U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                               ------------------


                                   FORM 10-QSB
                               ------------------


           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                    For the quarter ended September 30, 1996

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                        Commission file number 33-30365-C
                               ------------------


                        EMERALD CAPITAL INVESTMENTS, INC.
           (Name of Small Business Issuer as specified in its charter)

     Delaware                                                    36-3693936
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization                                identification No.)



                   330 East Main Street, Barrington, IL 60010
                    (Address of principal executive offices)

         Registrant's telephone no., including area code: (708) 990-0244


                                       N/A
         Former name, former address, and former fiscal year, if changed
                               since last report.


    Securities registered pursuant to Section 12(b) of the Exchange Act: None

    Securities registered pursuant to Section 12(g) of the Exchange Act: None



Check  whether  the Issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the Exchange  Act during the  preceding 12 months (or for
such shorter period that the registrant was required to file such reports),  and
(2) has been subject to such filing  requirements for the past 90 days. Yes X No
 .

Common  Stock  outstanding  at November 5, 1996 - 5,808,698  shares of $.001 par
value Common Stock.

                    DOCUMENTS INCORPORATED BY REFERENCE: NONE

                                                                       


<PAGE>

                                   FORM 10-QSB

                       FINANCIAL STATEMENTS AND SCHEDULES
                        EMERALD CAPITAL INVESTMENTS, INC.


                    For the Quarter ended September 30, 1996.


          The following financial statements and schedules of the registrant and
          its consolidated subsidiaries are submitted herewith:


                         PART I - FINANCIAL INFORMATION
                                                                     Page of
                                                                   Form 10-QSB

Item 1. Financial Statements:

          Balance Sheet--September 30, 1996                                  3

          Statements of Operations--for the three months and nine months
          ended September 30, 1996 and September 30, 1995                    4
 
          Statements of Cash Flows--for the three months and nine months
          ended September 30, 1996 and September 30, 1995                    5
          Notes to Financial Statements                                      6

Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations                                            7


                           PART II - OTHER INFORMATION

                                                                          Page
Item 1.    Legal Proceedings                                                 9
Item 2.    Changes in the Securities                                         9
Item 3.    Defaults Upon Senior Securities                                   9
Item 4.    Results of Votes of Security Holders                              9
Item 5.    Other Information                                                 9
Item 6(a). Exhibits                                                          9
Item 6(b). Reports on Form 8-K                                               9

                                        2
<PAGE>

                        EMERALD CAPITAL INVESTMENTS, INC.
                          (A Development Stage Company)

                                  Balance Sheet

                               September 30, 1996
                                   (Unaudited)






         Assets

Current assets - cash                                               $    17,626


         Liabilities and Stockholders' Equity

Current liabilities - accounts payable                              $       270
Stockholders' equity:
         Common stock - $.001 par value.
                  100,000,000 shares authorized;
                  5,808,698 shares issued and
                  outstanding, respectively                         5,809
         Additional paid-in capital                                 2,600,656
         Retained deficit                                           (2,589,109)

                           Total stockholders' equity                   17,356

                                  Total liabilities and stockholders'
                                  equity                            $    17,626











See accompanying notes to financial statements.

 

                                        3
<PAGE>

                        EMERALD CAPITAL INVESTMENTS, INC.
                          (A Development Stage Company)

                             Statement of Operations
                                   (Unaudited)




<TABLE>

<CAPTION>

                                                                                                            Cumulative
                                                                                                           Amounts Since
                                                                                                           December 29,
                                                                                                               1995
                                                                                                           (Commencement
                                                 Three Months Ended              Nine Months Ended             of the
                                                    September 30,                   September 30,           Development
                                                 1996          1995              1996         1995             Stage)
<S>                                            <C>         <C>                  <C>      <C>               <C>             
Revenue                                          $  -             -                 -            -                -

Selling, general and administrative               308             -              5,604           -            5,604

        Loss from continuing operations                        (308)                -       (5,604)               -
        (5,604)

Discontinued operations:
        Loss from discontinued operations           -      (401,834)                -    (1,078,620)               -
        Income on disposal of discontinued
          operations                                -             -                 -            -                -

        Loss from discontinued operations           -      (401,834)                -    (1,078,620)               -  

        Net loss                                $(308)     (401,834)            (5,604)  (1,078,620)         (5,604)

        Net loss per share continuing
          operations                            $(.00)         (.00)              (.00)       (.00)            (.00)
        Net loss per share discontinued
          operations                             (.00)         (.07)              (.00)       (.20)            (.00)

                                                $(.00)         (.07)              (.00)       (.20)            (.00)

Weighted average number of shares
  outstanding                                  5,808,698   5,480,787            5,808,698 5,374,033        5,808,698


</TABLE>










See accompanying notes to financial statements.



                                        4
<PAGE>

                        EMERALD CAPITAL INVESTMENTS, INC.
                          (A Development Stage Company)

                             Statement of Cash Flows
                                   (Unaudited)




<TABLE>
<CAPTION>

                                                                                                                Cumulative
                                                                                                               Amounts Since
                                                                                                                December 29,
                                                                                                                    1995
                                                                                                               (Commencement
                                                                         Nine Months Ended                       of the
                                                                              June 30,                           Development
                                                                  1996                        1995                   Stage)
<S>                                                          <C>                        <C>                        <C>
 
Cash flows from operating activities:
        Net loss                                             $  (5,604)                 (1,078,620)                 (5,604)
        Adjustment to reconcile net loss
          to net cash used in operating
          activities:
        Loss on discontinued operations                            -                     1,078,620                       -

        Decrease in accounts payable                            (6,770)                        -                    (6,770)

                            Net cash used in
                            operating activities               (12,374)                        -                   (12,374)

Cash flows from investing activities -
        Payments on receivable                                                              30,000                       -
        30,000

Cash flows from financing activities -                             -                           -                         -

               Net increase in cash                             17,626                         -                    17,626

Cash, beginning of period                                          -                           -                         -  

Cash, end of period                                           $ 17,626                         -                    17,626




See accompanying notes to financial statements.

</TABLE>

                                        5
<PAGE>

                        EMERALD CAPITAL INVESTMENT, INC.
                          (A Development Stage Company)

                          Notes to Financial Statements








(1)  The unaudited financial statements include the accounts of Emerald Capital,
     Inc., and include all adjustments  (consisting of normal  recurring  items)
     which are, in the opinion of  management,  necessary to present  fairly the
     financial  position as of September  30, 1996 and the results of operations
     for the three and nine months ended September 30, 1996 and 1995, cash flows
     for the nine  months  ended  September  30,  1996  and 1995 and  cumulative
     amounts since  inception of the  development  stage  through  September 30,
     1996.  The  results  of  operations  for the  three and nine  months  ended
     September  30,  1996 are not  necessarily  indicative  of the results to be
     expected for the entire year.

(2)  Income (loss) per common share is based on the weighted  average  number of
     shares outstanding during the period.
























                                        6
<PAGE>

                                     ITEM 2

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

     Prior to December 29, 1995,  the Company had been  involved in the business
of recycling used tires and  designing,  manufacturing  and marketing  shredding
equipment.  The Company's tire recycling and shredding equipment operations were
unsuccessful and the Company generated  significant losses during 1994 and 1995.
During 1995 the Company funded its operations with loans from a commercial banks
from management and other individuals.  By November 1995, the Board of Directors
had  concluded  that the  Company  did not have the  capital,  or the ability to
obtain capital necessary to continue its current operations. The Company's Board
of Directors  initiated  efforts to sell the Company's WRTI and CTR  operations.
The  Company  was  able to  interest  one of its  directors  and  several  other
individuals in purchasing WRTI and CTR.

     Effective December 29, 1995, the Company sold all of its shares of WRTI and
CTR for $30,000 and the payment and or assumption of liabilities. As a result of
such sale, the Company's total liabilities,  on a consolidated basis,  decreased
from $1,758,308 to $6,665.

     The Company  currently  has no active  business  operations  and is seeking
investments in other business entities.

     The financial statements attached hereto present WRTI and CTR for both 1996
and 1995 as discontinued operations.

     As a result  of the  matters  described  above,  the  Company's  historical
financial  statements  and this  Management's  Discussion  and  Analysis are not
necessarily   reflective  of  the  Company's  future   operations  or  financial
condition.

Financial Condition

     Total assets at  September  30, 1996 were  $17,626,  all of which was cash.
This  reflects the sale of WRTI and CTR on December 29, 1995.  On September  30,
1996,  the  Company  had  total  liabilities  of  $270.  All of  its  previously
liabilities,  which had been reflected on its consolidated financial statements,
were paid by or assumed by the Buyers of WRTI and CTR.  The  Company  intends to
use such cash to pay for various filing fees and  professional  fees relating to
its reporting obligations and to fund the costs which may arise from seeking new
business opportunities.

     It is likely that the Company will be required to raise additional  capital
in order to  attract  and  potential  acquisition  partner  but  there can be no
assurance that the Company will be able to raise any additional  capital.  It is
also likely that any future acquisition will be made through the issuance of

                                        7
<PAGE>

shares of the  Company's  common  stock which will result in the dilution of the
percentage ownership of the current shareholders.

Results of Operations

     As stated above, the Company sold WRTI and CTR on December 29, 1995 and has
treated them as discontinued operations. Therefore, the revenues of WRTI and CTR
have been excluded  from the  Statement of  Operations  which is included in the
financial  statements  attached hereto.  Therefore,  excluding the operations of
WRTI and CTR, the Company had no revenues during 1996 or 1995.

     The Company's  total loss for the three months ended September 30, 1996 was
$308. Its loss for the nine months ended September 30, 1996 was $5,604.

     It is unlikely  that the  Company  will be able to  generate  any  revenues
unless and until it  acquires  an  operating  company,  of which there can be no
assurance.

Plan of Operation
 
     Commencing in the fourth  quarter of 1995,  the Company's Plan of Operation
was essentially the plan to sell its WRTI and CTR operation.  Effective December
29, 1995 these operations were sold. The Company's  current plan of operation is
to acquire another operating company.  It is likely that any acquisition will be
a "reverse merger"  acquisition whereby the Company acquires a larger company by
issuing shares of the Company's  common stock to the  shareholders of the larger
company.  Although the Company would be the  surviving or parent  company from a
corporate law  standpoint,  the  shareholders of the larger company would be the
controlling  shareholders of the Company and the larger company would be treated
as the survivor or parent  company from an  accounting  point of view. It can be
expected that any company which may desire to be acquired by the Company will do
so as method of  potentially  becoming a public  company  more  quickly and less
expensively than if such company undertook its own public offering.  The Company
has  not  identified  any  potential  acquisition  target  and  there  can be no
assurance that it will be able to acquire any other company.  Furthermore,  even
if the Company is able to acquire  another  company,  there can be no  assurance
that the Company will ever operate at a profit.



                                        8
<PAGE>

                           PART II - OTHER INFORMATION

Item 1.    Legal Proceedings. To the best knowledge of the Company's
           management, the Company is not a party to any legal proceeding or 
           litigation.

Item 2.    Changes in the Rights of the Company's Security Holders.  None.

Item 3.    Defaults by the Company on its Senior Securities.  None.

Item 4.    Submission of Matters to Vote of Security Holders. No matter was
           submitted to a vote of the Company's security holders for the quarter
           ended September 30, 1996.

Item 5.    Other Information.

Item 6(a). Exhibits.  None.

Item 6(b). Reports on Form 8-K.  None filed.
 


                                        9
<PAGE>

                                    SIGNATURE


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


Dated: November 5, 1996                 EMERALD CAPITAL INVESTMENTS, INC.


 
                                        By /s/ Frank H. Ross, III             
                                        Frank H. Ross, III
                                        President/Principal Executive Officer
                                        Principal Financial Officer

                                       10