SECURITIES AND EXCHANGE COMMISSION
                                                  Washington, D.C.  20549

                                                         FORM 10-Q


                               QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF
                              THE SECURITIES AND EXCHANGE ACT OF 1934

(Mark One)
(X)      Quarterly report pursuant to section 13 or 15 (d) of the
         Securities Exchange Act of 1934, for the quarterly period ended
         March 31, 1997.

( )      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 333-03501

                                               THE HARMAT ORGANIZATION, INC.
                      (Exact name of registrant as specified in its charter)

Delaware                                                     11-2780723
(State of Incorporation)                              (I.R.S. Employer ID No.)

                                                    22 Old Country Road
                                                  Quogue, New York 11959
                                                      (516) 653-3303

                                         (Address of Principal Executive Offices
                       and Principal Place of Business and Telephone Number)

                        (Former name, former address and former fiscal year,
                                               if changed since last report)

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        

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the Issuer's
classes of common stock, as of the latest practicable date.



            Class                    Outstanding at March 31, 1997

Common Stock, $.001 par value            2,612,500 shares

                                                            1
<PAGE>








                                               The Harmat Organization, Inc.



                                                    Index to Form 10-Q

<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>




                                                                                                                   Page
                   Item                                                                                           Number


PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements:

         Consolidated Balance Sheets -
         March 31, 1997 and March 31, 1996                                                                           3-4
 
         Consolidated Statement of Operations -
         Three months and six months ended March 31, 1997
         and March 31, 1996                                                                                            5
 
         Consolidated Statements of Cash Flow -                                                                        6
         Six months ended March 31, 1997
     and March 31, 1996

         Consolidated Statement of Stockholder's Equity                                                              7-8

         Notes to Consolidated Financial Statements                                                                 9-15

         Management's Discussion and Analysis of Financial
          Condition and Results of Operations                                                                      16-17

PART II.          OTHER INFORMATION

         Item 1.  Legal Proceedings                                                                                   18
         Item 6.  Exhibits and Reports on Form 8-K                                                                    18

Signatures                                                                                                            19








</TABLE>


                                                            2
<PAGE>





The Harmat Organization, Inc. And Subsidiaries

Consolidated Balance Sheet
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>




ASSETS
CURRENT ASSETS                                         March 31, 1997                      March 31, 1996


Cash and Cash Equivalents                              $1,446,637                          $   82,340
Marketable Securities                                      13,581                              87,556
Accounts Receivable                                        91,310                              30,052
Land and Construction Costs                               922,501                             798,523
Prepaid Expenses                                           82,323                               8,367

Total Current Assets                                    2,556,351                           1,006,838
                                                        
Property and Equipment-Net                              1,235,681                           1,143,770

Other Assets

Land and Construction Costs                             2,201,016                             608,349
Land Held for Development                                   -                                  72,298
Due From Affiliated Companies                              31,364                              23,200
Goodwill-Net                                               62,325                              70,366
Investment in Partnership                                  26,447                              29,727
Deferred Offering Costs                                     -                                 176,300
Land Deposits                                              91,000                              75,000

Total Other Assets                                      2,412,151                           1,055,240

Total Assets                                           $6,204,183                          $3,205,848

 




















</TABLE>


                                                            3
<PAGE>







The Harmat Organization, Inc. And Subsidiaries

Consolidated Balance Sheet
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>


LIABILITIES & STOCKHOLDERS' EQUITY                                March 31, 1997             March 31, 1996
CURRENT LIABILITIES

Current Portion of Mortgage Payable                               $   107,700                $  331,266
Notes Payable-Shareholders                                               -                      270,260
Notes Payable-Related Parties                                            -                      215,000
Loans Payable-Bank                                                       -                      240,000
Other Notes and Loans Payable                                         139,140                   139,360
Accounts Payable and Accrued Expenses                                 286,786                   635,969
Customer and Security Deposits                                        265,618                   399,800

Total Current Liabilities                                             799,245                 2,231,655

Other Liabilities
Mortgage Payable-Net of Current Maturities                          1,021,669                   925,445
Construction Loans Payable - Net                                   
 of Current Maturities                                              1,108,241                     -    
 Total Other Liabilities                                            2,129,910                   925,445


Stockholders' Equity
Preferred Stock-.001 Par Value, 5,000,000
Shares Authorized
 no Shares Issued and Outstanding                                      -                          -

Common Stock-.001 Par Value, 25,000,000
Shares Authorized, 2,612,500 and 2,250,000
Shares Issued and Outstanding at March 31,                             2,613                      2,250
1997 and March 31, 1996

Additional Paid-In Capital-Common Stock                            4,253,604                    300,563

Retained Earnings (Deficit)                                         (981,188)                  (254,065)

Total Stockholders' Equity                                         3,275,029                     48,748

Total Liabilities and Stockholders' Equity                        $6,204,183                 $3,205,648















</TABLE>


                                                            4
<PAGE>




The Harmat Organization, Inc. And Subsidiaries

Consolidated Statement of Operations
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>



                                                                          Three             Three      Six Months         Six Months
                                                                          Months            Months     ended              ended
                                                                          ended             ended      March 31,          March 31,
                                                                          March 31,         March 31,   1997               1996
REVENUES                                                                  1997              1996

Construction Sales                                                        $  -              $ 1,873    $  1,476           $  45,063
Rental Income                                                               37,401           48,449      69,934             100,200
Management Fee Income                                                        -               37,500         -                75,000

Total Revenues                                                              37,401           87,822      71,410             220,263

Cost of Sales and Direct Operating Expenses                                  9,888             -         20,306              39,643

  Gross Profit                                                              27,513           87,822      51,104             180,620

  Selling, General and Administrative Expenses                             297,541          116,890     530,272             220,200
                                                                                                                
  Charge for Executive Compensation Capitalized                             -                14,750        -                 67,250

  Income (Loss) from Operations                                           (270,028)         (43,818)    (479,168)          (106,830)

Other Income (Expenses)
Gain on Sale of Marketable Securities                                       52,710           30,222      53,780            140,315
Unrealized Gain on Marketable Securities                                        24            8,711        -                37,178
Interest and Dividend Income                                                25,462              451      52,780              5,335
Interest Expense                                                           (24,579)         (40,622)    (43,279)           (83,029)

Total Other (Expense) Income                                                53,617          ( 1,238)     63,281             99,799

Net Income (Loss)                                                         (216,411)         (45,056)   (415,887)            (7,031)
                                                                                                                                   
Charge in Lieu of Income Taxes                                               -                 -           -                  -

Pro Forma Net Income (Loss)                                               $(216,411)        $(45,056)   (415,887)         $ (7,031)

(Loss) per Share                                                            ( .0.08)          ( 0.02)     ( 0.16)             -    

Weighted Average Number of Shares                                          2,598,607        1,952,381   2,510,683         1,851,190











</TABLE>
<PAGE>

THE HARMAT ORGANIZATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>


                                                                                Six Months                  Six Months
                                                                                   ended                       ended
                                                                                   March 31, 1997              March 31, 1996

Operating Activities:
                                                                                   $(415,887)                  $ (7,030)
Net (Loss) Income
Adjustments to Reconcile Net Income (Loss) to Net
Cash (Used For) Provided by Operating Activities:
Depreciation and Amortization                                                          12,704                    23,809
Gain on Sale of Marketable Securities                                                 (53,780)                 (140,315)
Change in Unrealized (Gain) Loss on Investments                                          -                       19,756
Executive Compensation Capitalized                                                       -                       67,250


Changes in Assets and Liabilities:
 Contract Receivables                                                                 (63,716)                  (15,288)
 Purchase of Marketable Securities                                                     (4,212)                 (204,667)
 Sale of Marketable Securities                                                         66,918                   360,087
 Prepaid Expenses                                                                     (38,825)                   (7,192)
 Accounts Payable and Accrued Expenses                                                 61,996                    46,763
 Customer Deposits                                                                    253,694                   349,800
 Accrued Interest Receivable                                                            -                        (8,332)

Total Adjustments                                                                     234,779                   491,671
Net Cash-Operating Activities-Forward                                                (181,108)                  484,641

Investing Activities:
 Advances from/to Affiliates and Related Parties                                      (31,364)                  (23,200)
 Acquisition of Property & Equipment                                                  (96,269)                  (42,178)
 Land Deposit                                                                          (6,000)                 (137,652)
 Land and Construction cost                                                        (1,313,069)                 (515,656)
 Payment of Deferred Offering Costs                                                     -                      (146,300)

Net Cash-Investing Activities-Forward                                              (1,446,702)                 (864,986)

Financing Activities:
 Repayment of Notes Payable-Related Party                                             (90,000)                     -
 Repayment of Mortgage Payable                                                         (6,862)                 (18,903)
 Repayment of Other Notes & Loans Payable                                             (32,360)                     -
 Repayment of Notes Payable-Shareholder                                                  -                      (6,740)
 Distribution to Shareholder                                                             -                     (52,616)
 Process of Private Placement                                                            -                     500,000
 Net Cash-Financing Activities                                                       (129,222)                 421,741

Net Increase (Decrease) in Cash and Cash Equivalents                               (1,757,032)                  41,396

Cash and Cash Equivalents-Beginning of Periods                                      3,203,669                   40,944

Cash and Cash Equivalents-End of Periods                                           $1,446,637                  $82,340

Supplemental Disclosures of Cash Flow Information:
 Cash paid during periods for:
   Interest                                                                          $43,799                   $83,029
   Income Taxes                                                                      $20,545                   $   -

Supplemental Disclosures on Non-Cash Investing
 and Financing Activities:
 For the six months ended March 31, 1996, the Company
 distributed marketable securities with a fair value of
 $186,400 to its controlling stockholder.


                                                                                                                
</TABLE>
<PAGE>




THE HARMAT ORGANIZATION, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>


                                            Common Stock                     Additional             Accumulated        Total
                                       Number of        Amount               Paid-in                (Deficit)         Stockholders
                                       Shares           At Par               Capital                                      Equity





Balance -
 September 30, 1996                    2,612,500        $2,613               $4,253,604             $(565,300)          $3,690,917

Net(Loss) for period                       -               -                     -                  (415,888)             (415,888)

Balance-March 31, 1997                 2,612,500       $ 2,613               $4,253,604             $(981,188)           $3,275,029
                                        







                                            Common Stock                      Additional             Accumulated        Total
                                       Number of         Amount               Paid-In                (Deficit)        Stockholders'
                                       Shares            At Par               Capital                                   Equity


Balance- September 30,                 1,750,000       $1,750                 $  128,750             $ (350,456)        $(219,956)
1995

Proceeds from Private
Placement                                500,000         500                     499,500                 -                 $ 500,000

Transfer of S
Corporation Deficit to
Additional Paid-In-
Capital                                    -             -                     (342,437)               342,437             $   -

Executive Compensation
Capitalized                                -             -                       14,750                  -                 $ 14,750

Net Income(Loss) for                       -             -                         -                   (7,031)               (7,031)
period

Stockholder
Distributions                              -             -                         -                 (239,016)             (239,016)

Balance-March 31, 1996                 2,250,000      $ 2,250                   $300,563             $(254,066)            $ 48,747












</TABLE>

<PAGE>

                                            The Harmat Organization, Inc.

                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                     (UNAUDITED)



NOTE 1 -          SIGNIFICANT ACCOUNTING POLICIES

                  BASIS OF PRESENTATION
                  The interim financial statements are prepared pursuant
                  to the requirements for reporting on Form 10-Q.  The
                  March 31, 1997 and March 31, 1996 balance sheet data was
                  derived from interim financial statements and together
                  with the interim financial statements and notes thereto
                  should be read in conjunction with the financial
                  statements and notes included in the Company's latest
                  annual report on Form 10-K.  In the opinion of the
                  management, the interim financial statements reflect all
                  adjustments of a normal recurring nature necessary for a
                  fair statement of the results for interim periods.  The
                  current period results of operations are not necessarily
                  indicative of results which ultimately will be reported
                  for the full fiscal year.

                  BUSINESS

                   In November 1995, The Harmat Organization, Inc.
                  [Delaware] [the "Company"] was formed for the purpose of
                  offering securities to the general public and 1,750,000
                  shares of common stock were issued to the individual
                  stockholder of the Harmat Companies.  On March 1, 1996,
                  the individual stockholder of the Harmat Companies
                  transferred his stock in the Harmat Companies to The
                  Harmat Organization [Delaware] for a 100% ownership
                  interest in the Harmat Organization, Inc. [Delaware].

                  The March 31, 1997 and March 31, 1996 financial
                  statements reflect the financial position and results of
                  operations of The Harmat Organization, Inc. and its
                  subsidiaries on a consolidated basis, which reflects the
                  Company's current organizational structure.  The
                  Company's policy is to consolidate all majority-owned
                  subsidiaries. All intercompany amounts have been
                  eliminated in consolidation.

                  The construction industry poses certain inherent risks
                  to the Company, such as a shortage of skilled labor.  In
                  addition, certain other problems may arise resulting in
                  construction delays such as weather delays, cost of
                  supplies and late deliveries and/or cost overruns that
                  the Company may have to absorb.  Furthermore, the
                  Company may incur unexpected costs with respect to
                  warranty service on completed projects even though it
                  carries warranty insurance to cover such contingencies.
                  Such construction risks can affect the Company's cash
                  flow and profits.  To date, the Company has not been
                  materially affected by such construction risks.  The

                                                          8
<PAGE>

                  Company faces competition from a number of local
                  builders, many of which can offer either the same or
                  lower building costs than the Company.

                  The principal stockholder of the Company is a general
                  partner in the partnership in which The Harmat
                  Management Co., Inc. - New York has a limited
                  partnership interest.

                    The Plan for Incentive Compensation of Matthew
                  Schilowitz [the "Schilowitz incentive Plan"] who is the
                  principal, was adopted by the Board of Directors and
                  approved by the Company`s sole stockholder on March 1,
                  1996 and amended August 3, 1996.  Pursuant to such plan,
                  Mr. Schilowitz has been granted an option to purchase up
                  to an aggregate of 500,000 shares of Common stock at an
                  exercise price of $2.125 per share.  In the event the
                  Company`s earnings before taxes first equals or exceeds
                  any amount listed below for any fiscal year ending after
                  the date of the Company`s initial public offering, the
                  shares shall be released to such stockholder as follows:


                  Earnings Before Taxes                 Shares to be Issued

                  $   750,000                                  250,000
                  $ 1,500,000                                  250,000

                  If the above earnings are achieved, the Company will
                  recognize compensation expense equal to the difference
                  between the fair market value and the exercise price at
                  the time the performance conditions are achieved.
                  Issuance of the shares would result in substantial
                  compensation expense to the Company in future years.

                  NOTE 2 - ACCOUNTING PERIOD

                  Effective September 30, 1996, the Company changed to a
                  fiscal year ending on September 30th.  Prior to 1996,
                  the Company utilized a calender year end.  The
                  accompanying financial statements include the six month
                  period ended March 31, 1997 and March 31, 1996.

                  CASH AND CASH EQUIVALENTS

                  The Company considers all highly liquid instruments
                  purchased with a maturity of three months or less to be
                  cash equivalents.  Cash equivalents totaled
                  approximately $1,446,637 at March 31, 1997.

                  CONCENTRATION OF CREDIT RISK

                  Financial instruments which potentially subject the
                  Company to concentrations of credit risk are cash and
                  cash equivalents and accounts receivable arising from
                  the normal business activities.  The Company routinely
                  assesses the financial strength of its customers and
                  based upon factors surrounding the credit risk of its

                                                          9
<PAGE>

                  customers, establishes an allowance for uncollectible
                  accounts, and as a consequence, believes that its
                  accounts receivable credit risk exposure beyond such
                  allowances is limited.  Deposits are usually required on
                  house construction contracts.  The Company places its
                  cash and cash equivalents with high credit quality
                  financial institutions.  The amount on deposit in any
                  one institution that exceeds federally insured limits is
                  subject to credit risk.  Such amount was approximately
                  $1,342,648 at March 31, 1997.  The Company believes no
                  significant concentration of credit risk exists with
                  respect to these cash equivalents.


                  NOTE 3 -  ECONOMIC DEPENDENCY 

                  There were no construction sales recorded during the six
                  months ended March 31, 1997.  For the six months ended
                  March 31, 1997, there were four construction contracts
                  in process that were deemed major customers.  These
                  contracts represent 27%, 25%, 20% and 19% of
                  construction in process at March 31, 1997.  There were
                  six construction contracts which were deemed major
                  customers and accounted for approximately 99% of total
                  construction sales for the six months ended March 31,
                  1997. For the six months ended March 31, 1996, five
                  contracts represented 16% each of total sales and one
                  contract represented 19% of total sales.  Most of the
                  Company's business is of a nonrecurring nature.  The
                  Company must continually market its homes in order to
                  attract new purchasers.  Unless the Company is
                  successful in attracting new purchasers for its homes, a
                  lack of new purchasers will have a severe negative
                  impact to the Company in the near term.

                  MARKETABLE SECURITIES

                  The Company accounts for its investments pursuant to
                  Statement of Financial Accounting Standards ["SFAS"] No.
                  115, "Accounting for Certain Investments in Debt and
                  Equity Securities."  SFAS No. 115 addresses the
                  accounting and reporting for investments in equity
                  securities that have readily determinable fair values
                  and for all investments in debt securities.  Those
                  investments are to be classified into the following
                  three categories:  held-to-maturity debt securities;
                  trading securities; and available-for-sale securities.
                  In accordance with SFAS No. 115, prior years' financial
                  statements are not to be restated to reflect the change
                  in adopting the new accounting method.

                  Management determines the appropriate classification of
                  its investments in debt and equity securities at the
                  time of purchase and reevaluates such determination at
                  each balance sheet date.  At March 31, 1997 and 1996,
                  all of the Company investments were classified as
                  trading securities.  Trading securities are securities
                  bought and held principally for the purpose of selling

                                                         10
<PAGE>

                  them in the near term and are reported at fair value,
                  with unrealized gains and losses included in operations
                  for the current year.  The Company primarily uses the
                  specific identification method for gains and losses on
                  the sales of marketable securities.

                  EARNINGS [LOSS] PER SHARE

                  Earnings [Loss] per share are computed by dividing the
                  net income [loss] for the year by the weighted average
                  number of common shares outstanding.  Stock options and
                  warrants are assumed converted to common stock, when
                  dilutive.

                  USE OF ESTIMATES

                  The preparation of financial statements in conformity
                  with generally accepted accounting principles requires
                  management to make estimates and assumptions that affect
                  the reported amounts of assets and liabilities and
                  disclosure of contingent assets and liabilities at the
                  date of the financial statements and the reported
                  amounts of revenues and expenses during the reporting
                  period.  Actual results could differ from those
                  estimates.

                  LAND DEVELOPMENT COSTS

                  Costs that clearly relate to land development projects
                  are capitalized.  Costs are allocated to project
                  components by the specific identification method
                  whenever possible.  Otherwise, acquisition costs are
                  allocated based on their relative fair value before
                  development, and development costs are allocated based
                  on their relative sales value.  Interest costs are
                  capitalized while development is in progress.


                  REVENUE RECOGNITION

                  HARMAT HOLDING AND HARMAT HOMES

                  Harmat Holding Corp. ("Harmat Holding") and Harmat Homes,
                  Inc. ("Harmat Homes")recognize revenue from the
                  acquisition, development and sale of land and
                  construction and sale of houses on such land.  Pursuant
                  to the terms of such contracts and Statement of
                  Financial Accounting Standards ["SFAS"] No. 66,
                  "Accounting for Sales of Real Estate," the Company uses
                  the deposit method of accounting.  The method provides
                  that all construction costs be recorded as incurred and
                  monies received from the purchases recorded as deposits
                  until the purchase contracts close when all revenue
                  costs and profits are recognized.

                  Harmat Holding classifies all land and construction
                  costs that are expected to be completed within one year
                  as a current asset.  At March 31, 1997 and 1996 such

                                                         11
<PAGE>

                  land and construction costs totaled $922,501 and
                  $798,523.  Customer deposits received on such contracts
                  totaled $265,618 and $399,800 at March 31, 1997 and
                  1996.

                  NORTHSIDE WOODS AND HARMAT CAPITAL

                  Rental income of Northside Woods, Inc. (Northside
                  Woods") and Harmat Capital Corp. ("Harmat Capital") is
                  recognized as it is earned pursuant to the terms of each
                  lease on a straight line basis.  All leases have an
                  initial or remaining term of one year or less.

                  NOTE 3 -  PROPERTY AND EQUIPMENT

                   Property and equipment are recorded at cost and depre-
                  ciated by the straight-line method over the estimated
                  useful lives of the assets for building and improvements
                  and accelerated methods for furniture and equipment of 5
                  - 40 years and consist of the following:

 
 
                                          March                 March
                                         31, 1997              31, 1996

         Land                           $ 523,330            $ 450,495
         Buildings and
           improvements                   842,802              821,975
         Furniture and fixtures            46,765               35,335
                                        1,412,897            1,307,805

         Less: accumulated
           depreciation
           and amortization           177,216                   164,035
                                   $1,235,681                $1,143,770


                  NOTE 4 -   INCOME TAXES

                  The Company will file a consolidated federal income tax
                  return with its subsidiaries.  At March 31, 1997, the
                  Company will have net operating loss carry forwards of
                  approximately $750,000 available to reduce future taxes.
                  These carry forward losses expire in 2011.  Pursuant to
                  Section 382 of the Internal Revenue Code regarding
                  substantial changes in Company ownership, utilization of
                  these losses may be limited.

                  For the year ended December 31, 1995, each of the
                  subsidiaries had elected S-corporation status under the
                  Internal Revenue Code and similar state statutes and,
                  therefore, did not incur federal or state income taxes
                  except for a New York State equalization tax on
                  S-corporation earnings.  Taxes are passed through to the
                  individual shareholder for S-corporations.  Pro forma
                  net income and earnings per share are presented as if
                  the companies were C-corporations.  On March 1, 1996,

                                                         12
<PAGE>

                  each of the S-corporations terminated their
                  S-corporation status and became C-corporations.


                  NOTE 5 -  GOODWILL

                  The cost of the newly acquired subsidiary, Quick Storage
                  of Quogue, Inc., in excess of the fair value of the net
                  assets of such subsidiary has been charged to goodwill.
                  The Company has decided to amortize its goodwill over a
                  period of up to ten years under the straight-line
                  method.  Accumulated amortization at March 31, 1997 and
                  1996 was $10,052 and $4,021.  The Company's policy is to
                  evaluate the periods of goodwill amortization to
                  determine whether later events and circumstances warrant
                  revised estimates of useful lives.  The Company also
                  evaluates whether the carrying value of goodwill has
                  become impaired by comparing the carrying value of
                  goodwill to the value of projected undiscounted cash
                  flows from the acquired assets of Quick Storage of
                  Quogue, Inc.  Impairment is recognized if the Company
                  value of goodwill is less than the projected
                  undiscounted cash flow from acquired assets or business.

                  NOTE 6 -   PRIVATE PLACEMENT

                  In February of 1996, Harmat Organization, Inc.
                  [Delaware] offered 500,000 units at $1.00 per unit as
                  part of a private placement transaction.  The units
                  consist of one share of common stock, three Series A
                  warrants entitling the holder to purchase three shares
                  of common stock for $6.00 for a period of four years and
                  one Series B warrant entitling the holder to purchase
                  one share of common stock for $9.00 for a period of four
                  years.  The shares of common stock and the Series A
                  warrants were registered as part of the initial public
                  offering.  On February 22, 1996, the Company received
                  proceeds of $500,000 from the private placement.

                  The following is a schedule of warrants:
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>


Date                                       No. of                                    FMV at                No. of
of                                         Warrants             Exercise             Date of               Warrants
Grant                 Type                 Issued               Price                Grant                 Exercised
February              Series A             1,500,000            $6.00                $5.75
1996
February              Series B               500,000            $9.00                $5.75
1996
TOTAL                                      2,000,000

</TABLE>
<PAGE>




                  NOTE 7 -      COMMON STOCK

                  CAPITAL CONTRIBUTION

                  On August 3, 1996, the Company's principal stockholder
                  contributed 500,000 shares of the Company's common stock
                  to the Company in lieu of an escrow of 750,000 of his
                  shares.  The escrow was part of the "earnout" agreement.
                  The 500,000 contributed shares were canceled.  The
                  contribution has been reflected retroactively in these
                  financial statements as a recapitalization.

                  NOTE 8 -   COMMITMENTS AND CONTINGENCIES

                  LAND CONTRACT

                  Pursuant to an agreement dated December 1995, the Harmat
                  Organization, Inc. has agreed to purchase three parcels
                  of undeveloped land located in Westhampton, New York for
                  $1,247,000.  The Harmat Organization, Inc. has deposited
                  $75,000 pursuant to the terms of such contract.  This
                  contract is subject to the Company receiving a
                  commitment for the financing of land acquisitions.

                  LEGAL PROCEEDINGS

                  The Company is involved in legal proceedings which are
                  considered routine and incidental to its business.  The
                  Company believes that the legal proceedings which are
                  presently pending have no potential liability which
                  would have an adverse material effect on the financial
                  condition, operations or cash flows of the Company.  Due
                  the inherent uncertainty of the legal process, however,
                  this assessment may be subject to change in the near
                  term.

                  COMMITMENTS AND STOCK OPTION PLAN

                  In 1996, the Board of Directors adopted a stock option
                  plan providing for the granting of up to 400,000 shares
                  of the Company's common stock.  This Plan excludes the
                  Company's chief executive officer and principal
                  shareholder.  In January, 1997, the Company granted five
                  year options under the Company's Qualified Stock Option
                  Plan providing for 10,000 shares at a price of $2.125
                  per share to five directors and one key employee of the
                  Company.

                  EMPLOYMENT AGREEMENT

                  On April 1, 1996, the Company entered into a five year
                  employment agreement with the President and Chief
                  Executive Officer, who is also the Company's principal
                  shareholder for a base salary of $105,000 with
                  increments of $50,000 each year thereafter.  In
                  addition, the Officer will receive a bonus of 5% of pre
                  tax annual earnings and is granted warrants to purchase
                  up to an aggregate of 500,000 shares of the Company
                  common stock for ten years exercisable at $2.125 per
                  share with rights vesting upon attainment of certain
                  earnings levels.

                                                         14
<PAGE>

                                                The Harmat Organization, Inc.

                                       MANAGEMENT'S DISCUSSION AND ANALYSIS

                              OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


FOR THE SIX MONTHS ENDED MARCH 31, 1997 COMPARED WITH THE
SIX MONTHS ENDED MARCH 31, 1996

Net revenues decreased $148,853 to $71,410 for the six months ended
March 31, 1997 from $220,263 for the six months ended March 31, 1996.
Net revenues decreased $50,421 to $37,401 for the three months ended
March 31, 1997 from $87,822 for the three months ended March 31, 1996.
The $43,190 decrease in gross sales was due primarily to the fact that
there were no sales recorded in the six months ended March 31, 1997.
The remaining change in net revenues related primarily to a lower
rental income and a reduction in management fee income.

Cost of sales for the six months ended March 31, 1997 was $20,306 as
compared to $39,643 for the six months ended March 31, 1996. Cost of
sales for the three months ended March 31, 1997 was $9,888 as compared
to none for the three months ended March 31, 1996. The reduction is due
to the lack of sales in the three months and six months ended March 31,
1997 versus 1996.

Selling, General and Administrative expenses were $530,272 for the six
months ended March 31, 1997 as compared to $220,200 for the six months
ended March 31, 1996. For the three months ended March 31, 1997,
Selling, General and Administrative expenses were $297,541 versus
$116,890 for the three months ended March 31, 1996.  The increase is
due primarily to the addition of administrative staff and marketing
costs in 1997 and 1996 versus 1996 and 1995.

Interest expense decreased from $83,029 for the six months ended March
31, 1996 to $43,279 for the six months ended March 31, 1997.  For the
three months ended March 31, 1997, interest expense decreased from
$40,622 for the three months ended March 31, 1996 to $24,579 primarily
as a result of a reduction in construction loans and the repayment of
bank debt and payables to Shareholders and Related Parties from the
public offering in September, 1996.

The net loss of $415,887 for the six months ended March 31, 1997
increased by $408,856 from a net loss of $7,031 for the six months
ended March 31, 1996. For the three months ended March 31, 1997 the net
loss of $216,411 increased by $171,355 from a net loss of $45,056 for
the three months ended March 31, 1996.























                                                             15
<PAGE>




                                                The Harmat Organization, Inc.

                                        MANAGEMENT'S DISCUSSION AND ANALYSIS

                             OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of liquidity have been the proceeds of
its initial public offering, cash generated from sales, and borrowings
from its officers and related parties.

During the six months ended March 31, 1997, the Company had negative
cash flows from operating activities of $181,108 versus a positive cash
flow of $484,641 for the six months ended March 31, 1996.  Investing
activities used cash of $1,446,702 in the six months ended March 31,
1997 and $864,986 in the six months ended March 31, 1996 primarily for
the acquisition of land and construction costs.




                                                             16
<PAGE>

                                                The Harmat Organization, Inc.

PART II               OTHER INFORMATION


ITEM 1.               Legal Proceedings


             On January 20, 1997,the Greater Westhampton Civic Association
and Edward Batcheller commenced in New York State Supreme Court
proceeding was commenced against the Town of Southampton Planning Board
pertaining to the approval process of the Jagger Village Subdivision,
the Company's 41-acre parcel.  Although not named as a defendant, the
Company  intervened to defend and filed a motion to dismiss the
petition.  Oral argument was heard on April 30, 1997.

             Management is of the opinion that there is no material exposure
to the Company and therefore, no provision has been made for any
possible loss in the Company's consolidated financial statements.  Due
to the inherent uncertainty of the legal process, however, this
assessment may be subject to change in the near term.


ITEM 6.               Exhibits and Reports on Form 8-K

                      a.  Exhibits - None

                      b.  Reports on Form 8-K
                           None



                                                             17
<PAGE>

                                                         SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.




                                               The Harmat Organization, Inc.
                                                        (Registrant)




By: Matthew C. Schilowitz
    Chief Executive Officer


By: Vincent E. Hunt
    Chief Financial Officer




Date: May 13, 1997


















                                                             18
<PAGE>




<PAGE>