U.S.
      SECURITIES AND EXCHANGE COMMISSIONWashington,
      D.C. 20549FORM
      10-Qx QUARTERLY REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the quarterly period ended September 30, 2008o TRANSITION REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the transition period fromCommission
      File No. 000-52685AFH
      Holding II, Inc.(Name
      of registrant in its charter)
 
 Delaware
                26-1364883(State
      or other jurisdiction of
                (I.R.S.
      employerincorporation
      or formation)
                identification
      number)
  9595
Wilshire Blvd.
 Suite
900
 Beverly
Hills, CA 90212
 (Address
of principal executive offices)
  Issuer’s
      telephone number:
                (310)
      300-3431N/A(Former
      name, former address and former fiscal year, if changed since last
      report)
  Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the preceding 12 months (or for such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes x No o
   Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
   Large
Accelerated filer o
          Accelerated Filer
o
          Non-Accelerated
Filer o
          Smaller Reporting
Company x
   Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
   Yes x No o
  State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of November 1, 2008:
 1,500,000 shares of common
stock.
  
    Item
      1.
                Financial
      Statements.
          AFH
HOLDING II, INC.
   FINANCIAL
STATEMENTS
 (Unaudited)
   September
30, 2008
           
  AFH
HOLDING II, INC.
 (A
Development Stage Enterprise)
 INDEX TO
FINANCIAL STATEMENTS
 September
30, 2008
 (Unaudited)
  PageFinancial
      Statements:Balance
      Sheet
                            
                            F−1Statement
      of Operations
                            
                            F−2Statement
      of Stockholders’ Equity
                            
                            F−3Statement
      of Cash Flows
                            
                            F−4Notes
      to Financial Statements
                            
                            F-5
      -
F-6
    
 
 
 
 
 
 
 
 
 
 
 
  
   AFH
HOLDING II, INC.
 (A
Development Stage Enterprise)
 BALANCE
SHEET
 SEPTEMBER
30, 2008
 (Unaudited)
  September
      30, 2008
                                                                                                          December
      31, 2007(Unaudited)ASSETSTotal
      assets
                                                                                                          $
                                                                                                          -
                                                                                                          $
                                                                                                          -LIABILITIES
      AND STOCKHOLDERS’ EQUITYCommitment
      and contingencies
                                                                                                          $
                                                                                                          -
                                                                                                          $
                                                                                                          -Stockholders’
      equity:Preferred
      stock, $.001 par value, authorized 20,000,000 shares, none
      issued
                                                                                                          
                                                                                                          -
                                                                                                          
                                                                                                          -Common
      stock, $.001 par value, authorized 100,000,000 shares, 1,500,000 issued
      and outstanding
                                                                                                          
                                                                                                          1,500
                                                                                                          
                                                                                                          5,000Additional
      paid in capital
                                                                                                          
                                                                                                          11,021
                                                                                                          
                                                                                                          11,021Treasury
      stock, at cost (3,500,000 at $.0025)
                                                                                                          
                                                                                                          (8,750)
                                                                                                          
                                                                                                          (8,750)Deficit
      accumulated during the development stage
                                                                                                          
                                                                                                          (7,271)
                                                                                                          
                                                                                                          (7,271)Total
      stockholders’ equity
                                                                                                          
                                                                                                          (3,500)
                                                                                                          
                                                                                                          -Total
      liabilities and stockholders’ equity
                                                                                                          
                                                                                                          -
                                                                                                          
                                                                                                          -$
                                                                                                          
                                                                                                          $
  
   
   
   
   The
accompanying notes are an integral part of these financial
statements
   F-1
   AFH
HOLDING II, INC.
 (A
Development Stage Enterprise)
 STATEMENTS
OF OPERATIONS
 (Unaudited)
 For
      the three months ended   September 30, 2008
                                                  
                                                  
                                                  For
      the period April 16, 2007 (Inception) through September 30,
      2007
                                                  
                                                  
                                                  For
      the nine months ended September 30, 2008
                                                  
                                                  
                                                  For
      the three months ended September 30, 2007
                                                  
                                                  
                                                  For
      the period April 16, 2007 (Inception) through September 30,
      2008Revenue
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  
                                                  
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  --Expenses
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  
                                                  
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  --General
      and Administrative
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  (5,000
                                                  )
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  (7,271
                                                  )Total
      Expenses
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  (5,000
                                                  )
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  (7,271
                                                  )Net
      Loss
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  (5,000
                                                  )
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  (7,271
                                                  )Net
      loss per share (basic and diluted)
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  0.00
                                                  
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  (.00
                                                  )Weighted
      average shares outstanding (basic and diluted)
                                                  
                                                  
                                                  1,500,000
                                                  
                                                  
                                                  
                                                  5,000,000
                                                  
                                                  
                                                  
                                                  1,500,000
                                                  
                                                  
                                                  
                                                  5,000,000
                                                  
                                                  
                                                  
                                                  2,881,579
   
   The
accompanying notes are an integral part of these financial
statements
   
   
   
   F-2
   AFH
HOLDING II, INC.
 (A
Development Stage Enterprise)
 STATEMENTS
OF STOCKHOLDERS’ EQUITY
 For the
period from April 16, 2007 (Inception) to September 30, 2008
 (Unaudited)
  Common
      StockShares
                                        
                                        
                                        Amount
                                        
                                        
                                        Additional
      Paid-in Capital
                                        
                                        
                                        Treasury
                                        
                                        
                                        Deficit
      accumulated
                                        
                                        
                                        TotalIssuance
      of Common StockBalance
      April 16, 2007
                                        
                                        
                                        0
                                        
                                        
                                        
                                        0
                                        
                                        
                                        
                                        0
                                        
                                        
                                        
                                        
                                        
                                        
                                        0
                                        
                                        
                                        
                                        0Shares
      issued in Lieu of expenses paid
                                        
                                        
                                        5,000,000
                                        
                                        
                                        $
                                        5,000
                                        
                                        
                                        $
                                        0
                                        
                                        
                                        
                                        
                                        
                                        $
                                        0
                                        
                                        
                                        $
                                        5,000Net
      Loss at December 31, 2007
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        (7,271
                                        )
                                        
                                        
                                        (7,271
                                        )Contributed
      Capital for Services
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        2271
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        2,271Purchase
      of Treasury shares
                                        
                                        
                                        (5,000,000
                                        )
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        (12,500
                                        )
                                        
                                        
                                        
                                        
                                        
                                        
                                        (12,500
                                        )Sale
      of Treasury shares
                                        
                                        
                                        1,500,000
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        8,750
                                        
                                        
                                        
                                        3,750
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        12,500Balance
      at December 31, 2007 and September 30, 2008
                                        
                                        
                                        1,500,000
                                        
                                        
                                        
                                        5,000
                                        
                                        
                                        
                                        11,021
                                        
                                        
                                        
                                        (8,750
                                        )
                                        
                                        
                                        (7,271
                                        )
                                        
                                        
                                        0
  
   The
accompanying notes are an integral part of these financial
statements
    F-3
   AFH
HOLDING II, INC.
 (a
Development Stage Enterprise)
 STATEMENTS OF CASH FLOWS
 (Unaudited)
 For
      the nine months ended September 30, 2008
                                        
                                        
                                        For
      the period April 16, 2007 (Inception) through September 30,
      2007
                                        
                                        
                                        For the period
      April 16, 2007 (Inception) through September 30,
      2008Cash
      flows from operating activitiesNet
      Loss
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        (5,000
                                        )
                                        
                                        $
                                        (7,271
                                        )Shares
      issued in lieu of expenses paid
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (5,000
                                        )
                                        
                                        
                                        5,000Contributed Capital
      For Services
                                        
                                        
                                        -
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        2,271Cash
      flows used in operating activities
                                        
                                        
                                        -
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        -Net
      increase in cash
                                        
                                        
                                        -
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        -Cash,
      beginning of period
                                        
                                        
                                        -
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        -Cash,
      end of period
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        
                                        
                                        
                                        $
                                        -SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Cash
      paid during the period for:Interest
                                        
                                        
                                        -
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        -Income
      taxes
                                        
                                        
                                        -
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        -
 
         The
accompanying notes are an integral part of these financial
statements
    F-4
    AFH
HOLDING II, INC.
 (A
Development Stage Enterprise)
 NOTES TO FINANCIAL STATEMENTS
 September
30, 2008
 (Unaudited)
   NOTE
1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
  Nature of
Operations
  AFH
HOLDING II, INC., a development stage company (the “Company”), was incorporated
in the State of Delaware on April 16, 2007. The Company is 100% owned by AFH
Holding & Advisory, LLC. The financial statements presented represent only
those transactions of AFH Holding II, Inc. The Company is looking to acquire an
existing company or acquire the technology to begin operations.
  As a
blank check company, the Company’s business is to pursue a business combination
through acquisition, or merger with, an existing company. As of the date of the
financial statements, the Company has not conducted negotiations or entered into
a letter of intent concerning any target business. No assurances can be given
that the Company will be successful in locating or negotiating with any target
company.
  Since
inception, the Company has been engaged in organizational efforts.
  General
  The
accompanying unaudited financial statements include all adjustments of a normal
and recurring nature, which, in the opinion of Company’s management, are
necessary to present fairly the Company’s financial position as of September 30,
2008, the results of its operations for the three and nine months ended
September 30, 2008 and 2007, and from the date of inception (April 16, 2007)
through September 30, 2008, and cash flows for the nine months ended September
30, 2008 from the date of inception (April 16, 2007) through September 30, 2007
and 2008.
  Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
omitted pursuant to the rules and regulations of the Securities and Exchange
Commission.
  The
results of operations and cash flows for the periods ended September 30, 2008
are not necessarily indicative of the results to be expected for the full year’s
operation.
  NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  The
accompanying financial statements are prepared in accordance with accounting
principles generally accepted in the United States. Significant accounting
policies follow:
   F-5
  Loss per Common
Share: Basic loss per share is calculated using the weighted-average
number of common shares outstanding during each period. Diluted loss per share
includes potentially dilutive securities such as outstanding options and
warrants, using various methods such as the treasury stock or modified treasury
stock method in the determination of dilutive shares outstanding during each
period. The Company does not have any potentially dilutive
instruments.
  New Accounting
Pronouncements:
  Management
does not believe that any other recently issued, but not yet effective
accounting pronouncements, if adopted, would have a material effect on the
accompanying financial statements.
  NOTE
3 - GOING CONCERN
  The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern, which contemplates the recoverability of
assets and the satisfaction of liabilities in the normal course of
business.
  The
Company has had no revenue and has incurred accumulated net losses from April
16, 2007 (inception) through the period ended September 30, 2008 of $7,271. In
addition, the Company’s development activities since inception have been
financially sustained through equity financing.
  The
ability of the Company to continue as a going concern is dependent upon its
ability to find a suitable acquisition/merger candidate, raise additional
capital from the sale of common stock, and receive additional paid-in capital
from its shareholder and, ultimately, the achievement of significant operating
revenues. The accompanying financial statements do not include any adjustments
that might be required should the Company be unable to recover the value of its
assets or satisfy its liabilities
  NOTE
4 - SHAREHOLDERS’ EQUITY
  Holders
of shares of common stock shall be entitled to cast one vote for each common
share held at all stockholders’ meetings for all purposes, including the
election of directors. The common stock does not have cumulative voting
rights.
  The
preferred stock of the Company shall be issued by the Board of Directors of the
Company in one or more classes or one or more series within any class and such
classes or series shall have such voting powers, full or limited, or no voting
powers, and such designations, preferences, limitations or restrictions as the
Board of Directors of the Company may determine, from time to time.
  No holder
of shares of stock of any class shall be entitled as a matter of right to
subscribe for or purchase or receive any part of any new or additional issue of
shares of stock of any class, or of securities convertible into shares of stock
of any class, whether now hereafter authorized or whether issued for money, for
consideration other than money, or by way of dividend.
   F-6
   
 Item
      2.
                Management’s
      Discussion and Analysis or Plan of
Operation.
  Plan of
Operation
  The
Company will attempt to locate and negotiate with a business entity for the
combination of that target company with the Company. The combination will
normally take the form of a merger, stock-for-stock exchange or stock-for-assets
exchange (the “business combination”). In most instances the target company will
wish to structure the business combination to be within the definition of a
tax-free reorganization under Section 351 or Section 368 of the Internal Revenue
Code of 1986, as amended. As of the date of this report, the Company has
identified an undisclosed potential target company for a possible business
combination. The Company is currently engaged in preliminary negotiations with
the target company. No assurances can be given that the Company will be
successful in locating or negotiating with any target company.
  The
Company has not restricted its search for any specific kind of businesses, and
it may acquire a business which is in its preliminary or development stage,
which is already in operation, or in essentially any stage of its business life.
It is impossible to predict the status of any business in which the Company may
become engaged, in that such business may need to seek additional capital, may
desire to have its shares publicly traded, or may seek other perceived
advantages which the Company may offer.
  In
implementing a structure for a particular business acquisition, the Company may
become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity.
  It is
anticipated that any securities issued in any such business combination would be
issued in reliance upon exemption from registration under applicable federal and
state securities laws. In some circumstances, however, as a negotiated element
of its transaction, the Company may agree to register all or a part of such
securities immediately after the transaction is consummated or at specified
times thereafter. If such registration occurs, it will be undertaken by the
surviving entity after the Company has entered into an agreement for a business
combination or has consummated a business combination. The issuance of
additional securities and their potential sale into any trading market which may
develop in the Company’s securities may depress the market value of the
Company’s securities in the future if such a market develops, of which there is
no assurance. However, if the Company cannot effect a non-cash acquisition, the
Company may have to raise funds from a private offering of its securities under
Rule 506 of Regulation D. There is no assurance the Company would obtain any
such equity funding.
  The
Company will participate in a business combination only after the negotiation
and execution of appropriate agreements. Negotiations with a target company will
likely focus on the percentage of the Company which the target company
shareholders would acquire in exchange for their shareholdings.
  Although
the terms of such agreements cannot be predicted, generally such agreements will
require certain representations and warranties of the parties thereto, will
specify certain events of default, will detail the terms of closing and the
conditions which must be satisfied by the parties prior to and after such
closing and will include miscellaneous other terms. Any merger or acquisition
effected by the Company can be expected to have a significant dilutive effect on
the percentage of shares held by the Company’s shareholders at such
time.
  Results of
Operation
  The
Company has not conducted any active operations since inception, except for its
efforts to locate suitable acquisition candidates. No revenue has been generated
by the Company from April 16, 2007 (inception) to September 30,2008. It is unlikely the
Company will have any revenues unless it is able to effect an acquisition or
merger with an operating company, of which there can be no
assurance.
   
  Expenses
incurred since inception are primarily due to legal, accounting, and other
professional service fees.
  Liquidity and Capital
Resources
  At
September 30, 2008, the Company had no capital resources and will rely upon the
issuance of common stock and additional capital contributions from shareholders
to fund administrative expenses pending acquisition of an operating
company.
  Management
anticipates seeking out a target company through solicitation. Such solicitation
may include newspaper or magazine advertisements, mailings and other
distributions to law firms, accounting firms, investment bankers, financial
advisors and similar persons, the use of one or more World Wide Web sites and
similar methods. No estimate can be made as to the number of persons who will be
contacted or solicited. Management may engage in such solicitation directly or
may employ one or more other entities to conduct or assist in such solicitation.
Management and its affiliates will pay referral fees to consultants and others
who refer target businesses for mergers into public companies in which
management and its affiliates have an interest. Payments are made if a business
combination occurs, and may consist of cash or a portion of the stock in the
Company retained by management and its affiliates, or both.
  The
Company and/or shareholders will supervise the search for target companies as
potential candidates for a business combination. The Company and/or shareholders
may pay as their own expenses any costs incurred in supervising the search for a
target company. The Company and/or shareholders may enter into agreements with
other consultants to assist in locating a target company and may share stock
received by it or cash resulting from the sale of its securities with such other
consultants.
  Off-balance sheet
arrangements
  The
Company does not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on the Company’s financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to investors.
  Item
      4.
                Controls
      and Procedures.
  The
management of the Company, including the principal executive and financial
officer, conducted an evaluation of the effectiveness of the design and
operation of our disclosure controls and procedures as defined in Exchange Act
Rule 13a-15(e) and 15d-15(e) as of December 31, 2007. Based on that evaluation,
the principal executive and financial officer concluded that as of December 31,
2007, our disclosure controls and procedures were effective at the reasonable
assurance level to ensure (i) that information required to be disclosed by us in
the reports we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and
forms and (ii) that information required to be disclosed in reports that we file
or submit under the Exchange Act is accumulated and communicated to our
management including our chief executive and financial officer, to allow timely
decisions regarding required disclosure.
  No change
in our internal control over financial reporting (as defined in Rules 13a-15(f)
and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended
September 30, 2008 that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial
reporting.
    
  PART
II - OTHER INFORMATION
  Item
      1.
                Legal
      Proceedings.None.Item
      2.
                Unregistered
      Sales of Equity Securities and Use of Proceeds.None.Item
      3.
                Defaults
      Upon Senior Securities.None.Item
      4.
                Submission
      of Matters to a Vote of Security Holders.None.Item
      5.
                Other
      Information.None.Item
      6.
                Exhibits.
 
 3.1
                Certificate
      of Incorporation, as filed with the Delaware Secretary of State on April
      16, 2007 (1)3.2
                By-Laws
      (1)31.1
                Certification
      of Principal Executive Officer pursuant to Section 302 of Sarbanes-Oxley
      Act of 2002*31.2
                Certification
      of Principal Financial and Accounting Officer pursuant to Section 302 of
      Sarbanes-Oxley Act of 2002*32.1
                Certification
      pursuant to Section 906 of Sarbanes Oxley Act of
  2002*
 
 *
                Filed
      herewith.(1)
                Filed
      as an exhibit to the Company’s Registration Statement on Form 10-SB, as
      filed with the Securities and Exchange Commission on November 28, 2007,
      and incorporated herein by
reference.
 
 
  SIGNATURES
   In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, there unto duly
authorized.
  AFH
      Holding II, Inc.(Registrant)Dated:
      November 14, 2008/s/ Amir F. HeshmatpourAmir
      F. Heshmatpour, President