U. S. SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON, D.C. 20549
                           FORM 10-KSB

Annual report pursuant to Section 13 or 15(d) of the Securities
and Exchange Act of 1934

For the fiscal year ended November 30, 1996

Commission file number 0-3492

                    RESERVE INDUSTRIES CORPORATION
              (Name of Small Business Issuer in its charter)

             NEW MEXICO                    85-0128783
 State or other jurisdiction         I.R.S. Employer Identification No.)
                                      Incorporation or Organization)

20 First Plaza, Suite 308, Albuquerque, New Mexico    87102
      (Address of principal executive offices)	   (Zip Code)

                       505-247-2384
Issuer's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act: none
Securities registered pursuant to Section 12(g) of the Act:  
Common stock, $1.00 Par Value Title of each class

Check whether the issuer: (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 and (2) has been subject
to such filing requirements for the past 90 days.
Yes      X        No                 

Check if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B contained in this form,
and no disclosure will  be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10KSB. X

State the issuer's revenues from continuing operations for its
most recent fiscal year.  $2.7 million

State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the
stock was sold, or the average bid and asked prices of such
stock, as of a specified date within the past 60 days.  As of
February 14, 1997  $221,350.

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.  As
of February 14, 1997,  3,203,763   $1.00 Par Value
<PAGE)
                             PART I        

Item 1.  Description of Business

(a)   	Business Development.  Reserve Industries Corporation, a
New Mexico Corporation incorporated in 1957, (the "Registrant")
is engaged in the mining and sale of  silica sand.  The
Registrant conducts these operations in the USA.  In addition,
the Registrant holds several properties with mineral potential
and has equity interests in operations that supply services and
products to the steel industry and in operations in the Far East
that process waste slag from the smelting of copper into various
abrasive products used by the ship repair industry.

The Registrant, through its wholly owned subsidiary Reserve
Silica Corporation (Reserve Silica), located in Ravensdale,
Washington, southeast of Seattle, mines and processes silica
sand.   The mine run sand is extracted from open pit mines
located on leased land and is transported to an adjacent sand
processing plant.  The wet plant crushes, washes and separates
the clay from the mine run sand and classifies the sand into
several products, which are marketed to the cement industry and
to golf courses for sand traps.  The facility also incorporates
a drying plant, which produces a dried silica sand for the glass
container industry.  Reserve Silica is working to develop other
silica sand products to serve other markets.  During last year,
Reserve Silica began a plant modernization program to replace
and upgrade both the wet plant and drying plant.  All of the
equipment for the wet plant upgrade was purchased and installed
during 1996.  The new air handling equipment to upgrade the
drying plant has been purchased and is expected to be installed
in the spring of 1997. 

The Registrant, through its wholly owned subsidiaries Reserve
Rossborough  Corporation (Reserve Rossborough) and Reserve
Rossborough Ventures Corporation (Reserve Rossborough Ventures),
owns an equity interest in Rossborough Manufacturing Co. L.P.
(Rossborough), of Avon Lake, Ohio.  A description of ownership
is described in footnote 5 of the notes to the consolidated
financial statements.  Rossborough provides products and
services to the primary steel industry and is a major supplier
of  magnesium based reagent compounds used to externally
desulfurize hot iron metal.  External desulfurization of hot
metal iron is its primary business segment of the Partnership. 
Rossborough has a magnesium grinding facility located near
Walkerton, Indiana that processes both magnesium ingots and
secondary magnesium granules into a size suitable for use in
iron desulfurization.  The  magnesium granules are blended at
both Avon Lake and Walkerton with other materials to make the
finished desulfurization reagents.  Rossborough is one of the
three primary suppliers of desulfurization services in North
America.  It has been working to expand its international
operations and is currently operating through joint ventures in
Japan, Slovakia and Belgium.

Rossborough's other business segments include the manufacture
of special refractory lances and slag skimmers used in
desulfurizing operations; the manufacture of  custom
desulfurizing reagent injection equipment; the manufacture of 
molten metal samplers and thermocouples; the exclusive
distributor for Bimac ladle powders and slag conditioning
agents; and the distribution of selected other purchased
products.  During the year, Rossborough became certified under
ISO 9001 and 9002
<PAGE>
The Registrant owns a 20% stock interest in JPL Industries Pte.
Ltd.,  (JPL) a Singapore company organized in 1990.  The other
shareholders are a subsidiary of Jurong Shipyards Ltd., a
Singapore company and two Japanese companies, Nippon Mining &
Metals Company, Ltd. and Mitsui & Company, Ltd. JPL is in the
waste management business.   JPL operates as a collection and
treatment center for wastes generated by other industries.  It
identifies wastes which have the potential to be recycled,
develops processes to recycle the wastes and coverts the wastes
into value added products.

JPL is also in the business of selling processed and
unprocessed copper slags that are used for abrasive blasting
purposes.  A plant has been constructed the help the Singapore
ship repairing industry dispose of its used copper slag
abrasives.  The plant mechanically separates contaminates from
used abrasives.  The recycled abrasives are segregated into a
coarse size fraction, which is suitable for reuse as a blasting
abrasive, and a fine slag size fraction.  The fine slag fraction
has been cycled to other products such as interlocking concrete
pavers and as a partial replacement for sand and aggregates in
ready-mix concrete.

During the fall of 1995, JPL authorized the issuance of S$12.5
million (Singapore dollars) of interest bearing redeemable
convertible unsecured loan stocks.  All of these convertible
loan stocks were subscribed by the first quarter of 1996.  The
loan has been used to finance the second stage of the copper
slag processing and recycle facility and to expand the concrete
paver plant.  If the all of the convertible loans are converted
into common stock, the Registrant's interest will be reduced to
approximately 7%.

The Registrant has a number of mineral interests that it deals
in the normal course of business and below is description of the
properties currently held.

The Registrant, through its wholly-owned subsidiary Reserve
Minerals Corporation (Reserve Minerals), has retained economic
interests in three uranium joint ventures located in northern
Saskatchewan, Canada.  The retained interests in the Waterbury
Lake Joint Venture and the Dawn Lake Joint Venture are net
profit interests of approximately 0.75% and 1.5%, respectively. 
The Registrant owns a 1% royalty on its former 9.063% interest
on all minerals produced in the McArthur River Joint Venture. 
Some or all of the retained net profits and royalty interests
may become earning assets in the future.

The Waterbury Lake Joint Venture includes the Cigar Lake
deposit, which contains approximately 1.0 million tons of
uranium mineralization at a grade of 14% and an additional 1.1
million tons of uranium mineralization at a grade of 4.5%.  This
equates to approximately 385 million pounds of uranium
concentrate, U3O8.  The deposit covers an area of approximately
40 acres.  The Cigar Lake Mining Corporation, formed by the
Waterbury Lake Joint Venture, has the responsibility of
developing the Cigar Lake property.  A special  underground
remote mining and transport method, which surpasses prevailing
safety standards, has been developed and successfully tested
within the deposit.  The venture has made arrangements to have
the ore processed at the McClean Lake mill currently under
construction and located approximately 60 kilometers from the
orebody.  In 1995, an environmental impact statement was
submitted for review.  Mining is dependent on the successful
completion of the permitting process and the development of
favorable markets, which could occur before the end of the
century.

The McArthur River Joint Venture continued exploration work on
the uranium deposit discovered in 1988.  As a result of
underground exploration drilling, the geologic reserves in the
property have been increased to 416 million pounds of  U3O8 at
an average grade of  15% U3O8.  The operator of the property has
begun the permitting process and an environmental impact
statement was submitted for review in 1995.  If the process is
successful, the new mine would begin production before the end
of the century.  The mine would replace production from the Key
Lake deposit and the Key Lake processing mill will be used to
process the ore.

The Dawn Lake Joint Venture has a uranium deposit containing
755,900 tons of uranium mineralization at an average grade of
1.97%.  This equates to approximately 29.8 million pounds of
uranium.  
<PAGE>
The Registrant holds various non-producing mineral properties
in the United States.  In New Mexico it owns the mineral rights
in a 57,000 acre tract and an 8-1/3% non-participating royalty
on all the minerals in a 60,000 acre tract.  Prior drilling has
located some uranium mineralization on these tracts.  

L-Bar Products Incorporated (L-Bar Products),  a wholly-owned
subsidiary of the Registrant, operated a magnesium recovery
plant located at Chewelah, Washington, north of Spokane.  The
plant was closed in December 1991.  In March 1995 L-Bar Products
was placed in Chapter 7 liquidation and a trustee was appointed.
 Matters pertaining to the L-Bar Products bankruptcy case are
more fully discussed below (reference Item 3. Legal Proceedings).

(b)	Business of Issuer. The business of the issuer is as follows:

1.  The Registrant primarily produces and sells silica sand to the
glass, cement and golf course industries.  Further descriptions
of the businesses are contained in Item 1. (a) above.

2.  In the majority of cases, the Registrant distributes its products
directly to its customers by truck or rail.  Some of the golf
course bunker sand is sold to distributors.

3.  The Registrant has not publicly announced any new products or services.

4.  For the silica sand operation numerous competitors exist, however
competition is limited to regions by the cost of shipping.  The
Registrant competes on the basis of keeping prices in line with
the competition and maintaining the quality and consistency of
the products.

5.  The Registrant acquires the raw materials for the silica sand operation
from a silica sand deposit leased by the Registrant and the mine is operated
to provide mine run sand as required by operations.

6.  The Registrant deals with relatively
few customers.  For the silica sand business, approximately
two-thirds of the sales are made to two long term customers.

7.  There are no patents or trademarks of material importance to the
Registrant's business.  Mining claims, leases and crown grants
are believed to be held under valid contracts or other evidence
of title.

8.  The Registrant does not currently require any new
government approval in order to conduct its business.
<PAGE>
9.  As with all small and large businesses, the existing and probable
governmental regulations are a significant burden, and the
cumulative effects are potentially detrimental to business
expansion.

10. The Registrant has not spent a material amount of funds on research and
development.

11  Federal, state and local laws and regulations relating to protection of
the environment effect the Registrant in many areas of its operations.
Except for L-Bar Products, the cost and effects of these laws, in the
opinion of management, are currently contained in the Registrant's financial
statements.  The State of Washington Department of Ecology (WDOE)
(Reference Item 3. Legal Proceedings) requested that L-Bar Products provide
financial assurance that the residue pile, accumulated at the Chewelah plant
by the previous owners of the plant, can be removed from the site.  L-Bar
Products is currently in Chapter 7 bankruptcy liquidation, and  this matter
is currently unresolved.  It is management's opinion that the Company will
not be liable for this matter, and in any event any liability can not be
estimated, therefore, no amounts have been accrued for this matter in the
accompanying financial statements.  The Registrant has also been sued by
Northwest Alloys, the generator of the material at the Chewelah plant, to
provide reimbursement for its costs for the site remediation that Northwest
Alloys has agreed to perform (Reference Item 3. Legal Proceedings).

12  The Registrant has 19 full time employees and 1 part time employee.
<PAGE>
Item 2.  Description of Properties

(a)  Information as to the location of the principal plants is
forth under Item l. above.  The silica sand property is operated under a
mineral lease from the owner.  The mineral property interests are described
in the table below.

                	RESERVE INDUSTRIES CORPORATION
                     MINERAL INTERESTS 

                  			       Gross        %         	Net 		        Type of
Location  and Mineral       	Acres  		Interest     Acres          Interest
New Mexico - Uranium
 L-Bar Ranch
  Reserve Tract	            57,000    	100.00%	    57,000 (1)   Mineral deed
  Exxon Tract               60,000       8.33%	     5,000       Royalty
  Other		                      552   		50-100%        312	      Mineral deed
                           -------                 ------ 
	                         	117,552				             62,312

Saskatchewan Canada *
  Waterbury Lake Project		234,300 (2)
  Dawn Lake Project	     	386,800 (2)
  McArthur River Project		211,400 (2)

* Approximate
 (1) Subject to a 1/24 royalty interest
 (2) The company's interest in these projects is described in  Item 1.

(b)  Investment Policies.  In the normal course of business,
the Registrant currently does not deal in investments in real
estate or real estate mortgages.

(c)  Description of Real Estate and Operating Data.  The
Registrant does not deal in Real Estate investments and a
description of its operating properties is contained above.  The
Registrant believes that its operating properties are adequately
insured.
<PAGE>
Item 3.  Legal Proceedings

	(a)  Pending legal proceedings

Northwest Alloys Inc. vs. Reserve Industries Corporation

On April 28, 1994, a complaint for monetary and declaratory
relief was filed in the United States District Court for the
Eastern District of Washington by Northwest Alloys against the
Registrant.

The complaint alleges causes of action for monetary and
declaratory relief for breach of contract and statutory
contribution under the Washington Model Toxics Control Act
(MTCA).  For its breach of contract claim, Northwest Alloys
seeks to rely upon an August 2, 1990 guaranty signed by the
Registrant, which Northwest Alloys claims guarantees payment of
the greater of (i) up to $2,000,000 for environmental cleanup at
the Chewelah, Washington site owned and operated by L-Bar
Products, or (ii) certain loan funds in excess of $2.5 million,
plus interest, related to L-Bar Products' alleged obligation to
repay certain loans from Northwest Alloys (estimated by
Northwest Alloys to be $1,291,481 plus accrued and accruing
interest).  For the statutory contribution action under the
MTCA, Northwest Alloys seeks contribution for ongoing remedial
costs for alleged soil and ground water contamination at the
L-Bar Products site in Chewelah, Washington.  Contribution is
sought from the Registrant for past and present costs incurred,
and future costs to be incurred, by Northwest Alloys to address
the alleged soil and ground water contamination at the L-Bar
Products site.

The Registrant denies any and all liability alleged in the
complaint and is contesting the claims.  On June 17, 1994, the
Registrant filed a counterclaim against Northwest Alloys seeking
damages for breach of contract, breach of fiduciary duty, and
declaratory relief regarding environmental cleanup costs at the
site.

Northwest Alloys filed a motion for summary judgment to enforce
the August 2, 1990 guaranty.  The motion was heard before the
Court on October 4, 1994 and Northwest Alloys' motion was
denied.  On December 6, 1994 an order was entered staying all
further proceedings pending the completion of adversary
proceedings involving the Registrant in L-Bar Product's
bankruptcy proceedings (see below).
<PAGE>
L-Bar Products Inc. Bankruptcy Proceedings

On December 13, 1991 L-Bar Products was notified that a
petition was filed against it for an order of relief under
Chapter 7 of the United States Bankruptcy Code, in the United
States Bankruptcy Court for the Eastern District of Washington. 
This petition was filed on behalf of three creditors that had
performed work on the capital improvements at the L-Bar Products
plant, prior to plant closure.  On July 13, 1992 L-Bar Products
filed a reorganization petition under Chapter 11 of the U.S.
Bankruptcy Code.  The case was consolidated in the Bankruptcy
Court for the Eastern District of Washington.  On March 15,
1995, the bankruptcy was converted to Chapter 7 and a trustee
was appointed.

L-Bar Products is continuing to pursue resolution of certain
claims against Northwest Alloys (see below). 

L-Bar Products, Inc. vs. Northwest Alloys Inc.

On August 31, 1994, L-Bar Products filed a complaint for breach
of contract, breach of fiduciary duty, equitable subordination,
declaratory relief and recovery of environmental cleanup costs
against Northwest Alloys.  The complaint was filed in the United
States Bankruptcy Court for the Eastern District of Washington. 
On October 21, 1994 Northwest Alloys filed a third party claim
against the Registrant seeking the same relief as requested in
the case described above.  On December 30, 1994, the Registrant
filed a counterclaim against Northwest Alloys seeking relief
similar to that contained in its counterclaim in the case
described above.  Because the District Court has stayed all
proceedings in that action, matters involving claims by and
against the Registrant, L-Bar Products and Northwest Alloys are
proceeding in the Bankruptcy Court.  Pre-trial discovery has
been underway since early 1996 and is expected to be completed
in 1997.

(b)  Pending governmental legal proceedings

WDOE Proceedings

The Washington Department of Ecology (WDOE) named the
Registrant and L-Bar Products as potentially liable persons
(PLP) for part of the cleanup related to the Chewelah site.  The
basis for naming L-Bar Products was its status as site
owner/operator.  The basis for naming the Registrant is the
alleged responsibility of the parent corporation.  It is
management's opinion that the Registrant was a separate entity
from L-Bar Products and is not responsible as a PLP for site
contamination. 
<PAGE>
The WDOE has entered into an administrative order with
Northwest Alloys under which Northwest Alloys has agreed to
undertake testing at the Chewelah site and prepare a proposed
remedial plan for cleanup.  L-Bar Products has petitioned the
Bankruptcy Court for approval to agree to the same order in
order to cooperate with WDOE.  The WDOE objected to L-Bar's
motion and no further action has been taken.  The Registrant has
declined to enter into the order due to its insistence that it
is not a PLP under the MTCA.

Environmental Protection Agency Proceedings

In the Spring of 1992, the Environmental Protection Agency
pursuant to information contained in a sealed affidavit
uncovered approximately 80 barrels that had contained a spent
sulfuric acid.  The barrels were mostly empty but some contained
some "sludge" in the bottom.

In the Spring of 1995, the Justice Department indicted a former
foreman and the former plant manager.  An indictment was also
presented against L-Bar Products.  The foreman plead guilty to
two counts and was sentenced to three years probation and six
months partial home confinement.  According to news reports, the
former foreman told the federal judge that an employee he
supervised suggested the barrels be buried, and that "there was
really no agreement to do anything... I did not discuss it with
L-Bar Products ahead of time... I guess it just didn't enter my
mind that it might have been considered hazardous (under federal
law)".  The former plant manager denied having any knowledge of
the barrels being buried.  He plead guilty to two misdemeanor
charges and was sentenced to six months unsupervised probation.  

During the year, L-Bar Products hired an attorney to represent
it and entered a plea of not guilty.  The Justice Department did
not pursue the case in a timely manner and in August 1996 the
court dismissed the charges against L-Bar, without prejudice. 
To date the Justice Department has not refiled the charges
against L-Bar.  The statues of limitations has expired on most
of the indictments.

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

The was no submission to the shareholders during the fourth
quarter.
<PAGE>
PART II

Item 5.  Market For Common Equity and Related Shareholders
Matters.

(a)	Market Information.  The Registrant's common stock is
currently not publicly traded because the Registrant has elected
to forgo an audit in order to conserve capital for necessary
plant improvements and legal fees.  Once the Registrant is in a
position to do so, it plans to file audited financial
statements.  Prior to August 1992, the Registrant was listed on
the NASDAQ National Over-the-Counter Market.  Since the
Registrant's stock is not quoted, the Registrant can not list
current prices for its stock. 

(b)	Holders.  On February 14, 1997, the Registrant had
approximately 800 shareholders. 

(c)	Dividends.  The Registrant has never paid a dividend.  There
are currently no restrictions or covenants to limit the ability
to pay a dividend.

Item 6.  Management's Discussion and Analysis of Financial
Condition and Results of Operations.

Results of Operations.  For the year ended November 30, 1996,
the Registrant had revenues of $2,688,392 which resulted in net
income of $207,463 or $0.06 per share.  For the year ended
November 30, 1995, the Registrant had revenues of $1,778,137
which resulted in a net loss of $754,543 or $0.24 per share.

The revenues in 1996 increased from 1995 as a result of
increased equity earnings which was offset by a nonrecurring
contract settlement of $344,791.  The sales at the Registrant's
silica sand operation decreased by $165,979.  The renovation of
the sand plant was begun in mid-1995 and the wet plant was
completed in the fall of 1996.  The equipment to replace the dry
plant air handling system has been purchased and will be
installed in the Spring of 1997.  The wet plant renovation has
improved the efficiency of the wet plant.  In 1995,
approximately $520,000 of the loss was attributable to a change
in the method of inventory accounting by an affiliate (see
footnote 5 of the notes to the consolidated financial
statements).

Liquidity and Capital Resources.  The Registrant's net cash
(used) provided by operating activities was $(7,875) and
$324,041 in 1996 and 1995, respectively.  The net cash used by
investing activities was $300,629 and  $722,512 in 1996 and
1995, respectively.  Most of the cash used by investing
activities in 1996 and 1995 was for capital improvements to the
sand project.  The Registrant increased its debt by $287,453 and
$401,914 in 1996 and 1995, respectively.

The Registrant had working capital deficits of approximately
$2.5 million and $2.1 million in 1996 and 1995, respectively. 
As part of the Registrant's program to conserve cash, part of
the salaries due to the officers of the Registrant, all of the
deferred compensation due to the deceased chairman's spouse and
the part of the interest due on certain loans were accrued but
not paid in 1996 and 1995.  As of November 30, 1996, these
accruals (salaries, deferred compensation and deferred interest)
exceeded $1.5 million.
<PAGE>
Item 7.  Financial Statements.

The following Consolidated Financial Statements of the
Registrant and its subsidiaries are filed as a part of the
report and are attached:

	Consolidated Balance Sheets as of November 30, 1996 and 1995 

	Consolidated Statements of Operations for the Years Ended
  November 30, 1996 and 1995

	Consolidated Statements of Stockholders' Investment for the
  Years Ended November 30, 1996 and 1995

	Consolidated Statements of Cash Flows for the Years Ended
  November 30, 1996 and 1996

	Notes to Consolidated Financial Statements 

Because the financial statements are not audited there is no
report of independent accountants. 

All other schedules are omitted, as the required information is
not required, or the information is presented in the financial
statements or related notes.

Item 8.  Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure.

Because of the Registrant's program to conserve cash, it was
not able to retain an independent accountant to audit the
financial statements for the fiscal years of 1996, 1995, 1994,
1993, 1992 and 1991.  The Registrant has previously used Arthur
Andersen & Co. and may retain them in the future.

While the Registrant has not used an independent accountant for
the fiscal years listed above, the Registrant is not aware of
any disagreements with accountants as contemplated by item 304
of SEC Regulation S-B.
<PAGE>
PART III

Item 9.  Directors, Executives Officers, Promoters and Control
Persons; Compliance With Section 16(c) of the Exchange Act.

(a)  Identify Directors and Executive Officers. 

The following paragraphs list the names, ages and business
experience of the directors, each of whom is an executive
officer of the Registrant.

James J. Melfi, Jr., age 68, is Chairman of the Board of the
Registrant.  Mr. Melfi was elected Chairman of the Board in
April 1985, and he was President from December 1975 to December
1985.  He has been a director of the Registrant since 1970.

Frank C. Melfi, age 60, is President of the Registrant, a
position he has held since December 1985.  From 1976 through
December 1985, he was Executive Vice President of the
Registrant.  He has been a director of the Registrant since
April 1985. 

William J. Melfi, age 54, is Vice President of Finance and
Administration of the Registrant, a position he has held since
December 1985.  He is also Treasurer of the Registrant, a
position he assumed in July 1995.  For more than five years
prior to 1985, he was manager of operations.  He has been a
director of the Registrant since January 1993.

All of these directors have been with the Registrant for
several years and are knowledgeable about the Registrant's
operations, problems and opportunities.

The executive officers of the Registrant are elected annually
and serve until such time as their respective successors are
elected and qualified.

(b)	Identification of certain significant employees.  Not
applicable.

(c)	Family Relationships.  James J. Melfi, Jr., Frank C. Melfi
and William J. Melfi are brothers.

(d)	Involvement in certain legal proceedings.  See Legal
Proceedings.

(1)  Frank C. Melfi, William J. Melfi and Thomas J. O'Grady
have been executive officers of  L-Bar Products, a wholly owned
subsidiary, which in currently in Chapter 7 bankruptcy
liquidation as described in Legal Proceedings.

(2), (3), and (4).  Not applicable.

Based solely on a review of applicable forms provided to the
Registrant, the Registrant believes that the officers, directors
and beneficial owners of the Registrant were all in timely
compliance with Section 16(a) of the Exchange Act.
<PAGE>
Item 10.  Executive Compensation

(a)	General.  The following text and tables provide information
on the compensation of the Chief Executive Officer and those
officers whose salary and bonus compensation equaled or exceeded
$100,000 for the fiscal years ended November 30, 1996, 1995 and
1994.
<TABLE>
<CAPTION>
(b)	Summary Compensation Table.  

                       Summary Compensation Table
Name and Principal Position        	Annual Compensation		 Long-Term Compensation			        All Other
                                                          Awards                   Payouts Compensation
                              Year  Salary  Bonus  Other  Restricted  Options/Sars LTIP
                                                   Annual Stock                    Payouts
</CAPTION>
<S>                           <C>   <C>     <C>    <C>    <C>         <C>          <C>      <C>       
Frank C. Melfi CEO	           1996	 135,000	27,000	635	    -	         -           	-        -
                              1995 	135,000	27,000	674	    -	         -	           -        -
                              1994 	135,000	27,000	752	    -	         -	           -        -
James J. Melfi, Jr. Chairman  1996	 135,000	27,000	520	    -	         -	           -	       -
                              1995 	135,000	27,000	635	    -	         -	           -	       -
                              1994 	135,000	27,000	752	    -	         -	           -        -
William J. Melfi	             1996	 100,000 20,000 2,165	  -	         -	           -        -
	Vice President	              1995	 100,000	20,000	1,663	  -	         -	           -	       -
                              1994	 100,000	20,000	987	    -	         -	           -	       -
</TABLE>

The amounts of salary and bonus stated for Mr. Frank C. Melfi,
Mr. James J. Melfi, Jr. and Mr. William J. Melfi represent the
amounts due to them and accrued by the Registrant during the
year.  As part of the Registrant's program to conserve cash, all
three individuals accrued part of their annual compensation. 
Mr. Frank C. Melfi, Mr. James J. Melfi, Jr. and Mr. William J.
Melfi were paid $54,752, $47,515 and $52,397, respectively  of
the annual compensation  due them in 1996.  (c)	Option/SAR
Grants Table.  This table is omitted because there was no
activity in the 1996 fiscal year.

(d)	Aggregated Option/SAR Exercises and Fiscal Year-End
Option/SAR Value Table.  
<TABLE>
<CAPTION>

 Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Value Table.

      Name 	         Shares Acquired       Value Realized    Number of Unexercised        Value of Unexercised
                     on Exercise (#)	         ( $)	          Options/SARs at FY-End       in-the-money Options/SAR at FY-End ($)  
                                                             Excercisable/ Unexcercisable Excercisable/Unexcercisable
<?CAPTION>
<S>                  <C>                   <C>              <C>              <C>          <C>
Frank C. Melfi CEO  	-                    	-                	7,500    /      0            -     
James J. Melfi, Jr.
 Chairman	           -	                    -	                7,500    /      0            -
William J. Melfi
 Vice President	     -	                    -	                6,500    /      0     	      -
</TABLE>
<PAGE>
The Registrant has two active stock option plans, which are
described in footnote 7 of the notes to the consolidated
financial statements.

(e)	Long-term Incentive Plans.  This table is omitted because
the Registrant currently does not have a longterm incentive plan.

(f)	Compensation of Directors.  The Registrant did not pay any
fees to directors, as such, as it does not have any directors
who are not employees of the Registrant. 

(g)	Employment Contracts and Termination of Employment, and
Change-in-Control Arrangements.  N/A.

(h)	Report on Repricing of Options/SARs.  During 1996, none of
the outstanding Options were repriced.

Item 11.  Security  Ownership of Certain Beneficial Owners and
Management.

(a)  Security Ownership of Certain Beneficial Owners.  The
following tabulation sets forth the number of shares of Common
Stock held by each person who owned of record, or is known by
the Registrant to own beneficially, five percent (5%) or more of
the Registrant's Common Stock.  Included in the table for
certain individuals are the maximum number of shares of the
Registrant's Common Stock which might be deemed to be
beneficially owned under the rules of the Securities and
Exchange Commission by those individuals.  The number of shares
beneficially owned by those individuals includes shares subject
to option to purchase, and the computation of the percentage
owned assumes exercise of such options  The information is as of
February 14, 1997:
<PAGE>
<TABLE>
<CAPTION>
			                                      Amount and Nature of			      Percent 
Name and Address                         Beneficial Ownership         of Class
</CAPTION>
<S>                                      <C>                          <C>
Northwest Alloys Inc.                   	Direct
P.O. Box 115			                          500,000				                  15.6%
Addy, Washington 99101

Melfi Corporation		                      Direct   
Suite 308, 20 First Plaza	               198,500				                  6.2%
Albuquerque, New Mexico 87102

James J. Melfi, Jr. (1)	                 DirecT, Indirect and Option
Suite 308, 20 first Plaza	               287,049				                  8.9%
Albuquerque, New Mexico 87102     

Frank C. Melfi (2)		                     Direct, Indirect and Option
Suite 308, 20 First Plaza	               299,169				                  9.3%
Albuquerque, New Mexico 87102

William J. Melfi (3)		                   Direct, Indirect and Option
Suite 308 20 First Plaza	                168,849				                  5.2%
Albuquerque, New Mexico 87102
</TABLE>

To the best of the Registrant's knowledge, the principal
shareholders listed have sole voting and investment power with
respect to the shares of the Registrant's Common Stock owned by
such shareholders, except as noted below.

(1)	Included in the number of shares opposite Mr. James J.
Melfi, Jr.'s name in the table above are 7,500 shares subject to
purchase under an option held by him and 26,700 shares owned by
his wife, for which beneficial ownership is disclaimed.  Mr.
Melfi has sole voting and investment power with respect to the
shares owned by him.  James J. Melfi, Jr. and members of his
immediate family own 25 percent of the issued and outstanding
stock of Melfi Corporation, which owns 198,500 shares of Common
Stock of the Registrant, for which he may be deemed to share
voting and investment power.   James J. Melfi, Jr. is also an
officer and director of Melfi Corporation.

(2)	Included in the number of shares opposite Mr. Frank C.
Melfi's name in the table above are 7,500 shares subject to
purchase under an option held by him.  Mr. Melfi has sole voting
and investment power with respect to the shares owned by him. 
Frank C. Melfi and members of his immediate family own 25
percent of the issued and outstanding stock of Melfi
Corporation, which owns 198,500 shares of Common Stock of the
Registrant, for which he may be deemed to share voting and
investment power.  Frank C. Melfi is also an officer and
director of Melfi Corporation.

(3)	Included in the number of shares opposite Mr. William J.
Melfi's name in the table above are 6,500 shares subject to
purchase under an option held by him, 7,790 shares owned by his
wife for which beneficial ownership is disclaimed.  Mr. Melfi
has sole voting and investment power with respect to the shares
owned by him.  William J. Melfi and members of his immediate
family own 25 percent of the issued and outstanding stock of
Melfi Corporation, which owns 198,500 shares of Common Stock of
the Registrant, for which he may be deemed to share voting and
investment power.   William J. Melfi is also an officer and
director of Melfi Corporation.
<PAGE>
(b)  Security Ownership of Management.  The ownership of Common
Stock by officers and directors is set forth in  the table
below.  Included in the table are the maximum number of shares
of the Registrant's Common Stock which might be deemed to be
beneficially owned under the rules of the Securities and
Exchange Commission by each nominee and director and by the
officers and the directors of the Registrant as a group.  The
number of shares beneficially owned by each individual and each
group includes shares subject to option to purchase and the
computation of the percentage owned assumes exercise of such
options.  The text below the table sets forth certain
information as to the extent to which beneficial ownership
consists of the right to acquire the Registrant's Common Stock. 
The information is as of February 14, 1997.
<TABLE>
<CAPTION>

                                 Amount and Nature of               Percent
Name and Address                 Beneficial Ownership               of Class
</CAPTION>
<S>                              <C>                                <C>
James J. Melfi, Jr. (1)          Direct, Indirect and Option
Suite 308, 20 first Plaza        287,049				                        8.9%
Albuquerque, New Mexico 87102     

Frank C. Melfi (2)	              Direct, Indirect and Option
Suite 308, 20 First Plaza	       299,169				                        9.3%
Albuquerque, New Mexico 87102

William J. Melfi (3)			          Direct, Indirect and Option
Suite 308 20 First Plaza	        168,849				                        5.2%
Albuquerque, New Mexico 87102

Officers and Directors	          Direct, Indirect and Option
as a group (4)			                756,967				                        23.2%
</TABLE>

(1)	Reference is made to "Security Ownership of Certain
Beneficial Owners" herein for information regarding the shares
of Common Stock of the Registrant beneficially owned by James J.
Melfi, Jr.

(2)	Reference is made to "Security Ownership of Certain
Beneficial Owners" herein for information regarding the shares
of Common Stock of the Registrant beneficially owned by Frank C.
Melfi.

(3)	Reference is made to "Security Ownership of Certain
Beneficial Owners" herein for information regarding the shares
of Common Stock of the Registrant beneficially owned by William
J. Melfi.

(4)	Included in the number of shares owned by officers and
directors as a group in the table above are 22,500 shares
subject to purchase under options.  

(c)  Changes in control.  Not applicable.
<PAGE>
Item 12.  Certain Relationships and Related Transactions.

(a)  Transactions with management and others.  The Melfi Family
Trust, which is part of the estate of Mr. James J. Melfi, Sr.,
loaned the Registrant $695,000 in 1991.  These funds were used
by the Registrant to purchase 20% of the stock in JPL Industries
Pte. Ltd., a Singapore company organized in 1991.  The terms of
the agreement between the Melfi Family Trust and the Registrant
call for a five year note at 10% interest, which was prime plus
0.5% at the time of the loan, and a warrant to purchase 60,000
shares of the common stock of the Registrant.  In addition,
several times during 1991, Ruth Ann Melfi, the wife of the
Registrant's former Chairman James J. Melfi, Sr., lent the
Registrant working capital.  In order to conserve cash the
Registrant has not fully repaid this loan.  The outstanding
balance of the loan at November 30, 1996 was $145,000, interest
was paid through November 30, 1996.  The interest rate on this
loan is 10% per annum.  Both of these loans are secured by the
stock in JPL Industries, Reserve Minerals Corporation, Reserve
Rossborough Corporation, Reserve Rossborough Ventures
Corporation and Industrial Mineral Products (Phil), Inc., the
Registrant's wholly owned Philippine subsidiary.

One of the Registrant's subsidiaries, L-Bar Products, Inc.,
which is currently in Chapter 7 bankruptcy liquidation, had a
supply arrangement with Northwest Alloys, Inc., to process and
market certain waste products from Northwest Alloys' magnesium
plant in Addy Washington.  Northwest Alloys lent funds to L-Bar
for the rehabilitation of L-Bar's Chewelah Washington facility. 
At November 30, 1996, L-Bar Products owed Northwest Alloys $3.7
million plus accrued interest (before any adjustments related to
the bankruptcy). 

(b)  Pursuant to certain promissory notes to the Registrant,
James J. Melfi, Jr., Frank C. Melfi and William J. Melfi have
borrowed $93,145, $188,640 and $115,200, receptively.

(c)  Parents of Registrant.  Not applicable

(d)  Transactions with promoters.  Not applicable.

Item 13.  Exhibits and Reports on Form 8-K.

(a)  Exhibits.  See the attached Index to Exhibits. 

(b)  Reports on Form 8K.  There were no reports on Form 8K
filed during the last quarter.
<PAGE>


                           SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                   RESERVE INDUSTRIES CORPORATION
                           (Registrant)

By     /s/  William J. Melfi
   William J. Melfi,  Vice President Finance and Administration
    (Principal Financial Officer)

Date   February 14, 1997             

In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the
Registrant and the capacities and on the dates indicated.

 Date   February 14, 1997		              By /s/ James J. Melfi, Jr.
                                 								James J. Melfi, Jr. Director, 
                                    					Chairman of the Board 


Date   February 14, 1997		               By  /s/ Frank C. Melfi               
                                    					Frank C. Melfi, Director and
                                    					President
                                    					(Principal Executive Officer)


Date   February 14, 1997		               By /s/ William J. Melfi       
                                     				William J. Melfi,  Director and
                                     				Vice President	Finance and
                                         Administration	(Principal Financial
                                         Officer)
<PAGE>

              RESERVE INDUSTRIES CORPORATION
                     EXHIBIT INDEX

Exhibit Number 		Description

 3.l			Articles of Incorporation**
     		August 28, l957

3.2			By-Laws of Reserve Industries Corporation as
    		amended on June 8, l987**

4.1			Loan Agreement with the Key Bank of Puget Sound
  	 	(formerly the Seattle Trust & Savings Bank) dated
   	 	February 28, 1986**
4.2			Amendment No. 4 to the Loan Agreement with the Key
    		Bank of Puget Sound dated June 15, 1987**

4.3			Loan Agreement between Northwest Alloys,Inc. and
    		L-Bar Products 	dated August 2, 1990**

4.4			Stock Purchase Agreement with Northwest Alloys,
    		Inc. dated October 28, 1991**

4.5			Loan Agreement with the Melfi Family Trust dated
    		October 31, 1991**

4.6			Supplemental Security Agreement with the Melfi
    		Family Trust dated January 31, 1994*

4.7			Second Supplemental Security Agreement with the
    		Melfi Family Trust dated May  6, 1996*

9  			Not Applicable

10.1			Sohio Agreement (Settlement) 
     		dated September 9, l982**

10.2			Amendment to Employment Agreement,
     		J. J. Melfi, Sr. dated June 20, l978**

10.3			l977 Stock Option Plan**

10.4			Agreement between Central Electricity Generating 
     		Board Exploration (Canada) Limited and Registrant    
     		dated March 23, 1984**
10.5			Agreement between Cogema and Registrant
     		dated May 17, 1984**
<PAGE>
10.6			Agreement between 413418 Ontario Limited and
     		Registrant dated August 31, 1984**

10.7			Agreement to purchase the assets of Industrial
     		Mineral Products, Incorporated dated March 3,1986**

10.8			Agreement with Northwest Allo		dated January 1, 1985**

10.9			Agreement with Meridian Minerals Company date		July 1, 1987**

10.10		Agreement and Plan of Acquisition of Interest of
     		Rossborough Manufacturing Compan		dated August 11, 1987**

10.11		Sales agreement between L-Bar Products,Incorporated and
       La Porte Metal Processing Venture dated September 1, 1987,
       subject to confidential treatment**

10.12		1987 Incentive Stock Option Plan**

10.13		1987 Nonqualified Stock Option Plan**

10.14		Sales agreement between Rossborough Manufacturing	Company and
       La Porte Metal Processing Venture	dated September 1, 1987, 
     		subject to confidential treatment**

10.15		Grinding Joint Venture Agreement between L-Bar	Grinding Corporation	
       and La Porte Metal Processing	Company dated September 1, 1987**

10.16		Agreement between L-Bar Canada, Inc. and Norsk	Hydro Canada, Inc.
       dated March 23, 1989**

10.17		Dispute Resolution Agreement between Reserve	Industries Corporation
       and Rossborough et al,	dated October 11, 1993**

10.18		Settlement and Release Agreement between L-Bar	Products, Inc. and
       La Porte Metal Processing	Venture et al, dated September 1, 1993**

11.			Not Applicable

12.			Not Applicable

13.			Not Applicable

16.			Not Applicable

18.			Not Applicable
<PAGE>
19.			Not Applicable

21.			List of Subsidiaries*

22.			Not Applicable

23.			Not Applicable

24.			Not Applicable

25.			Not Applicable

28.			Not Applicable

29.			Not Applicable

*	These exhibits are filed electronically with the report.

**	These exhibits were filed as indicated below and are
incorporated herein by this reference thereto:
<PAGE>
3.1			1982 10K - Exhibit  3.1
3.2			1987 10K - Exhibit  3.2
4.1			1986 10K - Exhibit  4.1
4.2			1987 10K - Exhibit  4.2
4.3			8K filed August 1990
4.4			1991 10K - Exhibit  4.4
4.5			1992 10K - Exhibit  4.5
10.1		1982 10K - Exhibit 10.1
10.2			1982 10K - Exhibit 10.2
10.3			l976 Proxy Statement
10.4			1984 10K - Exhibit 10.4
10.5			1984 10K - Exhibit 10.5
10.6			1984 10K - Exhibit 10.6
10.7			1986 10k - Exhibit 10.7
10.8			1986 10k - Exhibit 10.8
10.9			1987 10K - Exhibit 10.9
10.10		1987 10K - Exhibit 10.10
10.11		1987 10K - Exhibit 10.11
10.12		1987 10K - Exhibit 10.12
10.12 	1986 Proxy Statement
10.13  1986 Proxy Statement
10.14 	1987 10K - Exhibit 10.14
10.15 	1987 10K - Exhibit 10.15
10.16		1989 10K - Exhibit 10.16
10.17		1993 10KSB -Exhibit 10.17
10.18		1993 10KSB - Exhibit 10.18
<PAGE>
           RESERVE INDUSTRIES CORPORATION AND SUBSIDIARIES
        INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES

                                                       									Page

Consolidated Balance Sheets - November 30, 1996 and 1995	          1

Consolidated Statements of Income - For the years ended  
November 30, 1996 and 1995						                                   2

Consolidated Statements of Stockholders' Investment -   For the
years ended November 30, 1996 and 1995			                          3

Consolidated Statements of Cash Flows - For the years ended   
November 30, 1996 and 1995						                                   4

Notes to Consolidated Financial Statements 				                    5-13

All other schedules are omitted as the required information is
not applicable or the information is presented in the
accompanying consolidated financial statements or related notes.
<PAGE>
<TABLE>
<CAPTION>
 
     					 RESERVE INDUSTRIES CORPORATION AND SUBSIDIARIES			
                    CONSOLIDATED BALANCE SHEETS
             						 NOVEMBER 30, 1996 AND 1995						
</CAPTION>
<S>                                              <C>            <C>
ASSETS						                                     1996	         	1995
CURRENT ASSETS:
 Cash and cash equivalents (Note 2)              $	    15,332	  $	    36,383
 Receivables, less allowance for doubtful
  accounts of $45,582 in 1996 and $45,882
  in 1995                                             202,819      		185,757
  Receivables from affiliates and
   related parties (Note 12)                          464,655      		396,881
  Inventories (Notes 1 and 3)                        		92,573	      	112,551
  Prepaid expenses and deposits		                      28,481       		30,973
                                                 ------------   ------------
     Total current assets	                         			803,860      		762,545

PROPERTY, PLANT AND EQUIPMENT, at
 cost (Notes 1 and 4)	                              3,772,373   	 	3,554,738
 Less accumulated depreciation and depletion      	(1,053,114)      (919,317)
                                                 ------------   ------------
                                             							2,719,259    		2,635,421

INVESTMENT IN UNCONSOLIDATED AFFILIATES (Note 5)    4,864,179	    	4,170,727
ORGANIZATION COSTS, less accumulated amortization
 of $21,460 in 1996 and $20,750 in 1995 (Note 1)         -             		710
GOODWILL, less accumulated amortization of
 $30,000 in 1996 and $29,750 in 1995 (Note 1)            -	             	250
OTHER ASSETS					                                     	55,710		       55,710
                                                 ------------   ------------
     Total assets			                             $ 	8,443,008  	$ 	7,625,363

LIABILITIES AND STOCKHOLDERS' INVESTMENT
CURRENT LIABILITIES:
 Short-term debt related party	                  $   	145,000  	$   	145,000
 Short-term debt                                  					47,581       		47,581
 Current portion of long-term debt (Note 10)        	 237,463       	145,005
 Trade accounts payable		                           		267,863	      	450,785
 Deferred obligations to related parties (Note 12)		2,046,358    		1,651,537
 Other current liabilities (Note 9)	                  547,101      		436,448
                                                 ------------   ------------
     Total current liabilities                   			3,291,366    		2,876,356

LONG-TERM DEBT, less current portion (Note 10)      1,183,199	     1,034,634

DISCONTINUED OPERATIONS - L-Bar Products (Note 6)     973,246	      	973,069

COMMITMENTS AND CONTINGENCIES (Note 12)

STOCKHOLDERS' INVESTMENT:
 Common stock, $1.00 par value. Authorized
  6,000,000 shares, issued and outstanding
  3,203,763 shares in 1996	and 3,157,333
  shares in 1995 (Note 7)	                          3,203,763	     3,157,333
 Additional paid-in capital			                     	7,458,718     	7,458,718
 Accumulated deficit		                            	(7,667,284)   	(7,874,747)
                                                 ------------   ------------
     Total stockholders' investment	               	2,995,197	    	2,741,304
     Total liabilities and
      stockholders' investment                   $ 	8,443,008	  $ 	7,625,363
</TABLE>

					 The accompanying notes are an integral part of these consolidated
    	 statements.  The 1996 and 1995 financial information is unaudited.
<PAGE>
<TABLE>
<CAPTION>
               RESERVE INDUSTRIES CORPORATION AND SUBSIDIARIES
                				CONSOLIDATED STATEMENTS OF OPERATIONS
        						  FOR THE YEARS ENDED NOVEMBER 30, 1996 AND 1995						
</CAPTION>
			
<S>                                              <C>            <C>
                                           						1996	          1995
REVENUES:						 
 Sales			                                       	$ 	1,525,934  	$ 	1,691,913
 Contract settlement	                                    -	         	344,791
 Investment income		                                  		8,800		         -
 Gains (losses) on sales:
  Marketable securities		                                -		          16,128
  Property and equipment	                               		200	      	(38,552)
 Income (loss) from affiliates:
  Interest income			                                  	28,320       		28,320
  Equity in earnings                             			1,055,106     		(328,492)
  Consulting fees                                  				60,000       		60,000
 Other		                                             		10,032        		4,029
                                                 ------------   ------------
   Total revenues	                             		$	 2,688,392  	$ 	1,778,137

COSTS AND EXPENSES:
 Cost of sales	                                		$ 	1,148,404  	$	 1,336,308
 General and administration		                         895,945	      	889,908
 Interest	                                         			168,652      		131,266
 Depreciation and amortization	                      	217,928		      166,667 
 Abandonment			                                       	50,000	        	8,531
                                                 ------------   ------------
    Total costs and expenses	                    $ 	2,480,929  	$ 	2,532,680

Income (loss) from continuing
 operations (Note 6)	                           	$    207,463  	$  	(754,543)

Provision for income taxes (Note 8)	            			      -	      	      -
                                                 ------------   ------------
  Net income (loss)			                           $	   207,463  	$	  (754,543)

EARNINGS (LOSS) PER SHARE:
	 Earnings (loss) from continuing operations	    $      	0.06	  $      (0.24)
  Provision for income tax		                     		      -      		      -
                                                 ------------   ------------
   Net income (loss) per share			                $      	0.06	  $      (0.24)

Weighted Average Number of Shares of Common
 Stock Outstanding                               			3,192,219    		3,152,347
</TABLE>

					 The accompanying notes are an integral part of these consolidated
    	 statements.  The 1996 and 1995 financial information is unaudited.	
<PAGE>
<TABLE>
<CAPTION>
     					 RESERVE INDUSTRIES CORPORATION AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF CASH FLOWS
    						 FOR THE YEARS ENDED NOVEMBER 30, 1996 AND 1995						
</CAPTION>
<S>                                              <C>            <C>
                                   					 								1996         		1995
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income (loss) from continuing operations    $   	207,463  	$  	(754,543)
 Adjustments to reconcile net income from
  continuing operations to net cash provided by
  operating activities:
   Abandonment Canadian assets                           -           		5,780
   Partial abandonment Philippine assets              	50,000           -
   Depreciation and amortization	                    	217,928		      166,667
   Equity in (earnings) loss of affiliates       		(1,055,106)     		328,629
   (Increase) in interest receivable from
    affiliate                                        	(28,320     )		(28,320)
   Cash distribution from affiliates	                 389,974		       59,357
   Changes in assets and liabilities:
    (Increase) in receivables                        	(84,836)    		(172,130)
    (Increase) in inventories	                       	(30,022)	      	(6,857)
    Decrease in other current assets	                  	2,492       		35,446
    (Decrease) increase in trade accounts payable   	(182,922)	      	81,573
    Increase in accrued officer salaries	             394,821	       499,075
    Increase in other current liabilities            	110,653       	109,364
                                                 ------------   ------------
      Total adjustments	                           		(215,338)   		1,078,584

	       Net cash (used) provided by
         operating activities	                   $     (7,875)	 $   	324,041

CASH FLOWS FROM INVESTING ACTIVITIES:
 Capital expenditures - Net		                    $  	(300,806) 	$  	(703,160)
 Discontinued operations - L-Bar Products                	177      		(19,352)
                                                 ------------   ------------
       Net cash (used) by investing activities   $  	(300,629) 	$   (722,512)

CASH FLOWS FROM FINANCING ACTIVITIES:
 Increase in common stock issued	                $    	46,430  	$    	10,000
 Increase in short-term debt			                          -	          	47,581
 Increase long-term debt				                          241,023		      354,333
                                                 ------------   ------------
      Net cash provided by financing activities 	$   	287,453	  $   	411,914

 			  Net (decrease) increase in cash and cash
       equivalents                              	$    (21,051)	 $    	13,443

Cash and cash equivalents at the beginning
 of the year	                                          36,383		       22,940
Cash and cash equivalents at the end of the
 year                                           	$    	15,332  	$    	36,383

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:						 
 Cash paid during the year for interest	         $    	70,426  	$     38,302
 Common stock issued during the year for interest$    	46,430  	$	      -
</TABLE>

					 The accompanying notes are an integral part of these consolidated
    	 statements.  The 1996 and 1995 financial information is unaudited.
<PAGE>
<TABLE>
<CAPTION>

     	      RESERVE INDUSTRIES CORPORATION AND SUBSIDIARIES
     				  CONSOLIDATED STATEMENTS OF STOCKHOLDERS'INVESTMENT
      			 FOR THE YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994										

                                        	Common Stock			   Additional					
                                   $1 Par Value		          	Paid-In	      	Accumulated
                                   Shares	   	 Amount	     	Capital	      	Deficit		     Total	
</CAPTION>
<S>                                <C>         <C>         <C>             <C>           <C>
BALANCES, November 30, 1994		      3,147,333	  $	3,147,333	 $	7,458,718	   $	(7,120,204)	$	3,485,847
Common stock issued during 1995:
 (Note 12) For deferred compensation		10,000	      	10,000		       -	          -        		    10,000
                                   ---------   -----------  -----------    ------------  -----------
  Net loss		                            -		           -		          -	      	   (754,543)	   (754,543)
BALANCES, November 30, 1995	      	3,157,333  	$	3,157,333 	$	7,458,718	   $	(7,874,747)	$	2,741,304
Common stock issued during 1996:
 (Note 12)	For interest	             	46,430      		46,430 		      -	   	          -		        46,430

  Net income		                          -		           -	  	        -		          207,463		    207,463
                                   ---------   -----------  -----------    ------------  -----------
BALANCES, November 30, 1996		      3,203,763	  $	3,203,763 	$	7,458,718	   $	(7,667,284)	$	2,995,197
</TABLE>

					 The accompanying notes are an integral part of these consolidated	
      statements.  The 1996, 1995 and 1994 financial information is unaudited.	
<PAGE>
             RESERVE INDUSTRIES CORPORATION AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE YEARS ENDED NOVEMBER 30, 1996 AND 1995

(l)	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

	Principles of Consolidation

The accompanying consolidated financial statements include the
accounts of Reserve Industries Corporation, a New Mexico
corporation, and its wholly owned subsidiaries, Reserve Silica
Corporation, Reserve Abrasives Limited, Incorporated, Industrial
Mineral Products (Phil.), Inc., Reserve Rossborough Corporation,
Reserve Rossborough Ventures Corporation,  Reserve Minerals
Corporation , Reserve Trisal, Inc., L-Bar Canada Inc., and L-Bar
Products Incorporated, (collectively "the Company").

All significant intercompany accounts and transactions have been
eliminated in the accompanying consolidated financial
statements.  Investments in unconsolidated affiliates are
accounted for by the equity method (see Note 5) and are stated
at cost plus equity in undistributed earnings.

	Marketable Securities

Marketable securities are stated at the lower of aggregate cost
or market value.  The cost of securities sold is determined
using the specific identification method.

	Inventories

Inventories, consisting principally of raw materials, finished
products and supplies, are valued using the average cost method
at the lower of cost or market value.  Production costs included
in inventories represent actual operating labor, raw materials
and supply costs. 

	Property, Plant and Equipment

Property, plant and equipment is recorded at cost. 
Betterment's, renewals and extraordinary repairs that extend the
life of the asset are capitalized; other repair and maintenance
costs are expensed.  The cost and accumulated depreciation
applicable to assets sold or retired are removed from the
accounts, and the related gain or loss on disposition is
recognized in operations.

	Mineral Properties

Mineral properties, acquisition costs and all subsequent direct
costs incurred in retaining, exploring and developing the
properties are capitalized in property, plant and equipment
until production is attained.  If management determines that
development and production are not economically feasible, or
that capitalized costs exceed net realizable values, such costs
are charged to operations in the period such determination is
made.
<PAGE>
	Depreciation, Depletion, and Amortization

The cost of machinery, equipment and buildings is depreciated
over the estimated useful lives of the assets using the
straight-line method.  Organization costs and goodwill are
amortized using the straight-line method over 60 months and 120
months, respectively.  As reflected in note 6, operations at
L-Bar Products, Inc. (L-Bar Products) were suspended in December
1991 and L-Bar Products was  determined in November 1992 to be a
discontinued operation.

	 Income Taxes

The Company and its domestic subsidiaries file a consolidated
income tax return.  Separate tax returns are filed for the
Company's foreign subsidiaries and the corporate entities in
which the Company has equity interests.

Deferred taxes, which result from the effect of temporary
differences in reporting transactions for financial and tax
reporting purposes, will be provided when the Company exhausts
its net operating loss carryforwards.

	Earnings (loss) per share

Earnings (loss) per share were computed using the weighted
average number of shares outstanding during each fiscal year. 
Shares issuable upon the exercise of options have not been
included in the computation because they would not have a
material impact on earnings (loss) per share.

	Business Segments

The Company operates in two different industry segments; the
corporate operations segment and the industrial products segment
which contains silica sand operations.  The silica sand
industrial products operation produces various sand products for
use by the glass, concrete and golf course industries.  The
corporate segment includes partnership and equity income.  

	Statement of Cash Flows

For purposes of the statement of cash flows, the Company
considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.

	Reclassifications

Certain reclassifications have been made to prior year balances
to conform to current year financial statement presentation.

(2)	CASH AND CASH EQUIVALENTS:

At November 30, 1996 and 1995, the Company had on deposit in a
foreign country $10,177, which is restricted from transfer out
of the country to the extent of the foreign subsidiary's
retained earnings.  Cash transfers out of the foreign country
are subject to a withholding tax.
<PAGE>
(3)	INVENTORIES:

Inventories consist of the following at November 30:

                                    							      1996    	      1995      
Raw materials				                                $        101  	$        101
Finished products				                                  50,255         19,949 
Supplies and packaging	                                42,217         92,501
                                                 ------------   ------------
                                           						$     92,573	  $    112,551

(4)	PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment consist of the following at
November 30:

                                        							  1996    	      1995      
Machinery and equipment		                        $  2,055,530  	$  1,837,895
Mineral properties			                               1,716,843	     1,716,843
                                                 ------------   ------------
                                          						 $  3,772,373  	$  3,554,738

(5)	INVESTMENT IN UNCONSOLIDATED AFFILIATES:

	Rossborough Manufacturing Company and Rossborough Manufacturing Co. L. P.

The Company owns a 50% stock interest in Rossborough
Manufacturing Company (Rossborough Co.), through its wholly
owned subsidiary, Reserve Rossborough Corporation and a 20%
limited partnership interest in Rossborough Manufacturing Co.
L.P. (Rossborough L.P.) , through its wholly owned subsidiary,
Reserve Rossborough Ventures Corporation.  Rossborough Co. is
the general partner of and owns 60% of Rossborough L.P.  A stock
warrant is held by representatives of the former owner to
purchase up to 20% of the Rossborough Co. for $2.  The warrant
expires in October 1998.  Rossborough L.P. is in the business of
providing products and services to the steel and foundry
industries.

Investment in unconsolidated affiliates includes equity in
undistributed earnings and long-term interest bearing notes
receivable from Rossborough L.P.  Such notes receivable amounted
to $186,000 and $189,000 and at November 30, 1996 and 1995 the
accrued interest receivable on these notes amounted to $212,125
and $183,805, respectively.  Included in the Company's earnings
are equity in earnings of affiliates and consulting income and
the Company plans to reinvest its undistributed equity earnings
in those affiliates.  At November 30, 1996 and 1995 the Company
had $2,838,692 and $2,181,065 of undistributed earnings of
Rossborough Co. and Rossborough L.P. included in retained
earnings, respectively.  The equity in undistributed earnings of
Rossborough Co. and Rossborough L.P. recorded by the Company are
based on financial statements audited by independent public
accountants.
<PAGE>
For the year ended November 30, 1994, Rossborough L.P. changed
its method of determining the cost of certain raw material
inventory from the first-in, first-out (FIFO) to the last-in,
first-out (LIFO) method to more appropriately reflect the
inflationary cost increases of certain products.  The effect of
the change in 1996 and 1995 was to reduce the carrying value of
inventory and net income by approximately $19,000 and
$1,182,000, respectively.  At November 30, 1996 and 1995, 77%
and 71%, respectively, of the inventory is valued using the LIFO
method of accounting. 

The  financial information of Rossborough L.P. is summarized
below for the periods ended November 30:

                                       					     1996    	      1995      
Net sales				                                    $ 63,216,650  	$ 49,985,951
Gross profit			                                  $  9,735,322  	$  5,882,364  
Net partnership Income	                          $  3,210,377  	$   (807,506)

Total current assets		                           $ 17,686,945 	 $ 14,088,484
Fixed and other assets	                             6,601,460      7,012,146
                                                 ------------   ------------
Total assets			                                  $ 24,288,405  	$ 21,100,630

Current liabilities		                            $ 11,445,292  	$  9,638,019
Total long-term liabilities                         5,776,156	     6,593,728
Minority Interest		                                   615,385	          -
Total partnership capital	                          6,451,572 	    4,868,883  
                                                 ------------   ------------
Total liabilities and partnership capital	       $ 24,288,405 	 $ 21,100,630

 JPL Industries Pte. Ltd.

The Company owns a 20% stock interest in JPL Industries Pte.
Ltd. (JPL), a Singapore company organized in 1991.  The
Company's investment is $692,239 and is included in investment
in unconsolidated affiliates. 

(6)	DISCONTINUED OPERATIONS:

	Plant Closure

On December 6, 1991 L-Bar Products suspended operations at its
Chewelah, Washington facility because L-Bar lacked the necessary
funds to continue operation.  In November 1992, it was
determined to discontinue the operations of L-Bar Products.
<PAGE>
	Litigation

On December 13, 1991, L-Bar Products was notified that a
petition was filed against it for an order of relief under
Chapter 7 of the United States Bankruptcy Code, in the United
States Bankruptcy Court for the Eastern District of Washington. 
This petition was filed on behalf of three creditors that had
performed work on the capital improvements at the L-Bar Products
plant, prior to plant closure.  On July 13, 1992 L-Bar Products
filed a reorganization petition under Chapter 11 of the U.S.
Bankruptcy Code.  The case was consolidated in the Bankruptcy
Court for the Eastern District of Washington.  On March 15,
1995, the bankruptcy was converted to Chapter 7 and a trustee
was appointed.

On August 31, 1994, L-Bar Products filed a complaint for breach
of contract, breach of fiduciary duty, equitable subordination,
declaratory relief and recovery of environmental cleanup costs
against Northwest Alloys.  The complaint was filed in the United
States Bankruptcy Court for the Eastern District of Washington. 
Pre-trial discovery commenced in early 1996 and is expected to
be completed in 1997.

	Long-term debt

	 A term loan with an outstanding amount of $3.77 million plus
interest is owed to Northwest Alloys by L-Bar Products.  The
loan is secured by the assets of L-Bar Products and bears
interest at the prime rate.  The purpose of the loan was to fund
certain plant improvements in process at the time of the closure
of the plant, as discussed in Note 12.  As security for the
loan, Northwest Alloys has a mortgage on all of the assets of
L-Bar Products.  In addition, the Company, subject to the Loan
Agreement, signed a guaranty as discussed in Note 12.  The loan
is subject to certain covenants and restrictions which relate to
maintenance of working capital, net worth, and accounts payable
of L-Bar Products.  L-Bar Products has not made any principal or
interest payments on the loan and is not in compliance with the
loan covenants.  

A term loan by L-Bar Products in the amount of  $312,192 plus
interest at prime was due November 30, 1991.  The loan is
secured by certain mineral rights of the Company with a book
value of $1,417,000.  L-Bar Products has numerous other
unsecured creditors.
<PAGE>
Summary financial information

The balance sheet of L-Bar Products is summarized below for the
periods ended November 30:

                                       					     1996           1995
Current assets	                                		$    412,235  	$    412,449
Plant, Property & Equip, net of depreciation       	6,593,313	     6,593,313
Contractual rights and other assets	                  810,956	       810,956
                                                 ------------   ------------
                                           						$  7,816,504  	$  7,816,718

Current liabilities	                           		$  3,741,972  	$  3,742,009
Long-term debt, less current portion                3,547,778	     3,547,778
Deferred gain on issuance of stock for debt         1,500,000	     1,500,000
                                                 ------------   ------------
                                           						$  8,789,750  	$  8,789,787
Net liability					                               $    973,246	  $    973,069

The operating statement of L-Bar Products is summarized below
for the periods ended November 30:

                                    						       1996   	       1995
Revenue			                                      	$       -     	$       -
Cost of sales		 	                                        -            32,620
                                                 ------------   ------------
  Operating loss			                                      -           (32,620)

General and administrative expense	                        37	        66,861
Interest expense (income)			                             -	           (2,731)
Noncash expense	                         				            -              -
                                                 ------------   -------------
                                           						$         37	  $     (96,750)
(7)	STOCK OPTIONS:

The Company has two active stock option plans; the 1987
Incentive Stock Option Plan (1987 ISO Plan) and the 1987 Non
qualified Stock Option Plan (1987 Non qualified Plan).  The 1987
ISO Plan provides for the issuance of options to key employees
to purchase up to 90,000 shares in aggregate of the Company's
common stock.  Under the 1987 ISO Plan, at November 30, 1996,
33,500 shares were available for granting further options, and
options for 56,500 shares were outstanding at $1.00 to $3.25 per
share, all of which are exercisable.  The 1987 Non qualified
Plan provides for the issuance of options to officers and
directors, who can not participate in the 1987 ISO Plan, to
purchase up to 25,000 shares in aggregate of the Company's
common stock.  Under the 1987 Non qualified Plan, at November
30, 1996, 3,500 shares were available for granting further
options and options for 21,500 shares were outstanding at $1.625
to $3.00 per share, all of which are exercisable.  All option
plans provide that the option price must be equal to or greater
than the market price at the date of grant.  No options were
exercised under the plans during 1996 and 1995.  
<PAGE>
(8)	INCOME TAXES:

At November 30, 1996 the Company had net operating loss
carryforwards of approximately $6.9 million (net of 5.6 million
related to L-Bar Products) which will expire between 1996 and
2006.  Certain differences exist between the net operating loss
carryforwards available for financial statement purposes and for
Federal income tax return purposes due to differing treatments
of dividend income, depreciation, exploration and development
costs, goodwill and deferred compensation.  At November 30, 1996
the Company had investment tax and new jobs tax credit
carryforwards of approximately $8,125 which will expire between
1996 and 2001.

Due to losses from continuing operations in 1996 and 1995,
there is no tax expense computed for those years.  Because of
the Company's net operating loss carryforward, the Company did
not present the net tax effect of the losses from discontinued
operations.  For 1996 the taxable book loss is $136,000.  The
table below shows the composition of the income tax expense
(benefit): 

                                       						    1996   	       1995      
Current federal income tax	                      $      (46.0) 	$    (256.6)
Accrual for wages not yet paid	                         147.0	        186.6	
Partnership income in excess of equity income             -            55.0
Accrual for State Income tax                              -	            -
(Reduction) addition to federal 
   income tax loss carryforward                        (101.0)	         15.0
                                                  -----------  -------------
                                           					 	$       0.0 	$         6.0

(9)	OTHER CURRENT LIABILITIES:

Other current liabilities consist of the following at November
30:

                                      							    1996    	      1995     
Accrued interest                              			$    314,528	  $    238,014
Other current liabilities	                    	       232,573	       198,434
                                                 ------------   ------------
                                           						$    547,101  	$    436,448
<PAGE>
(10)	DEBT:

Long-term debt consists of the following at November 30:

                                      					      1996    	      1995
Term loan, due December 31, 1997, with annual
interest payments at 10% secured by the
stock in JPL Industries, Reserve Minerals
Corporation, Reserve Rossborough Corporation,
Reserve Rossborough Ventures Corporation and
Industrial Mineral Products (Phil) see Notes 5
and 12.				                                      $    695,000  	$    695,000

Other notes		                               	          68,399	        15,592
Capital leases                                			$    657,263  	$    469,047
                                                 ------------   ------------
                                           				     1,420,662	     1,179,639
Less current portion	                                 237,463	       145,005
                                                 ------------   ------------
                                             				$  1,183,199	  $  1,034,634

The long-term debt payment schedule consists of the following at
November 30, 1996:

                 	1997						                     $    237,463
                  1998						                          917,269
                  1999 or later				                   265,930
                                                 ------------
                                           						$  1,420,662

The net book value of the assets leased pursuant to capital
lease arrangements was $676,132 as of November 30, 1996.
<PAGE>
(11)	BUSINESS SEGMENTS:

The Company operates in the industrial products and corporate
business segments.  These business segments are described in
Note 1 under Business Segments.  In fiscal year 1996, the
Company had three customers in the industrial products segment
that accounted for net sales of 53.5% ($833,145) 17.1%
($265,338), and 11.2% ($173,789), respectively.  In fiscal year
1995, the Company had two customers in the industrial products
segment that accounted for net sales of  56.7% ($959,243) and
18.2% ($307,474), respectively.

Identifiable assets by segment are those assets involved in the
operation of the segment.  Corporate assets are cash and cash
equivalents, security investments, mineral properties, equity
investments and other assets.

The following tables summarize the operations, identifiable
assets and capital expenditures by industry segment as of
November 30:

                                        						   1996           1995
Net sales and revenues:
Industrial Products - Silica sand	               $  1,525,934	  $  1,640,097
Industrial Products - Abrasives/Other                   8,800	       396,608
Corporate				                               	      	   10,232         69,924
Equity in earnings from affiliates                  1,143,426	      (328,492) 
                                                 ------------   ------------
                                           						$  2,688,392  	$  1,778,137
Segment operating income:
Industrial Products - Silica sand	               $    377,530  	$    234,068
Industrial Products - Abrasives/Other                   8,800	       430,594
Corporate	                               					         10,232	       105,659
Equity in earnings from affiliates                  1,143,426	      (328,492)
 							                                         ------------   ------------
                                                    1,539,988 	      441,829
Corporate and other expenses:
General and administration	                           895,945	       889,908  
Depreciation and amortization - Industrial products   210,394	       158,099
Depreciation and amortization - Corporate               7,534          8,568
Interest expense				                                  168,652	       131,266
Abandonment-Foreign assets                             50,000           - 
Other expense				                                        -    	        8,531 
                                                 ------------   ------------
                                            						  1,332,526	     1,196,372
Income from continuing operations               	$    207,463  	$   (754,543)

Identifiable assets - Industrial Products        $  2,897,529   $  3,013,871
Identifiable assets - Corporate                     5,545,479	     4,611,492 
                                                 ------------   ------------
                                           						$  8,443,008	  $  7,625,363 
<PAGE>
Capital expenditures - Industrial Products       $    300,806  	$    703,160
Capital expenditures - Corporate	                        -     	        -
                                              			$      300,806	$    703,160

The following table summarizes financial data by geographic area
as of November 30:

Sales:
 United States			                               	$  1,525,934  	$  1,640,097
 Far East				                                           8,800	        51,816
                                                 ------------   ------------
                                             				$  1,534,734	  $  1,691,913

Operating profit (loss):
  United States			                               $  1,531,188  	$     11,233
  Far East	                                      			    8,800        397,779
  Canada		                                               -            32,817
                                                 ------------   ------------
                                              			$  1,539,988  	$    441,829
Identifiable Assets:
  United States			                               $  7,196,658   $  5,869,318
  Far East	                                         1,495,297	     1,756,045
  Canada	                                          		      54           - 	     
                                                -------------   ------------
                                             			$   8,692,009	  $  7,625,363

(12)	 COMMITMENTS AND CONTINGENCIES:

	Environmental Matters

The WDOE named the Company and L-Bar Products as potentially
liable persons (PLP) for part of the cleanup related to the
Chewelah site.  The basis for naming L-Bar Products was its
status as site owner/operator.  The basis for naming the Company
is the alleged responsibility of the parent corporation.  It is
management's opinion that the Company was a separate entity from
L-Bar Products and is not responsible as a PLP for site
contamination. 

The WDOE has entered into an administrative order with Northwest
Alloys under which Northwest Alloys has agreed to undertake
testing at the Chewelah site and prepare a proposed remedial
plan for cleanup.  L-Bar Products has petitioned the Bankruptcy
Court for approval to agree to the same order in order to
cooperate with WDOE.  This request is pending.  The Company has
declined to enter into the order due to its insistence that it
is not a PLP under the Washington Model Toxics Control Act MTCA.

It is management's opinion that the Company will not be liable
for the matter discussed above, and in any event, any liability
can not be estimated.  Therefore no amounts have been accrued
for this matter in the accompanying financial statements.

	Northwest Alloys Inc. vs. Reserve Industries Corporation

On April 28, 1994, a complaint for monetary and declaratory
relief was filed in the United States District Court for the
Eastern District of Washington by Northwest Alloys against the
Company.

The complaint alleges causes of action for monetary and
declaratory relief for breach of contract and statutory
contribution under the Washington Model Toxics Control Act
(MTCA).  For its breach of contract claim, Northwest Alloys
seeks to rely upon  an August 2, 1990 guaranty signed by the
Company which Northwest Alloys claims guarantees payment of the
greater of (i) up to $2,000,000 for environmental cleanup at the
Chewelah, Washington site owned and operated by L-Bar Products,
or (ii) certain loan funds in excess of $2.5 million, plus
interest, related to L-Bar Products' alleged obligation to repay
certain loans from Northwest Alloys (estimated by Northwest
Alloys to be $1,291,481 plus accrued and accruing interest). 
For the statutory contribution action under the MTCA, Northwest
Alloys seeks contribution for ongoing remedial costs for alleged
soil and ground water contamination at the L-Bar Products site
in Chewelah, Washington.  Contribution is sought from the
Company for past and present costs incurred, and future costs to
be incurred, by Northwest Alloys to address the alleged soil and
ground water contamination at the L-Bar Products site.

Northwest Alloys filed a motion for summary judgment to enforce
the August 2, 1990 guaranty.  The motion was heard before the
Court on October 4, 1994 and Northwest Alloys' motion was
denied.  On December 6, 1994 an order was entered staying all
further proceedings pending the completion of adversary
proceedings involving the Company in L-Bar Product's bankruptcy
proceedings.
<PAGE>
Deferred Compensation

The Company has a deferred compensation plan for its deceased
chairman's spouse.  The payment of this benefit is pursuant to a
management contract which provides for monthly disbursements.
adjusted annually for inflation.  The obligation, originally
recorded based on applicable mortality rates, was exhausted
during the fiscal year ended November 30, 1991.  Payments made
in excess of the obligation recorded have been expensed when
either paid or accrued.  

Amounts due under the plan were accrued, but no payments were
made in 1996, 1995, 1993 and 1992 because the Company has been 
conserving its cash.  In 1996 and 1995, the accrued deferred
compensation amounted to $199,865 and $114,209, respectively.

	Cash Flow Requirements

The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern.  The
Company is generating revenues from its continuing operations
and the current level of cash flow is sufficient to sustain
operations and a portion of its general and administrative
expenses.  The Company is conserving its cash and has not paid
all of the compensation due to the officers and directors and,
as described above, has accrued part of the deferred
compensation.  In 1996 and 1995, the accrued compensation due to
the officers and directors amounted to $1,794,781 and
$1,490,897, respectively.

During 1991, the Company borrowed $695,000 from the Melfi Family
Trust, which is part of the estate of Mr. James J. Melfi, Sr.,
in order to purchase the equity interest in JPL Industries Pte.
Ltd.  In order to conserve cash. the Company has not paid all of
the interest due on this loan.  In 1996 and 1995, the accrued
interest on the loan amounted to $305,307 and $233,527,
respectively.

The other Melfi family members have loaned working capital to
the Company.  The Company currently owes $145,000 plus accrued
interest on these working capital loans.  In 1996 and 1995, the
accrued interest on these working capital loans amounted to
$14,500 and $46,430, respectively.

Pursuant to promissory notes to the Company, officers have loans
amounting to $396,985 and $328,735 in 1996 and 1995, receptively.

	Other

During the normal course of business, the Company has other
commitments, lawsuits, claims and contingent liabilities. 
However, Company management does not expect that any sum it may
have to pay in connection with any of these matters would have a
materially adverse effect on the consolidated financial position.