FORM 10-Q

                   SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C.  20549


(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

   For the quarterly period ended             June 30, 1997         
                                   -----------------------------------
                                   OR
[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from                       to                
                                ---------------------  -------------------

                     Commission File Number 0-13817


                        MARGATE INDUSTRIES, INC.
          ----------------------------------------------------
         (Exact name of registrant as specified in its charter)


        Delaware                                 84-8963939              
----------------------------          ---------------------------------- 
(State or other jurisdiction         (I.R.S. Employer Identification No.)
of incorporation or organization)


129 N. Main Street      Yale, Michigan                            48097  
---------------------------------------                         ---------
(Address of principal executive offices)                       (Zip Code)


  (Registrant's telephone number, including area code) (810) 387-4300
                                                       ----------------
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      
                                                          -----     -----

As of June 30, 1997, the Company had 4,573,637 shares of its $.005 Par
Value Common Stock outstanding.

<PAGE>

                        MARGATE INDUSTRIES, INC.

                                FORM 10-Q


                                  INDEX
                                  -----


PART I:     FINANCIAL STATEMENTS                                   PAGE(S)
-------     --------------------                                   -------


Item 1.     Financial Information


                 Consolidated Balance Sheets . . . . . . . . . . . . .3-4


                 Consolidated Income Statement . . . . . . . . . . . . .5


                 Consolidated Statements of Changes in
                   Stockholders' Equity. . . . . . . . . . . . . . . . .6


                 Consolidated Statements of Cash Flows . . . . . . . . .7


                 Notes to Consolidated Financial
                   Statements. . . . . . . . . . . . . . . . . . . . 8-11



Item 2.          Management's Discussion and Analysis of Financial
                   Condition and Results of Operations . . . . . . . . 12



PART II:         OTHER INFORMATION . . . . . . . . . . . . . . . . . . 13
-------          -----------------




<PAGE>

                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS
                -----------------------------------------


                                                  June 30      December 31
                                                   1997           1996
                                                 --------       --------
                                                (Unaudited)
ASSETS
------

CURRENT ASSETS

   Cash and cash equivalents                     $    4,832     $    2,086 

   Accounts receivable:

      Trade                                         982,101        595,603 
      Related party                               1,236,866        990,970 


   Notes receivable - related party                  22,250         22,250 

   Inventories - parts and supplies                  91,464         32,464 

   Prepaid expenses and other                       180,317         84,133 

   Prepaid Federal income tax                             0        264,300 

   Deferred tax asset                                14,300         14,300 
                                                 ----------     ---------- 

         Total Current Assets                     2,532,130      2,006,106 

Investment in New Haven Foundry                           0              0 

Other                                                43,864         59,135 

Notes receivable - related party                      8,900         17,800 


PROPERTY, PLANT AND EQUIPMENT
   At cost net of accumulated depreciation
   and amortization of $1,145,705 and 
   $981,705 at June 30, 1997 and 
   December 31, 1996, respectively                4,119,750      4,112,295 
                                                 ----------     ---------- 

         Total Assets                            $6,704,644     $6,195,336 
                                                 ==========     ========== 





See Notes to Consolidated Financial Statements.

                                   -3-

<PAGE>

                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED BALANCE SHEETS (Continued)
               ------------------------------------------


                                                  June 30,      December 31,
                                                   1997            1996
                                                 ----------     ----------
                                                 (Unaudited)

LIABILITIES & STOCKHOLDER'S EQUITY
----------------------------------

CURRENT LIABILITIES

   Notes payable                                 $  854,000     $  582,000 
   Current portion of long-term debt                204,978        462,914 
   Accounts payable                                 387,556        513,071 
   Accrued salaries and wages                        53,234         42,000 
   Accrued workers' compensation                      9,650          6,654 
   Accrued single business tax                        5,582              0 
   Accrued federal income tax                       122,570              0 
   Other accrued liabilities                          6,131          2,841 
                                                 ----------     ---------- 

         Total Current Liabilities                1,643,701      1,609,480 

DEFERRED TAX LIABILITY                              207,200        207,200 

OTHER POSTRETIREMENT BENEFITS                       371,957        371,957 

NOTES PAYABLE                                       501,132        344,231 

STOCKHOLDERS' EQUITY

   Common stock, $.005 par value per
      share; 25,000,000 shares authorized,
      4,573,637 and 4,573,637 shares issued
      and outstanding at June 30, 1997 and
      December 31, 1996, respectively                22,868         22,868 
   Paid in for common stock in excess
      of par value                                7,410,725      7,410,725 
   Accumulated deficit                           (3,452,939)    (3,771,125)
                                                 ----------     ---------- 

         Total Stockholders' Equity               3,980,654      3,662,468 

         Total Liabilities and
           Stockholders' Equity                  $6,704,644     $6,195,336 
                                                 ==========     ========== 








See Notes to Consolidated Financial Statements

                                   -4-

<PAGE>

                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                     CONSOLIDATED INCOME STATEMENTS
                -----------------------------------------
                               (Unaudited)


                                  Three Months Ended     Six Months Ended
                                       June 30,               June 30,
                                   1997        1996       1997        1996
                                 --------    --------   --------    --------

NET SALES (including related
  party sales and commissions
  of $3,927,285, and 
  $3,746,486 during the 
  six months ended June
  30, 1997 and 1996,
  respectively)                 $3,010,330  $2,218,308 $6,147,171 $4,673,008 

COST OF SALES                    2,528,606   1,888,443  5,099,464  3,953,598 
                                ----------  ---------- ---------- ---------- 

  Gross profit                     481,724     329,865  1,047,707    719,410 

GENERAL AND ADMINISTRATIVE
  EXPENSES                         231,928     215,573    488,060    425,729 

RELATED PARTY SERVICES AND 
  SALES COMMISSIONS                 10,808           0     10,808      1,471 
                                ----------  ---------- ---------- ---------- 

  Income from operations           238,988     114,292    548,839    292,210 

INTEREST AND DIVIDEND INCOME           789       5,179      1,665     16,328 

INTEREST EXPENSE                    31,938      12,868     61,318     26,475 
                                ----------  ---------- ---------- ---------- 

  Net income before income
    taxes and equity in
    income of investee
    companies                      207,839     106,603    489,186    282,063 

PROVISION FOR FEDERAL
  INCOME TAXES                      75,000      36,000    171,000     95,000 
                                ----------  ---------- ---------- ---------- 

  Income before equity in
    income (loss) of 
    investee companies             132,839      70,603    318,186    187,063 

EQUITY IN INCOME (LOSS) OF
  INVESTEE COMPANIES                     0      79,000          0     15,000 
                                ----------  ---------- ---------- ---------- 

  Net income                    $  132,839  $  149,603 $  318,186 $  202,063 
                                ==========  ========== ========== ========== 

EARNINGS PER COMMON SHARE:

  Primary                       $    0.029  $    0.033   $  0.070   $  0.044 
  Fully diluted                 $    0.029  $    0.032   $  0.069   $  0.043 






See Notes to Consolidated Financial Statements.

                                   -5-

<PAGE>

                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
       CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
       ----------------------------------------------------------
                               (Unaudited)


<TABLE>
<CAPTION>

                                                   SIX MONTHS ENDED JUNE 30, 1997

                                COMMON STOCK       PAID IN FOR
                              ----------------     COMMON STOCK
                            NUMBER OF              IN EXCESS OF     ACCUMULATED    STOCKHOLDERS'
                             SHARES      AMOUNT      PAR VALUE        DEFICIT         EQUITY
                            --------    --------    -----------      ---------      --------
<S>                         <C>         <C>          <C>             <C>            <C>
Balance - January 1, 1997   4,573,637   $   22,868   $7,410,725      $(3,771,125)   $3,662,468 

Net income                         --           --           --          318,186       318,186 
                           ----------   ----------   ----------       ----------    ---------- 

Balance - June 30, 1997     4,573,637   $   22,868   $7,410,725       $(3,452,939)  $3,980,654 
                           ==========   ==========   ==========       ==========    ========== 
</TABLE>

<TABLE>
<CAPTION>
                                                    SIX MONTHS ENDED JUNE 30, 1996

                                COMMON STOCK        PAID IN FOR
                              ----------------      COMMON STOCK
                            NUMBER OF               IN EXCESS OF      ACCUMULATED   STOCKHOLDERS'
                             SHARES       AMOUNT      PAR VALUE         DEFICIT        EQUITY
                            --------     --------    -----------       ---------      --------
<S>                        <C>          <C>          <C>              <C>           <C>
Balance - January 1, 1996   4,653,637   $   23,268   $7,499,980       $(3,056,324)  $4,466,924 

Repurchase of common
 stock                       (100,000)        (500)    (103,156)               --     (103,656)

Net income                         --           --           --           202,063      202,063 
                           ----------   ----------   ----------        ----------   ---------- 

Balance - June 30, 1996     4,553,637   $   22,768   $7,396,824       $(2,854,261)  $4,565,331 
                           ==========   ==========   ==========        ==========   ========== 
</TABLE>











See Notes to Consolidated Financial Statements.

                                   -6-

<PAGE>

                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                -----------------------------------------
                               (Unaudited)

                                                      Six Months Ended
                                                           June 30,
                                                     1997           1996
                                                  ----------     ----------

INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS

OPERATING ACTIVITIES                             $   (5,664)    $  498,030 

INVESTING ACTIVITIES:

   Proceeds from sale of securities                      --         12,500 
   Purchase of plant and equipment                 (171,455)      (991,423)
                                                 ----------     ---------- 

Net cash used in investing activities              (171,455)      (978,923)

FINANCING ACTIVITIES:

   Net proceeds from short term loan                272,000             -- 
   Purchase of common stock                              --       (103,656)
   Principal payments under long-term
      obligations                                  (101,035)      (133,590)
   Proceeds from long-term obligations                   --        400,000 
   Proceeds from notes receivable                     8,900             -- 
                                                 ----------     ---------- 

Net cash provided by (used in)
   financing activities                             179,865        162,754 
                                                 ----------     ---------- 

NET INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                               2,746       (318,139)

CASH AND CASH EQUIVALENTS - Beginning                 2,086        513,700 
                                                 ----------     ---------- 

CASH AND CASH EQUIVALENTS - Ending               $    4,832      $ 195,561 
                                                 ==========     ========== 
















See Notes to Consolidated Financial Statements.

                                   -7-

<PAGE>

                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               ------------------------------------------

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
          The consolidated Balance Sheet as of June 30, 1997 and the
          related Consolidated Statements of Operations, Changes in
          Stockholders' Equity, and Cash Flows for the six months ended
          June 30, 1997 and 1996 are unaudited.  In the opinion of
          management, all adjustments necessary for a fair presentation of
          such financial statements have been included.  The results of
          operations for the six months ended June 30, 1997 and 1996 are
          not necessarily indicative of the results to be expected for the
          whole year.

          The notes to the financial statements are presented as permitted
          by Form 10-Q and do not contain certain information included in
          the Company's annual financial statements.

NOTE 2 - INVESTMENT IN UNCONSOLIDATED COMPANY
          The Company accounts for its 45% investment in New Haven Foundry
          ("NHF") using the equity method.  Summarized financial
          information of NHF is as follows: (No recognition of Income to
          Margate will be recorded until NHF achieves positive
          Stockholders' Equity.)
                                                          NHF
                                                          ---
                                                 June 30,      December 31,
                                                   1997           1996
                                                ----------     ----------

Assets

   Current assets                               $17,254,170    $14,085,521 
   Property, plant and equipment, net
      of accumulated depreciation                11,932,440     12,282,716 
   Other assets                                           0        392,000 
                                                 ----------     ---------- 

Total Assets                                    $29,186,610    $26,760,237 
                                                 ==========     ========== 

Liabilities and Stockholders' Equity

   Current liabilities                          $21,012,218    $17,407,355 
   Non-current liabilities                        9,133,631     10,325,990 
   Stockholders' equity                            (959,239)      (973,108)
                                                 ----------     ---------- 

Total Liabilities and Stockholders'
   Equity                                       $29,186,610    $26,760,237 
                                                 ==========     ========== 


                                                          NHF
                                                          ---
                                                    Six Months Ended
                                                        June 30,
                                                   1997           1996
                                                ----------     ----------

Net Sales                                       $30,668,000    $31,943,000 
Operating expenses                               30,419,000     31,650,000 
                                                 ----------     ---------- 
   Income (loss)
      before income taxes                           249,000        293,000 
Income taxes                                        235,000        260,000 
                                                 ----------     ---------- 

   Net income (loss)                             $   14,000     $   33,000 
                                                 ==========     ========== 

Net income (loss) per
   share of common stock                         $     0.21     $     0.50 
                                                 ==========     ========== 



                                   -8-

<PAGE>

NOTE 3 - DIVIDENDS
          The Company paid dividends for the first two quarters of 1995,
          but suspended dividends thereafter.

NOTE 4 - STATEMENTS OF CASH FLOWS
          A reconciliation of net income to net cash flows provided by
          operating activities is as follows:

                                                     Six Months Ended
                                                         June 30,
                                                        (unaudited)
                                                    1997           1996
                                                 ----------     ----------

Net income                                       $  318,186     $  202,063 
Adjustments to reconcile net income to
   net cash from operating activities:
      Equity in (income) loss
         of investee companies                           --        (15,000)

      Depreciation and amortization                 164,000        120,800 

      Changes in assets and liabilities:
         Accounts receivable
           - Trade                                 (386,498)       176,113 
           - Related parties                       (245,896)        34,866 
         Inventories                                (59,000)       (13,270)
         Prepaid expenses                           (96,184)         6,262 
         Prepaid Federal tax                        264,300         95,000 
         Other assets                                15,271             -- 
         Accounts payable                          (125,515)       (22,330)
         Accrued workers' compensation                2,996       (104,131)
         Accrued single business tax                  5,582         (1,000)
         Accrued salaries and wages                  11,234         31,941 
         Accrued income tax                         122,570             -- 
         Other liabilities                            3,290        (13,284)
                                                 ----------     ---------- 

          Net cash provided (used) by
           operating activities                  $   (5,664)    $  498,030 
                                                 ==========     ========== 

NOTE 5 - EARNINGS PER SHARE
          The weighted average number of shares used to compute the net
          income per shares was 4,593,637 and 4,689,928 fully diluted for
          the six month periods ended June 30, 1997 and June 30, 1996,
          respectively.

NOTE 6 - CONTINGENT LIABILITY
          NHF has received authorization from the Internal Revenue Service
          to defer funding requirements for its pension plans for the years
          1981 through 1984 and 1986.  The deferred obligations are being
          funded over a 15 year period.  The Pension Benefit Guaranty
          Corporation had required that the Company guarantee the deferred
          obligations and has second and third liens on all Company assets
          as collateral for the funding waivers.  Accordingly, the Company
          is contingently liable for the following contributions, including
          interest, to be made by NHF in future years against the deferred
          portion of the pension obligation.

                          Years                 Annual Contribution
                          -----                 -------------------
                          1997                            191,878
                          1998                            126,209
                      1999 and 2000                        60,422

                                   -9-

<PAGE>

NOTE 7 - ENVIRONMENTAL MATTERS
          NHF, the Company's 45%-owned equity investee, is party to an
          action brought by PIRGIM and the United States of America
          ("U.S.") which alleges that NHF discharged potentially
          contaminated water into a stream which flows to settling ponds
          they maintain, in violation of the Federal Clean Water Act.  NHF
          estimates that a civil penalty approximating $500,000 will be
          incurred by NHF to settle the litigation and the Company has
          provided reserves for this amount.

          NHF is party to an action brought by the U.S. and is also
          currently negotiating with the Michigan Department of
          Environmental Quality ("MDEQ") regarding alleged violations of
          environmental laws pertaining to air and waste issues, including
          used foundry sand on its property.  NHF is negotiating a consent
          decree with these agencies which encompasses most of these
          alleged violations and is also working with the MDEQ to resolve
          any remaining alleged violations.

          NHF has identified several options to remediate the sand
          including on-site treatment or capping in place.  Costs
          associated with these alternatives are currently estimated to
          range from $2,100,000 to $2,500,000, and NHF has recorded a
          reserve of $2,500,000, of which $1,800,000 was provided in the
          current year.  The estimate of the range assumes that no
          additional portions of the sand pile will contain heavy metals
          exceeding environmental standards.  Although the ultimate outcome
          of this matter is not known at this time, on the basis of
          investigations performed to date by the Company and its
          environmental consultants, NHF does not believe that future costs
          associated with remedial action in excess of reserves provided
          with ultimately have a materially adverse impact on the Company's
          financial position or future results of operations.

NOTE 8 - NOTES PAYABLE
          Notes payable consist of the following at June 30, 1997:

          Note payable bank, due in monthly
          principle installments of $7,583,
          plus interest at prime in payment
          of loan guarantee for investment
          in CEDS, uncollateralized, maturing
          December 31, 1998.                             $144,083

          Note payable Ft. Atkinson, due in 
          monthly installments of $3,992, 
          including interest at 4% through 
          July 2003.                                      264,466

          Note payable bank, due in 
          monthly installments of $8,300, 
          including interest at 9% maturing
          January 2000.  The note is 
          collateralized by the general 
          assets of the Company.                          297,561
                                                         --------
                                                          706,110
          Less current portion                            204,978
                                                         --------
                                                          501,132
                                                         ========




                                  -10-

<PAGE>

          Maturities of notes payable obligations are as follows:

          Year ended June 30:
            1998:                         $204,978
            1999:                          175,737
            2000:                          132,059
            2001:                           89,834
            Thereafter                     103,502
                                          --------
                                          $706,110
                                          ========

          The Company maintains a bank line of credit of $1,300,000 for
          working capital requirements.  The applicable interest rate is at
          the prime lending rate, currently 8.5% at June 30, 1997.  The
          line of credit is secured by all accounts receivable, inventories
          and equipment of the Company.  Additionally, certain required
          financial ratios must be maintained.  The Company is in
          compliance with all covenant requirements as of June 30, 1997. 
          The Company has borrowings against the line of $854,000 and $0 at
          June 30, 1997 and 1996, respectively.

NOTE 9 - OTHER MATTERS
          In February and March 1996, the Company repurchased 30,000 and
          20,000 shares, respectively, of its common stock in the open
          market.  The shares have been returned to treasury.









                                  -11-

<PAGE>

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

     The following is management's discussion and analysis of certain
significant factors which have affected the Company's financial condition
and results of operation during the periods included in the accompanying
consolidated financial statements for the six (6) months ended June 30,
1997.

LIQUIDITY & CAPITAL RESOURCES
-----------------------------

     The Company has a consolidated line of credit of $1,300,000 with
monthly interest payments at the prime rate with the National Bank of
Detroit.  The line is collateralized by substantially all assets. 
Borrowings as of June 30, 1997 was $854,000.

RESULTS OF OPERATIONS
---------------------

     The Company is reporting year-to-date pre-tax profit on operations of
$489,186 for the six months ended June 30, 1997 as compared to a $282,063
for the same period in 1996.  Net sales, year-to-date, as of June 30, 1997
were approximately $6,147,171; which represents an increase of 31.5% from
1996 sales through June 30, 1996 of $4,673,008.  The Company has recognized
equity in the loss of its investee company, NHF of $0 for the six months
ended June 30, 1997 compared to a profit of $15,000 for the same period in
1996.

     The cost of sales for the six months ended June 30, 1997 as a
percentage of sales was 83.0% as compared to 84.6% for the same period in
1996.

     Selling, General and Administrative for the six months ended June 30,
1997 as a percentage of sales was 7.9% as compared to 9.1% for the same
period in 1996.

     Management anticipates comparable results for the next three (3)
months of the year.







                                  -12-

<PAGE>

                                 PART II

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 Securities Holders
          -----------------------------------------------------

          An Annual Meeting of Shareholders was held on June 30, 1997
          for the election of Directors.

Item 5.   Other Information
          -----------------

          None

Item 6.   Exhibits and Reports on Form 8-K
          --------------------------------

          None









                                  -13-

<PAGE>

                               SIGNATURES
                               -----------


     Pursuant to the requirements of Section 13 or 15(d) 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.

MARGATE INDUSTRIES, INC.



By: /s/ William H. Hopton
   ---------------------------
     William H Hopton

Date:     July 28, 1997









                                  -14-