17
             U.S. SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC 20549
                                
                           FORM 10-KSB
                                
[X]   Annual  report  pursuant to section  13  or  15(d)  of  the
Securities  Exchange  Act  of 1934  for  the  fiscal  year  ended
December 31, 1996, 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 No.  0-23170

                HEADWAY CORPORATE RESOURCES, INC.
   (Name of Small Business Issuer as specified in its charter)

           Delaware                         75-2134871
(State or Other Jurisdiction of           (IRS Employer
Incorporation or Organization)         Identification No.)

        850 Third Avenue, 11th Floor, New York, NY  10022
      (Address of Principal Executive Offices and Zip Code)

Issuer's Telephone Number:  (212) 508-3560

Securities registered under Section 12(b) of the Act:  None

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

                 Common Stock, Par Value $0.0001

Check  whether  the issuer (1) filed all reports required  to  be
filed by sections 13 or 15(d) of the Exchange Act during the past
12 months (or 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 [ ]

Check  if there is no disclosure of delinquent filers in response
to  Item  405  of Regulation S-B in this form, and no  disclosure
will  be  contained,  to the best of registrant's  knowledge,  in
definitive  proxy  or  information  statements  incorporated   by
reference  in  Part III of this Form 10-KSB or any  amendment  to
this Form 10-KSB.  [X]

The  issuer's  revenues  for  its most  recent  fiscal  year  are
$57,197,000.

The aggregate market value of voting stock held by non-affiliates
computed  on the basis of the last sale price on March 24,  1997,
was $16,465,000.

As of December 31, 1996, the Registrant had outstanding 6,301,448
shares of Common Stock, par value $0.0001.

Documents  incorporated by reference:  Incorporated by  reference
in  Part  III of this report is to the definitive proxy statement
of the Company for the 1997 annual meeting of stockholders, which
the  Company  proposes to file with the Commission on  or  before
April 30, 1997.
                        TABLE OF CONTENTS

ITEM NUMBER AND CAPTION                                     Page

Part I                                                           

1.   Description of Business                                    3

2.   Description of Properties                                  7

3.   Legal Proceedings                                          8

4.   Submission of Matters to a Vote of Security Holders        8
                                                                 
Part II                                                          

5.    Market  for  Common Equity and  Related  Stockholder      9
Matters

6.    Management's  Discussion and  Analysis  or  Plan  of      9
Operations

7.   Financial Statements                                      12

8.   Changes in and Disagreements with Accountants             12
     on Accounting and Financial Disclosure

Part III                                                         

9.   Directors, Executive Officers, Promoters and Control       *
       Persons;  Compliance  with  Section  16(a)  of  the
Exchange Act

10.  Executive Compensation                                     *

11.   Security Ownership of Certain Beneficial Owners  and      *
Management

12.  Certain Relationships and Related Transactions             *

13.  Exhibits and Reports on Form 8-K                          12

*      These  items  are  incorporated  by  reference  from   the
definitive  proxy statement of the Company for  the  1997  annual
meeting  of  stockholders  to be filed with  the  Securities  and
Exchange Commission on or before April 30, 1997.













                             PART I
                                
                ITEM 1.  DESCRIPTION OF BUSINESS

General

       Headway   Corporate   Resources,   Inc.,   formerly   AFGL
International,  Inc.  ("the Company"), is  a  provider  of  human
resource management and strategic advisory services in the United
States and overseas.  The Company provides these services through
its   wholly-owned   subsidiaries,  Headway  Corporate   Staffing
Services,  Inc. ("Headway"), Whitney Partners, Inc.  ("Whitney"),
and  Furash  & Company, Inc. ("Furash").  Headway was  formed  in
1996  to  acquire  Irene  Cohen Temps, Inc.,  Corporate  Staffing
Alternatives, Inc., Certified Technical Staffing, Inc.,  and  the
operating assets of Irene Cohen Personnel, Inc. (collectively the
"IC  Group"), which was completed in May 1996.  In October  1996,
Headway acquired the assets of Vogue Personnel Services, Inc., of
New  York  City  ("Vogue"),  which  have  been  incorporated   in
Headway's   staffing   services   business.    Whitney   conducts
operations  in  Europe through its wholly-owned  subsidiary,  The
Whitney   Group  (Europe)  Limited,  based  in  London.   Whitney
recently formed two other subsidiaries, The Whitney Group  (Asia)
Limited, which offers human resource management services in  Hong
Kong, and Whitney Asia PTE Ltd., which operates from an office in
Singapore.   Whitney also maintains an office in  Japan.   Furash
operates from an office in Washington, D.C.

      On  November  6,  1996,  the stockholders  of  the  Company
approved  a  change in the state of incorporation of the  Company
from  Nevada  to Delaware through a merger of the  Company  (then
AFGL  International,  Inc.,  a Nevada corporation)  into  Headway
Corporate Resources, Inc., a Delaware corporation formed for that
purpose.   Documents  of merger were filed  with  the  states  of
Nevada  and  Delaware on November 7, 1996.  In  the  merger,  all
outstanding capital shares were exchanged on a one share for  one
share  basis, and the only change in the capital of  the  Company
was  reduction of the par value for all capital shares to $0.0001
per   share.    Hereinafter,  the  term  "Company"  shall   refer
collectively  to  Headway  Corporate  Resources,  Inc.,   Headway
(including  its  subsidiaries), Whitney, and Furash,  unless  the
context otherwise indicates.

      The  principal  offices of the Company are located  at  850
Third  Avenue,  New  York, New York, 10022, where  its  telephone
number is (212) 508-3560.

History

     1996 Developments

     The IC Group was purchased May 31, 1996, at a total price of
$9,230,000, plus an additional $500,000 payable only out  of  the
future  net  earnings derived from the acquired assets  of  Irene
Cohen  Personnel, Inc., approximately $19,000 of which  has  been
earned  and  is  payable as of December 31, 1996.   The  purchase
price  was  paid  in  cash, and determined  through  arms  length
negotiations  between the Company and the former shareholders  of
the  IC Group on the basis of the tangible assets of the IC Group
and  the goodwill associated with the business.  Funding for  the
acquisition  was  provided by debt financing  obtained  from  ING
(U.S.) Capital Corporation ("ING"), and equity financing obtained
by  sale  of  the Company's Series C and D Convertible  Preferred
Stock to certain private investors.

     Vogue was purchased on October 21, 1996, at a total purchase
price  of  $2,400,000  paid  in cash.   The  purchase  price  was
determined  through arms length negotiations between the  Company
and  the  former sole shareholder and officer of  Vogue,  on  the
basis of the tangible assets of Vogue and the goodwill associated
with the business.  Funding for the acquisition was provided by a
revolving credit facility established by the Company with ING.

     On May 31, 1996, the Company entered into a Credit Agreement
with  ING.  Under the Credit Agreement, ING made a term  loan  of
$9,000,000 to the Company, and established a $6,000,000 revolving
credit facility for the Company.  These funds have been used  for
the  acquisition of the IC Group, the acquisition of  Vogue,  and
working  capital.  In connection with this financing arrangement,
the  Company  granted  to ING the Series E  Warrant  to  purchase
575,000  shares of Series E Convertible Preferred  Stock  of  the
Company at an exercise price of $0.02 per share.  The Company has
placed a value of $1,757,000 on the Series E Warrant, based on an
independent appraisal, which it will amortize over the five  year
payment period of the term loan as deferred financing costs.  The
Series  E  Convertible  Preferred Stock  is  convertible  at  the
election of the holder to Common Stock of the Company at the rate
of  one share for one share, subject to adjustment based on anti-
dilution   provisions.   The  Company   also   entered   into   a
registration rights agreement with ING pertaining to  the  Common
Stock  of  the  Company issuable on conversion of  the  Series  E
Convertible Preferred Stock.  Under the terms of the Registration
Rights  Agreement,  the  Company is required  to  file  and  keep
effective a shelf registration covering the Common Stock issuable
to  ING.  In the registration rights agreement, ING agrees not to
make any private or public sale of the Common Stock prior to  May
31, 1997.

      On June 14, 1996, the Company completed a private placement
of  Series  D Convertible Preferred Stock.  The Company  sold  80
shares  of  Series D Convertible Preferred Stock for  $4,000,000,
which  was  used for the acquisition of the IC Group and  working
capital.   The face value for each share of Series D  Convertible
Preferred Stock ($50,000), is convertible to Common Stock of  the
Company at the lesser of $5.210625 or 80% of the market price for
the  Company's Common Stock on the date of conversion.  Dividends
are  payable on the Series D Convertible Preferred Stock  at  the
rate  of  8% per annum.  In the event of conversion, the  Company
may,  at  its  election, issue Common Stock  in  payment  of  the
dividend.  On conversion, the holders of the Series D Convertible
Preferred Stock are entitled to receive a warrant to purchase one
share  of  Common  Stock for every four shares  of  Common  Stock
issued on conversion exercisable on or before May 1, 1999, at  an
exercise  price of $4.25 per share.  As of December 31, 1996,  43
shares of Series D Convertible Preferred Stock with a face  value
of  $2,150,000 had been converted to Common Stock at  an  average
conversion  price of $2.91.  In connection with the placement  of
Series D Convertible Preferred Stock, the Company entered into  a
registration rights agreement in which it agreed to use its  best
efforts to file a registration statement on Form S-3 covering the
shares  of  Common Stock issuable on conversion of the  Series  D
Convertible Preferred Stock.  The Company has complied with  that
agreement.

      In  anticipation of the acquisition of the  IC  Group,  the
Company  completed  an offshore offering to a  limited  group  of
foreign  investors  in  April 1996, to provide  funding  for  the
purchase  and other working capital needs.  The Company sold  150
shares  of  Series C Convertible Preferred Stock for  $3,000,000.
The  face  value for each share of Series C Convertible Preferred
Stock ($20,000), is convertible to Common Stock of the Company at
the  lesser  of  $4.558125 or 80% of the  market  price  for  the
Company's Common Stock on the date of conversion.  Dividends  are
payable  on the Series C Convertible Preferred Stock at the  rate
of 8% per annum.  In the event of conversion, the Company may, at
its election, issue Common Stock in payment of the dividend.   As
of  December  31,  1996,  145  shares  of  Series  C  Convertible
Preferred  Stock  with  a  face  value  of  $2,900,000  had  been
converted  to  Common  Stock at an average  conversion  price  of
$2.8068.

      The  Company's May 1996 acquisition of the IC Group  was  a
major step in establishing the Company as a full-service staffing
company  serving the financial services industry, and marked  the
Company's  entrance into the temporary staffing industry.   Based
on a market study obtained by the Company, the temporary staffing
industry is experiencing growth in revenues and earnings.   Gross
revenues  in  the industry grew from $20 billion in 1991  to  $40
billion in 1995, representing a compounded annual growth rate  of
approximately 19%.  It is estimated that this industry will  grow
at  an annual average rate of approximately 11% through the  year
2000.  This growth is attributable to a trend among employers  to
control costs by reducing the number of employees and relying  on
human resource management firms to provide temporary workers  and
consultants  as needed to satisfy staffing requirements  as  they
fluctuate between the peaks and valleys of the business cycle.

      In an attempt to take advantage of this growth, the Company
will   seek   established  temporary  staffing   and   payrolling
businesses for possible acquisition throughout the United States.
Generally,  the  Company will seek businesses with  gross  annual
revenues  of at least $2,000,000, that can increase the Company's
market  share in areas where the Company is established or enable
the  Company  to  enter  the market in  new  geographical  areas.
Consistent  with  the  Company's history and  experience  in  the
financial services industry, the Company has a strong interest in
acquiring  businesses  that  have  established  clients  in  that
industry or are located in geographical areas where the financial
services industry has a significant or growing presence.   It  is
not  anticipated that the Company will acquire any business  with
which  any  of  the Company's officers, directors,  or  principal
stockholders  has  any association, since the  Company  does  not
believe  any  of  such  persons is associated  with  a  temporary
staffing or payrolling business.

      The  Company  has entered into a letter of intent  for  the
acquisition  of  a  temporary staffing business  based  in  North
Carolina.  The acquisition is subject to negotiation of the final
terms  of  purchase, completion of the Company's  review  of  the
business,  and other contingencies.  Under the letter of  intent,
the  Company is prohibited from disclosing the terms of  purchase
and  the  name  of the acquisition target unless  and  until  the
contingencies  have been resolved.  The Company anticipates  that
all contingencies will be satisfied and the acquisition completed
on or about March 31, 1997.

      The  Company  is  currently pursuing negotiations  for  the
acquisition  of  a  temporary  staffing  business  based  in  the
Northeastern  United  States.   The  acquisition  is  subject  to
negotiation  of  the final terms of purchase, completion  of  the
Company's  review  of the business, obtaining  a  commitment  for
financing  for  the acquisition, and other contingencies.   While
negotiations are ongoing, the Company has agreed not to  disclose
the  proposed  terms of purchase and the name of the  acquisition
target.   The Company is hopeful that that all contingencies  can
be  satisfied so that the acquisition can be consummated  in  the
second quarter of 1997.  There is no assurance, however, that all
of  the  contingencies  will  be  resolved  and  the  acquisition
completed.

     Pre-1996 Activities

      In  addition  to  the business operations  of  Whitney  and
Furash,  through the end of 1995 the Company was engaged  in  the
business  of  providing  public relations, corporate  consulting,
advertising,  and  financial notice  services  primarily  to  the
financial  services  industry.   The  advertising  and  financial
notice  business  was originally acquired in  1992.   The  public
relations  business was acquired in early 1993, and the corporate
consulting  business was developed internally from  1993  through
1994.

      At  the  beginning  of 1995, the Company  discontinued  the
corporate  consulting  business, the  operations  of  which  were
nominal.   Pursuant to an Asset Purchase Agreement  dated  as  of
December 31, 1995, the Company sold certain assets of the  public
relations, advertising, and financial notice business to Citigate
Communications Group Limited, a limited company based in  England
("Citigate").   Under the terms of the transaction,  the  Company
sold  assets  with  a book value of approximately  $9,420,000  to
Citigate  in  exchange  for 64,000 ordinary  shares  of  Citigate
valued  at  $2,368,000 (approximately 18.3% of Citigate's  issued
and  outstanding shares), payment or assumption of non-affiliated
obligations  in  the  amount  of  approximately  $8,660,000,  and
payment  of affiliated obligations in the amount of approximately
$531,000.   In connection with the sale, the Company also  wrote-
off  approximately $2,470,000 of intangible assets.  In  December
1996,  an  agreement was reached (subject to certain  conditions)
for  the acquisition of Citigate by Incepta Group plc, a publicly
held company in the United Kingdom ("Incepta").  These conditions
were subsequently met in March 1997, so that the Company received
in  exchange  for  its  stock  in Citigate  $1,643,000  in  cash,
8,677,111 ordinary shares of Incepta with a total market value at
March  17,  1997,  of  approximately $3,618,000,  and  up  to  an
additional 7,072,307 ordinary shares based on the performance  of
Citigate  during its fiscal year ending September 30, 1997.   The
Incepta  ordinary  shares are subject to  a  restriction  against
public  sale  or  disposition for  a  term  of  two  years.   The
resulting gain will be recognized in the first quarter of 1997.

      In  January 1995, the Company completed the acquisition  of
Furash as a wholly owned subsidiary.  The Company exchanged 6,858
shares  of  Series  B  Convertible  Preferred  Stock  valued   at
$2,400,000  for  all  of  the  capital  stock  of  Furash.    The
acquisition  was  accounted for as a purchase,  and  goodwill  of
$1,784,000 arose from the transaction.

Human Resource Management Services

      The  human  resource  management services  of  the  Company
provides  businesses with staffing solutions to the  complexities
and  high  costs related to employment and human resources.   The
Company  offers  a  broad  range of  employment-related  services
consisting of human resource administration (including  temporary
and  permanent placement services), executive search,  employment
regulatory   compliance   management,  managed   human   resource
services,  workers' compensation coverage, health care and  other
employee  benefits.   These services are  provided  primarily  to
clients in New York City and surrounding areas.

     The Company believes its services assist businesses in:  (i)
locating  and  employing  persons  who  will  contribute  to  the
clients' business; (ii) meeting temporary staffing needs as  they
arise in the business; (iii) managing escalating costs associated
with  workers' compensation, health insurance coverage, workplace
safety  programs and employee-related litigation; (iv)  providing
1099   consultants  with  competitive  health  care  and  related
benefits;  and  (v)  reducing the time  and  effort  required  of
business  management  to deal with the increasingly  complex  and
regulatory environment affecting employment.

      Whitney focuses on executive search services for middle and
upper  sales  and  management  level  positions  in  the  finance
industry, and provides this service in the United states,  Japan,
Europe,  Singapore, and Hong Kong.  The Company has traditionally
focused its services, and marketing effort for such services,  on
the  financial services industry consisting of investment banking
firms,  broker-dealers, banks and similar financial institutions.
The  Company intends to continue to focus on this industry in the
foreseeable  future.  Whitney is compensated for its services  on
the  basis of a percentage of the first year compensation of  the
candidate  successfully  placed  with  the  client.    The   base
percentage  is usually 33%, but may be reduced if the Company  is
working on filling multiple positions for the client.  The salary
range  for  the type of executive positions filled by Whitney  is
between $100,000 and $2,000,000.

       Headway  focuses  on  providing  temporary  and  permanent
placement and managed human resource services to a broad range of
industries,  with  a  concentration  in  the  financial  services
industry.  The acquisitions of the IC Group and Vogue by  Headway
in  1996  will  enable the Company to further develop  this  core
business.   The  long-term plan of the Company is to  expand  its
services  primarily to the financial services industry throughout
the  United  States.  Headway is compensated  for  its  temporary
staffing  services at an hourly rate, based on  the  compensation
paid  to  the  temporary employee, the associated tax  burden,  a
contribution towards the Company's overhead expenses and a profit
margin  that  will  allow  the Company  to  achieve  its  overall
financial  objectives.  Hourly rates for the Company's  temporary
employees range between $6.00 and $150.00, based on the  training
and  skill level of the employee.  Headway also provides  managed
human   resource   services  through   its   Corporate   Staffing
Alternatives ("CSA") division.  CSA works with large corporations
to   identify  and  address  the  issues  surrounding  contingent
employment and provide these workers with a full range  of  cost-
effective benefit programs.

      The  Company  has developed what it believes to  be  strong
client  relationships  with Merrill Lynch &  Co.  and  Montgomery
Securities,  which accounted for 11% and 4% of the  total  dollar
amount  of  revenues  earned by the Company  for  human  resource
management  services in 1996, respectively.  Management  believes
that  the  Company's relationship with these clients is good  and
will remain strong in the foreseeable future.  Nevertheless,  the
Company  is  continually  marketing its services  to  prospective
clients  in  order to diversify its client base.  The Company  is
also  hopeful  that  future acquisitions  will  help  to  further
diversify its client base.

      For the fiscal year ended December 31, 1996, human resource
management  accounted  for  approximately  $53,389,000   of   the
Company's total revenue.  Of this amount, 89% is attributable  to
domestic  operations,  9%  to  European  operations,  and  2%  to
operations in Asia.

Advisory Services

      Management and strategic advisory services are  offered  by
the  Company in the United States through Furash, which is  based
in  Washington,  D.C.   These services  are  provided  by  Furash
primarily  to  banks, thrifts, and holding companies  ranging  in
size  from $1 billion to $100 billion in assets; mortgage  banks;
investment and brokerage firms; law firms with financial services
clients;   private  investors;  insurance  companies;  regulatory
agencies;  trade  associations  representing  the  industry;  new
groups  entering  the  industry; and  international  firms.   The
Company  advises  its  clients on all aspects  of  the  financial
services industry,  including client operations, new products and
services,  marketing of products and services,  cost  containment
strategies,  mergers  and acquisitions,  turnaround  of  troubled
institutions, technology and information planning, and regulatory
developments and trends.  Most of the Company's clients originate
through  referrals  or from sources that know  of  the  work  and
reputation   of  Furash  in  the  financial  services   industry.
Advisory  services are performed on either a retainer or  project
basis.   In either case, budgets are established at the beginning
of  the  relationship  and  timetables and  objectives  are  well
defined.  Project assignment fees are billed to the client  on  a
monthly  basis  as time is incurred.  For retainer relationships,
clients  are provided with an estimated monthly usage of services
against  which  professional fees are billed.  In both  types  of
assignments  an  up-front or initial payment  may  be  requested.
This  initial  payment is typically one-third of total  estimated
fees.   Out-of-pocket expenses are billed at cost in addition  to
professional fees.

Government Regulations

      The  temporary  staffing  operations  of  the  Company  are
affected  by  numerous federal, state and local laws relating  to
labor,  tax, insurance and employment matters.  By entering  into
an  employment  relationship with employees who  work  at  client
company  locations  ("worksite employees"), the  Company  assumes
certain  obligations and responsibilities of  an  employer  under
these  laws,  which are subject to varying interpretations.   The
Company  believes  that its operations are in compliance  in  all
material  respects with all applicable federal and state statutes
and regulations.

Competition

     The human resource management industry is highly fragmented,
with   a   very  large  number  of  companies  providing  similar
employment  services.   The Company encounters  competition  from
other employer organizations and from single-service and "fee for
service"  companies such as payroll processing  firms,  insurance
companies  and  human  resource consultants.   In  addition,  the
Company  may  encounter substantial competition from  new  market
entrants.   With  respect to the placement services  of  Whitney,
management believes Korn-Ferry International, Spencer Stuart, and
Russell  Reynolds Associates, Inc., are the principal competitors
of  the  Company in providing placement services to the financial
services industry in the United States.

       In   advisory   services,  the  Company   faces   numerous
competitors,  both  large  and small,  including  full  line  and
specialized   management   consultants,   technology   companies,
accounting firms, and individual practitioners.

      The  Company believes that its niche strategy  of  being  a
quality,  preeminent  provider to  a  broad  range  of  financial
services and related clients will allow it to remain competitive.

Employees

     The Company presently has 150 full-time employees consisting
of  four  executive  officers,  113  management  and  supervisory
employees, and 33 office employees.  These numbers do not include
temporary employees and independent contractors employed  by  the
Company, who currently number approximately 1,700 persons.   None
of  the Company's employees is represented by a labor union,  and
the Company considers its relations with its employees to be good
and has not experienced any work stoppages or slowdowns.

               ITEM 2.  DESCRIPTION OF PROPERTIES

      The Company leases its offices from unrelated parties.  The
following  table is a description of the locations, lease  rates,
and expiration dates of the Company's office leases.

Location                 Monthly Rental      Lease Term Expires

850 Third Avenue            $75,000             October 2009
New York, New York

317 Madison Avenue          $34,000             January 2007
New York, New York

2001 L Street N.W.          $32,000               May 2005
Washington, D.C.

17 Buckingham Gate          $12,000             February 2003
London, England

3-20  Toranomon   5-        $ 9,000             October 1998
Chome
Minato-ku,    Tokyo,
Japan

Ocean  Tower,   Room        $ 7,000              March 1999
1004
Raffles       Place,
Singapore

      The  Company receives monthly rental income based on a sub-
lease  agreement with Citigate for the office space at 850  Third
Avenue.  The monthly rental is $45,000, expiring December 2000.


                   ITEM 3.  LEGAL PROCEEDINGS

      The  Company  is not a party to any material pending  legal
proceedings,  and  to  the  best  of  its  knowledge,   no   such
proceedings by or against the Company have been threatened.

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

     On November 6, 1996, a meeting of the Company's stockholders
was  held at which the stockholders voted upon and approved  each
of the following proposals:

     (1)  election of Edward E. Furash as a director to serve for
a  term  of  two years by a vote of 5,023,314 shares  for,  2,100
against,  and 78,375 abstaining; election of Ehud D. Laska  as  a
director  to serve for a term of two years by a vote of 5,022,414
shares for, 3,000 against, and 78,375 abstaining; election of  G.
Chris Andersen as a director to serve for a term of one year by a
vote   of  5,023,514  shares  for,  1,900  against,  and   78,375
abstaining; election of Richard B. Salomon as a director to serve
for  a  term of one year by a vote of 5,024,214 shares for, 1,200
against,  and  78,375  abstaining;  and,  election  of  Gary   S.
Goldstein and Barry S. Roseman as directors, each to serve for  a
term  of  three years, by a vote of 2,276 shares of the Company's
Series  A Convertible Preferred Stock, with no shares against  or
abstaining.

     (2)  approval of the change of the state of incorporation of
the  Company  from Nevada to Delaware through  a  merger  of  the
Company  with  and  into  Headway Corporate  Resources,  Inc.,  a
Delaware  company formed for that purpose, by a vote of 3,107,061
shares  of  Common  Stock, 2,276 shares of Series  A  Convertible
Preferred  Stock, 6,921 shares of Series B Preferred Stock,  23.4
shares  of  Series C Preferred Stock, and 45 shares of  Series  D
Preferred  Stock for the proposal; 91,767 shares of Common  Stock
against  the  proposal;  and 1,904,961  shares  of  Common  Stock
abstaining on the proposal, including 1,902,786 broker-dealer non-
votes;

      (3)  approval of the change of the Company's corporate name
to  "Headway  Corporate Resources, Inc.", by a vote of  5,033,097
shares  of  Common  Stock  for; 68,467  shares  of  Common  Stock
against;  and  419,094 shares of Common Stock abstaining  on  the
proposal, including 416,869 broker-dealer non-votes; and

     (4)  ratification of the appointment of Ernst & Young LLP as
independent  auditors of the Company for the year ended  December
31,  1996,  by  a vote of 5,029,039 shares of Common  Stock  for;
73,075  shares  of  Common Stock against; and 418,544  shares  of
Common Stock abstaining on the proposal, including 416,869 broker-
dealer non-votes.

                            PART III

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      The  following table sets forth, for the respective periods
indicated, the prices of the Company's Common Stock in the  over-
the-counter  market,  as reported and summarized  by  the  Nasdaq
SmallCap  Market  System.  Such prices are based on  inter-dealer
bid prices, without markup, markdown, commissions, or adjustments
and may not represent actual transactions.

Calendar Quarter Ended           Low Bid            High Bid

March 31, 1995                    $3.50               $4.75
June 30, 1995                     $2.625              $4.125
September 30, 1995                $1.50               $3.00
December 31, 1995                 $2.25               $3.75

March 31, 1996                    $2.00               $4.375
June 30, 1996                     $3.25               $6.00
September 30, 1996                $3.00               $4.9375
December 31, 1996                 $3.375              $5.125

      Since  its  inception, no dividends have been paid  on  the
Company's  Common  Stock.   Cumulative dividends  accrue  on  the
Series  A  Convertible  Preferred  Stock,  Series  C  Convertible
Preferred  Stock, and Series D Convertible Preferred Stock  at  a
rate  of  eight percent per annum on their respective liquidation
values.   Dividends on Series A Convertible Preferred  Stock  are
payable  semiannually  out of funds legally  available  therefor.
Dividends  on Series C Convertible Preferred Stock and  Series  D
Convertible Preferred Stock are payable in cash or Common  Stock,
at  the  Company's election, at the time shares are converted  to
Common Stock or redeemed by the Company.  The Company intends  to
retain  any  earnings not required for payment  of  dividends  on
preferred stock for use in its business activities, so it is  not
expected  that any dividends on the Common Stock will be declared
and paid in the foreseeable future.

      At  December 31, 1996, there were approximately 207 holders
of record of the Company's Common Stock.

    ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
                           OPERATIONS

Results of Operations

Overview

      During  1996,  the Company completed the initial  phase  of
refocusing  its  efforts on its core business of human  resources
management  and  advisory services.  The  Company  completed  the
acquisition of several staffing companies and is negotiating  for
the  acquisition of several others.  The Company is expecting  to
continue  to  grow  in  this  area both  internally  and  through
additional acquisitions.  While there are a number of competitive
companies in the staffing industry, the Company believes that its
strategy  of  focusing on the financial services  industry  is  a
significant point of differentiation.

      On  May 31, 1996, the Company completed the acquisition  of
the  IC  Group for cash at a total price of $9,230,000,  plus  an
additional  $500,000 payable only out of the future net  earnings
of  Irene  Cohen Personnel, Inc.  On October 21, 1996, Vogue  was
purchased for cash of $2,400,000.

       In   December  1996,  the  Company  signed  a  letter   of
understanding  with a significant temporary staffing  company  in
North Carolina.  The transaction is expected to close by the  end
of   the   first  quarter  of  1997.   The  Company  is  pursuing
negotiations to acquire a major Northeast staffing company,  with
the  goal of completing the acquisition in the second quarter  of
1997.

      In  April  and May of 1996, the Company obtained additional
equity financing through the sale of the Company's Series  C  and
Series  D Convertible Preferred Stock.  The Company also obtained
debt  financing in the form of a term loan and a revolving credit
facility  from  ING.  The Company will seek additional  financing
from  ING through an increase in the existing credit facility  to
fund the purchase of the current acquisition targets.

      On  March  21,  1996,  the Company completed  the  sale  of
substantially  all  of  its  operating  assets  of   its   public
relations,   advertising,  and  financial  notice   business   to
Citigate.  In exchange, the Company received approximately  18.3%
of  the  outstanding  stock of Citigate.  On  December  4,  1996,
Citigate  announced that it had reached an agreement to sell  all
of  its outstanding share capital to Incepta Group PLC.  On March
13,  1997,  the  Company, which was carrying  the  investment  in
Citigate  stock  at  $2,368,000,  received  $1,643,000  in  cash,
8,677,111 ordinary shares of Incepta with a total market value at
March  17,  1997,  of  approximately $3,618,000,  and  up  to  an
additional 7,072,307 ordinary shares based on the performance  of
Citigate  during its fiscal year ending September 30, 1997.   The
Incepta  ordinary  shares are subject to  a  restriction  against
public sale or disposition for a term of two years.

     The services of the IC Group, Vogue, Whitney, and Furash are
targeted  to the financial services industry, and it is  expected
that  this focus will continue in the current year.  Accordingly,
the performance of the Company has been, and will continue to  be
heavily  dependent  on the performance of the financial  services
industry.

Consolidated

      Consolidated  revenue increased $41,705,000 to  $57,197,000
for  the  year ended December 31, 1996, from $15,492,000 for  the
year ended December 31, 1995.  Of the increase, approximately $37
million  is  attributable  to  the temporary  staffing  companies
acquired in 1996.  The balance of the increase relates to Whitney
which  had  a record year with revenue in excess of $16  million.
Furash experienced a decline in revenue in 1996.

       Consolidated  operating  income  increased  $1,480,000  to
$2,943,000  for  the year ended December 31,  1996,  compared  to
$1,463,000 for the year ended December 31, 1995.  The significant
increase is attributable to the Company's acquisition of  the  IC
Group and the strong performance of Whitney.

      The Company's operations were not significantly impacted by
inflation during the years ended December 31, 1996 and 1995,  and
it  is  not  anticipated that inflation will have any significant
impact  on  the Company's results of operations for at least  the
next year.

Human Resource Management

      Revenue  from human resource management services  increased
$42,394,000 to $53,389,000 for the year ended December 31,  1996,
from  $10,996,000  for  the year ended December  31,  1995.   The
increase  in  revenue for 1996 is primarily attributable  to  the
acquisitions   of   the   temporary  staffing   companies.    The
acquisitions  accounted for $37,082,000  of  the  revenue,  while
Whitney  contributed $16,308,000, an increase of $5,312,000  from
last  year's  revenue of $10,996,000.  The increase in  Whitney's
revenue  is  due  to  the  strong performance  in  the  financial
services  industry and the related increase in hiring  activities
of Whitney's clients.

      Total  operating expenses attributable to  human  resources
management services increased $39,764,000 to $49,262,000 for  the
year  ended December 31, 1996, as compared to $9,498,000 for  the
same  period last year.  Of the increase, $35,965,000 relates  to
the   staffing  companies  acquired  during  the  year  of  which
$29,703,000  is  the direct cost of revenues relating  to  wages,
taxes  and  benefits of worksite employees.  Whitney's  operating
expenses  increased $3,798,000 to $13,296,000 for the year  ended
December  31, 1996 as compared to $9,498,000 for the same  period
last  year.   The  increase, which is primarily  in  compensation
expense, is directly attributable to the increase in revenue.

      Asian  operations resulted in an operating loss of  $33,000
for  1996,  as  compared to a loss of $136,000  for  1995.   This
improvement is attributable entirely to operating income in Japan
of  $210,000.  The Company's offices in Singapore and  Hong  Kong
incurred losses due to start up and related costs.

      Revenue  from operations in Europe was $4,557,000  for  the
year  ended December 31, 1996, compared to revenues of $3,327,000
in  1995.   The increase was attributable to a strong performance
in  the  financial services sector in Europe.  Operating expenses
which  increased  $1,213,000 to $4,522,000 in  1996  compared  to
$3,309,000 for the same period in 1995 related to the increase in
revenue related compensation accruals.  Included in the operating
expenses  of  Europe is a management charge from the  Company  of
$302,000  and $349,000 in 1996 and 1995 respectively.   Operating
income  was  $35,000 for 1996 compared to operating income  after
minority interest of $16,000 for 1995.

      Operating  income  from human resource management  services
increased  $2,629,000 to $4,127,000 for the year  ended  December
31,  1996,  compared to $1,498,000 for the same period  in  1995.
The increase in operating income can be attributed to an increase
in  Whitney  operating income of $1,515,000  resulting  from  the
increase  in  revenue  and  $1,114,000 from  the  newly  acquired
staffing companies.

Advisory Services

      Revenues from advisory services offered by Furash  declined
$688,000  to $3,808,000 for the year ended December 31,  1996  as
compared to $4,496,000 for the same period in 1995.  The loss  of
a  major  client  accounted  for approximately  $596,000  of  the
decline.  In addition, there was a decline in billable hours  for
certain  key  consultants  involved in  the  development  of  new
business lines.

      Operating expenses decreased $21,000 to $4,503,000 for  the
year  ended December 31, 1996 compared to $4,524,000 for the same
period in 1995.  The Company implemented a reorganization plan in
the  second  half  of  1996 resulting  in  a  refocusing  of  the
Company's  product line and a reduction to the operating  expense
structure for 1997.

     Furash had an operating loss for the year ended December 31,
1996,  of $695,000 compared to operating loss of $28,000 for  the
same  period  in  1995.  For the second half of 1996  Furash  had
operating  income  of  $156,000.  Management  believes  that  the
reorganization  plan  has been successful and  the  Company  will
continue to show improvement throughout 1997.

Liquidity and Capital Resources

      In  May 1996, the Company obtained $6,267,000 in additional
equity financing through the sale of the Company's Series  C  and
Series  D Convertible Preferred Stock.  The company also  entered
into  a  financing relationship in the form of a $9,000,000  term
loan  and a $6,000,000 revolving credit facility from ING Capital
Corporation.  The Company used a portion of this capital for  the
acquisition  of  the IC Group and Vogue and for  general  working
capital.   The term loan is payable quarterly over  a  five  year
term  commencing  September 30, 1996, and bears interest  at  the
LIBOR  rate  plus  3.25%.  The revolving  credit  facility  bears
interest  at  the  prime rate plus 1.25%  At  December  31,  1996
$8,500,000  was  outstanding on the term loan and $3,850,000  was
outstanding  on  the revolving credit facility.  The  Company  is
seeking additional financing from ING through an increase in  the
existing  credit  facility,  in order  to  complete  the  pending
acquisitions.   The term loan and revolving credit facility  with
ING  are  secured  by  substantially all of  the  assets  of  the
Company.

      Of  the  funds  obtained through the sale of the  preferred
stock and the financing arrangement, the Company used $12,139,000
for  the acquisitions of the IC Group and Vogue and $286,000  for
property and equipment.

      Cash  generated from operating activities was  $319,000  in
1996,  and  management  is  of the  opinion  that  cash  will  be
available  from its operations to meet its operating and  capital
requirements in 1997, exclusive of pending acquisitions.  In 1995
cash used for operating activities was $2,241,000 primarily as  a
result of the losses attributable to the discontinued operations.
The Company had working capital of $1,648,000 at the end of 1996,
compared   to  $1,494,000  at  December  31,  1995.    Management
anticipates that the improvement in working capital will continue
in 1997 if the Company's performance continues at present levels.
As  a  result,  cash  flow  from operations  in  1997  should  be
available  for  meeting payment obligations and  working  capital
needs as they arise.

       Total   cash  generated  from  financing  activities   was
$12,542,000  for  the year ended December 31, 1996,  compared  to
$3,014,000   generated  from  financing   activities   in   1995.
Financing  activities  included the net  proceeds  from  the  ING
financing  arrangement  of  $12,850,000  and  the  sale  of   the
Company's preferred stock of $6,267,000, and repayment  of  loans
outstanding prior to the ING financing of $5,675,000.

                  ITEM 7.  FINANCIAL STATEMENTS

      The consolidated financial statements of the Company appear
at   the  end  of  this  report  beginning  with  the  Index   to
Consolidated Financial Statements on page F-1.


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

      In September 1996, the accounting firm of Ernst & Young LLP
was  approved  by  the Board of Directors of  the  Company,  upon
recommendation  by the Audit Committee, to serve  as  independent
auditors  of  the  Company for 1996, which was  ratified  by  the
stockholders  of the Company in November 1996.   This  change  in
independent auditors was previously reported in a report on  Form
8-k  dated  September  16, 1996, filed with  the  Securities  and
Exchange Commission.

                            PART III

      The  information required by each of the Items listed below
is  incorporated  herein  by reference to  the  definitive  proxy
statement  of  the  Company  for  the  1997  annual  meeting   of
stockholders,  which  the  Company  proposes  to  file  with  the
Securities and Exchange Commission on or before April 30, 1997:

      Item  9.    Directors,  Executive Officers,  Promoters  and
Control  Persons; Compliance with Section 16(a) of  the  Exchange
Act;

     Item 10.  Executive Compensation;

      Item  11.  Security Ownership of Certain Beneficial  Owners
and Management; and

     Item 12.  Certain Relationships and Related Transactions.

                            ITEM 13.
                EXHIBITS AND REPORTS ON FORM 8-K

      Copies  of the following documents are included as exhibits
to this report pursuant to Item 601 of Regulation S-B.

Exhibits.

Exhibit     SEC    Ref.  Title of Document                Location
No.         No.                                           
1           (3)(i)       Certificate of Incorporation,    This
                                                          Filing
                                                          
2           (3)(ii)      By-Laws                          This
                                                          Filing
                                                          
3           (4)          Certificate of Designation       This
                           of Preferred Stock             Filing
                                                          
                                                          
4           (4)          Form of Registration Rights      Initial
                            Agreement with purchasers of  FM S-3
                         Series                           Ex#7
                           D Convertible Preferred Stock  
                         (1)
5           (2)          Stock Purchase Agreement dated   Fm8-K
                           April 10, 1996 (2)             Ex#1
                                                          
6           (2)          Asset Purchase Agreement dated   Fm8-K
                           May 31, 1996 (2)               Ex#2
                                                          
7           (4)          Credit Agreement dated           Fm8-K
                           May 31, 1996 (2)               Ex#6
                                                          
8           (4)          Revolving  Note dated  May  31,  Fm8-K
                         1996(2)                          Ex#7
                                                          
9           (4)          Term Note dated May 31, 1996(2)  Fm8-K
                                                          Ex#8
                                                          
10          (4)          Security Agreement dated         Fm8-K
                           May 31, 1996(2)                Ex#9
                                                          
11          (4)          Warrant Agreement dated          Fm8-K
                           May 31, 1996(2)                Ex#10
                                                          
12          (4)          Registration Rights Agreement    Fm8-K
                           dated May 31, 1996(2)          Ex#11
                                                          
13          (11)         Computation of Net Income Per    This
                           Common Share                   Filing
                         
14          (21)         Subsidiaries of the Company      This
                                                          Filing
15          (23)         Consent of Ernst & Young LLP     This
                                                          Filing
                                                          
16          (23)         Consent of Moore Stephens P.C.   This
                                                          Filing
17          (23)         Consent of Kingston Smith,       This
                           Chartered Accountants          Filing
                                                          
(1)   This  is  the  form  of the registration  rights  agreement
entered  into between the Company and purchasers of the Company's
Series  D Convertible Preferred Stock, and is incorporated herein
by   this   reference  from  exhibit  no.  7  of  the   Company's
registration statement on Form S-3, SEC File No. 333-08615, filed
on July 23, 1996.

(2)  Each of these exhibits are included in the Company's current
report  on  Form  8-K, dated May 31, 1996,  and  filed  with  the
Commission on June 14, 1996, and are incorporated herein by  this
reference.  The reference under the column "Location" is  to  the
exhibit number in the report on Form 8-K.

FORM 8-K FILINGS

None.









                           SIGNATURES

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

                                    HEADWAY  CORPORATE RESOURCES,
INC.

                                     By:    Barry   S.   Roseman,
President
                                        (Signature)

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

Dated:  March 27, 1997           Gary S. Goldstein (Signature)
                                 Principal   Executive   Officer,
                                 Director
                                 
Dated:  March 27, 1997           Barry S. Roseman (Signature)
                                 Principal     Financial      and
                                 Accounting
                                 Officer, Director
                                 
Dated:  March 20, 1997           G. Chris Andersen (Signature)
                                 Director
                                 
Dated:  March 25, 1997           Edward E. Furash (Signature)
                                 Director
                                 
Dated:  March 25, 1997           Ehud D. Laska (Signature)
                                 Director
                                 
Dated:  March 24, 1997           Richard B. Salomon (Signature)
                                 Director

                Headway Corporate Resources, Inc.
                                
           Index to Consolidated Financial Statements
                                
                                




                            Contents

Report of Independent Auditors_Ernst & Young LLP         F- 2

Report of Independent Auditors_Moore Stephens P.C        F- 3
Report of Kingston Smith (formerly Letchfords)           F- 4

Consolidated Balance Sheet as of December 31, 1996       F- 6
Consolidated Statements of Operations for the years ended
 December 31, 1996 and 1995                             F- 8
Consolidated  Statements of Stockholders' Equity  for  the  years
ended
 December 31, 1996 and 1995                             F- 9
Consolidated Statements of Cash Flows for the years ended
 December 31, 1996 and 1995                             F-13
Notes to Consolidated Financial Statements               F-15
<PAGE>





                 Report of Independent Auditors

The Board of Directors and Stockholders
Headway Corporate Resources, Inc.

We  have  audited  the  consolidated  balance  sheet  of  Headway
Corporate Resources, Inc. as of December 31, 1996 and the related
consolidated   statements   of   operations,   cash   flows   and
stockholders'  equity  for the year then ended.  These  financial
statements  are  the responsibility of the company's  management.
Our  responsibility is to express an opinion on  these  financial
statements based on our audit.

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

In our opinion, the consolidated financial statements referred to
above  present fairly, in all material respects, the consolidated
financial  position  of  Headway  Corporate  Resources,  Inc.  at
December   31,  1996  and  the  consolidated  results  of   their
operations  and  their  cash flows for the  year  then  ended  in
conformity with generally accepted accounting principles.




                                                ERNST & YOUNG LLP


New York, New York
March 14, 1997
<PAGE>
                  INDEPENDENT AUDITORS' REPORT


To the Stockholders and Board of Directors of
Headway Corporate Resources, Inc.


We  have  audited  the  accompanying consolidated  statements  of
operations,  stockholders'  equity, and  cash  flows  of  Headway
corporate   Resources,  Inc.  and  subsidiaries  (formerly   AFGL
International, Inc. and Subsidiaries) for the year ended December
31,  1995.   These  consolidated  financial  statements  are  the
responsibility  of the Company's management.  Our  responsibility
is   to  express  an  opinion  on  these  consolidated  financial
statements  based on our audits.  We did not audit the  financial
statements  of  the  foreign subsidiary  of  the  Company,  which
statements  reflect  total revenues of $3,765,738  for  the  year
ended  December 31, 1995.  Those statements were audited by other
auditors  whose report has been furnished to us, an our  opinion,
insofar  as  it relates to the amounts included for  the  foreign
subsidiary, is based solely on the report of the other auditors.

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

In  our  opinion, based on our audit and the report of the  other
auditors, the consolidated financial statements referred to above
present  fairly,  in  all  material  respects,  the  consolidated
results  of  operations  and  cash  flows  of  Headway  Corporate
Resources, Inc. and subsidiaries for the year ended December  31,
1995 in conformity with generally accepted accounting principles.



                              MOORE STEPHENS, P.C.
                              Certified Public Accountants

Cranford, New Jersey
March 27, 1996
<PAGE>
                AUDITORS REPORT TO THE DIRECTORS
                                
                      WHITNEY PARTNERS INC.


On  29  August  1996  Letchfords reported, as  auditors,  to  the
members  of Whitney Group (Europe) Limited on the U.K.  financial
statements  for the year to 31, December 1995.  Since  this  date
Letchfords  have merged their accountancy practice with  that  of
Kingston Smith.

Letchfords'  audit report on the UK financial statements  of  the
Whitney Group (Europe) Limited was as follows:

   We  have  audited the financial statements set out on pages  3
   to  10  which  have  been prepared under the  historical  cost
   convention and the accounting policies set out on page 6.
   
   Respective Responsibilities of Directors and Auditors
   
   As   described   on  page  1  the  company's   directors   are
   responsible  for the preparation of financial statements.   It
   is  our  responsibility to form an independent opinion,  based
   on  our  audit, on those statements and to report our  opinion
   to you.
   
   Basis of Opinion
   
   We  conducted our audit in accordance with Auditing  Standards
   issued  by  the  Auditing Practices Board.  An audit  includes
   examination,  on  a test basis, of evidence  relevant  to  the
   amounts and disclosures in the financial statements.  It  also
   includes  an  assessment  of  the  significant  estimates  and
   judgments  made  by  the directors in the preparation  of  the
   financial  statements, and of whether the accounting  policies
   are  appropriate to the company's circumstances,  consistently
   applied and adequately disclosed.
   
   We  planned  and performed our audit so as to obtain  all  the
   information and explanations which we considered necessary  in
   order   to  provide  us  with  sufficient  evidence  to   give
   reasonable  assurance that the financial statements  are  free
   from  material misstatement, whether caused by fraud or  other
   irregularity  or  error.   In  forming  our  opinion  we  also
   evaluated   the  overall  adequacy  of  the  presentation   of
   information in the financial statements.
   
   Opinion
   
   In  our opinion the financial statements give a true and  fair
   view  of  the state of the company's affairs as at 31 December
   1995  and of its profit for the year then ended and have  been
   properly  prepared  in accordance with the provisions  of  the
   Companies Act 1985 applicable to small companies.

The  above  audit report was made on the basis of work undertaken
by  Letchfords  in accordance with U.K. Auditing Standards  using
U.K. Accounting Principles.

Letchfords  determined  that there are  no  material  differences
between  the  U.K.  auditing Standards used in  conducting  their
audit   and   U.S.   Generally   Accepted   Auditing   Standards.
Additionally,  the U.K. Accounting Principles used by  Letchfords
in   preparing   the   accompanying  financial   statements   are
substantially  the  same  as U.S. Generally  Accepted  Accounting
Principles.



KINGSTON SMITH                     105 St. Peters Street
Chartered Accountants              St. Albans
                                   Herts
                                   AL1 3EJ
26 March 1997                      United Kingdom

<PAGE>
                Headway Corporate Resources, Inc.
                                
                   Consolidated Balance Sheet
                                
                        December 31, 1996
                                
                                
Assets                                           
Current assets:                                  
Cash and cash equivalents                         $1,008,00
                                                 0
Accounts receivable, trade, net of allowance for  
doubtful accounts of $122,000                    12,403,00
                                                 0
Deferred income taxes                             519,000
Prepaid expenses and other current assets         434,000
Total current assets                             14,364,00
                                                 0
                                                 
Property and equipment, net                      1,589,000
                                                 
Cash surrender value of officers' life insurance 426,000
Due from related party                           178,000
Intangibles, net of accumulated amortization of   12,028,00
$583,000                                         0
Investment_at cost                                2,368,000
Deferred financing costs                         2,416,000
Deferred income taxes                            734,000
Other assets                                     566,000
Total assets                                     $34,669,0
                                                 00
<PAGE>
                Headway Corporate Resources, Inc.
                                
             Consolidated Balance Sheet (continued)
                                
                        December 31, 1996
                                
                                
Liabilities and stockholders' equity            
Current liabilities:                            
Accounts payable and accrued expenses             $3,024,00
                                                0
Line of credit                                  3,850,000
 Capital lease obligations, current portion     87,000
Notes and loans payable, current portion        1,500,000
Accrued payroll                                 3,876,000
Income taxes payable                            379,000
Total current liabilities                       12,716,000
                                                
Notes and loans payable, less current portion   7,250,000
Capital lease obligations, less current portion 110,000
Deferred rent                                   1,169,000
                                                
Stockholders' equity                            
Preferred stock_$.0001 par value, 5,000,000      
shares authorized, none issued or outstanding   -
Series A, 8% cumulative convertible preferred    
stock_$.0001 par value, 2,800 shares            
authorized, issued and outstanding (aggregate   700,000
liquidation value $700,000)
Series B, convertible preferred stock_$.0001 par 
value, 6,858 shares authorized, issued and      
outstanding (aggregate liquidation value        2,400,000
$2,400,000)
Series C, convertible preferred stock_$.0001 par 
value, 24 shares authorized, 5 issued and       100,000
outstanding
Series D, convertible preferred stock_$.0001 par 
value, 44 shares authorized, 37 issued and      1,850,000
outstanding
Series E, convertible preferred stock_$.0001 par 
value, 575,000 shares authorized, none issued   -
and outstanding
Common stock_$.0001 par value, 20,000,000 shares 
authorized, 6,301,448 shares issued and         1,000
outstanding
Additional paid-in capital                       8,371,000
Cumulative translation adjustments               80,000
Notes receivable_preferred stock                 (457,000)
Retained earnings                                379,000
Total stockholders' equity                      13,424,000
Total liabilities and stockholders' equity       $34,669,0
                                                00
                                
                                
                     See accompanying notes.
<PAGE>
                Headway Corporate Resources, Inc.
                                
              Consolidated Statements of Operations
                                
                                     Year ended December 31
                                        1996        1995
Revenues:                                        
Human resources management            $53,389,0  $10,996,00
                                     00          0
Advisory services                    3,808,000   4,496,000
                                     57,197,000  15,492,000
Operating expenses:                              
Direct cost of human resources       29,703,000  -
management
General and administrative           23,873,000  13,744,000
Depreciation and amortization         678,000     285,000
                                     54,254,000  14,029,000
                                                 
Operating income from continuing     2,943,000   1,463,000
operations
                                                 
Other expenses (income):                         
Interest expense                     1,157,000   93,000
Interest income                      (96,000)    (75,000)
Other expense, net                    -           12,000
                                      1,061,000   30,000
Income from continuing operations                 
before income tax expense and        1,882,000   1,433,000
minority interest
                                                 
Income tax expense (benefit):                    
Current                               1,269,000   884,000
Deferred                              (569,000)   (320,000)
                                     700,000     564,000
                                                 
Income from continuing operations     1,182,000   869,000
                                                 
Discontinued operations :                         
Loss from operations of discontinued              
segment (net of income tax benefit   -           (1,672,000)
of $919,000)
Loss on disposal of segment (net of               
income tax benefit of $37,000)       -           (286,000)
(Loss) from discontinued operations   -           (1,958,000)
                                                  
(Loss) income before minority         -           (1,089,000)
interest
Minority interest in loss of                      
consolidated subsidiary              -           5,000
Net income (loss)                     1,182,000   (1,084,000)
                                                 
Deemed dividend on preferred stock    (1,470,000) -
Preferred dividend requirements       (276,000)   (56,000)
Net (loss) available for common        $(564,000) $(1,140,00
stockholders                                     0)
                                                 
Primary earnings (loss) per common               
share:
Continuing operations                 $   (.08)  $    .15
Net income (loss)                     $   (.08)  $   (.20)
                                                 
Fully diluted earnings (loss)                     
per common share:
Continuing operations                 $    -     $    .13
                                
                     See accompanying notes.
<PAGE>
                Headway Corporate Resources, Inc.
                                
         Consolidated Statements of Stockholders' Equity
                                
                                
                                 Series A         Series B
                                Convertible     Convertible
                              Preferred Stock Preferred Stock
                              Share   Amount  Share   Amount
                                s               s
                                                     
Balance_December 31, 1994     2,800       $   -            $
                                     700,000         -
Issuance of preferred stock    -      -        6,858  2,400,000
Preferred stock dividends_                            
$20 per share                 -      -        -      -
Translation Adjustments        -      -        -      -
Net (loss) for the year        -      -        -      -
Balance_December 31, 1995     2,800  700,000  6,858  2,400,000
Issuance of preferred stock    -      -        -      -
Conversion of preferred stock  -      -        -      -
Change in par value            -      -        -      -
Retirement of treasury stock   -      -        -      -
Repayment of loan to purchase                         
stock                         -      -        -      -
Warrants issued in connection                         
with financing transactions   -      -        -      -
Expenses incurred in                                  
connection with equity        -      -        -      -
transactions
Preferred stock dividends      -      -        -      -
Translation adjustments        -      -        -      -
Net income for the year        -      -        -      -
Balance_December 31, 1996     2,800       $   6,858        $
                                     700,000         2,400,000
<PAGE>
                Headway Corporate Resources, Inc.
                                
   Consolidated Statements of Stockholders' Equity (continued)
                                
<TABLE>
<CAPTION>                         Series C           Series D
                                 Convertible       Convertible
                               Preferred Stock   Preferred Stock
                              Shares   Amount   Shares    Amount
<S>                           <C>     <C>        <C>     <C>
Balance_December 31, 1994     -             $   -       $      -
                                      -
Issuance of preferred stock    -       -         -       -
Preferred stock dividends_                               
$20 per share                 -       -         -       -
Translation Adjustments        -       -         -       -
Net (loss) for the year        -       -         -       -
Balance_December 31, 1995     -       -         -       -
Issuance of preferred stock    150     3,000,000 80      4,000,000
Conversion of preferred stock  (145)   (2,900,00 (43)    (2,150,00
                                      0)                0)
Change in par value            -       -         -       -
Retirement of treasury stock   -       -         -       -
Repayment of loan to purchase                            
stock                         -       -         -       -
Warrants issued in connection                            
with financing transactions   -       -         -       -
Expenses incurred in                                     
connection with equity        -       -         -       -
transactions
Preferred stock dividends      -       -         -       -
Translation adjustments        -       -         -       -
Net income for the year                -           -     -
Balance_December 31, 1996     5             $   37      $1,850,0
                                      100,000           00
</TABLE>
<PAGE>
                Headway Corporate Resources, Inc.
                                
   Consolidated Statements of Stockholders' Equity (continued)
                                
<TABLE>
<CAPTION>                     Notes                          
                            Receivable                       
                            Preferred                    Addition
                              Stock       Common Stock      al
                                                          Paid-in
                              Amount     Shares  Amount   Capital
<S>                         <C>         <C>      <C>     <C>
Balance_December 31, 1994         $     4,597,35  $46,00         $
                            -           8         0       2,592,00
                                                         0
Issuance of preferred stock              -         -       -
Preferred stock                                            
dividends_$20 per share     -           -         -       -
Translation Adjustments      -           -         -       -
Net (loss) for the year      -           -         -       -
Balance_December 31, 1995   -           4,597,35  46,000  2,592,00
                                       8                 0
Issuance of preferred stock  -           -         -       -
Notes receivable for                                       
preferred stock             (507,000)   -         -       -
Conversion of preferred      -           1,818,05  -       5,178,00
stock                                   0                 0
Change in par value          -           -         (45,00  45,000
                                                 0)
Retirement of treasury stock -           (113,960  -       (577,000
                                       )                 )
Repayment of loan to                                       
purchase stock              50,000      -         -       -
Warrants issued in                                         
connection with financing   -           -         -       1,867,00
transactions                                             0
Expenses incurred in                                       
connection with equity      -           -         -       (734,000
transactions                                             )
Preferred stock dividends    -           -         -       
Translation adjustments      -           -         -       
Net income for the year      -           -         -       
Balance_December 31, 1996         $     6,301,44      $          $
                            (457,000)   8         1,000   8,371,00
                                                         0
</TABLE>
<PAGE>
                Headway Corporate Resources, Inc.
                                
   Consolidated Statements of Stockholders' Equity (continued)
                                
                                
                                                      
                                                      
                            Cumulativ  Retained     Total
                                e      Earnings   Stockholder
                            Translati                s'
                                on
                            Adjustmen  (Deficit)   Equity
                                t
                                                  
Balance_December 31, 1994   $78,000           $          $
                                       614,000    4,030,000
Issuance of preferred stock  -          -          2,400,000
Preferred stock                                    
dividends_$20 per share     -          (56,000)   (56,000)
Translation Adjustments      12,000     -          12,000
Net (loss) for the year      -          (1,085,00  (1,085,00
                                       0)         0)
Balance_December 31, 1995   90,000     (527,000)  5,301,000
Issuance of preferred stock  -          -          7,000,000
Notes receivable for                               
preferred stock             -          -          (507,000)
Conversion of preferred      -          -          128,000
stock
Change in par value          -          -          -
Retirement of treasury stock -          -          (577,000)
Repayment of loan to                               
purchase stock              -          -          50,000
Warrants issued in                                 
connection with financing   -          -          1,867,000
transactions
Expenses incurred in                               
connection with equity      -          -          (734,000)
transactions
Preferred stock dividends    -          (276,000)  (276,000)
Translation adjustments      (10,000)   -          (10,000)
Net income for the year      -          1,182,000  1,182,000
Balance_December 31, 1996   $80,000           $          $
                                       379,000    13,424,00
                                                  0



See accompanying notes.
<PAGE>
                Headway Corporate Resources, Inc.
                                
              Consolidated Statements of Cash Flows
                                
                                
                                       Year ended December
                                               31
                                        1996       1995
Operating activities                            
Income from continuing operations            $    $874,000
                                      1,182,000
Adjustments to reconcile income from             
continuing operations to net cash
provided by (used for) operating
activities:
Minority interest in (loss) of                   
consolidated subsidiary               -         (5,000)
Depreciation and amortization          1,099,000 285,000
Deferred income taxes                  (569,000) (320,000)
Noncash compensation                   -         130,000
Changes in assets and liabilities:              
Accounts receivable                    (4,163,00 (2,072,000
                                      0)        )
Prepaid expenses and other current     622,000   (396,000)
assets
Other assets                           (329,000) 50,000
Accounts payable and accrued          347,000   823,000
expenses
Accrued payroll                       2,092,000 (904,000)
Income taxes payable                  (1,000)   138,000
Deferred rent                         39,000    1,118,000
Net cash_continuing operations        319,000   (279,000)
(Loss) from discontinued operations             (1,958,000
                                                )
Adjustments to reconcile (loss) from             
discontinued operations to net cash
(used for) by operating activities:
Loss on asset disposals               -         286,000
Depreciation and amortization         -         555,000
Net change in assets and liabilities  -         (845,000)
Net cash_discontinued operations      -         (1,962,000
                                                )
Net cash provided by (used in)                   
operating activities                  319,000   (2,241,000
                                                )
                                                
Investing activities                            
Expenditures for property and         (286,000) (1,456,000
equipment                                       )
Repayment from employees               50,000    (50,000)
Advances to employees                 (257,000) 192,000
Due from related parties              (167,000) (32,000)
Cash acquired through acquisitions     -         311,000
Cash paid for acquisitions            (12,139,0 -
                                      00)
Increase in cash surrender value                 
of officers life insurance            (107,000) (77,000)
Net cash (used in) investing          (12,906,0 (1,112,000
activities                            00)       )
<PAGE>
                Headway Corporate Resources, Inc.
                                
        Consolidated Statements of Cash Flows (continued)
                                
                                
                                     Year ended December 31
                                        1996       1995
Financing activities                            
Cash pledged                                  $  $ 500,000
                                     85,000
Net change in revolving credit line   -          325,000
Proceeds from notes                   12,850,000 2,500,000
Repayment of notes                    (5,675,000 (154,000)
                                     )
Payment of capital lease obligations  (72,000)   (101,000)
Payments of loan acquisition fees     (857,000)  -
Sale of preferred stock              6,267,000  -
Cash dividends paid                  (56,000)   (56,000)
Net cash provided by financing       12,542,000 3,014,000
activities
                                                
Effect of exchange rate changes on               
cash and cash equivalents            (10,000)   12,000
                                                
(Decrease) in cash and cash          (55,000)   (327,000)
equivalents
Cash and cash equivalents at                     
beginning of year                    1,063,000  1,390,000
Cash and cash equivalents at end of           $  $1,063,00
year                                 1,008,000  0
                                                
Supplemental disclosures of cash                 
flow information
Cash paid during the years for:                 
Interest                                      $  $  79,000
                                     736,000
Income taxes                                  $  $ 349,000
                                     1,043,000
                                
    Supplemental schedule of noncash investing and financing
                           activities
                                
In  December 1996, an officer and a former employee sold  113,960
shares  of common stock valued at $577,000 to the Company,  which
was  used  to  reduce  amounts due  to  the  Company  from  these
individuals.

Effective January 1995, the Company issued 6,858 shares of Series
B  convertible preferred stock valued at $2,400,000 in connection
with the acquisition of Furash and Company, Inc.

During 1995, the Company acquired $539,000 of equipment through
financing arrangements of which $247,000 related to continuing
operations.



See accompanying notes.

<PAGE>
                Headway Corporate Resources, Inc.
                                
           Notes to Consolidated Financial Statements
                                
                        December 31, 1996




1. Organization

Headway  Corporate Resources, Inc. (formerly AFGL  International,
Inc.)  and its wholly-owned subsidiaries, Whitney Partners,  Inc.
and  its United Kingdom and Asian subsidiaries ("WPI"), Furash  &
Company,  Inc. ("FCI"), and Headway Corporate Staffing  Services,
Inc.  ("HCSSI"), and its wholly-owned subsidiaries,  Irene  Cohen
Temps ("ICT"), Corporate Staffing Alternatives ("CSA"), Certified
Technical  Staffing ("CTS"), and Headway Personnel,  Inc.  d.b.a.
Irene Cohen Personnel, Inc. ("ICP"), (collectively referred to as
the  "Company") provide a wide range of human resource management
and advisory services. WPI is engaged in providing human resource
management,  primarily  in the financial  services  market,  with
offices and principal markets in New York, London, Tokyo and Hong
Kong.  FCI  is  engaged  in providing management  and  consulting
advisory  services, primarily to the financial  services  market,
throughout  the United States, through its office in  Washington,
D.C.  HCSSI provides temporary and permanent staffing and related
services,  primarily in the New York, New Jersey and  Connecticut
tri-state area, through its office in New York City.

Effective  January 1, 1996, the Company disposed of substantially
all  of  the  operating assets of its subsidiary  AFGL  Inc.  The
disposal  of the subsidiaries' operating assets was reflected  as
discontinued operations as of December 31, 1995. At December  31,
1995,  the  Company owned 76.58% of the United Kingdom subsidiary
of  WPI.   Effective January 1, 1996, WPI acquired the  remaining
minority interest in its United Kingdom subsidiary.

Through its newly formed subsidiary, HCSSI, the Company purchased
all  of the capital stock of ICT, CSA, and CTS and certain assets
of  ICP  in  May  1996 and certain assets from another  temporary
staffing agency in October 1996.

2. Summary of Significant Accounting Policies

Principles of Consolidation

The  consolidated financial statements include  the  accounts  of
Headway  Corporate  Resources, Inc. and  its  subsidiaries  after
elimination of all intercompany accounts and transactions.
<PAGE>
                Headway Corporate Resources, Inc.
                                
     Notes to Consolidated Financial Statements (continued)



2. Summary of Significant Accounting Policies (continued)

Recognition of Income

WPI's  services are primarily engaged on a retainer basis. Income
from retainer contracts, which provide for periodic billings over
periods of up to one year, is recognized as earned based  on  the
terms of the contract.

FCI recognizes revenue when services are performed.

Temporary  staffing  revenue  is recognized  when  the  temporary
personnel perform the related services and revenue from permanent
placement services is recognized when the placement is employed.

Cash Equivalents

Cash   equivalents  are  comprised  of  certain   highly   liquid
investments  with  a  maturity  of  three  months  or  less  when
purchased.

Property and Equipment

Property  and  equipment  are stated  at  cost.  Depreciation  is
computed utilizing straight-line and accelerated methods over the
estimated  useful lives of the assets which range from  three  to
seven  years. Leasehold improvements are amortized utilizing  the
straight-line method over the leaseholds' useful life or the term
of the lease, whichever is less.

Deferred Rent

The  Company  leases  premises under  leases  which  provide  for
periodic increases over the lease term. Pursuant to Statement  of
Financial  Accounting Standard No. 13, "Accounting  for  Leases,"
the  Company records rent expense on a straight-line  basis.  The
effect of these differences is recorded as deferred rent.

Deferred Taxes

The Company provides for deferred taxes pursuant to Statement  of
Financial  Accounting  Standard No. 109, "Accounting  for  Income
Taxes,"   which  requires  the  recognition  of  deferred   taxes
utilizing the liability method.

<PAGE>
                Headway Corporate Resources, Inc.
                                
     Notes to Consolidated Financial Statements (continued)




2. Summary of Significant Accounting Policies (continued)

Cumulative Translation Adjustments

Balance  sheet  accounts  of  WPI's  United  Kingdom  and   Asian
subsidiaries  are  translated  using  year  end  exchange  rates.
Statement  of  operations  accounts  are  translated  at  monthly
average  exchange rates. The resulting translation adjustment  is
recorded as a separate component of stockholders' equity.

Goodwill

Goodwill is amortized utilizing the straight-line method  over  a
period  of  20  years.  The  Company periodically  evaluates  the
carrying value and the periods of amortization of goodwill  based
on  the  current and expected future non-discounted  income  from
operations  of  the  entities giving  rise  to  the  goodwill  to
determine  whether  events  and  circumstances  warrant   revised
estimates of carrying value or useful lives.

Deferred Financing Costs

Deferred  financing costs are amortized utilizing  the  straight-
line method over the term of the related debt.

Earnings Per Share

Primary  earnings  per share of common stock  are  based  on  the
weighted  average  number of common shares outstanding  for  each
period  presented.  Common  stock  equivalents  are  included  if
dilutive.  Fully  diluted  earnings per  share  of  common  stock
amounts are based on an increased number of shares that would  be
outstanding  assuming  conversion of  the  convertible  preferred
stock  at  the highest potential conversion rate. Net income  has
been  adjusted  for the dividend requirements on the  convertible
preferred stock. The number of shares used in the computation  of
primary  earnings  per  share  was  6,643,326  and  5,610,048  at
December  31, 1996 and 1995, respectively. The number  of  shares
used  in the computation of fully diluted earnings per share  was
6,942,464 at December 31, 1995.

Concentration of Credit Risk

Financial  instruments that potentially subject  the  Company  to
concentration  of  credit risk include cash and cash  equivalents
and   accounts  receivable  arising  from  its  normal   business
activities. The Company places its cash and cash equivalents with
high credit quality financial institutions.

<PAGE>
                Headway Corporate Resources, Inc.
                                
     Notes to Consolidated Financial Statements (continued)



2. Summary of Significant Accounting Policies (continued)

The  Company  believes  that its credit risk  regarding  accounts
receivable  is  limited  due  to the  large  number  of  entities
comprising the Company's customer base. In addition, the  Company
routinely  assesses the financial strength of its customers,  and
based  upon factors surrounding the credit risk of its customers,
establishes  an  allowance  for  uncollectible  accounts,   where
appropriate  and,  as a consequence, believes that  its  accounts
receivable credit risk exposure is limited.

Use of Estimates

The  preparation  of  financial  statements  in  conformity  with
generally  accepted accounting principles requires management  to
make estimates and assumptions that affect the reported amount of
assets  and  liabilities and disclosure of contingent assets  and
liabilities  at  the  date of the financial  statements  and  the
reported  amount  of  revenue and expenses during  the  reporting
period. Actual results could differ from those estimates.

Stock Based Compensation

The Company accounts for its stock-based compensation plans using
the  provision  of  Accounting Principles Board  Opinion  No.  25
"Accounting for Stock Issued to Employees" ("APB 25").

In   1995,  the  Financial  Accounting  Standards  Board   issued
Statement  of Financial Accounting Standards No. 123, "Accounting
for  Stock-Based Compensation ("SFAS 123")." Under the provisions
of  SFAS  123,  companies  can elect to account  for  stock-based
compensation  plans using a fair-value based method  or  continue
measuring   compensation  expense  for  those  plans  using   the
intrinsic  value method prescribed in APB 25. SFAS  123  requires
that  companies  electing to continue using the  intrinsic  value
method make pro forma disclosures of net income and earnings  per
share  as  if the fair-value based method of accounting had  been
applied.  The  Company  has elected to account  for  stock  based
compensation  in accordance with the provisions of  APB  25.  See
Note 9.

<PAGE>
                Headway Corporate Resources, Inc.
                                
     Notes to Consolidated Financial Statements (continued)



3. Property and Equipment

Property  and  equipment  at December 31,  1996  consist  of  the
following:

 Leasehold improvements                           $ 665,000
 Furniture and fixtures                           747,000
 Office and computer equipment                    1,305,000
                                                  2,717,000
 Less accumulated depreciation and amortization   (1,128,000
                                                  )
                                                  $1,589,00
                                                  0

4. Due from Related Parties and Related Party Transactions

Due  from  related  party  represents the  balance  ($178,000  at
December  31,  1996)  due  from  the  Chairman  from  a  loan  of
$1,066,000.  This loan bears interest at 6.53%  per  annum,  with
principal  due in $100,000 annual installments from May  1,  1994
through  2003, and is stated net of a $750,000 reserve.  Interest
on  this  loan and other advances to the Chairman were repaid  in
1996 with the proceeds received by the Chairman upon the sale  of
shares  of  the  company's  common stock  back  to  the  Company.
Interest paid to the Company amounted to $63,000 and $12,000  for
the years ended  December 31, 1996 and 1995, respectively.

A  director  of  the  Company is an employee of  an  entity  that
provides  financial  advisory  services  to  the  Company.  Total
amounts  paid  to this entity in 1996 and 1995 for such  services
amounted to $582,500 and $80,000, respectively. In addition,  for
services  provided  in  1996, this entity  received  warrants  to
purchase 240,000 shares of common stock at $4.25 per share.  Such
warrants  were  valued at $270,000. Financial  advisory  services
provided  in  1996  related  to the  Company's  equity  and  debt
financings  and,  accordingly,  these  expenses  were   allocated
between share issuance expenses ($160,000) and financing expenses
($110,000).

During  the  year  ended  December 31,  1996,  the  Company  paid
approximately   $246,000   and   $286,000,   respectively,    for
professional and consulting services to related parties.

<PAGE>
                Headway Corporate Resources, Inc.
                                
     Notes to Consolidated Financial Statements (continued)



5. Credit Facilities

Under the terms of a credit agreement entered into with ING  U.S.
Capital Corporation ("ICC") on May 31, 1996, the Company received
a  revolving  line of credit of $6,000,000 and  a  term  loan  of
$9,000,000.  In  connection with this financing arrangement,  the
Company  granted  to ICC a Series E Warrant to  purchase  575,000
shares of Series E Convertible Preferred Stock of the Company  at
$.02  per share exercisable at any time through May 31, 2004.  At
December  31,  1996,  such  warrants  could  be  converted   into
approximately  572,000  shares of  common  stock.  The  Series  E
Warrant was valued by an independent appraiser at $1,757,000  and
is being amortized over the period of the term loan.

The  revolving line of credit is due on demand and bears interest
at  the bank's prime rate plus 1-1/4% per annum (9.5% at December
31,  1996).  The  term  loan requires quarterly  installments  of
principal  and interest through June 2001 and bears  interest  at
LIBOR plus 3-1/4% per annum (8.87% at December 31, 1996).

Substantially  all  assets of the Company have  been  pledged  as
collateral  for  this agreement. The agreement places  limits  on
annual  capital  expenditures and requires the  Company  to  meet
certain financial ratios, as defined. In addition, ICC has issued
a  letter  of  credit under the line of credit  for  $200,000  in
connection with an operating lease agreement entered into by  the
Company.

Annual maturities of the term loan as of December 31, 1996 are as
follows:

 Fiscal year:       
 1997               $1,250,00
                    0
 1998               1,650,000
 1999               1,950,000
 2000               2,350,000
 2001               1,300,000
                    $8,500,00
                    0

In  connection  with the Company's May 31, 1996  acquisition  the
Company  assumed a loan, which had a $250,000 balance at December
31,  1996. This loan bears interest at 8.25% per annum and is due
in December 1997.

At December 31, 1995 the Company had outstanding borrowings, with
interest  rates  varying from prime plus 1%  to  prime  plus  2%,
aggregating $2,552,000, all of which were repaid during 1996.

<PAGE>
                Headway Corporate Resources, Inc.
                                
     Notes to Consolidated Financial Statements (continued)



6. Acquisitions

In  January 1995, the Company completed the acquisition  of  FCI,
exchanging  6,858 shares of Series B convertible preferred  stock
for all of the capital stock of FCI. The 6,858 shares of Series B
convertible  preferred stock are convertible into  a  minimum  of
628,600  shares and a maximum of 685,744 shares of the  Company's
common  stock, and were valued at $2,400,000. Goodwill  resulting
from the transaction was $1,784,000.

On May 31, 1996, the Company acquired all of the capital stock of
ICT, CSA and CTS and certain assets of ICP for cash of $9,230,000
plus  $500,000, payable based upon future earnings  derived  from
the  use  of  the  assets acquired. The purchase  price  for  the
capital   stock,  including  transaction  expenses  of  $491,000,
exceeded   net   assets  acquired,  resulting  in   goodwill   of
$6,651,000.

The  pro  forma unaudited consolidated results of operations  for
the  years ended December 31, 1996 and 1995 assuming consummation
of  the  above-mentioned transactions as of the beginning of  the
periods are as follows:

                                    Year ended December
                                            31
                                      1996       1995
                                              
  Total revenue                    $80,325,0  $54,345,00
                                   00         0
  Net income                       1,346,000  887,000
  Net (loss) applicable to common  (204,000)  (580,000)
   shareholders
  Net (loss) per share             (.02)      (.07)

In  October 1996, the Company purchased certain assets of another
temporary  staffing  agency  for cash  of  $2,418,000,  including
transaction  expenses of $18,000 of which $280,000 was  allocated
to  a  covenant  not-to-compete.  Goodwill  resulting  from  this
transaction  amounted  to $2,118,000. The convent  not-to-compete
is  being  amortized over four years.  This acquisition  was  not
significant to the results of operations of the Company.

The  aforementioned  acquisitions  have  been  accounted  for  as
purchases and have been included in the Company's operations from
the dates of the respective purchases.

<PAGE>
                Headway Corporate Resources, Inc.
                                
     Notes to Consolidated Financial Statements (continued)



7. Stockholders' Equity

The  Company  has  outstanding,  2,800  shares  of  Series  A  8%
cumulative convertible preferred stock.  Each share of  Series  A
preferred stock is convertible into 476 shares of common stock of
which  125 shares were convertible in August 1996 and the balance
is  convertible  in August 1997. The Company  has  the  right  to
redeem  the  preferred stock at a price equal to the  liquidation
preference of $250 per shares at any time prior to conversion.

In  1995,  6,858  shares of Series B convertible preferred  stock
were  issued  for all of the capital stock of FCI. The  Series  B
preferred  stock is convertible into a minimum of 628,600  shares
and  a maximum of 685,744 shares of common stock and participates
fully with the common stock in all dividends.

In  April  1996,  the Company issued 150 shares of  Series  C  8%
convertible preferred stock for $3,000,000 under Regulation S  of
the  Securities Act. The Series C preferred stock is  convertible
to  common stock of the Company at lesser of $4.558125 or 80%  of
the market price of Company's common stock. At December 31, 1996,
the  holders  of  145  shares of Series  C  preferred  stock  had
converted  their shares into common stock. Warrants  to  purchase
240,000 shares of common stock at $4.25 per share were issued  to
related  parties  for services rendered in connection  with  this
transaction.

In  June  1996, the company completed a private placement  of  80
shares of Series D 8% convertible preferred stock for $4,000,000.
The  Series D preferred stock is convertible to common  stock  of
the  Company at lesser of $5.21065 or 80% of the market price  of
the  Company's  common  stock. In addition,  on  conversion,  the
holders  of Series D convertible preferred stock are entitled  to
receive  a  warrant to purchase one share of common stock  at  an
exercise  price  of  $4.25 per share, for every  four  shares  of
common  stock issued upon conversion. The guaranteed discount  on
conversion  ($1,000,000) and, the valuation  of  warrants  to  be
issued  upon conversion which amounted to $470,000 (based  on  an
independent appraisal), was deemed to be a dividend for  purposes
of  calculating  net  income available  to  common  stockholders.
Accordingly,  a  deemed dividend of $1,470,000 was  recorded  and
shown   as   a   reduction  to  earnings  available   to   common
shareholders. At December 31, 1996, the holders of 43  shares  of
Series  D preferred stock had converted their shares into  common
stock, and warrants to purchase 184,470 shares at $4.25 per share
were issued.

<PAGE>
                Headway Corporate Resources, Inc.
                                
     Notes to Consolidated Financial Statements (continued)



7. Stockholders' Equity (continued)

On  November 6, 1996, the stockholders of the Company approved  a
change  in the state of incorporation of the Company from  Nevada
to   Delaware  through  a  merger  of  the  Company  (then   AFGL
International, Inc., a Nevada corporation) into Headway Corporate
Resources, Inc., a Delaware corporation formed for that  purpose.
In the merger, all outstanding capital shares have exchanged on a
one share for one share basis, and the only change in the capital
of  the  Company was reduction of the par value for  all  capital
shares to $.0001 per share. The accompanying financial statements
give retroactive effect to this transaction.

In December 1996, an officer and a former employee of the Company
sold  113,960  shares of common stock at the then current  market
price  of $577,000 to the Company. Such amount was used to reduce
amounts  due  to the Company from these individuals.  The  shares
purchased by the Company were retired in 1996.

In  May  1996,  the  Company loaned a total of  $507,000  to  ten
employees and certain directors of the Company at 8% interest per
annum payable quarterly over a term of five years. The funds were
used  by the employees and directors to purchase a total of 2,170
shares of the Company's Series A Convertible Preferred Stock from
the  then current Series A Convertible Preferred stockholder. The
loans  are  collateralized by the Series A  Stock  purchased  and
additional assets with a value in excess of the principal  amount
of each loan.

In  April  1996, the Company issued warrants to purchase  200,000
shares  of  common stock at $3.50 per share as consideration  for
services rendered in connection with equity financing obtained by
Company and investor relations services.

At  December  31, 1996 approximately 8,194,000 shares  of  common
stock have been reserved  for future issuance upon conversion  of
preferred stock and exercise of options and warrants as follows:

Conversion of Series A Preferred Stock           1,333,000
Conversion of Series B Preferred Stock           686,000
Conversion of Series C Preferred Stock           27,000
Conversion of Series D Preferred Stock           500,000
Warrants issued and issuable upon conversion of  
 Series D Preferred Stock                        310,000
Series E Warrants                                572,000
Stock Incentive Plan                             3,772,000
Other Warrants                                   994,000
                                                 8,194,000
<PAGE>
                Headway Corporate Resources, Inc.
                                
     Notes to Consolidated Financial Statements (continued)



8. Income Taxes

The  components  of income before income taxes  consists  of  the
following:

                                       December 31
                                    1996        1995
                                             
   Domestic                      $1,843,000  $1,422,000
   Foreign                       39,000      11,000
                                 $1,882,000  $1,433,000

Income  tax  expense from continuing operations consists  of  the
following:

                                       December 31
                                    1996        1995
   Current:                                  
   Domestic                      $1,231,000  $ 851,000
   Foreign                       38,000      33,000
                                 1,269,000   884,000
   Deferred (benefit):                       
   Domestic                      (569,000)   (320,000)
   Foreign                       -           -
   Total deferred (benefit)      (569,000)   (320,000)
                                 $ 700,000   $ 564,000

As  of  December 31, 1996 the Company has available, federal  net
operating  loss  carryovers of approximately $569,000.  Such  net
operating  loss carryovers are limited to usage, as a  result  of
ownership  changes, to approximately $67,000 per year which  will
begin  to expire in 2004. In addition, the Company has state  and
local  net  operating loss carryovers of approximately $2,500,000
expiring through 2011.

<PAGE>
                Headway Corporate Resources, Inc.
                                
     Notes to Consolidated Financial Statements (continued)



8. Income Taxes (continued)

The  components  of  deferred tax assets and liabilities  are  as
follows:

                                       December 31
                                     1996        1995
   Deferred tax assets:                       
   Net operating loss             $495,000             $
                                              330,000
   Goodwill                       -           121,000
   Deferred charges               828,000     517,000
   Reserves                       362,000     282,000
   Gross deferred tax assets      1,685,000   1,250,000
   Valuation allowance            (193,000)   (262,000)
                                  1,492,000   988,000
   Deferred tax liabilities:                  
   Property and equipment         (80,000)    (8,000)
   Intangibles                    (28,000)    (93,000)
   Cash to accrual adjustments    (131,000)   (203,000)
                                  (239,000)   (304,000)
                                  $1,253,0             $
                                  00          684,000

The  Company  recorded a reduction in its valuation allowance  of
$69,000  during  the  year ended December  31,  1996  because  it
anticipates  sufficient  income from operations  to  realize  its
deferred  tax  asset  in  the future.  The  change  in  valuation
allowance  amounted  to  $237,000 for  the  year  ended  December
31,1995.

A  reconciliation of the statutory Federal income tax rate to the
effective rates is as follows:

                                             December 31
                                             1996    1995
                                                       
   Statutory rate                           34.0%   34.0%
  State  and local income taxes  (net  of              
   federal tax benefit)                     23.0%    3.5
   Deferred tax benefit (net)              (20.0%)    -
   Other                                      -      1.9
   Effective tax rate                       37.0%   39.4%
<PAGE>
                Headway Corporate Resources, Inc.
                                
     Notes to Consolidated Financial Statements (continued)



9. Stock Incentive Plan

On October 20, 1993, the Company adopted its Stock Incentive Plan
("Plan"). The Plan provides for the grant of awards in  the  form
of options to purchase shares of common stock. The maximum number
of  shares issuable under the Plan was 5,000,000, but was subject
to  reductions based upon the failure to achieve specified income
levels.  Pursuant  to  those provisions,  the  number  of  shares
issuable  was  reduced to 3,771,567. The Plan  provides  for  the
granting  of stock options, stock appreciation rights  and  stock
awards. Stock options intended to be incentive stock options will
be  granted at prices equal to at least market price on the  date
of  the  grant.  A  summary of the activity in  the  Plan  is  as
follows:

                                    Number      Weighted
                                  of Shares      Average
                                                Exercise
                                                  Price
                                              
Outstanding at December 31, 1994  607,750        $2.81
Granted                           210,000     2.99
Canceled                          (224,250)   2.90
Outstanding at December 31, 1995  593,500     2.86
Granted                           719,950     3.28
Canceled                          (92,503)    2.85
Outstanding at December 31, 1996  1,220,947   3.12
                                              
 Exercisable   at  December   31, 127,833     2.82
 1995
 Exercisable at December 31,1996  374,225     2.74

In   connection  with  the  acquisition  of  FCI,   the   Company
established  the Furash Stock Incentive Plan which  provided  for
the issuance of up to 171,432 shares of common stock in a form to
be  determined  by the FCI committee. A maximum of 42,858  shares
per  year for four years may be issued, provided certain  revenue
criteria  are  met. For the year ended December 31, 1995,  65,000
options  were issued in lieu of shares. No shares were earned  in
1996.
<PAGE>
                Headway Corporate Resources, Inc.
                                
     Notes to Consolidated Financial Statements (continued)



9. Stock Incentive Plan (continued)

Stock Based Compensation

Pro forma information regarding net income and earnings per share
is  required  by  SFAS  123, and has been determined  as  if  the
Company  had accounted for its employee stock options  under  the
fair  value method of SFAS 123.  The fair value for these options
was  estimated at the date of grant using a Black-Scholes  option
pricing model with the following weighted-average assumptions for
1995 and 1996:

           Assumption                1996     1995
                                                  
Risk-free rate                         6.6%     6.6%
Dividend yield                       0%       0%
Volatility factor of the expected                 
market price of the Company's         .5       .5
common stock
Average life                         3 years  3 years

The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting
restrictions  and  are fully transferable.  In  addition,  option
valuation   models   require  the  input  of  highly   subjective
assumptions   including  the  expected  stock  price  volatility.
Because   the   Company's  employee  stock  have  characteristics
significantly different from those of traded options, and because
changes in the subjective input assumptions can materially affect
the  fair  value estimate, in management's opinion, the  existing
models  do  not necessarily provide a reliable single measure  of
the   fair  value  of  its  employee  stock  options  and   stock
appreciation rights.

For  purposes of pro forma disclosures, the estimated fair  value
of  the  options  and stock appreciation rights is  amortized  to
expense  over  the  vesting  period  of  the  options  and  stock
appreciation rights. The Company's pro forma information follows:

                                   1996       1995
                                           
  Pro forma net (loss)           $(897,0   $(1,173,
                                 00)       000)
  Pro   forma  net  (loss)  per  $         $
  share                          (.13)     (.21)

<PAGE>
                Headway Corporate Resources, Inc.
                                
     Notes to Consolidated Financial Statements (continued)



9. Stock Incentive Plan (continued)

The  weighted  average fair value of options granted  during  the
years  ended  December  31, 1996 and 1995 were  $1.32  and  $1.20
respectively. The weighted-average remaining contractual life  of
options exercisable at December 31, 1996 is 8.1 years.

10. Leases

The  Company  leases  office space under operating  leases  which
expire through 2009. The leases provide for additional rent based
on  increases  in  operating costs and  real  estate  taxes.  The
Company  also leases equipment under capital leases  expiring  at
various times through 1999.

Future   minimum   lease  payments  under  capital   leases   and
noncancelable operating leases (shown net of $537,000 of sublease
income  per annum through 2000) with remaining terms of one  year
or more are as follows at December 31, 1996:

                                      Capital    Operating
                                       Leases      Leases
                                                
1997                                 $103,000   $1,209,000
1998                                 98,000     1,367,000
1999                                 20,000     1,319,000
2000                                 -          1,396,000
2001                                 -          1,944,000
Thereafter                           -          11,100,000
Total minimum lease payments         221,000    $18,335,000
Less amounts representing interest   24,000     
 Present value of net minimum  lease $197,000   
 payments
 Less current portion                87,000     
 Long-term portion                   $110,000   

<PAGE>
                Headway Corporate Resources, Inc.
                                
     Notes to Consolidated Financial Statements (continued)



10. Leases (continued)

Included  in  property  and equipment at December  31,  1996  are
assets  recorded under capital lease with a cost of $329,000  and
accumulated   depreciation   and   amortization   of    $126,000.
Amortization of assets recorded under capital leases is  included
with depreciation expense.

Rent  expense, including escalation charges, for the years  ended
December 31, 1996 and 1995 was $1,524,000 (net of sublease income
of  $628,000)  and $930,000 (net of sublease income of  $49,000),
respectively.

11. Retirement Plan

The   Company's  401(k)  Plan,  covering  substantially  all  its
domestic   employees,  requires  the  Company  to  make  matching
contributions  equal  to  25%  of the  employees'  contributions.
Company  contributions into the plan, which have been charged  to
operations,  totaled  $55,000 and $65,000  for  the  years  ended
December  31,  1996  and  1995, respectively.  In  addition,  the
Company  has another 401 (k) plan for employees of HCSSI and  its
subsidiaries. No contributions were made to this plan.

12. Commitments and Contingencies

The  Company  has  long-term employment agreements  with  certain
officers  and  employees  providing  for  base  compensation  and
bonuses,  as  defined.  The  base compensation  related  to  such
agreements are as follows: $1,678,000 (1997); $1,678,000  (1998);
$807,000 (1999); $578,000 (2000) and $241,000 (2001).

In  addition,  certain  officers and employees  are  entitled  to
bonuses  if  certain revenue and profitability targets  are  met.
Such  bonuses  amounted to $859,000 and $0 for  the  years  ended
December 31, 1996 and 1995, respectively.

13. Major Customer

For  the  year  ended  December 31, 1996,  the  Company  had  one
customer which accounted for 11% of revenues.

<PAGE>
                Headway Corporate Resources, Inc.
                                
     Notes to Consolidated Financial Statements (continued)



14. Segment and Geographic Information

In  1996,  the  Company's  operations  are  classified  into  two
industry   segments;  human  resource  management  and   advisory
services.  The  following is a summary of segment and  geographic
information:
<TABLE>
<CAPTION>                                                   
                       United     Europe      Asia    Consolidat
                       States                             ed
<S>                   <C>        <C>        <C>        <C>
Revenue:                                               
Human resource                                         
management           $47,742,0  $          $1,090,0    $53,389,0
                     00         4,557,000  00         00
Advisory services     3,808,000  -          -          3,808,000
Totals                51,550,00  4,557,000  1,090,000  57,197,000
                     0
                                                       
Income (loss) from                                     
operations:
Human resource                                         
management           4,127,000  35,000     (33,000)   4,129,000
Advisory services     (695,000)  -          -          (695,000)
Corporate             (491,000)  -          -          (491,000)
Totals                2,941,000  35,000     (33,000)   2,943,000
                                                       
Other expense         1,065,000  (4,000)    -          1,061,000
(income)
Income before income                                   
tax expense          1,876,000  39,000     (33,000)   1,882,000
                                                       
Identifiable assets:                                   
Human resource        24,700,00  1,642,000  143,000    26,485,000
management           0
Advisory services     2,257,000  -          -          2,257,000
Corporate             5,927,000  -          -          5,927,000
Totals                32,884,00  1,642,000  143,000    34,669,000
                     0
                                                       
Depreciation and                                       
amortization:
Human resource                                         
management           462,000    49,000     3,000      514,000
Advisory services     164,000    -          -          164,000
Corporate             421,000    -          -          421,000
Totals                1,047,000   49,000    3,000      1,099,000
                                                       
Capital expenditures:                                  
Human resource        116,000    51,000     -          167,000
management
Advisory services     119,000    -          -          119,000
Totals                         $ $ 51,000    $     -   $ 286,000
                     235,000
</TABLE>
<PAGE>
                Headway Corporate Resources, Inc.
                                
     Notes to Consolidated Financial Statements (continued)



14. Segment and Geographic Information (continued)

In  1995,  the Company's continuing operations were comprised  of
two  industry  segments: human resource management  and  advisory
services.  The  Company's  marketing/communications  segment  was
discontinued  on  December 15, 1995 and is not presented  in  the
following  summary.  The  following is a  summary  of  geographic
information:
<TABLE>
<CAPTION>               United                              
                       States     Europe      Asia     Consolida
                                                          ted
<S>                   <C>        <C>        <C>         <C>
Revenue:                                                
Human resource                                          
management                  $   $3,327,0   $1,183,0          $
                     6,486,000  00         00          10,996,00
                                                       0
Advisory services     4,496,000  -          -           4,496,000
Totals                10,982,00  3,327,000  1,183,000   15,492,00
                     0                                 0
                                                        
Income (loss) from                                      
operations:
Human resource                                          
management           1,618,000  16,000     (136,000)   1,498,000
Advisory services     (28,000)   -          -           (28,000)
Corporate             (7,000)    -          -           (7,000)
Totals                1,583,000  16,000     (136,000)   1,463,000
                                                        
Other expenses        -          -          -           30,000
(income)
Income before income                                    
tax expense          -          -          -           1,433,000
                                                        
Identifiable assets:                                    
Human resource                                          
management           5,114,000  1,101,000  202,000     6,417,000
Advisory services     1,314,000  -          -           1,314,000
Corporate             2,043,000  -          -           2,043,000
Totals                8,471,000  1,101,000  202,000     9,774,000
                                                        
Depreciation and                                        
amortization:
Human resource                                          
management           68,000     63,000     6,000       137,000
Advisory services     148,000    -          -           148,000
Totals                216,000    63,000     6,000       285,000
Capital expenditures:                                   
Human resource                                          
management           977,000    79,000     -           1,056,000
Advisory services     129,000    -          -           129,000
Totals                       $   $ 79,000   $      -          $1,185,000
                     1,106,000
</TABLE>
<PAGE>
                Headway Corporate Resources, Inc.
                                
     Notes to Consolidated Financial Statements (continued)



15. Discontinued Operations

On  December  15,  1995, the Company adopted  a  formal  plan  to
discontinue  its  marketing  communications  segment  which   the
Company  operated  through its subsidiary,  AFGL.  The  marketing
communications  segment conducted their operations  primarily  in
the  New  York  City  and San Francisco areas.  The  decision  to
discontinue  the  segment was precipitated by  the  inability  to
attain  profitable  operations.  The  Company  entered  into   an
agreement  to  exchange  substantially all  of  the  subsidiary's
operating   assets  to  Citigate  Communications  Group   Limited
("Citigate")  for  an  18.3%  interest  in  Citigate  valued   at
$2,368,000  and  the  assumption by  Citigate  of  $9,191,000  in
liabilities.   The  exchange  was  consummated  in   March   1996
retroactive to January 1, 1996. Net sales of the segment for  the
years  ended  December 31, 1996 and 1995 were $0 and  $5,990,000,
respectively.  This amount is not included in net  sales  in  the
statement of operations.

16. Subsequent Events

In  March  1997,  Citigate was acquired by  Incepta  Group,  plc.
("Incepta"),  a  United  Kingdom  public  company.  The   Company
received  13,653,926  shares  of  Incepta  in  exchange  for  its
investment in Citigate. An additional 7,072,307 shares of Incepta
is  receivable  in  May  1998 if Incepta meets  certain  earnings
targets.  The  Company  sold 4,951,930 shares  for  approximately
$1,643,000 in March 1997. The gain from this transaction will  be
recognized in 1997.