SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB/A


                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


<TABLE>
<CAPTION>
                                                            SEPT 30,     DECEMBER  31,
                                                             1996           1995
                                                          (UNAUDITED)      (AUDITED)
ASSETS
Current Assets:
<S>                                                     <C>              <C>         
     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:
      Investment Real Estate ........................      1,000,000        2,115,000
      Investment Preferred Stock ....................      2,000,000        2,000,000
      Investment Green World stock ..................         21,925
      Goodwill, net of amortization .................        711,646          785,833
      Green World Goodwill, net of amortization .....      1,033,155
      Deposits and other assets .....................         32,418           30,298
                                                        ------------     ------------
Total other assets ..................................      4,799,144        4,931,131

TOTAL ASSETS ........................................     13,273,476       25,510,158
                                                        ============     ============
</TABLE>

                                        4
<PAGE>
                          WESTMARK GROUP HOLDINGS, INC.
                           CONSOLIDATED BALANCE SHEET


<TABLE>
<CAPTION>
                                                                                                     SEPT 30,           DECEMBER 31,
                                                                                                       1996                 1995
                                                                                                    (UNAUDITED)           (AUDITED)

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
<S>                                                                                             <C>                    <C>         
     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 ......................................               533,323                698,323
                                                                                                ------------           ------------
Total Long Term Liabilities ..........................................................               533,323              1,698,323
                                                                                                ------------           ------------

Total Liabilities ....................................................................            11,099,755             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  .........................................................                 4,833             23,165,937
Common stock, issued but unearned ....................................................            (1,187,656)
Additional Paid in Capital from outstanding options
    and warrants .....................................................................            24,475,989              1,153,688

Accumulated deficit ..................................................................           (24,272,912)           (22,728,421)
                                                                                                ------------           ------------

Total Stockholder Equity .............................................................             2,173,721              1,591,204
                                                                                                ------------           ------------


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ...........................................            13,273,476             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
Revenues:
<S>                                                            <C>                <C>                <C>                <C>        
   Loan origination and gain on sales ..................       $   717,142        $ 1,172,665        $ 2,036,589        $ 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 .........................................           790,966          1,188,424          2,191,738          2,532,970
                                                               -----------        -----------        -----------        -----------

EXPENSES:

   Loan origination costs ..............................            47,200             67,240            185,309            289,733
   Cost of goods sold ..................................            11,343                                11,343
   Servicing sale adjustment ...........................                                                 (70,000)
   General and administrative ..........................         1,313,159          1,529,378          3,480,385          4,614,102
   Marketing and advertising ...........................             1,805              7,456             33,858             33,870
   Goodwill amortization ...............................            69,649             24,729            119,107             74,187
   Depreciation ........................................            25,974             24,834             73,598             74,230
                                                               -----------        -----------        -----------        -----------

TOTAL EXPENSES .........................................         1,469,130          1,653,727          3,833,600          5,086,122
                                                               -----------        -----------        -----------        -----------


   Loss before income tax ..............................          (678,164)          (465,213)        (1,641,862)        (2,553,152)
   Provision for income tax ............................                                                       0                  0
                                                               -----------        -----------        -----------        -----------
NET INCOME (LOSS) BEFORE ...............................          (678,164)          (465,213)        (1,641,862)        (2,553,152)
EXTRAORDINARY ITEM

    Gain on sale of subsidiary .........................            97,371             97,371

NET INCOME ( LOSS) .....................................          (580,793)          (465,213)        (1,544,491)        (2,553,152)
                                                               ===========        ===========        ===========        ===========

NET LOSS PER SHARE
   Loss before extraordinary
    item ...............................................       ($     0.09)       ($     0.40)       ($     0.42)       ($     2.71)
    Extraordinary item .................................               .02                                   .02
NET INCOME (LOSS) ......................................       ($     0.07)       ($     0.40)       ($     0.40)       ($     2.71)
                                                               ===========        ===========        ===========        ===========

WEIGHTED AVERAGE OF ....................................         3,660,000          1,166,394          3,660,000            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)
OPERATING ACTIVITIES
<S>                                                                                           <C>                      <C>          
Consolidated net loss ............................................................            ($ 1,544,491)            ($ 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 ....................................................                 792,347                  410,115
    Stock issued for settlement of litigation ....................................                                          174,250
    Goodwill Amortization ........................................................                 119,107                   74,187
                                                                                              ------------             ------------

Cash used in operations before working capital changes ...........................                (559,439)              (1,820,370)
                                                                                              ============             ============

   (Increase)/Decrease in accounts receivable ....................................                (123,507)                 424,434
    (Increase)/Decrease in current assets ........................................                (107,546)                (987,082)
   (Increase)/Decrease in mortgage loans held for sale ...........................              11,692,742              (11,110,742)
     (Increase)/Decrease in REO loan .............................................                                           62,050
    (Increase)/Decrease in Inventory .............................................                 (28,770)
    (Increase)/Decrease in other assets ..........................................                   2,120
    (Increase)/Decrease in Long term assets ......................................                  15,000                  314,319
    Increase/(Decrease)in Accounts payable .......................................                (621,250)                  17,632
    Increase/(Decrease)in Interest payable .......................................                 (31,308)                  58,329
    Increase/(Decrease)in Other current liabilities ..............................                (459,692)                 166,025
    Increase/(Decrease)in Long Term Notes payable ................................              (1,000,000)
    Increase/(Decrease)in Other notes payable ....................................                 446,183                        0
                                                                                              ------------             ------------
Net cash used after working capital changes ......................................               9,779,732               12,875,405)
                                                                                              ------------             ------------
Cash used in operating activities ................................................               9,220,293              (14,695,775)

INVESTING ACTIVITIES
    Purchase of fixed assets and improvements ....................................                 (30,808)                (144,141)
                                                                                              ------------             ------------
Cash provided/(used) in investing activities .....................................                 (30,808)                (144,141)
                                                                                              ------------             ------------

FINANCING ACTIVITIES
     Net Increase/(Decrease) in warehouse line of credit .........................             (10,997,132)              10,977,515
     Investment related party ....................................................               2,388,593
      Payment of notes receivable - stock sale ...................................                 374,222
       Repayments of notes payable ...............................................                                          657,000
     Repurchase of stock .........................................................                (700,000)
      Sale of stock for cash .....................................................                  10,000                1,204,995
      Increase/(Decrease) in notes payable - short term ..........................                                          125,000
                                                                                              ------------             ------------
Cash provided/(used) by financing activities .....................................              (8,924,317)              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 $790,966 in the
quarter ended September 30, 1996 from $1,188,424 in the quarter ended September
30, 1995, a decrease of 33%. 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.

         Expenses for the Quarter ended September 30, 1996 decreased 11% to
$1,469,130 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 14% to $1,313,159 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 $678,164 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 increased loss is due to the loss for the period
of Green World which did not exist in 1995 as well as the reduction in net
revenues. 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, 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

                                        8
<PAGE>
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 $2,173,721.
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 this Warehouse Facility, totaled
$7,787,287. The Company does not have any other external lines of credit for
financing.

                                        9
<PAGE>
         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 in balance. If such action is required, there is
no assurance that the Company will be successful in any such effort

                                       10
<PAGE>
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 fair market 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 GTB Company 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 fair market 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 date of this
agreement, which payments are to be made on a quarterly basis.

         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 on the West Coast,

                                       11
<PAGE>
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 Trane
Specialty A/C Products ("Trane"). The contract calls for Trane 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.

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

                                       12
<PAGE>
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 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.

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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, 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.

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         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
third 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.

         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.

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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

                  The Company completed redomiciling in Delaware pursuant to the
                  affirmative vote of the shareholders at the recent annual
                  meeting. The common stock now has a par value of $.001. The
                  balance sheet now reflects the change to the par value method
                  by moving the value of the common stock to Additional Paid in
                  Capital pursuant to Generally Accepted Accounting Principles
                  (GAAP).

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.

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


                             BY:    /C/ 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: APRIL 29, 1997

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