SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

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

                        For Quarter Ended Commission File
                         SEPTEMBER 30, 1996 NO. 0-18945

                          WESTMARK GROUP HOLDINGS, INC.

      DELAWARE                                         84-1055077
(State of Incorporation)                  (I.R.S. Employment Identification No.)
         
                              355 N.E. Fifth Avenue
                           Delray Beach, Florida 33483
                                  (407)243-8010
               (Address of Principal Executive Offices. Including
                         Zip Code and Telephone Number)

        Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                     YES [ X ] NO [  ]

        THE NUMBER OF SHARES OUTSTANDING OF THE ISSUER'S COMMON STOCK AS OF
SEPTEMBER 30, 1996 WAS 4,370,876.

               [ X ] TRADITIONAL SMALL BUSINESS DISCLOSURE FORMAT.

                                        1
<PAGE>
                          WESTMARK GROUP HOLDINGS, INC.

                            FORM 10-QSB REPORT INDEX

10-QSB PART AND ITEM NO.

     PART I-FINANCIAL INFORMATION

          ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

               Consolidated balance sheet as of September 30, 1996 and December
                    31, 1995.................................................4,5

               Consolidated statement of operations for the nine months ended
                    September 30, 1996 and 1995..............................6
               
               Consolidated statement of cash flows for the nine months ended
                    September 30, 1996.......................................7

               Notes to consolidated financial
                    statements...............................................3

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

OPERATIONS...................................................................8

     PART II-OTHER INFORMATION

          ITEM 1. LEGAL PROCEEDINGS...........................................14
          ITEM 2. CHANGES IN SECURITIES.......................................17
          ITEM 3. DEFAULTS UPON SENIOR SECURITIES.............................17
          ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.........17
          ITEM 5. OTHER INFORMATION...........................................17
          ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K............................17

          SIGNATURES..........................................................18

                                        2
<PAGE>
NOTE 1:        BASIS OF PRESENTATION

        The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-QSB and
Item 310b of Regulation S-B. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the nine month period
ended September 30, 1996 are not necessarily indicative of the results that may
be expected for the year ended December 31, 1996. For further information, refer
to the consolidated financial statements and footnotes thereto included in the
Company's audited annual report on Form 10-KSB for the year ended December 31,
1995.


NOTE 2:        THIRD QUARTER FINANCING ACTIVITY

        The Company received $150,000 from Red River Cattle Company ("Red
River"). $100,000 of which was reported as having been received from Heart Labs
of America ("HLOA") in the second quarter of 1996. $20,000 of the Red River debt
was repaid along with $40,000 to HLOA. New placements were made for $170,001 in
the third quarter of 1996 from various sources for working capital. $200,000 was
received from GTB Company as part of the purchase agreement for Green World
Technologies, Inc ("Green World").

                                        3
<PAGE>
                          PART I FINANCIAL INFORMATION

                          WESTMARK GROUP HOLDINGS, INC.
                           CONSOLIDATED BALANCE SHEETS

                                               SEPT 30,    DECEMBER  31,
                                                 1996          1995
                                              (UNAUDITED)    (AUDITED)
ASSETS
Current Assets:
     Cash and cash equivalent ...........   $    60,534   $   311,916
     Accounts receivable,  net of reserve       131,511         8,004
     Inventory ..........................        28,770
     Note receivable - stock sale .......                     374,222
     Mortgage loans held for sale .......     7,787,287    19,480,029
     Other current  assets ..............       109,748         2,202
                                            -------------------------
     Total Current Assets ...............     8,117,850    20,176,373
                                            -------------------------
Fixed Assets:
Property and equipment ..................       851,396       820,588
Equipment under lease ...................        16,477        16,477
                                            -------------------------
                                                867,873       837,065
     Less Accumulated Depreciation ......      (511,391)     (434,411)
                                            -------------------------
Total fixed assets ......................       356,482       402,654
                                            -------------------------
Other Assets:
      Prepaid Expenses ..................     1,187,656
      Investment Real Estate ............     1,000,000     2,115,000
      Investment Preferred Stock ........     2,000,000     2,000,000
      Investment Green World stock ......     1,100,000
      Goodwill, net of amortization .....       711,646       785,833
      Deposits and other assets .........        32,418        30,298
                                            -------------------------
Total other assets ......................     6,031,720     4,931,131

TOTAL ASSETS ............................    14,506,052    25,510,158
                                            =========================

                                        4
<PAGE>
                          WESTMARK GROUP HOLDINGS, INC.
                           CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
                                                                   SEPT 30,       DECEMBER 31,
                                                                     1996           1995
                                                                  (UNAUDITED)      (AUDITED)
<S>                                                              <C>             <C>         
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
     Accounts payable ........................................   $    612,949    $  1,234,199
     Warehouse line of credit ................................      7,628,734      18,625,866
     Interest Payable ........................................        196,311         227,619
     Settlement liability ....................................        407,560         419,348
     Other notes payable .....................................      1,173,001         717,818
     Payroll  taxes payable ..................................         68,329         141,329
     Other current liabilities ...............................        479,548         854,452

Total  Current Liabilities ...................................     10,566,432      22,220,631
                                                                   --------------------------
Long-Term Liabilities:
      Notes payable ..........................................                      1,000,000
      Short term debt expected to be refinanced ..............        121,984         698,323
                                                                   --------------------------
Total Long Term Liabilities ..................................        121,984       1,698,323
                                                                   --------------------------
Total Liabilities ............................................     10,688,416      23,918,954
                                                                   --------------------------
STOCKHOLDERS EQUITY
Preferred stock, no par value, 10,000,000 shares authorized;
   648,750 shares issued and outstanding  at  Sept 30, 1996 ..      2,675,000
Common  stock, no par value, 50,000,000 shares
    authorized; 4,370,876  shares issued and outstanding
    at June 30, 1996,  2,632,772 shares issued and outstanding
    as of December 31, 1995  .................................     23,488,911      23,165,937
Additional Paid in Capital from outstanding options
    and warrants .............................................      1,396,448       1,153,688

Accumulated deficit ..........................................    (23,742,723)    (22,728,421)
                                                                   --------------------------
Total Stockholder Equity .....................................      3,817,636       1,591,204
                                                                   --------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ...................     14,506,052      25,510,158
                                                                   ==========================
</TABLE>
                                        5
<PAGE>
                          Westmark Group Holdings, Inc.
                      Consolidated Statements of Operations
                                   (unaudited)
<TABLE>
<CAPTION>
                                             Three Months Ended           Nine Months Ended
                                           Sept 30,       Sept 30,      Sept 30,       Sept 30,
                                             1996           1995         1996            1995
<S>                                     <C>            <C>            <C>            <C>        
Revenues:
   Loan origination and gain on sales   $   825,104    $ 1,172,665    $ 2,737,880    $ 2,492,479
   Product  sales ...................        29,252           --           29,252           --
   Interest - Preferred Stock .......        35,000           --          105,000           --
   Other Income .....................         9,572         15,759         20,897         40,491
                                        --------------------------------------------------------
TOTAL REVENUES ......................       898,928      1,188,424      2,893,029      2,532,970
                                        --------------------------------------------------------
EXPENSES:
   Loan origination costs ...........        47,200         67,240        185,309        289,733
   Cost of goods sold ...............         7,771           --            7,771           --
   Servicing sale adjustment ........          --             --          (70,000)          --
   General and administrative .......     1,301,079      1,529,378      3,468,305      4,614,102
   Marketing and advertising ........         1,805          7,456         33,858         33,870
   Goodwill amortization ............        24,729         24,729         74,187         74,187
   Depreciation .....................        25,974         24,834         73,598         74,230
                                        --------------------------------------------------------
TOTAL EXPENSES ......................     1,408,558      1,653,727      3,773,028      5,086,122
                                        --------------------------------------------------------
   Loss before income tax ...........      (509,630)      (465,213)      (879,999)    (2,553,152)
   Provision for income tax .........          --             --            1,600              0
                                        --------------------------------------------------------
NET INCOME (LOSS) BEFORE ............      (509,630)      (465,213)      (881,599)    (2,553,152)
EXTRAORDINARY ITEM
    Gain on sale of subsidiary ......        97,371           --           97,371           --
NET INCOME ( LOSS) ..................      (412,259)      (465,213)      (784,228)    (2,553,152)
                                        =========================================================
NET LOSS PER SHARE
   Loss before extraordinary
    item ............................   ($     0.11)   ($     0.40)   ($     0.24)   ($     2.71)
    Extraordinary item ..............           .02           --              .02           --
NET INCOME (LOSS) ...................   ($     0.09)   ($     0.40)   ($     0.22)   ($     2.71)
                                        =========================================================
WEIGHTED AVERAGE OF .................     4,370,876      1,166,394      3,260,258        941,827
     SHARES OUTSTANDING                 =========================================================
</TABLE>
                                        6

<PAGE>
                          WESTMARK GROUP HOLDINGS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                               NINE MONTHS ENDED
                                                             SEPT 30,       SEPT 30,
                                                               1996          1995
                                                            (UNAUDITED)   (UNAUDITED)
<S>                                                        <C>             <C>          
OPERATING ACTIVITIES
Consolidated net loss ..................................   ($   782,628)   ($ 2,553,152)
Adjustments to reconcile consolidated net (loss)
      to net cash used by operating activities:
    Depreciation .......................................         73,598          74,230
    Stock issued for services ..........................        655,544         410,115
    Stock issued for settlement of litigation ..........           --           174,250
    Goodwill Amortization ..............................         74,187          74,187
                                                             --------------------------
Cash used in operations before working capital changes .         20,701      (1,820,370)
                                                             ==========================

   (Increase)/Decrease in accounts receivable ..........       (118,869)        424,434
    (Increase)/Decrease in current assets ..............       (102,798)       (987,082)
   (Increase)/Decrease in mortgage loans held for sale .     11,692,742     (11,110,742)
    (Increase)/Decrease in prepaid expense .............     (1,187,656)
    (Increase)/Decrease in REO loan ....................         62,050
    (Increase)/Decrease in Inventory ...................         (6,169)           --
    (Increase)/Decrease in other assets ................          2,222
    (Increase)/Decrease in Long term assets ............         15,000         314,319
    Increase/(Decrease)in Accounts payable .............       (660,999)         17,632
    Increase/(Decrease)in Interest payable .............        (31,308)         58,329
    Increase/(Decrease)in Other current liabilities ....       (740,729)        166,025
    Increase/(Decrease)in Long Term Notes payable ......     (1,000,000)           --
    Increase/(Decrease)in Other notes payable ..........         55,183               0
                                                             --------------------------
Net cash used after working capital changes ............      7,916,619      12,875,405)
                                                             --------------------------
Cash used in operating activities ......................      7,937,320     (14,695,775)

INVESTING ACTIVITIES
    Purchase of fixed assets and improvements ..........         (1,832)       (144,141)
                                                             --------------------------
Cash provided/(used) in investing activities ...........         (1,832)       (144,141)
                                                             --------------------------

FINANCING ACTIVITIES
     Net Increase/(Decrease) in warehouse line of credit    (10,997,132)     10,977,515
     Allowance related party ...........................      2,388,593            --
      Payment of notes receivable - stock sale .........        374,222            --
       Repayments of notes payable .....................       (576,339)        657,000
     Repurchase of stock ...............................       (700,000)
      Sale of stock for cash ...........................         10,000       1,204,995
      Increase/(Decrease) in notes payable - short term       1,300,000         125,000
                                                             --------------------------
Cash provided/(used) by financing activities ...........     (8,200,656)     12,964,510
                                                             --------------------------

Net increase/(decrease) in cash ........................        265,168          55,036
Cash and cash equivalents, beginning period ............        325,702         107,573
Cash and cash equivalent, end of period ................         60,534          52,537
Cash  paid for interest ................................        477,260         761,477
                                                             ==========================
Cash paid for income tax ...............................          1,600               0
                                                             ==========================
</TABLE>
                                        7
<PAGE>
ITEM 2.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        The following discussion should be read in conjunction with the attached
condensed consolidated financial statements and notes thereto.

FINANCIAL RESULTS OF OPERATIONS

        On a consolidated basis, total revenues decreased to $898,928 in the
quarter ended September 30, 1996 from $1,188,424 in the quarter ended September
30, 1995, a decrease of 24%. The decrease is a result of downsizing the
Conforming "A" Division ("A"), whose profit margins are approximately 1/5 of the
Non-Conforming B/C Division ("B/C"). Additionally, the frequency of B/C Bulk
Sales have reduced the interest income as the loans have remained on the
warehouse line for a reduced period. This causes a reduction in both interest
income and interest expense. The revenue figure reflects a net gain on sale.

        Expenses for the Quarter ended September 30, 1996 decreased 17% to
$1,408,558 from $1,653,727 for the quarter ended September 30, 1995. Loan
origination costs decreased 30% to $47,200 for the current quarter from $67,240
in the comparable prior year quarter ending September 30, 1995. General and
Administrative expenses decreased 15% to $1,301,079 from $1,529,378 for the
quarter ended September 30, 1995. Marketing and Advertising expense decreased
75% to $1,805 from $7,456 for the quarter ended September 30, 1996.

         A net loss resulted for the current quarter of $412,259 or $0.09 per
share as compared to a net loss of $465,213 or $.40 per share for the quarter
ended September 30, 1995. This decreased loss is due to continued cost cutting
efforts by management in areas of General and Administrative through operational
consolidations. The loss breakdown is as follows: Westmark Mortgage Corporation
(.05), Green World (.02) Other WGHI (.02).

BUSINESS OPERATIONS

        During the third quarter of 1996, the Company continued increasing loan
volumes in B/C paper. B/C loan fundings increased from $8.26 million in the 3
months ending September 30, 1995 to $11.90 million for the three months ended
September 30,

                                        8
<PAGE>
1996, an increase of 44%. For the nine months ending September 30, 1996, total
B/C production increased 44% to $25.3 million verses $17.6 million in period
ending September 30, 1995. Total production including "A" paper was $57.3
million for nine months ending September 30, 1996.

        The Company expanded its B/C lending program through bulk sales during
the first three quarters of 1996. B/C loans are for borrowers with credit
histories that fall below the guidelines set forth by Fannie Mae and Freddie
Mac. The B/C division is only 21 months old and 56% of the Company's loan
fundings during the third quarter of 1996 were from B/C loans and over 80% of
revenues realized were from B/C loans. The Company is focusing its marketing
efforts in the B/C loan market due to the enhanced returns. The increase in the
B/C loans has come primarily from an increased market share in Florida.
Management intends to continue its marketing strategy in additional states,
including California, Georgia, Missouri, Arizona and Illinois and the
Northwestern United States.

         The Company continues to sell loan origination's on a
"servicing-released" basis to investors in the normal course of business. The
Company's bulk sales program for B/C paper in which loans are pooled and sold in
packages ranging from $500,000 to $3,500,000 remains an integral key to future
growth. During the third quarter, the bulk sales delivery was completed
successfully with institutional investors, such as Household Financial Services,
purchasing Westmark non-conforming originations.

LIQUIDITY AND CAPITAL RESOURCES

        The Company uses its cash flow from whole loan sales, loan origination
fees, net interest income and borrowings under its warehouse line of credit to
meet its working capital needs. The Company's cash requirements include the
funding of loan originations, purchases, payment of interest expenses, operating
expenses, taxes and capital expenditures, along with settlement agreements
negotiated during the first quarter.

        On September 30, 1996, total stockholders equity was $4,217,636.
Adequate credit facilities and other sources of funding, including the ability
of the Company to sell loans, are essential to the continuation of the Company's
ability to originate and purchase loans. The Company borrows funds on a short
term basis to support the accumulation of loans prior to sale. These short term
borrowings are made under a warehouse line of credit with Princap Mortgage, Inc.
("Warehouse Facility"). Pursuant to the Warehouse Facility, the Company has
available a secured revolving credit line of $15 million to finance the
Company's origination or purchase of loans, pending sale to investors. The line
of credit, pursuant to the Warehouse Facility, has collateral of the assignment
and pledge of eligible mortgage loans, bears interest at an annual rate of 2%
above prime, payable at the time of purchase by the permanent investor. The
Warehouse Facility provides for a transaction charge of $140 per loan and
requires the Company to possess a minimum net worth of $250,000 and a
compensating cash balance on deposit in the amount of $5,000. On September 30,
1996, the balance outstanding , pursuant to

                                        9
<PAGE>
this Warehouse Facility, totaled $7,787,287. The Company does not have any other
external lines of credit for financing.

        Historically, the Company has obtained financing through the issuance of
its common stock and borrowings on a negotiated basis. During the third quarter
of 1996, the Company issued 1,761,996 shares and canceled 519,242 shares of
stock for a net change of 1,242,754. The increase in the number outstanding was
attributable to: A) shares issued to HLOA (138,000) in accordance with the
anti-dilution provision of the Stock Purchase Agreement. The provision expired
retroactive to July 29, 1996 pending future receipt of $500,000; B) Prepaid
management expense of the Palm Beach County real estate (252,000); C)
Professional fees for other legal services (163,000); and D) Consulting
agreements for services provided in areas of leasing, public relations,
acquisitions, secondary marketing, insurance and computers(690,000).

        In May and June 1995, the Company raised $600,000 cash through the
issuance of convertible promissory notes in the principal amount of $600,000 and
the warrants entitling holders to purchase certain securities ("Bridge
Financing"). In April 1996, the Company and all these investors agreed to
restructure the investment and the Company paid such investors an aggregate
amount of $600,000 and issued such investors 300,000 shares of Series B
Preferred Stock ("Series B Preferred Stock") with a stated value of $600,000.
The Series B Preferred Stock has a liquidation preference of $600,000, plus
accrued and unpaid dividends, is redeemable by the Company at a redemption price
of $600,000, plus accrued and unpaid dividends from the date of redemption,
subject to adjustment in the event of certain circumstances, and is convertible
into shares of Common Stock at a conversion price equal to the lessor of $2.00
or 84% of the closing bid price prior to the date of conversion (subject to
further adjustment).

        In the second quarter of 1996, HLOA has advanced $1,638,593. Total
advanced for the six month period ending June 30, 1996 was $2,428,593. $40,000
of the advance was paid back in the third quarter. These fundings were utilized
to discharge outstanding debts and for working capital purposes.

        The Company's internally generated cash flows from operations has
historically been and continue to be insufficient for its cash needs. It is
expected that internal sources of liquidity will improve when net cash is
provided by operating activities and, until such time, the Company will rely on
external sources for liquidity. During the third quarter, a subsidiary, Westmark
Mortgage Corporation ("WMC") approached cash flow break-even from daily
operations. However, additional holding company and subsidiary expenses continue
to require additional capital be raised until WMC produces enough revenue to
offset these expenses. The Company has not established any other lines of credit
or other similar financial arrangements with any lenders. If it appears at any
time in the future that the Company is again approaching a condition of cash
deficiency, the Company will be required to seek additional debt or equity
financing or bring cash flows

                                       10
<PAGE>
in balance. If such action is required, there is no assurance that the Company
will be successful in any such effort

RECENT TRANSACTIONS

        On June 10, 1996, the Company filed an SB-2 Registration Statement with
the Securities and Exchange Commission. The Prospectus relates to the issuance
by the Company of shares of Company Common Stock, $.001 par value ("Common
Stock"), to fund debt settlements. This Prospectus also relates to the resale of
2,373,787 shares of Common Stock which may be sold by the holders thereof
("Selling Stockholders") from time to time as market conditions permit in the
market, or otherwise, at prices and terms then prevailing or at prices related
to the then current market price, or in negotiated transactions. The shares of
Common Stock to be resold include 666,526 shares currently issued and
outstanding and up to 1,707,261 shares to be issued upon (I) exercise of
warrants outstanding to purchase an aggregate of 666,666 shares ("Warrants"),
(ii) exercise of options outstanding to purchase an aggregate of 331,995 shares
("Options"), and (iii) conversion of 418,750 outstanding shares of the Company's
Series A and Series B Preferred Stock to adjustment (collectively, "Preferred
Stock") presently convertible to purchase an aggregate of 708,690 shares,
subject to adjustment.

        On July 10, 1996, the Company sold all of its capital stock of Network
Capital Group, Inc. to PBF Land Company ("PBF") in exchange for various parcels
of real property in Florida with a market value appraised at $1,298,000 (Parcel
A). In addition, PBF placed an attorney's opinion letter of title for Quit Claim
Deeds for additional parcels (Parcel B) valued at up to $5 million in to escrow.
In exchange for the additional property, the Company placed preferred stock with
a stated value of $5 million into escrow. The preferred stock may be convertible
into common stock beginning April 1, 1997. The minimum conversion price is $1
and no more than a cumulative total of $100,000 worth of preferred stock may be
converted per quarter. Further due diligence regarding appraisal, title and
legal are necessary in order for the Company to exercise the option to acquire
the additional parcels.

        Whitehall Financial Services, Inc. ("Whitehall") claimed a third party
beneficial interest in and to the PBF agreement. PBF agreed to return 88,963
shares of Company common stock to the Company which was then issued to Whitehall
in full and final settlement of all claims.

        Effective July 21, 1996, the Company and Green World entered into an
agreement whereby the Company acquired all of the issued and outstanding capital
stock of Green World in consideration for (I) 130,000 shares of Class E
Convertible Preferred Stock, stated value $10.00 per share ("Preferred Stock:),
which Preferred Stock is convertible into Common Stock at the option of the
holder at any time within one year of issuance at a conversion price of $.45 per
share of Common stock, and (ii) payment of royalties of 14% of the gross sales
of Green World for a period of two years from the

                                       11
<PAGE>
date of this agreement, which payments are to be made on a quarterly basis.
Green World is in the business of refrigerant management systems for energy
savings.

        The Company acquired the stock of Green World from GTB Company. Green
World is a nationwide marketer of the Talon Refrigerant Management
System("Talon"), an energy-saving add-on to air-cooled condensers found in air
conditioners, heat pumps and refrigeration systems. Green World has been
establishing a dealer network and currently has commitments from nine dealers
and negotiations with many more located on the West Coast, plus Hawaii and the
Pacific Basin, from the Marshall to the Fiji Island. Green World has executed an
exclusive contract for the sales of its Talon with Trade Specialty A/C Products
("Trade"). The contract calls for Trade to purchase no less than 7,125 units
over the next 24 months, with 2,535 units in the first 12 months and 4,800 the
remaining 12 months and is renewable for an additional 24 months. Additionally,
the contract allows the distributor the exclusive right to market in 16
California counties including those counties in the San Francisco Bay area. The
Talon unit has an average payback from energy savings of eight months and is
regarded as one of the premier energy saving devices being marketed

        The Company has entered into a number of settlement agreements with
various vendors and consultants of the Company, which settlements include the
registration and issuance of 294,934 shares of common stock of the Company. Upon
registration and issuance of said shares, the creditors will be allowed to sell
shares on a monthly basis for a period of two to twelve months to satisfy the
obligations in full. The specific creditors and the number of shares to be
registered in the name of each creditor are set forth in the Registration
Statement on file with the Securities & Exchange Commission ("SEC") or in the
amendment thereto. Said settlement shares have been included in a Form SB-2
Registration Statement filed with the SEC on or about June 6, 1996 or will be
included to said registration statement. The Company has been unable to comply
with the terms and conditions of the settlement agreements with respect to the
registration and issuance of shares in view of the fact that the aforementioned
Form SB-2 Registration Statement is not effective. As a result of the default,
three of the settlement creditors have entered judgment against the Company as
follows: Brentwood Credit Corporation - $38,264.00, Bowne of Los Angeles -
$11,514.00 and Cohen, Brame & Smith - $26,278.00. The Company is in the process
of negotiating a modification to the various settlement agreements, extending
the time for registration and issuance of shares to a date that the Company
anticipates the SB-2 Registration Statement will be effective.

                                       12
<PAGE>
SUBSEQUENT EVENTS

CONVERTIBLE PREFERRED A

        In February 1996, the Company received a letter from Drew Hollenbeck
alleging irregularities concerning his investment in the equity and convertible
debt securities of the Company, and various disputed matters with the former
directors and officers of the Company in connection with that investment. In
March 1996, the Company entered into a settlement agreement with Mr. Hollenbeck,
pursuant to which the Company agreed, among other things, to issue to Mr.
Hollenbeck 100,000 shares of convertible preferred stock redeemable upon written
notice to the Company six months following the execution of the settlement
agreement for the sum of $400,000 plus any accrued interest. In addition, the
settlement agreement provided that the Company pay Mr. Hollenbeck's legal fees
in connection with the matter in the sum of $50,000. Mr. Hollenbeck has made
demand on the Company for the repurchase of the stock and the payment of the
legal fees. The Company and Mr. Hollenbeck are currently in negotiations to
resolve the matter.

                           PART II-OTHER INFORMATION

        ITEM 1.       LEGAL PROCEEDINGS

          The Company is a defendant in ROBERT J. CONOVER VS. GREENTREE MORTGAGE
CO., L.P. AND GREENTREE MANAGEMENT CORPORATION (COLLECTIVELY, "GREENTREE"),
WESTMARK GROUP HOLDINGS, INC., WESTMARK MORTGAGE CORPORATION AND MICHAEL F.
MORRELL, Superior Court of New Jersey, Chancery Division, Burlington County,
filed September 25, 1995. The plaintiff served as president and chief financial
officer of Greentree pursuant to an employment agreement between the plaintiff
and Greentree. Plaintiff was discharged from those positions in September 1995.
Plaintiff brought this action for compensatory damages based upon alleged breach
of such employment agreement. Plaintiff seeks, among other things, damages
against Westmark and Mr. Morrell based upon an allegation of intentional
interference with contractual obligations and a third party beneficiary claim
with respect to the Company. Mr. Morrell is indemnified by the Company.

        On October 27, 1995, the plaintiff sought a temporary restraining order
and preliminary injunction enjoining the Company from acquiring Greentree. Such
request was denied as the Court found that, among other things, the applicable
test requiring plaintiff to show a likelihood of success on the merits was not
met. The Company has

                                       13
<PAGE>
terminated negotiations with Greentree. Greentree has agreed to maintain a
minimum net worth of $1,000,000. Management believes that this obligation does
not transfer in any way to the Company in connection with its attempted purchase
of certain assets of Greentree. Greentree disputes the allegations of the
complaint. The Company believes that there is not legal justification for the
joinder of the Company and Mr. Morrell as defendants in the pending dispute
between the plaintiff and Greentree, and intends to vigorously defend this
allegation.

        Extensive discovery has been undertaken by plaintiff and defendants and
the Company anticipates filing a Motion for Summary Judgment within the next two
weeks. The Company does not anticipate any liability with respect to this
litigation.


        In the matter of SAXON MORTGAGE V. WESTMARK, Saxon Mortgage obtained a
judgment in the amount of $469,348 in connection with various repurchase
obligations. An amount of $61,788 has been paid, and the remaining liability of
$407,560 is accrued at December 31, 1995. The Company has reached a settlement
which calls for monthly payments of $11,788 for 36 months.

        Counsel for the Company anticipates a further amendment to the
stipulated judgment wherein all monthly payments are suspended in consideration
for which the Company will secure the obligation to Saxon Mortgage with a
portion of the real property acquired from PBF. The Company would remain
obligated for the full payment of $407,560 on July 15, 1998 and would be
entitled to a full release and final settlement upon payment of the sum of
$318,261 on or before June 27, 1997.


        The Company is a defendant in CONWAY ET AL V. DANNA, NETWORK FINANCIAL
SERVICES, INC., ET AL. The suit alleges Unfair Practices, Fraud (Negligent
Misrepresentations; Intentional Misrepresentations; Concealment); Breach of
Written Contract; Breach of Implied Covenant of Good Faith and Fair Dealing;
Common Count; and Breach of California Securities Statutes against Network
Financial Services, Inc. (a.k.a. Westmark Group Holdings, Inc.) and others. The
Company considers the risk of loss in this matter to be remote and,
consequently, no amount has been accrued as of December 31, 1995.

        Plaintiffs were recently sanctioned by the Superior Court for failing to
file appropriate pleadings and until such time as Plaintiff's Amended Complaint
is filed, no discovery will be undertaken. The Company remains confident that
there is only a remote possibility of liability.

        The Company is plaintiff in NETWORK FINANCIAL SERVICES, INC. V. MCCURDY,
RAICHE, RYALS, NASH & MOSS LAND COMPANY, filed March 1993 in Monterey County,

                                       14
<PAGE>
California Superior Court. The plaintiff alleges fraud, negligent
misrepresentation, breach of fiduciary duty, negligence, quiet title, RICO
violations and conversion. Defendant McCurdy initiated a cross-complaint naming,
among others, the Company as a cross defendant. The cross-complaint seeks
damages for breach of a stock option agreement, breach of contract, and
declaratory relief. The Company has finalized a settlement with defendants
Raiche and Ryals, wherein defendants Raiche and Ryals transferred 7,166 shares
of the Company's Common Stock to the Company in addition to one-half (1/2)
interest in certain property. The balance of the pending litigation involving
defendant and cross-complaint McCurdy and others is unaffected by the
Raiche/Ryals settlement. Management intends to vigorously defend this
cross-complaint.

        A settlement has been negotiated wherein and whereby both the Complaint
and Cross-Complaint will be dismissed and no monetary compensation paid by
either party.

        The Company is defendant in KNIGHT V. LOMAS MORTGAGE U.S.A. AND WESTMARK
MORTGAGE CORPORATION. The complaint is based upon a contention by the Plaintiff
that Lomas Mortgage U.S.A. as the servicing agent wrongfully impaired the credit
rating of Plaintiff and breached the written agreement between the parties. A
preliminary determination indicates that the basis for the dispute is between
Lomas U.S.A. and the Plaintiff, but the Company has been named as a party
defendant in view of the original contractual relationship between the Plaintiff
and Westmark. The Company considers the risk of loss in this matter to be
remote, and consequently, no amount has been accrued as of December 31,1995.

        The Company and plaintiffs entered into an agreement wherein and whereby
the subject litigation was dismissed without prejudice. The case was refiled in
Orange County, California Superior Court on October 29, 1996. The Company does
not anticipate any liability with respect to this litigation.

        The Company is a defendant in ORTEGA V. MICHAEL SANTA MARIA ET AL filed
in Orange County Superior Court of the State of California. The complaint is
based upon a contention by the Borrower Ortega that Santa Maria, individually
and as a owner/manager/broker of Bann Cor Mortgage made false presentations of
material fact to plaintiffs. The Company acquired this loan from Bann Cor and
subsequently sold the loan to Imperial Credit Industries. A preliminary
determination indicates that the basis for the dispute is between Santa Maria
and Bann Cor. However, the Company has been named as a party defendant. Westmark
generally and specifically denies each and every allegation contained in the
complaint. The Company considers the risk of loss in this matter to be minimal
and fully intends to defend this action.

        The Company has recently filed a Demurrer to plaintiff's Complaint,
which Demurrer was sustained on or about October 11, 1996. Although plaintiff
has been allowed time to file an Amended Complaint, it is anticipated that
plaintiff will dismiss the company from the pending litigation.

                                       15
<PAGE>
        One of the Company's wholly owned subsidiaries, Green World has been
named, together with other defendants, in a suit action SHAPE UP AMERICA V.
PHILLIPPE ET AL., filed in Alameda County, California Superior Court on August
19, 1996. The Complaint alleges breach of contract, conspiracy, fraud, and
quantum meruit. The basic premise to plaintiff's Complaint is that plaintiff
claims to be entitled to various forms of compensation based upon the sale of
certain licensing, patent and marketing rights to the Talon Refrigerant
Management System. It is anticipated that venue for this action will be
transferred to Sacramento County and to date, no discovery has been undertaken.
Based upon a preliminary review of relevant documentation, the Company does not
anticipate any liability.

        From time to time the Company is a defendant (actual or threatened) in
certain lawsuits encountered in the ordinary course of its business, the
resolution of which, in the opinion of management, should not have a material
adverse affect on the Company's financial position.

                                       16
<PAGE>
ITEM 2.        CHANGES IN SECURITIES

               None.

ITEM 3.        DEFAULTS UPON SENIOR SECURITIES

               In October 1996, Drew Hollenbeck, holder of Series A preferred
               stock noticed the Company to redeem his shares of convertible
               preferred stock and the Company is in default with respect to
               this request. The Company and Mr. Hollenbeck are currently in
               negotiations to resolve the matter.

ITEM 4.        SUBMISSION OF MATTERS TO A VOTE SECURITY HOLDERS

               None.

ITEM 5.        OTHER INFORMATION

               None.

ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K

               Effective June 14, 1996, Mark Schaftlein was appointed Chief
               Financial Officer of the Company. On September 10, 1996, Norman
               Birmingham resigned as President of the Company. Mr. Birmingham
               remains Chairman of the Board and retains his role as Principal
               Accounting Officer. Subsequently, Mr. Schaftlein was named Chief
               Operations Officer on September 11, 1996.

               Financial Statements for the Green World acquisition will be
               filed within 30 days.

                                       17
<PAGE>
                                   SIGNATURES

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

                             WESTMARK GROUP HOLDINGS, INC.

                             BY: /s/ NORMAN J. BIRMINGHAM
                             NORMAN J. BIRMINGHAM, DIRECTOR, CHAIRMAN,
                             ( PRINCIPAL ACCOUNTING OFFICER & DULY AUTHORIZED
                             DIRECTOR OF THE REGISTRANT)

                             BY: /s/ MARK D. SCHAFTLEIN
                             MARK D. SCHAFTLEIN, DIRECTOR & PRESIDENT OF
                             WESTMARK MORTGAGE CORPORATION, CHIEF OPERATING
                             OFFICER OF WESTMARK GROUP HOLDINGS, INC.
                             (DULY AUTHORIZED DIRECTOR & OFFICER OF THE
                             REGISTRANT)

DATED: NOVEMBER 19, 1996

                                       18