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                 U.S. 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 the quarterly period ended June 30, 1997 

                       Commission File Number: 0-21275

                              WALNUT CAPITAL, INC.
        ----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

          Nevada                                        84-1349553
----------------------------                ---------------------------------
(State of other jurisdiction of             (IRS Employer Identification No.)
 incorporation or organization)

                    P.O. Box 460363, Aurora, Colorado 80046
          ----------------------------------------------------------
          (Address of principal executive offices including zip code)

                              (303) 690-6787
                        --------------------------
                        (Issuer's telephone number)

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

                            Yes X             No___

As of June 30, 1997, 1,250,000 shares of common stock, $.0001 par value per
share, were outstanding.    

Transitional Small Business Disclosure Format (check one): Yes__    No X
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                              INDEX

                                                         Page
                                                         Number

Part I.   Financial Information

     Item I.   Financial Statements
                    
               Balance Sheets as of June 30, 1997
                 and December 31, 1996                     3

               Statement of Operations, Three Months
                 Ended June 30, 1997                            4

               Statement of Operations, Six Months
                 Ended June 30, 1997                            5

               Statement of Cash Flows, Three Months
                 Ended June 30, 1997                            6

               Statement of Cash Flows, Six Months
                 Ended June 30, 1997                            7

               Notes to Financial Statements                    8

     Item 2.   Management's Discussion and Analysis of 
                 Financial Conditions and Results of 
                 Operations                                9

Part II.  Other Information                                     9
                                2
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                       WALNUT CAPITAL, INC.

                          BALANCE SHEETS
                           (Unaudited)

                              ASSETS
                                                           June 30  December 31 
                                                             1997       1996    
Current Assets
  Cash                                            $      194         $      904 
  Total Current Assets                                   194                904 

Organization costs, net of amortization                  200                225 

  Total Assets                                    $      394         $    1,129 

             LIABILITIES AND STOCKHOLDERS' (DEFICIT)

Current Liabilities:
      Accounts payable                            $    2,266     $      228 
  Total Current Liabilities                            2,266                228 

Stockholders' (Deficit):
  Preferred Stock, $.0001 par value,
          5,000,000 shares authorized
          none issued and outstanding                     -              -    
  Common Stock, $.0001 par value,
          100,000,000 shares authorized
          1,250,000 shares issued and 
          outstanding                                   125            125 
     Additional paid-in capital                      12,375         12,375 
     Accumulated deficit                            (14,372)       (11,599)
Total Stockholders' (Deficit)                        (1,872)           901 
 
Total Liabilities and Stockholders' (Deficit)    $      394     $    1,129 

The accompanying notes are an integral part of the financial statements.
                                3
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                       WALNUT CAPITAL, INC.

                     STATEMENT OF OPERATIONS
                           (Unaudited)

                Three Months Ended June 30, 1997 

Revenues                                                 $         - 

Operating Expenses:
     Professional fees                                         1,098 
     Other                                                       471 
       Total Operating Expenses                                1,569 

Net Loss                                                  $   (1,569)

Per Share                                                 $      nil 

Weighted Average Number of Shares
 Outstanding                                               1,250,000 

The accompanying notes are an integral part of the financial statements.
                                4
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                       WALNUT CAPITAL, INC.

                     STATEMENT OF OPERATIONS
                           (Unaudited)

                 Six Months Ended June 30, 1997 

Revenues                                                 $         - 

Operating Expenses:
     Professional fees                                         2,266 
     Other                                                       507 
       Total Operating Expenses                                2,773 

Net Loss                                                  $   (2,773)

Per Share                                                 $      nil 

Weighted Average Number of Shares
 Outstanding                                               1,250,000 

The accompanying notes are an integral part of the financial statements.
                                5
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                       WALNUT CAPITAL, INC.

                     STATEMENT OF CASH FLOWS
                           (Unaudited)

                 Three Months Ended June 30, 1997


Cash Flows Operating Activities:
     Net (loss)                                           $   (1,569)
     Amortization                                                 13 
     Increase in accounts payable                              1,098 

  Net Cash (Used in) Operating
   Activities                                                   (458)

Cash Flows from Investing Activities                               - 

Cash Flows from Financing Activities                               - 

(Decrease) in Cash                                              (458)

Cash, Beginning of Period                                        652 

Cash, End of Period                                       $      194 

Interest Paid                                             $        - 

Income Taxes Paid                                         $        - 

The accompanying notes are an integral part of the financial statements.
                                6
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                       WALNUT CAPITAL, INC.

                     STATEMENT OF CASH FLOWS
                           (Unaudited)

                  Six Months Ended June 30, 1997

Cash Flows Operating Activities:
     Net (loss)                                           $   (2,773)
     Amortization                                                 25 
     Increase in accounts payable                              2,038 

  Net Cash (Used in) Operating
   Activities                                                   (710)

Cash Flows from Investing Activities                               - 

Cash Flows from Financing Activities                               - 

(Decrease) in Cash                                              (710)

Cash, Beginning of Period                                        904 

Cash, End of Period                                       $      194 

Interest Paid                                             $        - 

Income Taxes Paid                                         $        - 

The accompanying notes are an integral part of the financial statements.
                                7
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                       WALNUT CAPITAL, INC.

                  NOTES TO FINANCIAL STATEMENTS
                    June 30, 1997 (Unaudited)

(1) Condensed Financial Statements

    The financial statements included herein have been prepared by Walnut
    Capital, Inc. without audit, pursuant to the rules and regulations of
    the Securities and Exchange Commission.  Certain information and
    footnote disclosures normally included in the financial statements
    prepared in accordance with generally accepted accounting principles
    have been condensed or omitted as allowed by such rules and regulations,
    and Walnut Capital, Inc. believes that the disclosures are adequate to
    make the information presented not misleading.  It is suggested that
    these financial statements be read in conjunction with the December 31,
    1996 audited financial statements and the accompanying notes thereto. 
    While management believes the procedures followed in preparing these
    financial statements are reasonable, the accuracy of the amounts are in
    some respect's dependent upon the facts that will exist, and procedures
    that will be accomplished by Walnut Capital, Inc. later in the year.

    The management of Walnut Capital, Inc. believes that the accompanying
    unaudited condensed financial statements contain all adjustments
    (including normal recurring adjustments) necessary to present fairly the
    operations and cash flows for the periods presented.

                                8
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                              ITEM 2

        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS

Walnut Capital, Inc. (the "Company") was organized as a Colorado corporation
on June 14, 1996, in order to evaluate, structure and complete a merger with,
or acquisition of, prospects consisting of private companies, partnerships of
sole proprietorships.  The Company may seek to acquire a controlling interest
in such entities in contemplation of later completing an acquisition.  The
Company is not limited to any operation or geographic area in seeking out
opportunities.  Management has not identified any particular business or
industry within which the Company will seek an acquisition or merger.  The
Company has not conducted, nor have others made available to it, market
research supporting the viability of the Company's proposed operations.

The Company generated no revenues during the quarter ended June 30, 1997, and
management does not anticipate any revenues until following the conclusion of
a merger or acquisition, if any, as contemplated by the Company's business
plan.

The Company's capital is limited.  The Company anticipates operational costs
will be limited until such time as significant evaluation work is undertaken
regarding prospective mergers or acquisitions.

At June 30, 1997, the Company had no material commitments for capital
expenditures.


                    PART II. OTHER INFORMATION

Item 1.  Legal Proceedings.  None.

Item 2.  Changes in Securities.  None.

Item 3.  Defaults upon Senior Securities.  None.

Item 4.  Submission of Matters to a Vote of Security Holders.  None.

Item 5.  Other Information.  None.

Item 6.  Exhibits and Reports on Form 8-K.  None.

                            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, thereunto duly authorized.

                                        WALNUT CAPITAL, INC.

Date:     August 26, 1997               By:  /s/ Timothy J. Brasel
                                             Timothy J. Brasel
                                9
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                               EXHIBIT INDEX
EXHIBIT                                              METHOD OF FILING
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  27.    FINANCIAL DATA SCHEDULE               Filed herewith electronically