UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

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

For the quarterly period ended March 31, 2005

                                       OR

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

For the transition period from                to
                               --------------        -----------------

Commission file number:      000-28515

                              AFG ENTERPRISES, INC.
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

         Nevada                                    84-1249735
--------------------------------------------------------------------------------
(State or other jurisdiction of             (IRS Employer Identification
 incorporation or organization)              Number)

                73-595 El Paseo Suite 2204, Palm Desert, CA 92260
--------------------------------------------------------------------------------
              (Address of principal executive offices and Zip Code)

                                 (760) 674-1063
--------------------------------------------------------------------------------
                         (Registrant's telephone number)

                                       N/A
         --------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

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

    APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
                              PRECEEDING FIVE YEARS

Check whether the  registrant  filed all  documents  and reports  required to be
filed by Section 12, 13 or 15(d) after  distribution of securities  under a plan
confirmed by a court: Yes |X| No |_|

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares  outstanding of the issuer's  classes of common stock,  par
value $.001 per share, as of May 15, 2005 is 5,000,000 shares.

<PAGE>

                              AFG ENTERPRISES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                                      INDEX

<TABLE>
<CAPTION>
                                                                                Page No.
                                                                                --------
<S>                                                                               <C>
PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

Balance Sheet - of Predecessor at December 31, 2004 and Successor
at March 31, 2005 (unaudited)                                                      3

Statement of  Operations  - For the Three Months Ended March 31, 2004,  for
Predecessor for the One Month ended January 31, 2005, for the Successor for
the Two Months ended March 31, 2005 and for the Successor
from February 1, 2005 (inception) through March 31, 2005 (unaudited)               5

Statement of Changes In Stockholders' Equity (Deficit) - For the Three Months
Ended March 31, 2005 (unaudited)                                                   6

Statement  of Cash Flows - For the Three  Months  Ended  March 31, 2004 for
Predecessor for the One Month ended January 31, 2005, for the Successor for
the Two Months ended March 31, 2005 and for the Successor
from February 1, 2005 (inception) through March 31, 2005 (unaudited)               7

Notes to Unaudited Financial Statements                                            8

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION                10

ITEM 3.  CONTROLS AND PROCEDURES                                                  10

PART II. OTHER INFORMATION                                                        11

ITEM 1.  LEGAL PROCEEDINGS                                                        11

ITEM 2.  CHANGES IN SECURITIES AND SMALL BUSINESS ISSUER
               PURCHASES OF EQUITY SECURITIES                                     11

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                                          12

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                      12

ITEM 5.  OTHER INFORMATION                                                        12

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                         12
</TABLE>


                                       1
<PAGE>

                                Explanatory Note

On November 12, 2002,  In Store Media  Systems,  Inc.  (the  "Company")  filed a
voluntary petition for reorganization under Chapter 11 of the federal bankruptcy
laws  ("Bankruptcy  Code" or "Chapter 11") in the United States Bankruptcy Court
for  the  District  of  Colorado   ("Bankruptcy   Court").  The  Joint  Plan  of
Reorganization  (the  "Plan")  was  confirmed  on January 20,  2005,  and became
effective  on  January  31,  2005  (the  "Effective  Date").  In  the  financial
statements  provided  herein,  all results for  periods  prior to and  including
January 31, 2005 are referred to as those of the  "Predecessor  Company" and all
results for periods including and subsequent to February 1, 2005 are referred to
as those of the  "Successor  Company".  Due to the effects of the "fresh  start"
accounting,  results for the Predecessor  Company and the Successor  Company are
not comparable  (See Note 1, "Basis of  Presentation,  Reorganization  and Fresh
Start Accounting," of the notes to financial statements).


                                       2
<PAGE>

                             AFG ENTERPRISES, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEET
                      December 31, 2004 and March 31, 2005

                                 ASSETS

<TABLE>
<CAPTION>
                                                         Predecessor   Successor
                                                           Company      Company
                                                            2004          2005
                                                            ----          ----
                                                          (Audited)   (Unaudited)
<S>                                                        <C>          <C>
Current assets:
   Cash and cash equivalents                               $  6,809     $ 37,457
   Other current assets                                      51,955       32,314
                                                           --------     --------

    Total current assets                                     58,764       69,771

Other assets:
   Reorganization value in excess of amounts allocable
    to identifiable assets                                       --       40,567

                                                           $ 58,764     $110,338
                                                           ========     ========
</TABLE>

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


                                       3
<PAGE>

                             AFG ENTERPRISES, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEET
                      December 31, 2004 and March 31, 2005

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

<TABLE>
<CAPTION>
                                                                                     Predecessor         Successor
                                                                                       Company            Company
                                                                                         2004               2005
                                                                                         ----               ----
                                                                                      (Audited)         (Unaudited)
<S>                                                                                  <C>               <C>
Liabilities Not Subject to Compromise
Current liabilities:
   Accounts payable                                                                  $     53,049      $     11,801
   Payroll liabilities                                                                         --             6,580
   Accrued expenses                                                                       312,584            26,529
   Interest payable                                                                        57,591               869
   Notes payable-related party                                                             87,100           125,000
   Short-term notes payable                                                               106,000                --
                                                                                     ------------      ------------

    Total current liabilities                                                             616,324           170,779

Liabilities Subject to Compromise
   Pre-Petition Liabilities                                                             1,557,931                --

Commitments and contingencies

Stockholders' deficit:
   Preferred stock, no par value; 50,000,000 shares authorized,  2 shares issued
    and outstanding liquidation preference $520,000 (2004) and 5,000,000 shares
    authorized; $0.001 par value, no shares issued (2005)                                 500,000                --
   Common stock, $.001 par value; 150,000,000 shares
    authorized, 88,126,148 issued (2004) 50,000,000
    shares authorized, 5,000,000 committed (2005)                                          88,126             5,000
   Additional paid-in capital                                                          21,567,220                --
   Stock subscriptions received                                                           150,000                --
   Treasury stock, at cost; 9,374,742 shares (2004), 0 shares (2005)                     (563,750)               --
   Deficit accumulated during the development stage                                   (23,857,087)          (65,441)
                                                                                     ------------      ------------

    Total stockholders' deficit                                                        (2,115,491)          (60,441)
                                                                                     ------------      ------------

                                                                                     $     58,764      $    110,338
                                                                                     ============      ============
</TABLE>

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


                                       4
<PAGE>

                             AFG ENTERPRISES, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                            STATEMENT OF OPERATIONS
                                  (Unaudited)

                      For the Three Months Ended March 31,
               2004, One Month Ended January 31, 2005, Two Months
              Ended March 31, 2005 and for the Period from February
                   1, 2005 (inception) through March 31, 2005

<TABLE>
<CAPTION>
                                                                                                             Successor
                                                                                                              Company
                                             Predecessor           Predecessor          Successor            Cumulative
                                               Company               Company             Company           Amounts From
                                            Three Months            One Month          Two Months            Inception
                                            Ended 3/31/04         Ended 1/31/05       Ended 3/31/05       through 3/31/05
                                            -------------         -------------       -------------       ---------------
<S>                                          <C>                  <C>                  <C>                  <C>
Revenues:
    Coupon handling fees and other           $         --         $         --         $         --         $         --

Costs and expenses:
    General and administrative                    113,164                1,860               60,901               60,901
                                             ------------         ------------         ------------         ------------

      Total costs and expenses                    113,164                1,860               60,901               60,901
                                             ------------         ------------         ------------         ------------

      Operating loss                             (113,164)              (1,860)             (60,901)             (60,901)

Other (expense):
    Interest expense                              (39,111)              (2,261)                (869)                (869)
                                             ------------         ------------         ------------         ------------

      Total other (expense)                       (39,111)              (2,261)                (869)                (869)
                                             ------------         ------------         ------------         ------------

    Loss before reorganization items             (152,275)              (4,121)             (61,770)             (61,770)

Reorganization expense                             (3,465)              (1,041)              (3,672)              (3,672)
                                             ------------         ------------         ------------         ------------

Net loss                                         (155,740)              (5,162)             (65,441)             (65,441)
                                             ------------         ------------         ------------         ------------

Net loss applicable to common
    stockholders                             $   (155,740)        $     (5,162)        $    (65,441)        $    (65,441)
                                             ============         ============         ============         ============

Basic and diluted net loss per common
    share                                               *                    *         $       (.01)        $       (.01)
                                             ============         ============         ============         ============

Weighted average common shares
    outstanding                                78,800,000           78,800,000            5,000,000            5,000,000
                                             ============         ============         ============         ============
</TABLE>

* less than ($.01) per share

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


                                       5
<PAGE>

                             AFG ENTERPRISES, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                 STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT

                    For the Three Months Ended March 31, 2005
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                        Preferred stock                      Common stock
                                              -------------------------------       -------------------------------
                                                 Shares             Amount             Shares            Amount
                                                 -------            -------            -------           -------
<S>                                                      <C>      <C>                  <C>              <C>
Balance, December 31, 2004                                2       $    500,000         88,126,148       $     88,126

   Net loss for the one month ended
     January 31, 2005

   Reorganization entries required
     under fresh start accounting                        (2)      $   (500,000)       (83,126,148)      $    (83,126)

   Net loss for the two months ended
     March 31, 2005                                      --                 --                 --                 --
                                               ------------       ------------       ------------       ------------

Balance, March 31, 2005                                  --       $         --          5,000,000       $      5,000
                                               ============       ============       ============       ============
<CAPTION>
                                                                                                    Deficit
                                                                                                   accumulated
                                              Additional                                           during the
                                               paid-in            Stock          Treasury          development
                                               capital        subscriptions        stock              stage             Total
                                               -------        -------------        -----              -----             -----
<S>                                           <C>              <C>              <C>                <C>                <C>
Balance, December 31, 2004                    $ 21,567,220     $    150,000     $   (563,750)      $(23,857,087)      $ (2,115,491)

   Net loss for the one month ended
     January 31, 2005                                                                              $     (5,162)      $     (5,162)

   reorganization entries required under
    fresh start accounting                    $(21,567,220)    $   (150,000)    $    563,750       $ 23,862,249       $  2,125,653

   Net loss for the two months ended
     March 31, 2005                                     --               --               --            (65,441)           (65,441)
                                              ------------     ------------     ------------       ------------       ------------

Balance, March 31, 2005                       $         --     $         --     $         --       $    (65,441)      $    (60,441)
                                              ============     ============     ============       ============       ============
</TABLE>

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


                                       6
<PAGE>

                             AFG ENTERPRISES, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                            STATEMENT OF CASH FLOWS

  For the Three Months Ended March 31, 2004, One Month Ended January 31, 2005,
                     Two Months Ended March 31, 2005 and for
                  the Period from February 1, 2005 (inception)
                             through March 31, 2005
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                     Predecessor      Predecessor      Successor      Successor
                                                       Company          Company         Company        Company
                                                     Three Months      One Month       Two Months     Cumulative
                                                    Ended 3/31/04    Ended 1/31/05   Ended 3/31/05   Amounts From
                                                                                                       Inception
                                                                                                       ---------
Cash flows from operating activities:
<S>                                                   <C>             <C>             <C>             <C>
   Net loss                                           $(155,740)      $  (5,162)      $ (65,441)      $ (65,441)
   Adjustments to reconcile net loss to net
     cash used in operating activities:
       Depreciation, amortization and impairment         88,191              --              --              --
       Amortization of debt issuance costs               32,500              --              --              --
       Changes in assets and liabilities:
        Other assets                                        495          14,342           5,299           5,299
        Accounts payable                                  2,368         (26,219)         10,297          10,297
        Interest payable                                  6,611           2,261             869             869
        Accrued expenses                                 20,899        (125,161)        (43,685)        (43,685)
                                                      ---------       ---------       ---------       ---------

       Total adjustments                                151,064        (134,777)        (27,220)        (27,220)
                                                      ---------       ---------       ---------       ---------

       Net cash used in operations                       (4,676)       (139,939)        (92,661)        (92,661)

Cash flows from investing activities:

       Net cash used in investing activities                 --              --              --              --

Cash flows from financing activities:
   Proceeds from notes payable                               --         138,248         125,000         125,000
                                                      ---------       ---------       ---------       ---------

       Net cash provided by financing activities             --         138,248         125,000         125,000
                                                      ---------       ---------       ---------       ---------

Net increase (decrease) in cash                          (4,676)         (1,691)         32,339          32,339

Cash and cash equivalents at beginning of period          6,109           6,809           5,118           5,118
                                                      ---------       ---------       ---------       ---------

Cash and cash equivalents at end of period            $   1,433       $   5,118       $  37,457       $  37,457
                                                      =========       =========       =========       =========
</TABLE>

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


                                       7
<PAGE>

1.   Basis of Presentation, Reorganization and Fresh Start Accounting:

     The accompanying  unaudited financial  statements have been prepared by the
     Company. In the opinion of management, the accompanying unaudited financial
     statements  contain all  adjustments  (consisting of only normal  recurring
     accruals) necessary for a fair presentation of the financial position as of
     March 31,  2005,  and the  results  of  operations  and cash  flows for the
     periods ended March 31, 2004 and 2005.

     The accompanying  financial statements have been prepared assuming that the
     Company will continue as a going concern. The Company is in the development
     stage  and  has  been  primarily   involved  in  research  and  development
     activities,  resulting in significant losses and a stockholders' deficit at
     March 31,  2005 of $60,441 and has  recently  emerged  from  reorganization
     under Chapter 11 of the United States  Bankruptcy  Code.  These  conditions
     raise  substantial  doubt about its ability to continue as a going concern.
     The financial  statements do not include any adjustments  that might result
     from the outcome of this uncertainty.

     On November 12, 2004, a Plan of Reorganization (the "Plan") for the Company
     was filed with the Bankruptcy  Court.  The Plan was jointly proposed by the
     Company and AFGVII  (collectively  referred  to as the "Plan  Proponents").
     Also on November 16, 2004, a Disclosure  Statement to be used in soliciting
     votes to  accept  or  reject  the Plan  (the  "Disclosure  Statement")  was
     approved by the  Bankruptcy  Court and a hearing to  determine  whether the
     Bankruptcy  Court should approve the Plan was held on January 20, 2005. The
     Plan  became  final on  January  31,  2005 (the  "Effective  Date") and was
     implemented on such date for accounting purposes.

     References in these financial statements to "Predecessor  Company" refer to
     the  Company  prior  to and  including  January  31,  2005.  References  to
     "Successor  Company"  refer to the  Company on and after  February 1, 2005,
     after giving effect to cancellation  of all  outstanding  securities of the
     Predecessor  Company and the issuance of new  securities  of the  Successor
     Company in  accordance  with the Plan and  implementation  of "fresh start"
     accounting.

     Upon  emergence  from  bankruptcy,   the  Company  implemented  fresh-start
     accounting   under  the  provisions  of  SOP  90-7.  Under  SOP  90-7,  the
     reorganization  fair value of the Company was  allocated  to its assets and
     liabilities, its accumulated deficit was eliminated, and its new equity was
     issued according to the Plan as if it were a new reporting entity.

     The Company adopted the provisions of fresh-start accounting as of February
     1,  2005.  In  accordance  with  fresh-start  accounting,  all  assets  and
     liabilities  were  recorded at their  respective  fair  market  values upon
     emergence  from  Chapter 11  Reorganization.  The Company  reports the fair
     market value of its primary assets, the patents and intellectual  property,
     at $0. All pre-petition  liabilities  discharged by the Plan are eliminated
     as of  February  1,  2005.  The  Successor  Company  is  deemed  to have an
     inception date of February 1, 2005.


                                       8
<PAGE>

     SOP 90-7  requires an  allocation  of the  reorganization  equity  value in
     conformity with procedures specified by APB 16, Business  Combinations,  as
     amended by SFAS 141, Business  Combinations,  for transactions  reported on
     the basis of the purchase method.  The excess of reorganization  value over
     fair value of net assets ("goodwill") was $40,567 as of January 31, 2005.

     As a result of the confirmation and  implementation  of the Plan, as of the
     Effective Date the following are deemed to have occurred:

                  Transfer  of  Assets.   All  assets  of  the   Company   owned
         pre-petition  or  acquired  during the  Restructuring  Proceedings  are
         transferred  to the  reorganized  Company  free and clear of all liens,
         claims and  interests of all  creditors  and  interested  parties.  The
         reorganized Company is not liable for repayment of any claims except as
         set forth in the Plan. All other debts and liabilities are discharged.

                  Name Change. The reorganized Company has changed its name from
         "In Store Media Systems, Inc." to "AFG Enterprises, Inc."

                  Change in Capital Structure.  All of the outstanding shares of
         capital stock were reverse split into an aggregate of 500,000 shares of
         Common Stock of the reorganized  Company.  The Company issued 4,500,000
         shares to creditors, comprised of 3,000,000 shares to Acclaim Financial
         Group Ventures II, LLC and NMPP,  Inc. in satisfaction of their secured
         claims.  NMPP,  Inc. and Acclaim  Financial  Group Ventures II, LLC are
         related  parties  (referred  to  hereafter  as  "AFGVII").  No options,
         warrants or other rights to acquire  capital stock remain  outstanding,
         other than the options to  purchase  1,077,531  shares of Common  Stock
         held by AFGVII at various prices, ranging from $0.001 to $0.03.

                  As  a  result  of  direct  ownership  or  indirectly   through
         affiliated companies,  AFGVII controls approximately 63.7% of the stock
         in the Successor Company.

                  Changes in Management. The Board of Directors of the Successor
         Company is now comprised  five persons:  John B. Burns III,  Douglas B.
         Croxall, Erich Spangenberg, David Pridham and Stephen Peary.

2.   Income taxes

     No provision  for income taxes is required at March 31, 2005,  because,  in
     management's  estimation  the Company will not recognize any taxable income
     through December 31, 2005.


                                       9
<PAGE>

ITEM 2 MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULTS
       OF OPERATIONS

These  discussions may contain  forward-looking  statements.  A  forward-looking
statement may contain words or phrases such as "will continue to be," "will be,"
"continue  to,"  "expect  to,"  "anticipates  that,"  "to be," or "can  impact."
Management  cautions that  forward-looking  statements  are subject to risks and
uncertainties that could cause the Company's actual results to differ materially
from those projected in forward-looking statements.

OVERVIEW

The Company has identified the accounting  policies  described below as critical
to its business  operations and the  understanding  of the Company's  results of
operations. The impact and any associated risks related to these policies on the
Company's  business  operations is discussed  throughout this section where such
policies  affect the  Company's  reported and expected  financial  results.  The
preparation of this Quarterly  Report requires the Company to make estimates and
assumptions  that affect the reported  amount of assets and  liabilities  of the
Company,  revenues and expenses of the Company  during the reporting  period and
contingent  assets and  liabilities  as of the date of the  Company's  financial
statements.  There can be no assurance  that the actual  results will not differ
from those estimates.

The Company is a development  stage company.  The Company  generated no revenues
from operations since February 1, 2005  (inception).  Additionally,  the Company
has incurred operating losses of $60,901 since inception through March 31, 2005.

At March 31,  2005,  the Company had a  stockholders'  deficit of $60,441  which
reflects  $5,000 of common  stock  less  accumulated  deficit  of  $65,441.  The
accumulated  deficit amount is primarily the result of costs and expenses of the
Bankruptcy and general and administrative expenses incurred since inception.

The Company  continues to evaluate merger and acquisition  candidates as part of
its ongoing  operating  strategy.  There can be no assurance  that any potential
merger and acquisition opportunity will be consummated.

FINANCIAL CONDITION

The  Successor  Company  had  $110,338  in total  assets and  $170,779  in total
liabilities  at March 31, 2005,  as compared to $58,764 and $616,324  (excluding
$1,557,931 of  pre-petition  liabilities  subject to compromise) at December 31,
2004,  respectively.  Accounts  payable at  December  31,  2004 were  $53,049 as
compared to $11,801 at March 31, 2005.  Accrued expenses decreased to $26,529 at
March 31, 2005  compared to $312,584 at December 31, 2004.  Payroll  liabilities
increased  from $0 at  December  31,  2004 to $6,580 at March  31,  2005.  Notes
payable to a related  party  increased  from  $87,100 at  December  31,  2004 to
$125,000 at March 31, 2005 and short term notes payable  decreased from $106,000
at December 31, 2004 to $0 at March 31, 2005.  All  pre-petition  liabilities of
$1,557,931  at December 31, 2004 were  eliminated  as of January 31, 2005.  As a
result of these changes,  the Company had a working capital deficit of $ 101,008
at March 31,  2005,  as  compared  to a working  capital  deficit of $557,560 at
December 31, 2004.

RESULTS OF OPERATIONS


                                       10
<PAGE>

The Company has incurred  operating  expenses of $60,901 from inception  through
March 31, 2005.  These expenses  include  general and  administrative  expenses,
primarily  professional  accounting  fees and expenses  related to completion of
current and prior year Annual  Report on Form  10-KSB and  Quarterly  Reports on
Form 10 QSB to bring the Company  current in its SEC filings and corporate staff
payroll and related payroll tax expense for the period.

QUARTER ENDED MARCH 31, 2005, COMPARED TO QUARTER ENDED MARCH 31, 2004

For the quarter  ended March 31, 2005,  the Company  sustained net losses before
reorganization  items of $61,770,  as compared to net losses of $152,275 for the
quarter ended March 31, 2004.  The decrease was a result of decreases in general
and administrative expenses along with a decrease in interest expense.

General and administrative  expenses in total declined as the Company recognized
impariment  expense of $88,191 in the previous  quarter as compared to $0 in the
current quarter.  As a result of the confirmation and implementation of the Plan
as of the effective  date,  the Company  eliminated  certain  indebtedness  thus
reducing interest expense for the quarter ended March 31, 2005.

Reorganization  expenses  for the  quarter  ended  March 31, 2005 were $3,672 as
compared to $3,465 for the quarter ended March 31, 2004.

LIQUIDITY AND CAPITAL RESOURCES

At March 31,  2005,  the Company had $170,779 in current  liabilities,  of which
$125,000 was a note payable to a related party (AFGVII).  The remaining  portion
of the Company's current liabilities are primarily comprised of accounts payable
of $11,801,  accrued expenses of $26,529 and payroll  liabilities of $6,580. The
Company  relies on the  availability  of additional  capital to satisfy all such
obligations.

The  Company  will  require   additional   capital  to  implement  its  business
strategies.

The  Company  has  limited  access to  additional  sources  of  equity  and debt
financing  and it can  provide  no  assurance  that  additional  funds  will  be
available at all, or if  available,  on  commercially  acceptable  terms or in a
timely manner to enable the Company to continue its operations as expected.

Since the end of fiscal year 2004 through  March 31, 2005,  the  Company's  cash
position has  increased.  At March 31, 2005,  the Company had available  cash of
$37,457,  as compared to  available  cash of $6,809 at December  31,  2004.  The
increase in cash is a result of the Company borrowing under its credit facility.

ITEM 3.  CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures.


                                       11
<PAGE>

The Company's Chief Executive Officer and Chief Financial Officer have conducted
an evaluation of the Company's  disclosure  controls and procedures as of a date
(the  "Evaluation  Date")  within 90 days  before the  filing of this  quarterly
report.  Based on their  evaluation,  the Company's Chief Executive  Officer and
Chief Financial  Officer have concluded that the Company's  disclosure  controls
and procedures are effective to ensure 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 the applicable Securities and Exchange Commission rules and
forms.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Upon adoption of the Plan and  resolution  of the  Bankruptcy  Proceedings,  the
Company is not involved in any legal proceedings.

ITEM 2. CHANGES IN  SECURITIES  AND SMALL  BUSINESS  ISSUER  PURCHASES OF EQUITY
        SECURITIES

None other than the changes in the outstanding  number of shares of common stock
effectuated by the Plan. See Note 1 above.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5. OTHER INFORMATION

The trading symbol of the Company has been changed to AFGE.

ITEM 6. EXHIBITS AND REPORTS

(a)      Exhibits

31.1     Certification of Principal Executive Officer pursuant to Rule 13a-14(a)
         or Rule 15d-14(a)

31.2     Certification  of  Principal   Accounting   Officer  pursuant  to  Rule
         13a-14(a) or Rule 15d-14(a)


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<PAGE>

32.1     Certification  pursuant to 18 U.S.C.  Section 1350, as adopted pursuant
         To Section 906 Of The Sarbanes-Oxley Act Of 2002

(b)      Reports on Form 8-K.

         Current Report on Form 8-K filed on April 22, 2005.

                                   Signatures

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
     Registrant  has duly  caused  this report to be signed on its behalf by the
     undersigned thereunto duly authorized.

     Date: May 19, 2005                         AFG ENTERPRISES, INC.
                                                (Registrant)

                                                By:/s/Erich Spangenberg
                                                   -----------------------------
                                                   Erich Spangenberg, CEO

                                                By:/s/ William P. Stelt
                                                   -----------------------------
                                                   William P. Stelt, CFO


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