SECURITIES AND EXCHANGE COMMISSION
					                       Washington, D.C. 20549

                             					FORM 10-Q

          		Quarterly Report Pursuant to Section 13 or 15 (d) of the 
				                Securities and Exchange Act of 1934


        	For the Quarter Ended					             Commission File Number

        	  November 30, 1996			                      		0-12423			
	


                				MERIT DIVERSIFIED INTERNATIONAL, INC.
		       (Exact name of registrant as specified in its charter)

        		   	Nevada					                           	94-2906927		
	(state or other jurisdiction of			               (I.R.S. Employer 
	 incorporation or organization)		 	              Identification No.)
	 


              				25320 Bellanca Way, Torrance, CA 90505
			              (Address of principal executive offices)


   Registrants telephone number, including area code:	 (310) 326-3871 		

												

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 each of the registrants classes of common 
stock, as of November 30, 1996 was 16,209,316 shares, all of one class of 
$.00 par value Common Stock.











 
	              		     MERIT DIVERSIFIED INTERNATIONAL, INC.
				                             FORM 10-Q
			                     Quarter Ended November 30, 1996

                       				  TABLE OF CONTENTS


FINANCIAL INFORMATION		                                          							PAGE

Item 1-	 Consolidated Financial Statements						

       		Consolidated Balance Sheets as of November 30, 1996 and
		       August 31, 1995								                                        3

       		Consolidated Statements of Operations for the three months
       		ended November 30, 1996 and November 30, 1995			               4

       		Consolidated Statements of Cash Flows for the three months
	       	ended November 30, 1996 and November 30, 1995			               5

       		Notes to Consolidated Financial Statements	                  		6,7

Item 2- 	Managements Discussion and Analysis of Financial
		       Condition and Results of Operations			                       		8,9

OTHER INFORMATION

Item 1-	 Legal Proceedings			                                       				10

Item 2-	 Changes in Securities			                                   				10
  
Item 3-	 Defaults upon Senior Securities	                           				10

Item 4-	 Submission of Matters to a Vote of Security Holders          		10

Item 5-	 Other Information							                                      	10

Item 6-	 Exhibits and Reports on Form 8-K				                          	10


SIGNATURES										                                                   	11  



























			  		             MERIT DIVERSIFIED INTERNATIONAL, INC.
			   	   	           (A Developmental Stage Company)
			    		              PART 1: FINANCIAL INFORMATION
				  	                 CONSOLIDATED BALANCE SHEETS
				            AS OF NOVEMBER 30, 1996 AND AUGUST 31, 1996


                               			November 30,			           August 31,
					         	                       1996   	        	        1996 	        
 					       	                    (Unaudited)	  	            (Note 1)

Assets					                   	     $	-		                   $	-
												
Total Assets              				     	$	-		                  	$	-
												

Liabilities and Shareholders Equity

Current liabilities

	Accounts and taxes payable	       	$    8,000			          	$    8,000

Total current liabilities	         	     8,000		        	        8,000

Commitments

Shareholders Equity

Common Stock-no par value; 
50,000,000 shares authorized, 
16,209,316 issued and outstanding 
as of November 30, 1996 and
August 31, 1996				                   	1,332,349		  	        	1,332,349

Additional paid-in capital		          	1,122,215		          		1,122,215

Accumulated deficit-accumulated
during the developmental stage	       (2,462,564)		    	    (2,462,564)

Total shareholders equity		        	$     (8,000)		   	    	$   (8,000)
												
Total liabilities and 
shareholders equity			             	$ 	-		  	              	$      -
												
	



See Notes to Consolidated Financial Statements




















			                	MERIT DIVERSIFIED INTERNATIONAL, INC.
			  	                (A Developmental Stage Company)

 		   	           	CONSOLIDATED STATEMENTS OF OPERATIONS
	        	     THREE MONTHS ENDED NOVEMBER 31, 1996 AND 1995
						                         (UNAUDITED)
<TABLE>
<S>
<S>

                      				    Three Months	      	Three Months		  Since Being
				                             Ended		             Ended 		          A
				                          November 30,	      	November 30,  	 Developmental
			 	                            1996		              1995	        Stage Company
				    	      		                                  (Note 1)

Net revenue				                $ 	-		             $	 -		         	$ 	-

Costs and expenses:

  General and administrative 	   	-		               	-		             2,244,147
  Depreciation and amortization	  -  			             -			                6,200

Income (loss)from operations 	 $ 	-			               -		         	$ (2,250,347)
                                                                                                        
Other income (expense):

  Interest expense		             	-		               	-		               (22,518)
  Loss on sale of fixed assets	   -		               	-			                 (918)
  Loss on sale of investments   		-		               	-		              (269,800)
  Income from debt adjustment		   -               			-			               86,419

Total other income (expense)    		-		               	-		              (206,817)

Income before taxes
 on income                   					-	               		-		            (2,457,164)

Taxes on income				               -			               -			                5,400

Net income (loss)		             		-		               	-		            (2,462,564)

Net income (loss) per share	    	 nil	             		nil		

Weighted average number of shares 
  and share equivalents 
  outstanding			                 16,209,316	        	19,717,435


</TABLE>


See Notes to Consolidated Financial Statements



















               					MERIT DIVERSIFIED INTERNATIONAL, INC.
					                  (A Developmental Stage Company)

               				CONSOLIDATED STATEMENTS OF CASH FLOWS
			            THREE MONTHS ENDED NOVEMBER 31, 1996 AND 1995
						                         (UNAUDITED)
<TABLE>
<S>
<S>

Increase (Decrease) in Cash and Cash Equivalents

          					                 	Three Months     	Three Months 	   Since Being
			     		                          Ended		           Ended             A
			 			                          November 30,     	November 30,	   Developmental
				     	   	                      1996		            1995	        Stage Company
				    			       

Operating activities:

  Net income (loss)		               	$	-		          $ 	-		           $  (2,462,564)
  Adjustments to reconcile net loss	
    to cash used in operating activities:
    Amortization expense              	-		            	-		                   6,200
  Changes in operating assets and
    liabilities:
    Accounts payable       		         	-		            	-          		         8,000	
Cash provided by (used in)
 operating activities				              -			            -		              (2,448,364)	
Investing activities:				              -		            	-		                 	-	
Financing activities:
Loan proceeds			                     		-	            		-		                  66,364
  Issuance of capital stock			         -	            		-		               2,382,000	
Cash provided by financing
  activities			                     	 	-	            		-          		     2,448,364	
Net increase (decrease) in 
 cash and cash equivalents          			-	            		-		                 	-	
Cash and cash equivalents,
 beginning of period			               	-	            		-	                 		-	
Cash and cash equivalents,
 end of period		               	    	$	-	           $ 	-	           	$    	-	


</TABLE>


See Notes to Consolidated Financial Statements





















			               	MERIT DIVERSIFIED INTERNATIONAL, INC.
				                 (A Developmental Stage Company)
			             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
					                      NOVEMBER 30, 1996

Note 1 - Basis of Presentation
												

The accompanying consolidated financial statements have been prepared in 
accordance with United States generally accepted accounting principles for 
interim financial information and with the instructions to Form 10-Q and Rule 
10-01 of Regulation S-X.  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 considered necessary for a fair presentation have been 
included.  Operating results for the three months ended November 30, 1994 are 
not necessarily indicative of the results that may be expected for the year 
ended August 31, 1995.  For further information, refer to the consolidated 
financial statements and footnotes thereto included in the Companys Form 
10-K for the year ended August 31, 1994.	

Note 2 - Net Income (Loss) Per Share
												

Net income (loss) per share and common equivalent share is computed using the 
weighted average number of shares outstanding during each period.

During April, 1996, the Board of Directors declared a reverse stock split, 
reducing the number of common shares outstanding through the distribution of 
one common share in exchange for twenty (20) common shares held by shareholders 
of record as of April 30, 1996.  All references to common share and per share 
amounts in the accompanying financial statements have been retroactively 
adjusted to reflect the effect of this transaction. 	

Note 3- Related Party Transactions
												

The Company has been able to continue in existence and reduce its debts and 
obligations through the assistance of certain major shareholders who continue 
to fund the Companys general and administrative expenses and to pay outstanding
obligations.  There can be no assurance that these shareholders will continue 
such funding in the future.

Note 4- Going Concern
												

The Company has incurred significant losses since its inception and as of 
November 30, 1996, has no source of revenue.  The Company has no cash and has 
maintained its existence and paid ongoing expenses through the issuance of 
common stock.


















		             		MERIT DIVERSIFIED INTERNATIONAL, INC.
				               (A Developmental Stage Company)
		         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 				                    NOVEMBER 30, 1996




The Company has been able to continue because major shareholders have continued
to invest in the Company to meet its expenses.  As of November 30, 1996, the 
Company has been successful in converting most of its debt to equity.

The Company is considered a development stage Company and will remain in this 
status until operations begin.  There can be no assurance that the Company will
be able to merge with an operating company, acquire an ongoing business, or 
that the major shareholders will continue to pay the expenses of the Company.
























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			                 	MERIT DIVERSIFIED INTERNATIONAL, INC.
				                   (A Developmental Stage Company)
					                       NOVEMBER 30, 1996


Item 2 - Managements Discussion and Analysis of Financial Condition and 
         Results of Operations or Plan of Operation
												

The following review concerns the three month period ended November 30, 1996 
and November 30, 1995, which should be read in conjunction with the financial 
statements and notes thereto presented in the Form 10-Q.

The information set forth in Managements Discussion and Analysis of Financial 
Condition and Results of Operations below includes forward looking statements 
within the meaning of Section 27A of the Securities Act, and is subject to the 
safe harbor created by that section.  Factors that could cause actual results to
differ materially from these contained in the forward looking statements are 
set forth in Managements Discussion and Analysis of Financial Condition and 
Results of Operations.

Plan of operation.

The Company has continued its efforts to acquire, merge with or enter into 
another form of business combination with another entity, and the Company plans 
to continue these efforts in the current fiscal year.  It is presently unknown 
whether any transaction will be concluded. The Company considers it current 
cash and cash equivalent balances inadequate to satisfy its cash requirements 
for the next twelve months.  Legal and accounting and other expenses required 
could increase significantly in connection with any contemplated business 
combination. The Company may not have the liquidity and capital resources to 
consummate such business combination.  Due to the nature of the Companys 
present activities, however the Company is unable to predict its likely 
expenditure for professional fees and other expenses.  The Company has no 
major capital commitments nor access to mechanisms to fund working or 
operating capital, and there can be no assurance that it will be successful 
in its efforts to raise additional capital to maintain its plan of operation.

Results of Operations Three Months Ended November 30, 1996 and November 30, 
1995

The Company has no assets and has not engaged in any operational activities 
during the past three years.  At present, the Company has no employees.   The 
Company does not expect any changes unless the Company concludes a merger or 
other business combination.

During the three months ended November 30, 1996, the Company had no 
operations. The Company maintained its existence through contributions from 
its shareholders to satisfy its general and administrative expenses.  As 
detailed on the accompanying consolidated statements of cash flows, there 
were no significant adjustments between the net loss and net change in cash.
















		                		MERIT DIVERSIFIED INTERNATIONAL, INC.
				                   (A Developmental Stage Company)
					                        NOVEMBER 30, 1996


Item 2 - Managements Discussion and Analysis of Financial Condition and 
         Results of Operations or Plan of Operation (Continued)
												

As stated above in the Plan of Operation, due to the nature of the Companys 
activities, the Companys prospects for the future are dependent on a number of 
variables which cannot be predicted.  Generally, after identifying a potential 
business opportunity, the Company could incur significant costs in evaluating 
the desirability of an acquisition or other form of business combination. 
Should the Company determine to proceed with the business combination, the 
transaction costs could be significant.  Thereafter, results of operation 
would likely be materially affected by the business acquired or merge with 
the Company.






















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			                  	MERIT DIVERSIFIED INTERNATIONAL, INC.
				                    (A Developmental Stage Company)
				   	                      NOVEMBER 30, 1996



Item 1			Legal Proceedings						

     				None

Item 2			Change 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





































                 				MERIT DIVERSIFIED INTERNATIONAL, INC.
				                   (A Developmental Stage Company)

                         						 SIGNATURES


Pursuant to the requirements of Section 13 of 15(d) of the Securities and 
Exchange Act of 1934, the Registrant has duly caused this report to be signed 
on its behalf by the undersigned, thereunto duly authorized.



                           					MERIT DIVERSIFIED INTERNATIONAL, INC.
							                                    (Registrant)




Date:  January 23, 1997		By: __________________/s/__________________

                        					Michael Neri, Chief Accountant