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     September 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 September 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
                -----------------------------------------


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

ASSETS
------


CURRENT ASSETS

   Cash and cash equivalents                      $    8,843     $    2,086

   Accounts receivable:

      Trade                                          522,817        595,603
      Related party                                  993,923        990,970

   Notes receivable - related party                   22,250         22,250

   Inventories - parts and supplies                   69,964         32,464

   Prepaid expenses and other                         74,147         84,133

   Prepaid Federal income tax                              0        264,300

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

         Total Current Assets                      1,706,244      2,006,106

Investment in New Haven Foundry                            0              0

Other                                                 43,864         59,135

Notes receivable - related party                       4,450         17,800


PROPERTY, PLANT AND EQUIPMENT
   At cost net of accumulated depreciation
   and amortization of $1,226,705 and 
   $981,705 at September 30, 1997 and 
   December 31, 1996, respectively                 4,081,461      4,112,295
                                                  ----------     ----------

         Total Assets                             $5,836,019     $6,195,336
                                                  ==========     ==========



See Notes to Consolidated Financial Statements.

                                   -3-

<PAGE>

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


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

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

CURRENT LIABILITIES

   Notes payable                                  $ 332,000     $  582,000 
Current portion of long-term debt                   204,089        462,914 
   Accounts payable                                 424,602        513,071 
   Accrued salaries and wages                        41,538         42,000 
   Accrued workers' compensation                     12,650          6,654 
   Accrued single business tax                       30,182              0 
   Accrued federal income tax                         6,570              0 
   Other accrued liabilities                         11,113          2,841 
                                                 ----------     ---------- 

         Total Current Liabilities                1,062,744      1,609,480 

DEFERRED TAX LIABILITY                              207,200        207,200 

OTHER POSTRETIREMENT BENEFITS                       371,957        371,957 

NOTES PAYABLE                                       447,909        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 September 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                           (3,687,384)    (3,771,125)
                                                 ----------     ---------- 

         Total Stockholders' Equity               3,746,209      3,662,468 

         Total Liabilities and
           Stockholders' Equity                  $5,836,019     $6,195,336 
                                                 ==========     ========== 




See Notes to Consolidated Financial Statements

                                   -4-

<PAGE>

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

<TABLE>
<CAPTION>

                                      Three Months Ended          Nine Months Ended
                                        September 30,               September 30,
                                      1997          1996          1997          1996
                                    --------      --------      --------      --------
<S>                                <C>           <C>           <C>           <C>
NET SALES (including related
  party sales and commissions
  of $5,144,645, and $5,405,943 
  during the nine months ended 
  September 30, 1997 and 1996,
  respectively)                    $1,885,119    $2,194,788    $8,032,290    $6,867,796 

COST OF SALES                       1,968,191     2,489,844     7,067,655     6,443,442 
                                   ----------    ----------    ----------    ---------- 

  Gross profit                        (83,072)     (295,056)      964,635       424,354 

GENERAL AND ADMINISTRATIVE
  EXPENSES                            240,465       218,603       728,525       644,332 

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

  Income from operations             (323,537)     (513,659)      225,302      (221,449)

INTEREST AND DIVIDEND INCOME              662         4,068         2,327        30,396 

INTEREST EXPENSE                       27,570        18,157        88,888        44,832 
                                   ----------    ----------    ----------    ---------- 

  Net income before income 
    taxes and equity in income
    of investee companies            (350,445)     (527,748)      138,741      (235,885)

PROVISION FOR FEDERAL
 INCOME TAXES                         116,000       178,000        55,000        83,000 
                                   ----------    ----------    ----------    ---------- 

  Income before equity in income
    (loss) of investee companies     (234,445)     (349,748)       83,741      (162,685)

EQUITY IN INCOME (LOSS) OF
  INVESTEE COMPANIES                        0      (159,000)            0      (144,000)
                                   ----------    ----------    ----------    ---------- 
 
  Net income                       $ (234,445)   $ (508,748)   $   83,741    $ (306,685)
                                   ==========    ==========    ==========    ========== 

EARNINGS PER COMMON SHARE:

  Primary                          $   (0.051)   $   (0.112)   $    0.018    $   (0.067)
  Fully diluted                    $   (0.051)   $   (0.110)   $    0.018    $   (0.066)
</TABLE>

See Notes to Consolidated Financial Statements.

                                   -5-

<PAGE>

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

<TABLE>
<CAPTION>

                                                   NINE MONTHS ENDED SEPTEMBER 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                         --           --           --           83,741        83,741 
                           ----------   ----------   ----------       ----------    ---------- 

Balance - 
  September 30, 1997        4,573,637   $   22,868   $7,410,725      $(3,687,384)   $3,746,209 
                           ==========   ==========   ==========       ==========    ========== 
</TABLE>

<TABLE>
<CAPTION>
                                                    NINE MONTHS ENDED SEPTEMBER 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                         --           --           --          (306,685)    (306,685)
                           ----------   ----------   ----------        ----------   ---------- 

Balance -
 September 30, 1996         4,553,637   $   22,768   $7,396,824       $(3,363,009)  $4,056,583 
                           ==========   ==========   ==========        ==========   ========== 
</TABLE>













See Notes to Consolidated Financial Statements.

                                   -6-

<PAGE>

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

                                                      Nine Months Ended
                                                        September 30,
                                                     1997           1996
                                                  ----------     ----------

INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS

OPERATING ACTIVITIES                             $  612,750     $(169,590) 

INVESTING ACTIVITIES:

   Proceeds from sale of securities                      --        152 713 
   Purchase of plant and equipment                 (214,166)    (1,308,901)
                                                 ----------     ---------- 

Net cash used in investing activities              (214,166)    (1,156,188)

FINANCING ACTIVITIES:

   Net proceeds from line of credit (net)          (250,000)       428,000 
   Purchase of common stock                              --       (103,656)
   Principal payments under 
      long-term obligations                        (155,147)      (182,151)
   Proceeds from long-term obligations                   --        692,000 
   Proceeds from notes receivable                    13,350          8,900 
                                                 ----------     ---------- 

Net cash provided by (used in)
 financing activities                              (391,797)       843,093 
                                                 ----------     ---------- 

NET INCREASE (DECREASE) IN CASH AND
   CASH EQUIVALENTS                                   6,757       (482,685)

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

CASH AND CASH EQUIVALENTS - Ending               $    8,843     $   31,015 
                                                 ==========     ========== 













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 September 30, 1997 and the
          related Consolidated Statements of Operations, Changes in
          Stockholders' Equity, and Cash Flows for the nine months ended
          September 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 nine months ended September 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
                                                          ---
                                               September 30,  December 31,
                                                   1997           1996
                                                ----------     ----------
Assets

   Current assets                               $14,570,468    $14,085,521 
   Property, plant and equipment, net
      of accumulated depreciation                11,695,543     12,282,716 
   Other assets                                           0        392,000 
                                                 ----------     ---------- 

Total Assets                                    $26,266,011    $26,760,237 
                                                 ==========     ========== 

Liabilities and Stockholders' Equity

   Current liabilities                          $19,419,526    $17,407,355 
   Non-current liabilities                        8,776,668     10,325,990 
   Stockholders' equity                          (1,930,183)      (973,108)
                                                 ----------     ---------- 

Total Liabilities and
 Stockholders' Equity                           $26,266,011    $26,760,237 
                                                 ==========     ========== 


                                                           NHF
                                                           ---
                                                    Nine Months Ended
                                                      September 30,
                                                   1997           1996
                                                ----------     ----------

Net Sales                                       $40,146,000    $46,391,000 
Operating expenses                               40,870,000     46,332,000 
                                                 ----------     ---------- 
   Income (loss)
      before income taxes                          (724,000)        59,000 
Income taxes                                        234,000        380,000 
                                                 ----------     ---------- 

   Net income (loss)                             $ (958,000)    $ (321,000)
                                                 ==========     ========== 

Net income (loss) per
   share of common stock                         $   (14.52)    $    (4.87)
                                                 ==========     ========== 


                                   -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:

                                                     Nine Months Ended
                                                       September 30,
                                                        (unaudited)
                                                    1997           1996
                                                 ----------     ----------

Net income                                       $   83,741     $ (306,685)
Adjustments to reconcile net income to
   net cash from operating activities:
      Equity in (income) loss
         of investee companies                           --        144,000 

      Depreciation and amortization                 245,000        185,200 

      Changes in assets and liabilities:
         Accounts receivable
           - Trade                                   72,786         48,184 
           - Related parties                         (2,953)      (581,822)
         Inventories                                (37,500)        (7,510)
         Prepaid expenses                             9,986         50,385 
         Prepaid Federal tax                        264,300         (5,886)
         Other assets                                15,271          2,184 
         Accounts payable                           (88,469)       373,302 
         Accrued workers' compensation                5,996        (97,143)
         Accrued single business tax                 30,182         (1,000)
         Accrued salaries and wages                    (462)        43,284 
         Accrued income tax                           6,570             -- 
         Other liabilities                            8,272        (16,083)
                                                 ----------     ---------- 

           Net cash provided (used) by
            operating  activities                $  612,720     $ (169,590)
                                                 ==========     ========== 


NOTE 5 - EARNINGS PER SHARE
          The weighted average number of shares used to compute the net
          income per shares was 4,593,637 and 4,624,385 fully diluted
          for the nine month periods ended September 30, 1997 and 
          September 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-

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 September 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.                    $121,333

          Note payable Ft. Atkinson, due in 
          monthly installments of $3,992, 
          including interest at 4% through 
          July 2003.                                      251,301

          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.                  279,364
                                                        ---------
                                                          651,998
          Less current portion                            204,089
                                                        ---------
                                                          447,909
                                                        =========










                                  -10-

<PAGE>

          Maturities of notes payable obligations are as follows:

          Year ended September 30:
            1998:                              $204,089
            1999:                               155,266
            2000:                               134,533
            2001:                                66,243
            Thereafter                           91,867
                                               --------
                                               $651,998
                                               ========

          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 September 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 September 30,
          1997.  The Company has borrowings against the line of $332,000
          and $428,000 at September 30, 1997 and 1996, respectively.

NOTE 9 - OTHER MATTERS
          The Company repurchased 100,000 shares of its common stock 
          in the open market.  The shares have been returned to treasury.









                                  -11-

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 nine (9) months ended September
30, 1997.

FORWARD-LOOKING STATEMENTS MAY NOT PROVE ACCURATE
-------------------------------------------------

     When used in this Form 10-QSB, the words "anticipate," "estimate,"
"expect," "project," and similar expressions are intended to identify
forward-looking statements.  Such statements are subject to certain risks,
uncertainties and assumptions including the possibility that the Company's
projected sales, revenues and contract negotiations are not realized. 
Should one or more of these uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
anticipated, estimated or projected.

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 September 30, 1997 was $332,000.

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

     The Company is reporting year-to-date pre-tax profit on operations of
$138,741 for the nine months ended September 30, 1997 as compared to a
$(245,685) loss for the same period in 1996.  Net sales, year-to-date, as
of September 30, 1997 were approximately $8,032,290; which represents an
increase of 17.0% from 1996 sales through September 30, 1996 of $6,867,796. 
The Company has recognized equity in the loss of its investee company, NHF
of $0 for the nine months ended September 30, 1997 compared to a loss of
$144,000 for the same period in 1996.

     The cost of sales for the six months ended September 30, 1997 as a
percentage of sales was 88.0% as compared to 93.8% for the same period in
1996.

     Selling, General and Administrative for the nine months ended
September 30, 1997 as a percentage of sales was 9.1% as compared to 9.4%
for the same period in 1996.

     Sales for the third quarter were down compared to the first two (2)
quarters of 1997 due to union problems, inefficiencies and excess scrape at
the Company's main customer.

     Management anticipates improved results for the fourth quarter of the
year based on projected increased sales and a new union contract at the
Company's main customer.









                                  -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:     October 23, 1997









                                  -14-