---

---

|                                                                                            |                                              
|------------------------------------------------------------------------------------------- | ---------------------------------------------
|U.S. SECURITIES AND EXCHANGE COMMISSIONWashington,
D.C. 20549                              
|                                                                                            |                                              
|FORM 10-Q                                                                                  
|                                                                                            |                                              
|x QUARTERLY REPORT
 PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|                                                                                            |                                              
|                                                                                            | For the quarterly period ended June 30,
 2008
|                                                                                            |                                              
|o TRANSITION REPORT
 PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File No. 000-52685

AFH Holding II, Inc.(Name of registrant in its charter)

|                                |                       
|------------------------------- | ----------------------
|Delaware                        | 26-1364883            
|                               
|(State or other jurisdiction of | (I.R.S. employer      
|incorporation or formation)     | identification number)

9595 Wilshire Blvd.
Suite 900
Beverly Hills, CA 90212(Address of principal executive offices)

|                                                                                   |               
|---------------------------------------------------------------------------------- | --------------
|Issuers telephone number:                                                         | (310) 300-3431
|                                                                                  
|N/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 July 25, 2008: 
1,500,000 shares of common stock.

---

---



|        |                      
|------- | ---------------------
|Item 1. | Financial Statements.

AFH HOLDING II, INC.

FINANCIAL STATEMENTS
(Unaudited)

JUNE 30, 2008

AFH HOLDING II, INC.
(A Development Stage Enterprise)
INDEX TO INTERIM AND UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 2008
(Unaudited)

|                                   |          
|---------------------------------- | ---------
|                                   | Page     
|                                   |          
|                                  
|Financial Statements:              |          
|                                   |          
|Balance Sheet                      | F1      
|                                   |          
|Statements of
Operations           | F2      
|                                   |          
|Statements of Stockholders
Equity | F3      
|                                   |          
|Statements of Cash
Flows           | F4      
|                                   |          
|Notes to Financial Statements      | F-5 - F-6

---



AFH HOLDING II, INC.
(A Development Stage Enterprise)INTERIM AND UNAUDITED BALANCE SHEET
JUNE 30, 2008
(Unaudited)

|                                                                                                           |  |                |        |  
|---------------------------------------------------------------------------------------------------------- |  | -------------- | ------ | -
|                                                                                                           |  | June 30,
 2008 |       
|                                                                                                           |  |                |       
|                                                                                                           |  | (Unaudited)    |       
|                                                                                                           |  |                |       
|ASSETS                                                                                                     |  |                |        |  
|                                                                                                           |  |                |        |  
|                                                                                                           |  |                |        |  
|Total assets                                                                                               |  | $              |       |  
|                                                                                                           |  |                |        |  
|                                                                                                           |  |                |        |  
|LIABILITIES
 AND STOCKHOLDERS EQUITY                                                                      |  |                |        |  
|                                                                                                           |  |                |        |  
|                                                                                                           |  |                |        |  
|Commitment
 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, 5,000,000 issued and
 1,500,000 outstanding |  |                | 5,000  |  
|                                                                                                           |  |                |        |  
|Additional
 paid in capital                                                                                |  |                | 11,021 |  
|Treasury
 stock, at cost (3,500,000 at $.0025)                                                             |  |                | (8,750 | )
|Deficit
 accumulated during the development stage                                                          |  |                | (7271  | )
|                                                                                                           |  |                |        |  
|Total
 stockholders equity                                                                                |  |                |       |  
|                                                                                                           |  |                |        |  
|                                                                                                           |  |                |        |  
|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)INTERIM AND UNAUDITED STATEMENTS OF OPERATIONS
(Unaudited)

|                                                         |  |                                           |           |                                            |   |                                                                  |   |                                                                |           |   |   |           |  
|-------------------------------------------------------- |  | ----------------------------------------- | --------- | ------------------------------------------ | - | ---------------------------------------------------------------- | - | -------------------------------------------------------------- | --------- | - | - | --------- | -
|Income                                                   |  | For the six
 months
 ended June
 30, 2008 |           | For the three
 months ended
 June 30, 2008 |   | For the
 period 16-
 Apr-07
 (Inception)
 through June
 30, 2007 |   | For the period 16-
 Apr-07 (Inception)
 through June 30,
 2008 |          
|                                                         |  |                                           |           |                                            |   |                                                                  |   |                                                                |          
|                                                        
|Revenue                                                  |  |                                           |          |                                            | $ |                                                                  |   | $                                                              |          |   | $ |          |  
|Expenses                                                 |  |                                           |          |                                            | $ |                                                                  |   | $                                                              |          |   | $ |          |  
|General and
 Administrative                              |  |                                           |          |                                            | $ |                                                                  |   | $                                                              | (5,000    | ) | $ | (7271     | )
|                                                         |  |                                           |           |                                            |   |                                                                  |   |                                                                |           |   |   |           |  
|Total
 Expenses                                          |  |                                           |          |                                            | $ |                                                                  |   | $                                                              | (5,000    | ) | $ | (7271     | )
|                                                         |  |                                           |           |                                            |   |                                                                  |   |                                                                |           |   |   |           |  
|                                                         |  |                                           |           |                                            |   |                                                                  |   |                                                                |           |   |   |           |  
|Net loss per
 share (basic and diluted)                  |  |                                           | (.00      | )                                          | $ | (.00                                                             | ) |                                                                | (.00      | ) | $ | (.00      | )
|Weighted
 average shares outstanding (basic and diluted) |  |                                           | 1,500,000 |                                            |   | 1,500,000                                                        |   |                                                                | 5,000,000 |   |   | 3,170,814 |  
|                                                         |  |                                           |           |                                            |   |                                                                  |   |                                                                |           |   |   |           |  

The accompanying notes are an integral part
of these financial statements

F-2

---



AFH HOLDING II, INC.
(A Development Stage Enterprise)INTERIM AND UNAUDITED STATEMENTS OF STOCKHOLDERS EQUITY
For the period from April 16, 2007 (Inception) to June 30, 2008
(Unaudited)

|                                        |  |              |            |        |   |                              |  |          |        |                      |  |         |   |   |       |   |   |        |  
|--------------------------------------- |  | ------------ | ---------- | ------ | - | ---------------------------- |  | -------- | ------ | -------------------- |  | ------- | - | - | ----- | - | - | ------ | -
|                                        |  | Common Stock |            |        |   |                              |  |          |        |                      | 
|                                        |  |              |            |        |   |                              |  |          |        |                      | 
|                                        |  | Shares       |            | Amount |   | Additional
 Paid-in
 Capital |  | Treasury |        | Deficit
 accumulated |  | Total   |  
|                                        |  |              |            |        |   |                              |  |          |        |                      |  |         |  
|Issuance of Common Stock                |  |              |            |        |   |                              |  |          |        |                      |  |         |   |   |       |   |   |        |  
|Balance April
 16, 2007                 |  |              | 0          |        |   | 0                            |  |          | 0      |                      |  |         |   |   | 0     |   |   | 0      |  
|Shares
 issued in Lieu of expenses paid |  |              | 5,000,000  |        | $ | 5000                         |  | $        | 0      |                      |  |         |   | $ | 0     |   | $ | 5,000  |  
|Net Loss at
 June 30, 2008              |  |              |            |        |   |                              |  |          |        |                      |  |         |   |   | (7271 | ) |   | (7271  | )
|Contributed
 Capital for Services       |  |              |            |        |   |                              |  |          | 2271   |                      |  |         |   |   |       |   |   | 2271   |  
|Purchase of
 Treasury shares            |  |              | (5,000,000 | )      |   |                              |  |          |        |                      |  | (12,500 | ) |   |       |   |   | (12500 | )
|Sale of
 Treasury shares                |  |              | 1,500,000  |        |   |                              |  |          | 8,750  |                      |  | 3,750   |   |   |       |   |   | 12500  |  
|Balance at
 June 30, 2008               |  |              | 1,500,000  |        |   | 5000                         |  |          | 11,021 |                      |  | (8,750  | ) |   | (7271 | ) |   | 0      |  

The accompanying notes are an integral part
of these financial statements

F-3

---



AFH HOLDING II, INC.
(a Development Stage Enterprise)INTERIM AND UNAUDITED STATEMENTS OF CASH FLOWS
(Unaudited)

|                                                   |  |                                           |   |                                                                     |  |                                                                     |   |   |       |  
|-------------------------------------------------- |  | ----------------------------------------- | - | ------------------------------------------------------------------- |  | ------------------------------------------------------------------- | - | - | ----- | -
|                                                   |  | For the six
 months
 ended June
 30, 2008 |   | For the period
 April 16, 2007
 (Inception)
 through
 June 30, 2007 |  | For the period
 April 16, 2007
 (Inception)
 through
 June 30, 2008 |  
|                                                   |  |                                           |   |                                                                     |  |                                                                     |  
|                                                   |  |                                           |   |                                                                     |  |                                                                     |  
|Cash flows
 from operating activities              |  |                                           |   |                                                                     |  |                                                                     |   |   |       |  
|Net Loss                                           |  |                                           |  |                                                                     |  | (5,000                                                              | ) | $ | (7271 | )
|                                                   |  |                                           |   |                                                                     |  |                                                                     |   |   |       |  
|Shares
 issued in lieu of expenses paid            |  |                                           |  |                                                                     |  | 5000                                                                |   |   | 5000  |  
|                                                   |  |                                           |   |                                                                     |  |                                                                     |   |   |       |  
|Contributed
 Capital For Services                  |  |                                           |  |                                                                     |  |                                                                     |   |   | 2271  |  
|                                                   |  |                                           |   |                                                                     |  |                                                                     |   |   |       |  
|Cash 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 INTERIM AND UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 2008

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 is not conducting negotiations with 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 June 30, 2008, the results of its
operations for the three and six months ended June 30, 2008, and from the date
of inception (April 16, 2007) through June 30, 2008, and cash flows for the six
months ended June 30, 2008 from the date of inception (April 16, 2007) through
June 30, 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 period ended June 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:

New
Accounting Pronouncements:

Management does not believe
any recently issued, but not yet effective accounting pronouncements, if
adopted, would have a material effect on the accompanying financial statements.

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.

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 June 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
stockholders 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 June 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 June 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
June 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 June 13, 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: August 14, 2008 |  | -s- Amir F. Heshmatpour           
|                       |  |                                   
|                       |  | Amir F. Heshmatpour, President    

---