held pending sale to interim and permanent
investors. The mortgages are carried at the lower of cost or market.  The
Company generally sells whole loans without servicing rights retained.  Gains
or losses on such sales are recognized at the time legal title transfers to the
investor based upon the difference between the sales proceeds from the final
investor and the basis of the loan sold, adjusted for net deferred loan fees
and certain direct costs and selling costs.  The Company defers net loan
origination fees as components of deferred income and prepaid expenses on the
balance sheet.  Such costs are not amortized and are recognized into income as
a component of the gain or loss upon sale.




                                      11
YEAR ENDED DECEMBER 31, 2003 COMPARED TO THE YEAR ENDED DECEMBER 31, 2002

     Total revenues for the year ended December 31, 2003 were $2,349,709
compared to $1,664,892 for the year ended December 31, 2002, an increase of
$684,817 or approximately 41.1%.  The increase is partially attributable to
land sales of $175,000 during the year ended December 31, 2003 as compared to
an absence of land sales during the year ended December 31, 2002 which was
generated from American Asset Development Corporation, the Company's wholly
owned real estate development subsidiary. Capital, the Companys wholly owned
mortgage banking subsidiary, had an increase of $81,232 or approximately 65.7%
in application and commitment fee income in 2003 from $123,560 to $204,792, and
an increase of $419,928 or approximately 36.8% in mortgage origination fees
from $1,141,468 during 2002 to $1,561,396 during 2003.  In addition there was
an increase in mortgage interest income from Capital of $8,657 or approximately
2.2% from $399,864 during 2002 to $408,521 during the year ended December 31,
2003.  The increase in mortgage related originations was the result of an
increase in amount of $11,750,371, or approximately 21.1%, to $67,435,647 in
total loan closings for the year ended December 31, 2003 from $55,685,276 in
closings for 2002 and an increase in the number of closings by 63 to 321 or an
approximately 24.4% increase for 2003 from 258 mortgage closings during 2002.
This was a result of the Company increasing its profit margins, lower interest
rates throughout most of the year, and by the Company's focus on building its
wholesale and retail business and mortgage programs offered to the Company's
correspondents and sales personnel.  The increase in mortgage interest income
was a direct result of a greater amount of mortgage loans held for sale to
institutions and other investors, and to a lesser extent the Company holding a
greater number of second mortgages in its warehouse facility which carry higher
interest rates and generate greater rates of interest to the Company than first
mortgages.

     For the year ended December 31, 2003, Capital closed 321 residential
mortgage loans in the principal amount of approximately $67,435,647 compared
to 258 loans in the principal amount of approximately $55,685,276 in the prior
year, an increase in number of 63 or approximately 24.4% and an increase in
amount of $11,750,371 or approximately 21.1%.  At December 31, 2003, the
Company had approximately 20 mortgage loan applications in process in the
amount of approximately $4,938,959 compared to approximately 136 mortgage loan
applications in process in the approximate amount of $35,240,131 at December
31, 2002, a decrease in number of 116 or approximately 85.3% and a decrease
in dollar amount of approximately $30,301,172 or 86.0%. The decrease in amount
of loans was due to the Companys primary investor of fixed rate loans
suspending all business activity in New Jersey during the fourth quarter of
2003 as a direct result of a new, New Jersey law which took effect in November
2003.  In the first quarter of 2004 the Company believes it has replaced the
investor with two other investors which has reestablished the Companys
competitiveness in the marketplace. Of the 20 loans in process as of December
31, 2003, 17 loans in the approximate amount of $4,262,656, or 85.0% were from
wholesale originations and 3 loans in the approximate amount of $676,303 or
15.0% were originated by the Company's retail sales personnel and from the
Company's executive staff.  As of March 24, 2004, the Company has 57 mortgage
loan applications in process in the approximate amount of $10,730,137.  Of the
57 loans in process as of March 24, 2004, 10 loans in the approximate amount of
$2,741,571, or 17.5%, were from wholesale originations and 47 loans in the
approximate amount of $7,988,566 or 82.5% were originated by the Companys
retail sales personnel and from the Companys executive staff.

                                      12
     Total operating expenses for the year ended December 31, 2003 were
$2,424,932, an increase of $657,254 or 37.2% from the $1,767,678 incurred in
the prior year.  The $657,254 increase in operating expenses was the result of
$186,765 land development costs for the year ended December 31, 2003
compared to an absence in land development costs in the prior year, an increase
in interest expense of $82,786 or approximately 45.4% to $265,248 from $182,462
in the prior year due to interest charged on a larger amount of closed loans
and borrowed funds, an increase of $291,715 or approximately 36.9% in
commissions to $1,081,834 from $790,119 in the prior year, an increase in
employee compensation and benefits of $9,911 or approximately 2.8% to $363,516
from $353,605 from the prior year and an increase in other expenses of $79,526
or 18.0% to $521,018 from $441,492 in the prior year, and a $6,551 net loss on
derivative instruments compared to an absence of net loss in the prior year.
Other expenses are primarily attributable to legal and accounting fees,
associated warehouse and loan processing fees, and rent.  Expressed as a
percentage of revenues, operating expenses decreased to approximately 103.2% in
2003 from 106.2% in 2002, reflecting the decrease in expenses and increase in
revenues discussed above.

     Due to the foregoing, the Company incurred a net loss of $75,223 for 2003
compared to a net loss of $102,786 for 2002 and, after payment of preferred
stock dividends of $23,500 in 2003 and $20,660 in 2002, a loss attributable to
common stockholders of $98,723, or a $0.08 loss per basic and diluted share,
for the year ended December 31, 2003 compared to a loss of $123,446, or $.10
per basic and diluted share for the year ended December 31, 2002.

     The Company had a deferred tax asset at December 31, 2003, arising from
federal and state net operating loss ("NOL") carryforwards of approximately
$3,700,000 and $2,700,000 respectively.  The NOL carryforwards expire between
2004 and 2022.  A valuation allowance has been recorded in the amount of
$1,418,202 at December 31, 2003, due to the uncertainty of future utilization
of the Company's NOL carryforwards.

     No provision for income taxes was made in 2003 and 2002 due to net
operating losses.



LIQUIDITY AND CAPITAL RESOURCES

     Throughout 2002 the Company continued to take actions that it believes
are necessary to improve future operating results.  Such actions included,
but were not limited to, moving its offices to Parsippany, New Jersey during
April 2002 and expanding its space within the same building in January 2003
which has enabled the Company to reduce the cost of rent as compared to the
expired lease costs in its former office lease that expired in 2002, added
additional outside sources of mortgage loans from wholesale accounts such as
other mortgage bankers and brokers.  During December 2002, the Company's
warehouse line was increased from $6,000,000 to $8,000,000 and during January
2003, the warehouse credit line was increased to $9,000,000, and again during
April 2003 increased to $10,000,000 as the Company's mortgage closings had
increased to require a greater credit line available to fund its monthly
mortgage closing obligations.  As of March 31, 2004, the Company allowed the
$10,000,000 warehouse credit line to expire. On March 11, 2004 the Company was


                                    13
approved and commenced utilizing a new $7,000,000 warehouse credit line with a
different commercial lending institution.  The terms of this new credit line
provide the Company with lower interest rate and fees charged than with the
previous credit line.

    The Company's capital resources during the year ended December 31, 2003,
have primarily been derived from revenues generated by its mortgage banking
operations and through land sales.  The Company's cash position decreased in
2003 primarily as a result of a loss from operations of $75,223, a decrease of
$23,060 in accounts payable and a $141,068 reduction in notes payable.

     On December 31, 2003 the Company had working capital of $179,718
compared to working capital of $168,780 on December 31, 2002.

     As of December 31, 2003, the Company had cash and cash equivalents of
$345,947 compared to $376,425 at December 31, 2002, a decrease of $30,478 or
approximately 8.1%.  The decrease was primarily attributable to net cash
used in financing activities of $163,943, and by net cash used in investing
activities of $35,429. These decreases were partially offset by the net cash
provided in operating activities of $168,894.

    Net cash provided by operating activities was the result of a net loss of
$75,223, decreases in prepaid expenses and other current assets of $28,703, a
derivative loss of $6,551 and decreases in warehouse finance facility of
$3,837,600.  These amounts were partially offset by a decrease in mortgage
loans held for sale of $3,909,156 and land development costs of $163,590,
depreciation and amortization of $2,795, a decrease in deferred income of
$6,018, and a decrease in accounts payable, accrued expenses and other current
liabilities of $23,060.

     Net cash used in investing activities during the year ended December 31,
2003 were an increase in other assets of $41,800, purchase of property and
equipment of $8,795, which was offset by the proceeds of the sale of a
derivative instrument of $15,167.

     Net cash used in financing activities during the year ended December 31,
2003 were $141,068 payments on notes payable and $22,875 in preferred stock
dividends paid.

     The Company estimates that it will require additional capital in order
to successfully implement its existing operational plans. As a result, the
Company is seeking additional capital through, among other means, an infusion
of noncollateralized loans and the sale of additional equity in the Company.
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
management currently estimates is needed to meet its capital requirements.






                                       14
EFFECTS OF RECENT ACCOUNTING PRONOUNCEMENTS
     In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities, which amends and clarifies
financial accounting and reporting for derivative instruments, including
certain derivative instruments embedded in other contracts, and for hedging
activities under SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities.  SFAS No. 149 requires that contracts with comparable
characteristics be accounted for similarly and clarifies under what
circumstances a contract with an initial net investment meets the
characteristics of a derivative and when a derivative contains a financing
component.  SFAS No. 149 also amends the definition of an underlying to conform
it to language used in FIN No. 45, Guarantors Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others.  SFAS No. 149 was effective for contracts entered into or modified
after June 30, 2003, with certain exceptions.  The adoption of SFAS No. 149 did
not have a impact on the Companys historical financial position or results of
operations.

     In March, 2004 the Securities and Exchange Commission issued Staff
Accounting Bulletin No.105- Application of Accounting Principles to Loan
Commitments.  The staff accounting bulletin summarizes the view of the SEC
staff regarding the application of generally accepted accounting principles
to loan commitments accounted for as derivative instruments.  The bulletin
indicates that loan commitments should be accounted for as derivative
instruments and measured at fair value.  The staff also indicated a Company
should disclose it accounting policy for loan commitments pursuant to APB
Opinion no. 22 Disclosure of Accounting Policies.  The staff also indicates
that they would expect all loan commitments accounted for as derivatives and
entered into after March 31, 2004 to apply the accounting described in this
bulletin.  The Company believes that this interpretation by the SEC staff will
not have a material effect on the Companys consolidated results of operations
and financial condition.



ITEM 7.  FINANCIAL STATEMENTS


FINANCIAL STATEMENTS
                                                        PAGE NO.
Independent Auditors Report                               F-1

Consolidated Balance Sheets - December 31, 2003 and 2002   F-2
Consolidated Statements of Operations -
 for the years ended December 31, 2003 and 2002            F-3
Consolidated Statements of Stockholders' Equity -
 for the years ended December 31, 2003 and 2002            F-4
Consolidated Statements of Cash Flows - for the years
 ended December 31, 2003 and 2002                          F-5
Notes to Consolidated Financial Statements             F-6 - F-15






                                  15
ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURES

     None.

Item 8A. Controls and Procedures.

     An evaluation was carried out under the supervision and with the
participation of the Company's management, including the Chief Executive
Officer (CEO) who also serves as the Companys Chief Financial Officer (CFO),
of the effectiveness of the Company's disclosure controls and procedures as of
December 31, 2003.  Based on that evaluation, the CEO/ CFO has concluded that
the Company's disclosure controls and procedures are effective to provide
reasonable assurance that information required to be disclosed by the Company
in reports that it files or submits under the Securities Exchange Act of 1934
is recorded, processed, summarized and reported within the time periods
specified in Securities and Exchange Commission rules and forms.  During the
quarter ended December 31, 2003, there were no changes in the Company's
internal control over financial reporting that have materially affected, or are
reasonably likely to materially affect, its internal control over financial
reporting.




                                 PART III

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

The Company's executive officers and directors are as follows:

                                          POSITION WITH
      NAME                AGE              THE COMPANY
Richard G. Gagliardi      57          Chairman of the Board, President,
                                      Chief Executive Officer and Chief
                                      Financial Officer

Bernard Gitlow            77          Director

Russell D. Frayko         41          Director

     RICHARD G. GAGLIARDI has been Chairman, President, Chief Executive
Officer and Chief Financial 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.

     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.

                                         16
     RUSSELL FRAYKO has been a director of the Company since June 2002.  He has
been employed as President of Joint Venture Antiques since 1983, a company in
the antique and modern furniture restoration and sales business.  Mr. Frayko is
also President of Joint Venture Promotions, an affiliate company involved in
the promotion of furniture and antique dealer trade shows.

     Directors are elected 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 by the Company's Board
of Directors.  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.

     The Company has an Audit Committee of the Board of Directors, which
supervises the audit and financial procedures of the Company.  The members of
the Audit Committee are Messrs. Gitlow (Chairman) and Frayko, each of whom is
an independent director as defined under the rules of the National
Association of Securities Dealers, Inc.  The Companys Audit Committee does not
have a member that qualifies as a financial expert under the federal
securities laws.  Each of the members of the Audit Committee have been active
in the business community and have broad and diverse backgrounds, and financial
experience.  The Company believes that the current members of the Audit
Committee are able to fully and faithfully perform the functions of the Audit
Committee and that the Company does not need to install a financial expert on
the Audit Committee.


Compliance with Section 16(a) of the Securities Exchange Act

     Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10 percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(SEC).  Officers, directors, and greater than 10 percent stockholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.

     To the Companys knowledge, based solely on a review of the copies of such
reports furnished to the Company, all reports under Section 16(a) required to
be filed by its officers, directors and greater than ten-percent beneficial
owners were timely filed.


Code of Business Conduct and Ethics


     The Company has not adopted a code of ethics that applies to its principal
executive officer, principal financial officer, principal accounting office
(controller) and persons performing similar functions

     In light of the fact that the Company's Chief Executive Officer acts as
the Company's principal executive, accounting and financial officer and the
relatively small number of persons employed by the Company, the Company did not



                                        17
previously adopt a formal written Code of Business Conduct and Ethics but is in
the process of developing a comprehensive Code of Business Conduct and Ethics
to cover all of its employees. Copies of the Company's Code of Business Conduct
and Ethics, which is expected to be adopted during the second quarter of 2004,
can be obtained, when available, upon written request, addressed to:

American Asset Management Corporation
1280 Route 46 West
Parsippany, New Jersey 07054
Attention: Chief Executive Officer



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, 2003 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, 2003.


                        SUMMARY COMPENSATION TABLE

                         ANNUAL COMPENSATION     LONG-TERM COMPENSATION
   Name and Principal                        Other Annual       Awards
   Position                Year    Salary    Compensation  Securities Under-
                                                            Lying Options(#)

 Richard G. Gagliardi     2003   $139,970      $12,225(1)            0
 Chairman of the Board,   2002    110,000       11,225(1)            0
 President, Chief         2001    110,000       11,225(1)       25,000(2)
 Executive Officer and
 Chief Financial Officer

(1)  Represents the approximate reimbursement cost of an automobile leased and
insured by Mr. Gagliardi for business purposes. Also includes a 2% contribution
aggregating approximately $2,680 during 2003 and $2,000 during 2002 in the
Simple IRA retirement plan established in June 1998 by Capital for all
employees.

(2) Represents options granted to Mr. Gagliardi in his capacity as a director
of the Company.


OPTION GRANTS IN THE LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES

     No options were granted to the named executive during fiscal 2003.

     The following table sets forth information concerning the number of
options owned by the named executive and the value of any in-the-money
unexercised options owned by the named executive as of December 31, 2003.  No
options were exercised by the named executive during the year ended
December 31, 2003:

                                       18

            AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUES

                          Number of Securities    Value of Unexercised
                         Underlying Unexercised      In-The-Money
                       Options/SARs at 12/31/2003  Options/SARs at 12/31/2003

                       Exercisable  Unexercisable  Exercisable  Unexercisable

Richard G. Gagliardi       0              0           $0             $0


     The year-end values for unexercised in-the-money options represent the
positive difference between the exercise price of the options and the year-end
market value of the Companys Common Stock. An option is "in-the-money" if the
year-end fair market value of the Companys Common Stock exceeds the option
exercise price. The closing sale price of the Companys Common Stock on
December 31, 2003 was $0.40.


COMPENSATION OF DIRECTORS

     Directors of the Company receive $200 for each regular meeting they attend
and $400 for attending an annual meeting.  During 2003 the Company paid a total
of $800 in director fees for Board of Director meeting attendance.  There were
no options granted during the year ended December 31, 2003.



ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
          RELATED SHAREHOLDER MATTERS

     The following table sets forth certain information as of March 24, 2004
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:

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

Richard G. Gagliardi(1)       528,490 (1)              40.1%
Bernard Gitlow                180,751 (1)(5)           13.7%
Nathan Low                    149,000 (1)(3)           11.3%
Sunrise Foundation Trust       68,000 (1)(4)            5.1%
Brian Gonnelli                 68,000 (1)               5.1%
Russell Frayko                 61,301 (6)(7)            4.7%

All directors and executive
officers as a group (three persons) 770,542 (5),(6),(7) 58.9%
---------------------------------


                                         19
(1)  The address of Mr. Gagliardi is 1280 Route 46 West, Parsippany, New Jersey
07054.  The address of Mr. Low and Sunrise Foundation Trust is 135 E. 57th
Street, New York, NY 10022.  The address of Mr. Gonnelli is 22 Kathryn Drive,
Whippany, NJ 07981.  The address of Mr. Gitlow is 1280 Route 46 West,
Parsippany, NJ 07054.

(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)  According to a joint Schedule 13D filed with the Securities and Exchange
Commission represents (i) 31,000 shares of Common Stock owned by Mr. Low (ii)
68,000 shares of Common Stock owned by the Sunrise Foundation Trust, of which
Mr. Low is a trustee and (iii) 50,000 shares of Common Stock owned by the
Nathan Low Individual Retirement Account f/b/o Low.

(4)  According to a joint Schedule 13D filed with the Securities and Exchange
Commission these shares are also beneficially owned by Nathan Low as reflected
in footnote 3 (iii) above.

(5) Includes 175,000 shares of Common Stock issuable upon conversion of
150,000 shares of the Companys 10% Series A Cumulative Convertible
Participating Preferred Stock and 25,000 shares of the Company 10% Series B,
Cumulative Convertible Participating Preferred Stock.

(6) Includes 26,301 shares of Common Stock owned by Mr. Fraykos family.

(7) Includes 10,000 shares of Common Stock issuable upon conversion of 10,000

shares of the Companys 10% Series A Cumulative Convertible Participating
Preferred Stock.


EQUITY COMPENSATION PLAN

The following table provides certain information with respect to all of the
Companys equity compensation plans in effect as of December 31, 2003

                   Number of Securities  Weighted Average  Number of Securities
                   to be issued upon     exercise price of  remaining available
                   exercise of out-      outstanding        for issuance under
                   standing options,     options, warrants  compensation plans
                   warrants and rights    and rights        (excluding securi-
                                                             ties reflected in
                                                              column (a))
Plan Category:             (a)                (b)                   (c)
Equity compensation
Plans approved by
security holders:             0             $0.00                    0


Equity compensation
Plans not approved by
Security holders:             0             $0.00                    0

Total                         0             $0.00                    0


                                    20

ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     During March 2004 the Company borrowed a total amount of $100,000 in
demand notes at an annual interest rate of 10% from two directors of the
Company, Bernard Gitlow and Russell Frayko, in the amount of $50,000 each.




ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

(a)     EXHIBITS

      *3.1(a) Certificate of Incorporation as Amended
     **3.1(b) Amendment to Certificate of Incorporation filed
                February 1995
    ***3.1(c) Amendment to Certificate of Incorporation filed
                January 1998
    ***3.1(d) Amendment to Certificate of Incorporation filed
                December 2001
    ***3.1(e) Amendment to Certificate of Incorporation filed
                December 2002
      *3.2    By-Laws
   ***10.1    Executive Office Lease
      21      Subsidiaries of the Company
      31.1   Certification of the Principal Executive Officer and
              Chief Financial Officer, pursuant to Section 302
              of the Sarbanes-Oxley Act of 2002.
      32.1   Certification of Principal Executive Officer and
              Chief Financial Officer, pursuant to Section 906
              of the Sarbanes-Oxley Act of 2002.

_________________________

  * 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, 1994.

*** Incorporated by reference to the corresponding exhibit in the
    Companys Form 10-KSB for the year ended December 31, 2002.

(b)  CURRENT REPORTS ON FORM 8-K

     No reports on Form 8-K were filed by the Company during the quarter
ended December 31, 2003







                                       21
Item 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

Independent Auditor Fees

     Fees for professional services provided by the Companys independent
auditors, WithumSmith+Brown, P.C., for the years ended December 31, 2003 and
2002 are as follows:

                                           2003                2002
    Audit Fees                           $43,000             $40,000
    Audit-related fees                     1,500                 -0-
    Tax fees                                 -0-               5,500
    All other fees                           -0-                 -0-
    Totals                               $44,500             $45,500



Audit Fees

     Audit fees consist of fees relative to the audit of the Companys year-end
financial statements and review of the Companys quarterly reports on Form
10-QSB.

Audit Related Fees

     Audit Related Fees consists of the Companys agreed upon procedures
engagement relating to the Companys HUD filing for the year ended
December 31, 2003.

Tax Fees

     Tax fees consist of fees relative to preparation of the Companys
consolidated United States federal and state tax returns in 2003 and 2002.

Audit Committee Pre-Approval Policy

     It is the policy of the Companys audit committee to approve all
engagements of the Companys independent auditors to render audit or non-audit
services prior to the initiation of such services.











                                        22


                                  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)



                                     /S/_Richard G. Gagliardi________
                04/14/04             Richard G. Gagliardi
                  Date               President




     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.



                                     /S/_Richard G. Gagliardi________
                04/14/04                Richard G. Gagliardi
                  Date                  President
                                        (Principal Executive,
                                         Financial and Accounting
                                         Officer)
                                        (Signature)


                04/14/04             /S/_Bernard Gitlow______________
                  Date                  Bernard Gitlow
                                        Director
                                        (Signature)


                04/14/04             /S/_Russell Frayko________________
                  Date                  Russell Frayko
                                        Director
                                        (Signature)











                                    23







INDEPENDENT AUDITORS REPORT





To the Board of Directors and Stockholders,
American Asset Management Corporation and Subsidiaries:

We have audited the consolidated balance sheets of American Asset Management
Corporation and Subsidiaries as of December 31, 2003 and 2002, and the related
consolidated statements of operations, stockholders' equity and cash flows for
the years then ended.  These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of American Asset
Management Corporation and Subsidiaries as of December 31, 2003 and 2002, and
the consolidated results of their operations and their cash flows for the years
then ended in conformity with accounting principles generally accepted in the
United States of America.



                                              /s/       WithumSmith+Brown, P.C.




New Brunswick, New Jersey
March 24, 2004, except for the
second paragraph of Note 12
as to which the date is March 30, 2004






                                         F-1

               AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES
                            CONSOLIDATED  BALANCE SHEETS
                             DECEMBER 31, 2003 AND 2002
                                                          2003          2002
ASSETS
Current Assets:
 Cash                                                 $  345,947    $  376,425
 Mortgage loans held for sale                            833,828     4,742,984
 Prepaid expenses and other current assets                15,971        44,674
     Total Current Assets                              1,195,746     5,164,083

Land and Development Costs                                   --        163,590

Property and Equipment, Net                                8,179         2,178

Other Assets                                              58,924        17,124

     TOTAL ASSETS                                     $1,262,849    $5,346,975

LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities:
 Warehouse line of credit                             $  813,701    $4,651,301
 Deferred income                                           5,619        11,637
 Derivative instrument                                    21,718            --
 Accounts payable, accrued expenses and
  other current liabilities                              156,985       179,420
 Current maturities of notes payable                      18,005       152,945
     Total Current Liabilities                         1,016,028     4,995,303

Notes Payable, Net of Current Maturities                     --         18,064

Stockholders Equity:
 Series B Cumulative Convertible Participating
 Preferred stock, no par value; (liquidation
 Preference $25,000); 300,000 shares authorized,
 25,000 shares issued and outstanding                     25,000        25,000

Series A Cumulative Convertible Participating
 Preferred stock, no par value (liquidation
 preference $210,000); 600,000 shares authorized,
 210,000 shares issued and outstanding                   205,000       205,000
Common stock, no par value; 10,000,000 shares
 authorized; 1,316,989 shares issued; 1,316,989
 and 1,295,970 shares outstanding at
 December 31, 2003 and 2002, respectively             3,852,825      3,852,825
Additional paid-in capital                              171,998        231,207
Accumulated deficit                                  (4,008,002)    (3,909,279)
                                                        246,821        404,753
Treasury stock, at cost;
 21,019 shares at December 31, 2002                      --            (71,145)
Total Stockholders Equity                              246,821        333,608

TOTAL LIABILITIES AND STOCKHOLDERS EQUITY           $1,262,849     $5,346,975

The Notes to Consolidated Financial Statements are an integral part of these
statements.
                                    F-2
             AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


                                                        2003         2002
Revenues:

Mortgage origination fees                           $1,561,396   $1,141,468
Land sales                                             175,000          --
Application and commitment fees                        204,792      123,560
Mortgage interest income                               408,521      399,864

     Total Revenues                                  2,349,709    1,664,892


Expenses:
Employee compensation and benefits                     363,516      353,605
Commissions                                          1,081,834      790,119
Other expenses                                         521,018      441,492
Land and development costs                             186,765          --
Losses on derivative instruments, net                    6,551          --
Interest expense                                       265,248      182,462

     Total Expenses                                  2,424,932    1,767,678

Net Loss                                               (75,223)    (102,786)

Dividends on Preferred Stock                            23,500       20,660

Net Loss Attributable to Common Stockholders        $  (98,723)    (123,446)

Net Loss Per Common Share:

     Basic                                              $(0.08)      $(0.10)

     Diluted                                            $(0.08)      $(0.10)

Weighted Average Number of Shares of Common

     Stock Outstanding:

     Basic                                           1,301,225    1,295,970

     Diluted                                         1,301,225    1,295,970


The Notes to Consolidated Financial Statements are an integral part of these
statements.


                                     F-3





              AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

Series B            Series A
Cumulative          Cumulative
Convertible         Convertible
Participating       Participating                       Additional
Preferred Stock     Preferred Stock     Common Stock      Paid-In    Accumulated
Shares  Amount      Shares  Amount    Shares   Amount    Capital     Deficit

Treasury Stock
Shares    Amount    Total

Balance, January 1, 2002
  --      --     150,000   $150,000 1,316,989  $3,852,825  $231,207 $(3,785,833)
 (21,019) $(71,145)$377,054

Series A Preferred Stock Issued For Cash
  --      --      60,000     55,000        --          --        --          --
      --        --   55,000

Series B Preferred Stock Issued For Cash
25,000  25,000      --          --         --          --        --          --
     --       --   25,000

Preferred Stock Dividends
  --      --         --        --          --          --        --     (20,660)
    --       --   (20,660)

Net Loss
  --      --         --        --          --          --        --    (102,786)
     --       --  (102,786)

Balance, December 31, 2002
25,000   25,000 210,000   205,000   1,316,989   3,852,825   231,207  (3,909,279)
(21,019) (71,145)  333,608

Sale of Treasury Stock
    --     --       --        --           --          --   (59,209)         --
  21,019   71,145    11,936

Preferred Stock Dividends
  --       --       --        --           --          --        --     (23,500)
     --       --   (23,500)

Net Loss
  --       --       --        --           --          --        --     (75,223)
     --       --   (75,223)

Balance, December 31, 2003
25,000 $25,000  210,000  $205,000   1,316,989  $3,852,825  $171,998 $(4,008,002)
     --        --  $246,821

 The Notes to Consolidated Financial Statements are an integral part of these
statements.
                                     F-4
             AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                         2003          2002
Cash Flows From Operating Activities:
Net loss                                             $  (75,223)    $(102,786)
Adjustments to reconcile net loss to net cash
 Provided by(used in) operating activities:
 Depreciation and amortization                            2,795         3,552
 Losses on derivative instrument, net                     6,551          --
Changes in:
 Mortgage loans held for sale                         3,909,156    (1,331,096)
 Prepaid expenses and other current assets               28,703        17,905
 Land and development costs                             163,590        (5,088)
 Warehouse line of credit                            (3,837,600)    1,314,943
 Deferred income                                         (6,018)       (6,354)
 Accounts payable, accrued expenses and other
  current liabilities                                   (23,060)       18,412
Net Cash Provided by(Used in)Operating Activities       168,894       (90,512)

Cash Flows From Investing Activities:
 Purchases of property and equipment                     (8,796)         (836)
 Proceeds from sale of derivative instrument             15,167            --
 Increase in other assets                               (41,800)           --
   Net Cash Used In Investing Activities                (35,429)         (836)

Cash Flows From Financing Activities:
 Payments on notes payable                             (141,068)      (20,136)
 Proceeds from issuance of notes payable                     --       125,000
 Proceeds from issuance of Series B Prefd Stock             --        25,000
 Proceeds from issuance of Series A Prefd Stock             --        55,000
 Payment of preferred stock dividends                   (22,875)      (15,410)
   Net Cash Provided by(Used In) Financing Activities (163,943)      169,454

Net Increase (Decrease) In Cash                         (30,478)       78,106

Cash at Beginning of Year                               376,425       298,319

Cash at End of Year                                    $345,947       376,425

Supplemental Disclosure of Cash Flow Information:
 Cash paid during the year for:
  Interest                                           $  275,176    $  179,504
  Income taxes                                       $   10,133    $       --

Supplemental Schedule of Non-Cash Investing and
 Financing Activities:
 Purchase of treasury stock resulting in
  reduction of note payable                          $   11,936    $       --
 Accrued preferred stock dividends                   $    5,875    $    5,250

The Notes to Consolidated Financial Statements are an integral part of these
statements.


                                    F-5
AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES- NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS.

NOTE 1 - Significant Accounting Policies:


NATURE OF BUSINESS OPERATIONS
     American Asset Management Corporation (the Company) through its
wholly owned subsidiary, Capital Financial Corp. (CFC) is engaged in
originating and selling loans secured primarily by first mortgages on
one-to-four family residential properties. CFC is a licensed mortgage
banker in the State of New Jersey.

PRINCIPLES OF CONSOLIDATION
     The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries.  All material intercompany
accounts and transactions have been eliminated in consolidation.

     Geographic and Customer Concentration and Significant Risks
The Company's mortgage banking activities are primarily concentrated in
the New Jersey market.

     The Company's origination and premium fees are derived from loan sales
to various investors and interest revenue from the use of Company funds to
fund loans.  During 2003, the Company sold loans to 6 different investors,
2 of which accounted for 94 percent of total revenues.  During 2002, the
Company sold loans to 11 different investors, three of which accounted for 70
percent of total revenues.

     The Company receives all of its funds for mortgage banking activities
from one mortgage warehouse lender (see Note 7).

USE OF ESTIMATES
     In preparing financial statements in conformity with accounting
principals generally accepted in the United States of America,
management makes estimates and assumptions in determining the reported
amounts of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

PROPERTY AND EQUIPMENT
     Property and equipment are stated at cost.  Depreciation and
amortization are computed by using the straight-line method over the
estimated useful lives of three to five years for computer equipment, furniture
and fixtures, and office equipment and over the life of lease for leasehold
improvements.  Repairs and maintenance expenditures are expensed as incurred.
Expenditures for betterment and major renewals are capitalized and, therefore,
are included in property and equipment.

RECLASSIFICATIONS
     Certain items for 2002 have been reclassified to conform with the 2003
presentation.  There was no effect on the Companys net loss for 2002 as a
result of these reclassifications.



                                    F-6
AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES- NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS.

Note 1 - Significant Accounting Policies (Continued):

DERIVATIVE INSTRUMENTS
     The Company periodically purchases derivative instruments to stabilize its
risk associated with market fluctuations in interest rates.  The purchase of
these derivative instruments does not constitute an effective hedging strategy
in accordance with generally accepted accounting principles and therefore these
purchases are treated as speculative investments.  The fair market value of the
derivative instruments are marked to market at each reporting date on the
Companys balance sheet and all unrealized gains and losses are recognized in
earnings currently.

CASH AND CASH EQUIVALENTS
     The Company considers cash and cash equivalents as amounts on hand, on
deposit in financial institutions and highly liquid investments
purchased with an original maturity of three months or less.

MORTGAGE LOANS HELD FOR SALE
     Mortgage loans held for sale represent mortgage loans originated and held
pending sale to interim or permanent investors.  The mortgages are carried at
the lower of cost or market as determined by outstanding
commitments from investors or current investor yield requirements
calculated on the aggregate loan basis (see Note 2).  The Company
generally sells whole loans without servicing retained.  Gains or losses
on such sales are recognized at the time legal title transfers to the
investor based upon the difference between the sales proceeds from the
final investor and the basis of the loan sold, adjusted for net deferred
loan fees and certain direct costs and selling costs.  The Company
defers net loan origination fees as a component of deferred income on
the balance sheet.  Such costs are not amortized and are recognized into
income as a component of the gain or loss upon sale.

REVENUE AND COST RECOGNITION

Gain on Sale
     The Company records gain on sale of mortgages in accordance with
SFAS No. 140, which provides accounting and reporting standards for
transfers and servicing of financial assets and extinguishments of
liabilities.  This statement also provides standards for distinguishing
transfers of financial assets that are sales from transfers that are
secured borrowings.  The Company does not engage in servicing mortgages
held for sale.  The components of the Companys gain or loss on sales of
loans are as follows:

(A) Origination and Premium Fees
     The Company accounts for origination and premium fee income on mortgages
held for sale in conformity with Statement of Financial Accounting Standards
No. 91.  This statement requires that origination and premium fees be offset by
their direct loan costs and the net deferred income is recognized at the time
the loan is sold.



                                    F-7
AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES - NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS.

Note 1 - Significant Accounting Policies (Continued):

(B) Application and Commitment Fees
The Company's application fees for processing mortgage applications and
commitment fees for committing to fund a loan are recorded in the statement of
operations at the time the loan is sold or when the specific processing service
(i.e. appraisal) has been provided and the fee is non-refundable.

(C) Loan Origination Costs
Loan fees, discount points and certain direct origination costs are recorded as
an adjustment to the cost of the loan and are included in gain on sales of
loans when sold.  The Company estimates that direct loan origination costs,
reported as operating expenses, were approximately $1,192,000 and $884,000 for
the years ended December 31, 2003 and 2002, respectively.

Interest Recognition
     Interest income is accrued as earned.  Loans are placed on a nonaccrual
status when any portion of the principal or interest is 90 days past due or
earlier when concern exists as to the collectibility of principal or interest.
The Company had no loans on nonaccrual status at December 31, 2003 and 2002.
Loans return to accrual status when principal and interest become current and
are anticipated to be fully collectible.  Interest expense is recorded on
outstanding borrowings on the Companys warehouse line of credit based on the
lines effective interest rate.  The gross amounts of interest income and
interest expense are presented as separate items on the statement of
operations.

CONCENTRATION OF CREDIT RISK
     The Company maintains cash balances, at times, with financial institutions
in excess of amounts insured by the Federal Deposit Insurance Corporation.
Management monitors the soundness of these institutions and considers the
Companys risk negligible.

NET LOSS PER COMMON SHARE
     Net loss per share is computed by dividing net loss attributable to common
stockholders by the weighted number of common shares outstanding. Diluted loss
per share reflects the potential dilution that could occur if securities or
other contracts to issue common stock were exercised or converted into common
stock or resulted in the issuance of common stock that then shared in the
earnings of the Company.  Basic and diluted net loss per common share for 2003
and 2002 are the same because the effect of outstanding stock options and
preferred stock conversions would be anti-dilutive.

STOCK-BASED COMPENSATION
As permitted by the provisions of Statement of Financial Accounting Standards
No. 123, Accounting for Stock-Based Compensation (SFAS 123), the Company
follows Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees (APB 25) and related interpretations in accounting for
its employee stock option plans.  Under APB 25, if the exercise price of the
Companys employee stock options equals or exceeds the fair market value of the



                                   F-8
AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES - NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS.

Note 1 - Significant Accounting Policies (Continued):

underlying stock on the date of grant, no compensation expense is recognized.
Stock options and warrants issued to non employees are accounted for based on
the fair value of the consideration received or the fair value of the equity
instruments issued, whichever is more reliably measurable.  There were no
stock options granted in 2003 and 2002.

INCOME TAXES
     Deferred income tax assets and liabilities are computed for differences
between financial statement and tax basis of assets and liabilities that will
result in future taxable or deductible amounts, based on the enacted tax laws
and rates to the periods in which the differences are expected to affect
taxable income.  Valuation allowances are established, when necessary, to
reduce deferred tax assets to the amount expected to be realized.  The primary
deferred tax items are net operating loss carryforwards.  All deferred tax
assets are fully reserved for because it is more likely than not that the
benefit will not be realized.

EFFECTS OF RECENT ACCOUNTING PRONOUNCEMENTS
     In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133
on Derivative Instruments and Hedging Activities, which amends and clarifies
financial accounting and reporting for derivative instruments, including
certain derivative instruments embedded in other contracts, and for hedging
activities under SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities.  SFAS No. 149 requires that contracts with comparable
characteristics be accounted for similarly and clarifies under what
circumstances a contract with an initial net investment meets the
characteristics of a derivative and when a derivative contains a financing
component.  SFAS No. 149 also amends the definition of an underlying to conform
it to language used in FIN No. 45, Guarantors Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others.  SFAS No. 149 was effective for contracts entered into or modified
after June 30, 2003, with certain exceptions.  The adoption of SFAS No. 149 did
not have a impact on the Companys historical financial position or results of
operations.

     In March, 2004 the Securities and Exchange Commission issued Staff
Accounting Bulletin No.105- Application of Accounting Principles to Loan
Commitments.  The staff accounting bulletin summarizes the view of the SEC
staff regarding the application of generally accepted accounting principles to
loan commitments accounted for as derivative instruments.  The bulletin
indicates that loan commitments should be accounted for as derivative
instruments and measured at fair value.  The staff also indicated a Company
should disclose it accounting policy for loan commitments pursuant to APB
Opinion no. 22 Disclosure of Accounting Policies.  The staff also indicates
that they would expect all loan commitments accounted for as derivatives and
entered into after March 31, 2004 to apply the accounting described in this
bulletin.  The Company believes that this interpretation by the SEC staff will
not have a material effect on the Companys consolidated results of operations
and financial condition.


                                    F-9

AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES- NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS.


Note 2 - Fair Value of Financial Instruments:

     The fair value of the Companys mortgage loans held for sale, warehouse
line of credit, notes payable and derivative instrument approximate book value
as of December 31, 2003 and 2002 due to the short term maturity of these items.


Note 3 - Property and Equipment:
Property and equipment at December 31 consist of:

                                                  2003         2002

Computer equipment                           $   79,529   $   72,197
Furniture and fixtures                           19,291       19,291
Office equipment                                 46,080       44,616
Leasehold improvements                            2,240        2,240
                                                147,140      138,344
Less:  Accumulated depreciation
       and amortization                         138,961      136,166

Property and Equipment, Net                  $    8,179   $    2,178

Depreciation and amortization expense was $2,795 and $3,552 for the
years ended December 31, 2003 and 2002, respectively.


Note 4 - Retirement Plan:
     The Company maintains a SIMPLE individual retirement account plan under
section 408(p) of the Internal Revenue Code whereby eligible employees are
permitted salary reduction contributions.  The Company may make nonelective
contributions equal to 2 percent of compensation for the calendar year to the
SIMPLE IRA of each eligible employee.  For the years ended December 31, 2003
and 2002, the Company contributed $3,450 and $4,248 to employee retirement
plans.


Note 5 - Accounts Payable, Accrued Expenses and Other Current Liabilities:
Accounts payable, accrued expenses and other current liabilities consist of
the following at December 31:
                                                 2003         2002

Accounts payable                                $ 97,646   $120,030
Accrued expenses and other current liabilities    59,339     59,390
     Total                                      $156,985   $179,420







                                    F-10
AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES- NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Note 6 - Notes Payable:
Notes payable consists of the following at December 31:
                                                  2003        2002
Note payable (face amount $18,750 and $50,000
as of December 31, 2003 and 2002, respectively)
imputed interest at 7.5 percent per annum,
quarterly payments of $6,250, personally
guaranteed by the Companys President,
final payment due September 2004                 $18,005   $ 46,009

Mortgage payable, interest at 10 percent
per annum, secured by land, due July 2003             --    100,000

Stockholders notes payable,interest at
10 percent per annum, due July 2003                   --     25,000
                                                  18,005    171,009

Less: Current Maturities                          18,005    152,945

Notes Payable, Net of Current Maturities         $    --   $ 18,064

Interest expense paid on the stockholders notes payable amounted
to $1,460 and $ 0, for the years ended December 31, 2003 and 2002,
respectively.

Note 7 - Warehouse Line of Credit:
     The Company had a warehouse line of credit of $10,000,000 with a financial
institution, which expired on March 31, 2004.  This line bore interest at prime
plus 1.75 percent.  The prime rate at December 31, 2003 was 4 percent.  Funds
from this line of credit were used for short-term financing of mortgage loans
held for sale, and are secured by residential mortgage loans and a personal
guarantee of the Companys President.  The investor paid the line of credit at
the time of the closing.  As of December 31, 2003, three loans, amounting to
$833,828 had yet to be delivered to investors, resulting in a warehouse loan
payable of $813,701.  As of December 31, 2002, twenty two loans, amounting to
$4,742,984, had yet to be delivered to investors, resulting in a warehouse loan
payable of $4,651,301.

     The warehouse line of credit contained requirements for maintaining
defined levels of net worth, maximum leveraged ratio and a compensating cash
balance of $10,000.  The Company was not in compliance with the covenant
requirement of maintaining as of December 31, 2003 a minimum net worth, as
defined, of $500,000 in the financial statements of CFC and maintaining a
compensating cash balance of $10,000 as of December 31, 2003. On March 11,
2004, the Company executed a new warehouse line agreement (see Note 12).

Note 8 - Income Taxes:
     There was no provision for income taxes for the years ended December 31,
2003 and 2002, due to the losses generated in each year.  All deferred tax
assets are fully reserved for because it is more likely than not that the
deferred tax asset will not be realized.


                                  F-11
AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES- NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Note 8 - Income Taxes (Continued):

Deferred income taxes, consisting primarily of net operating loss
carryforwards, are summarized as follows at December 31:

                                               2003         2002

Deferred Income Tax Asset                  $1,418,202   $1,432,473
Valuation Allowance                        (1,418,202)  (1,432,473)
Net Deferred Income Tax Asset                      --           --
Deferred Income Tax Liability                      --           --
Net Deferred Income Tax Liability          $       --   $       --

     The Company has federal net operating loss carryforwards available to
offset future taxable income of approximately $3,700,000 at December 31, 2003,
which expire in 2006 through 2022, and state net operating loss carryforwards
of approximately $2,700,000, which expire in 2005 through 2010.  The use of the
Companys New Jersey net operating loss carryforwards is suspended until 2004.

     For the years ended December 31, 2003 and 2002, the Companys effective
tax rate differs from the federal statutory rate principally due to net
operating losses and other temporary differences for which no benefit was or
has been recorded.


Note 9 - Stockholders Equity:

     The Company authorized the issuance of 300,000 shares of Series B
Cumulative Convertible Participating Preferred Stock with no par value.  The
holder is entitled to annual dividends of $.10 per preferred share, accruing
from the date of original issuance and payable in cash on a quarterly basis at
a rate of $.025 per preferred share.  Series B Preferred shares rank equal to
the Series A Preferred Stock and rank senior to the common stock with respect
to dividends and liquidating distributions and senior to any future capital
stock that ranks junior to the preferred shares.  Each preferred share may be
converted by the holders thereof, at any time, into one share of common stock
of the Company at a conversion price equal to $1.00, subject to certain
adjustments, which include: payment of stock dividends on common stock, common
stock splits, or combinations affecting the common stock and recapitalizations,
mergers or reorganizations.  Preferred stock holders have no voting rights,
except where required by law or upon conversion to common stock.

     On December 10, 2002, the Company sold 25,000 shares of this Series B
Preferred stock to a Company director for $25,000.

     The Company has also authorized the issuance of 600,000 shares of
Series A Cumulative Convertible Participating Preferred Stock with no par
value.  The holder is entitled to annual dividends of $.10 per preferred
share, accruing from the date of original issue and payable in cash on a
quarterly basis at a



                                   F-12
AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES- NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Note 9 - Stockholders Equity (Continued):

rate of $.025 per preferred share.  Preferred shares rank senior to the common
stock with respect to dividends and liquidating distributions or any future
capital stock that ranks junior to the preferred shares.  Each preferred share
may be converted by the holders thereof, at any time, into one share of common
stock of the Company at a conversion price equal to $1.00, subject to certain
adjustments, which include: payment of stock dividends on common stock, common
stock splits, or combinations affecting the common stock and recapitalizations,
mergers or reorganizations.  Preferred stock holders have no voting rights,
except where required by law or upon conversion to common stock.

     For the year ended December 31, 2002, the Company sold 60,000 shares of
this Series A Preferred stock to Company directors and unrelated third parties
for net proceeds of $55,000.

     Cumulative unpaid declared dividends on all preferred stock totaled
$5,875, as of December 31, 2003.

     In August 2001, the Company issued a note payable (See Note 6) to purchase
21,019 shares of its outstanding common stock as part of a settlement.  In
2003, the treasury stock was sold by a state government and the proceeds were
remitted directly to the noteholder to reduce the balance of the note payable.


Note 10 - Commitments and Contingent Liabilities:

OPERATING LEASES
The Company has entered into various operating lease agreements for office
space and office equipment.  The leases expire periodically through December
2005.

The future minimum rental commitments under non-cancelable operating leases are
as follows:
                     Year                              Amount

                     2004                             $ 57,771
                     2005                               54,111
                     Thereafter                          6,528
                          Total                       $118,410

Rental costs under operating leases included in other expenses amounted to
$56,646 and $46,850 for the years ended December 31, 2003 and 2002,
respectively.

PENDING LITIGATION

     On March 25, 1999, the Company, its President, and the Companys wholly
owned subsidiary (CFC) (the Company Defendants) and one of the Companys former
directors together with other individuals were named in an action filed in the



                                   F-13
AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES- NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Note 10  Commitments and Contingent Liabilities (Continued):

Superior Court of New Jersey, Chancery Division by two New Jersey limited
liability companies (the LLCs).  The plaintiffs allege the Companys former
director and other defendants other than the Company Defendants (Other
Defendants) misappropriated assets and opportunities of the LLCs for their own
use, engaged in self-dealing with respect to the LLCs, breached the operating
agreements of the LLCs and converted and embezzled assets and funds of the
LLCs.  The Company Defendants are alleged to have aided and abetted the
Companys former director in converting the assets of the LLCs by accepting
loans and payments from the LLCs and the Companys former director and repaying
loans to the Companys former director in the form of cash and Company stock.

     The LLCs seek declaratory and injunctive relief against the Company
Defendants; an accounting of (1) all shares of Company stock purchased by the
Companys former director and Other Defendants and (2) all payments to or from
the Company and the Companys former director and Other Defendants; imposition
of a lien or equitable trust in favor of the LLCs on shares of the Companys
stock issued to the Companys former director and Other Defendants; and certain
unspecified compensatory and punitive damages, attorneys fees and costs.

     In April 1999, the Court granted a preliminary injunction, which among
other things, enjoins the Companys Defendants from allowing the transfer of
any Company stock held in the name of the Companys former director and Other
Defendants and directs the Company and related Defendants to provide an
accounting of all such stock.  The case is scheduled for a May 10, 2004 trial.
The plaintiffs had previously demanded a payment of $588,000 from the Company
and related Defendants and have currently reduced their demand to $300,000.
There is no settlement offer currently pending from The Company.

    The Company denies any wrongdoing and believes that the claims against the
Company Defendants are without merit, and that it has meritorious defenses and
intends to defend the action vigorously.  However, at this time the Company
cannot predict their ultimate liability, if any, that may result from this
action

MINIMUM NET CAPITAL REQUIREMENTS
     CFC is a HUD nonsupervised loan correspondent, and as such is required
to maintain certain levels of minimum net worth and is subject to certain
report filing requirements.  CFC was in compliance with the minimum net worth
requirement as of December 31, 2003.  The Company did not file the financial
statements of CFC with HUD by the required due date of March 30, 2004.

Note 11 - Stock Based Compensation:

     The Company adopted a 1992 Stock Option Plan, whereby the Company may

grant incentive and new qualified options to eligible participants that vest
upon grant date.  The plan provided for the issuance of options with terms of
not more than ten years.  The plan included a provision whereby stock options
granted by the Company may not exceed 100,000 shares of common stock, and
accordingly has reserved 100,000 shares for this purpose. The plan terminated
on May 22, 2002.  There were no options granted during 2003 and 2002.

                                   F-14
AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES- NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Note 11  Stock Based Compensation (Continued):

Options outstanding and exercisable as of December 31, 2002 were as follows:

                                            Weighted-Average
                                          Remaining
   Range of             Number          Contractual    Exercise
   exercise prices   Outstanding        Life (Years)    Price

     $  0.40           80,000               .45        $  0.40

The above options expired during 2003.


Note 12 - Subsequent Events:

     On March 11, 2004, the Company obtained a new warehouse line of credit
from a bank in the amount of $7,000,000.  This line has an expiration date of
March 31, 2005.  The line is secured by residential mortgage loans and a
personal guarantee of the Companys President.  The line bears various interest
rates from prime plus three-quarters to prime plus one and a half percent.  The
percentage is directly related to the type of loan written.  The Company is
required to maintain several financial covenants including:  1) maintaining a
minimum adjusted net worth of $550,000 2) not exceeding a maximum leverage
ratio of 20 to 1 and 3) maintaining a compensating cash balance of $35,000.
The Company did not meet the minimum adjusted net worth requirement as of March
11, 2004 (the inception date of the agreement).  The bank has informed the
Company in writing that they will not consider a net worth deficiency as an
event of default.

On March 30, 2004, the Company borrowed $100,000 from two board members in the
form of demand notes bearing interest at 10% per annum.





















                                     F-15


                                 EXHIBIT INDEX



    EXHIBIT NO.                      DESCRIPTION

     10.1       Executive Office Lease

     21         Subsidiaries of the Company

     31.1       Certification of Principal Executive Officer and
                Chief Financial Officer, pursuant to Section 302
                of the Sarbanes-Oxley Act of 2002.

     32.1       Certification of Principal Executive Officer and
                Chief Financial Officer, pursuant to Section 906
                of the Sarbanes-Oxley Act of 2002.




































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