SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

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

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

For the transition period from_________________________to_______________________

Commission file number 0-25276
                       -------

                       ALGORHYTHM TECHNOLOGIES CORPORATION
--------------------------------------------------------------------------------
         Exact name of small business issuer as specified in its charter

Nevada                                      88-0320364
----------------------------                ------------------------------------
(State or other jurisdiction                (I.R.S. Employer Identification No.)
 of incorporation)                         

                      4330 NW 207th Drive, Miami, FL 33055
              -----------------------------------------------------  
              (Address of principal executive offices and Zip code)

                                 (305) 625-0332
                 ----------------------------------------------
                 (Issuer'stelephone number, including area code)

               Nitros Franchise Corporation (DigiMedia USA, Inc.)
              ---------------------------------------------------  
              (Former name, former address and former fiscal year,
                          if changed since last report)

      Check  whether  the issuer (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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 [ ] 

                APPLICBLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

      Check whether the registrant  filed all documents and reports  required to
be filed by Section 12, 13 or 15(d) of the Exchange  Act after the  distribution
of securities under a plan confirmed by Court.  Yes        No   x
                                                    ----       ----

                     APPLICABLE ONLY TO CORPORATE ISSUERS

      State the number of shares  outstanding of each of the issuer's classes of
common  equity,  as of the latest  practicable  date:  July 31, 1997:  9,603,556
shares of common stock

      Transitional Small Business Disclosure Format (check one): Yes     No  x
                                                                     ---    ---




<PAGE>



                                     INDEX


                                                                       Page
                                                                       ----

Part I

Condensed Balance Sheets                                                 3
Statement of Operations                                                  4 
Statement of Cash Flows                                                  5  
Notes to Condensed Financial Statements                                  6 
Management's Discussion and Analysis or Plan of Operations               7 

Part II

Item 1.  Legal Proceedings                                               8
Item 2.  Changes in Securities                                           8 
Item 3.  Defaults Upon Senior Securities                                 8     
Item 4.  Submission of Matters to a Vote of Security Holders             8  
Item 5.  Other Information                                               8
Item 6.  Exhibits and Reports on Form 8-K                                9








































<PAGE>

Part 1. Financial Information

                       Algorythm Technologies Corporation
          (f/k/a Nitros Franchise Corporation and Digimedia USA, Inc.)

                            CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                      June 30,    December 31,
                                                                        1997           1996
                                                                    -----------    -----------
ASSETS                                                              (Unaudited)       (Note)
<S>                                                                 <C>            <C>        
CURRENT ASSETS
  Cash                                                              $    21,627    $    32,079
  Accounts receivable                                                      --           57,400
                                                                    -----------    -----------
          Total current assets                                           21,627         89,479

PROPERTY, PLANT AND EQUIPMENT                                              --          123,675
Less allowances for depreciation                                           --          (75,991)
                                                                    -----------    -----------
                                                                           --           47,684

OTHER ASSETS                                                               --           60,613
                                                                    -----------    -----------
                                                                    $    21,627    $   197,776
                                                                    ===========    ===========
LIABILITIES AND STOCKHOLDERS' EQUITY

  CURRENT LIABILITIES
  Accounts payable                                                  $     5,500    $    26,675
  Accrued expenses                                                         --           52,276
                                                                    -----------    -----------
         Total current liabilities                                        5,500         78,951

LONG-TERM DEBT                                                           16,667         16,667

 STOCKHOLDERS' EQUITY
  Preferred Stock; 1,000,000 shares authorized; $1 par value;
    no shares issued or outstanding                                      37,683         37,683
  Common stock; 25,000,000 shares authorized; $.002 par value;
    967,397 shares issued and outstanding at December 31,1996 and
    8,603,556 shares issued and outstanding at June 30, 1997             17,207          1,935
  Additional paid in capital                                          1,487,052      1,456,324
  Accumulated  deficit                                               (1,542,482)    (1,393,784)
                                                                    -----------    -----------
                                                                           (540)       102,158
                                                                    -----------    -----------
                                                                    $    21,627    $   197,776
                                                                    ===========    ===========
</TABLE>


Note:  The balance  sheet at December 31, 1996 has been derived from the audited
financial  statements at that date but does not include all the  information and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements.

See notes to condensed consolidated financial statements.




                                       3

<PAGE>



                       Algorythm Technologies Corporation
          (f/k/a Nitros Franchise Corporation and Digimedia USA, Inc.)

                             STATEMENT OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                          Three Months Ended         Six Months Ended
                                                June 30                   June 30
                                      ------------------------   ------------------------
                                          1997          1996         1997         1996
                                      -----------    ---------   -----------    ---------
                                                       (Note)                    (Note)
<S>                                   <C>            <C>         <C>            <C>      
Revenues                              $      --      $    --     $      --      $    --  
Costs and expenses                                                                       
  General and administrative               28,449         --          56,952         --  
  Loss on abandonment of property          91,746         --          91,746         --  
                                      -----------    ---------   -----------    ---------
                                          120,195         --         148,698         --  
                                      -----------    ---------   -----------    ---------
Earnings (loss) before taxes             (120,195)        --        (148,698)        --  
                                                                                         
Income taxes                                 --           --            --           --  
                                      -----------    ---------   -----------    ---------
Net earnings (loss)                   $  (120,195)   $    --     $  (148,698)   $    --  
                                      ===========    =========   ===========    =========
                                                                                         
Net earnings (loss) per share         $    (0.054)   $    --     $    (0.066)   $    --  
                                      ===========    =========   ===========    =========
                                                                                         
Weighted average shares outstanding     2,240,090         --       2,240,090         --  
                                      ===========    =========   ===========    =========
                                                                                
</TABLE>









Note:       The previous  management of the Company failed to file the Quarterly
            report on form 10-Q for the period  ended June 30,  1996,  therefore
            the  comparative  data for that period is not available.  It will be
            filed by amendment.



See notes to condensed consolidated financial statements.











                                       4


<PAGE>
                       Algorythm Technologies Corporation
          (f/k/a Nitros Franchise Corporation and Digimedia USA, Inc.)

                             STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
                                                    Three Months Ended         Six Months Ended   
                                                           June 30                June 30         
                                                   ----------------------   ----------------------
                                                     1997          1996       1997         1996
                                                   --------    ----------   --------    ----------
                                                                  (Note)                  (Note)  
<S>                                                <C>         <C>          <C>         <C>       
CASH FLOWS FROM OPERATIONS                         $(27,949)   $     --     $(56,452)   $     --  
                                                                                                  
CASH FLOWS FROM INVESTING ACTIVITIES:                                                             
  Purchases of property and equipment                  --            --         --            --  
                                                   --------    ----------   --------    ----------
       Net cash provided by investing activities       --            --         --            --  
                                                   --------    ----------   --------    ----------
                                                                                                  
CASH FLOWS FROM FINANCING ACTIVITIES:                                                             
  Receipt of proceeds from stock sales               46,000          --       46,000          --  
                                                   --------    ----------   --------    ----------
       Net cash provided by financing activities     46,000          --       46,000          --  
                                                   --------    ----------   --------    ----------
                                                                                                  
     NET INCREASE (DECREASE) IN CASH               $ 18,051    $     --     $(10,452)   $     --  
                                                   ========    ==========   ========    ==========
                                                                                        
</TABLE>




Note:       The previous  management of the Company failed to file the Quarterly
            report on form 10-Q for the period  ended June 30,  1996,  therefore
            the  comparative  data for that period is not available.  It will be
            filed by amendment.





See notes to condensed consolidated financial statements.

























                                       5

<PAGE>
                       Algorythm Technologies Corporation
          (f/k/a Nitros Franchise Corporation and Digimedia USA, Inc.)


Notes to Condensed Financial Statements
(Unaudited)

June 30, 1997


NOTE A - BASIS OF PRESENTATION

The accompanying  unaudited condensed financial statements have been prepared in
accordance with generally accepted  accounting  principles for interim financial
information and with the  instructions to Form 10-Q and Article 10 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 (consisting of normal
recurring  accruals)  considered  necessary  for a fair  presentation  have been
included.  Operating  results  for the six months  ended  June 30,  1997 are not
necessarily  indicative  of the results  that may be expected for the year ended
December 31, 1997. For further information,  refer to the refer to the financial
statements  and footnotes  thereto  included in the Digimedia  USA, Inc.  annual
report on FORM 10-KSB for the period ended December 31, 1996.

NOTE B - ABANDONMENT OF PROPERTY

During  the  quarter  ended  June 30,  1997,  the  Company  has come  under  new
management.  Various options are under consideration  concerning a new direction
for the Company. In the meantime,  management has abandoned the former corporate
facilities, the remaining lease term was assumed by another party. Additionally,
the Company has written off intangible assets that were deemed to have no future
value.






























                                       6

<PAGE>

ITEM 2.     MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

Results of Operations
---------------------

      During the three  month  period  ended June 30,  1997 the  Company  had no
revenues  and had no revenues  during the six month  period ended June 30, 1997.
During the three  month  period  ended June 30, 1997 the Company had general and
administrative  expenses of $28,449 and in the six month  period  ended June 30,
1997 had general and administrative expenses of $56,952.

Liquidity and Capital Resources
-------------------------------

      The  Company's  cash on hand  decreased  by  $10,452  during the six month
period  ended June 30,  1997.  As shown on the  financial  statements  and notes
thereto,  the Company has written off intangible assets that were deemed to have
no future  value.  The Company has reduced its accounts  payable from $26,675 to
$5,500 in the six month period ended June 30, 1997.

      During the three month  period  ended June 30,  1997 the Company  realized
$46,000  from the  exercise  of stock  options  and applied the funds to working
capital.

      As a result of the merger with Nitros  Franchise  Corporation  in May 1997
and the  change  in  management  as a  result  of the  merger,  the  Company  is
considering  a  new  direction,  including  the  focusing  on  internet  related
businesses. The Company upon the expiration of its current contract  obligations
will discontinue its CD Rom training division.

      The Company,  in order to  implement  its new  business  plan and meet its
obligations  will seek to raise capital  and/or make  acquisitions.  There is no
assurance that the Company will be successful in obtaining  capital or in making
any acquisition.

      The previous management of the Company failed to file the quarterly report
on Form 10-QSB for the period ended June 30,  1996,  therefore  the  comparative
data for that  period  is not  available.  It will be  filed by  amendment  when
obtained.

























                                       7

<PAGE>

PART II

Item 1.     Legal Proceedings
-------     -----------------

      None


Item 2.     Changes in Securities
-------     ---------------------

      None

Item 3.     Defaults Upon Senior Securities
-------     -------------------------------

      Not Applicable


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

      1.    A special  meeting of  shareholders  was held on May 12,  1997.  The
following action was approved by holders of a majority of the shares entitled to
vote:  Amending the Certificate of  Incorporation to authorize the Registrant to
issue 10,714,285  shares of common stock,  par value $.00467 per share.  Thereby
giving  effect to 7:1 reverse  split adopted by the Board of Directors on May 7,
1997.

      2.    A special  meeting of  shareholders  was held on May 13,  1997.  The
following  action of the Board of  Directors  was  approved  by the holders of a
majority  of the  shares  entitle  to vote:  1)  approval  of the Plan of Merger
between the Registrant and Nitros Franchise  Corporation;  2) the change of name
of the Registrant to Nitros Franchise  Corporation;  3) the appointment of Jason
Sherman and Alan J.  Kvares as  directors  in place of Kirk J.  Girbach and Gene
Farmer.

      3.    A special  meeting of  shareholders  was held on May 30,  1997.  The
following  action  was  approved  by the  holders  of a  majority  of the shares
entitled to vote: The amendment of the Certificate of Incorporation changing the
number of shares of common  stock  authorized  to be issued and the par value to
25,000,000 shares of common stock, par value $.002 per share.


ITEM 5.     OTHER INFORMATION

      On May 14, 1997 as a result of the meger between the Registrant and Nitros
Franchise  Corporations David Bawarsky received 2,400,889 shares, Alan J. Kvares
received  2,150,889  shares and Jason Sherman  received  2,150,889 shares of the
Registrant in exchange for their shares of Nitros  Franchise  Corporation.  This
transaction  resulted in a change of  management.  David  Bawarsky was appointed
President,  CEO and a director,  Alan J. Kvares was  appointed  Secretary  and a
director,  and Jason  Sherman  was  appointed  Vice  President  and a  director.
Thereafter  on  July  18,  1997,  Telephonetics  International,   Inc.  acquired
2,600,000  shares from Mr. Bawarsky and 2,075,889  shares from Mr. Kvares.  This
transaction  was  reported in a Form 8-K dated  August 1, 1997.  The table below
represents the information as to security ownership set forth in that filing.



                 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                                 AND MANAGEMENT


      The  following  table sets forth  information  as of July 23,  1997 of the
Company's  Common  Stock  with  respect  to the  shares  owned by its  officers,
directors, both individually and as a group, and by the record and/or beneficial
owners of more than 5% of the outstanding amount of such stock.

                                        8

<PAGE>





Name and Address                    Amount and nature of
of beneficial owner                 beneficial ownership     Percentage of Class
-------------------                 --------------------     -------------------

David Bawarsky                      6,803,378(1)                      68.69%
6184 Vista Linda Lane
Boca Raton, FL 33433
President, CEO, Director

Alan J. Kvares                       5,677,489(2)                      59.1%
4330 NW 207th Drive
Miami, FL 33055
Secretary, Director

Jason Sherman                        1,119,889                        11.66%
558402 Arbor Club Way
Boca, Raton, FL 33055
Vice President, Director

Telephonetics International, Inc.    5,677,489                         59.1%
4330 NW 207th Drive
Miami, FL 33055

Officers and Directors               6,803,378(1)(2)                   80.0%
as a group (5 persons)

________________________

1.    Includes 5,677,489 shares owned by Telephonetics  International,  Inc. and
      300,000 shares that Mr. Bawarsky has options to purchase.  Mr. Bawarsky is
      the President,  and a director of Telephonetics  International Inc. and he
      along with Mr. Kvares are the controlling  shareholders  of  Telephonetics
      International, Inc.

2.    Includes 5,677 4899 shares owned by Telephonetics International,  Inc. Mr.
      Kvares is the CEO and a director of Telephonetics  International  Inc. and
      he  along  with  Mr.   Bawarsky  are  the   controlling   shareholders  of
      Telephonetics International, Inc.


ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

      A.    Exhibit 2.1 - Agreement and Plan of Merger  Between  DigiMedia  USA,
Inc. and Nitros Franchise Corporation, dated May 14, 1997.

      B.    The Registrant has been advised by the previous  management that two
reports on Form 8-K had been filed during the period, but for some reason,  they
are not shown as filed by the SEC. The reports are being refiled.













                                       9

<PAGE>



                                  SIGNATURES

      In accordance  with the  requirements  of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



                                    ALGORHYTHM TECHNOLOGIES CORPORATION
                                    -----------------------------------
                                          Registrant


Date: August 18, 1997               s/DAVID BAWARSKY
                                    --------------------------------------------
                                    David Bawarsky, President



Date: August 18, 1997               s/RICHARD ZADANOFF
                                    --------------------------------------------
                                    Richard Zadanoff, Treasurer




































10