<PAGE>
                     US SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                       -----------------------------------


                                  FORM 10-KSB/A/A
(Mark One)
[X] ANNUAL REPORT (AMENDED) PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
       EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
       For the fiscal year ended December 31, 1997

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
      For the transition period from  _____________  to  _____________

                      COMMISSION FILE NUMBER: 0-23532
                      --------------------------------------------------
                      AMERICAN DIVERSIFIED GROUP, INC.
                      ------------------------------------------------


          NEVADA                              88-0292161
---------------------------------             ----------
 (State or Other Jurisdiction of              (IRS Employer Identification No.)
          Incorporation)

             110 NORTH CENTER STREET, SUITE 202, HICKORY, NC 28601
             -----------------------------------------------------
                   (Address of Principal Executive Offices)


                                (704) 322-2044
                          ---------------------------
                          (Issuer's telephone number)

Securities registered under Section 12 (b) of the Exchange Act:  NONE
                                                                 ----
                               (Title of class)

Securities registered under Section 12(g) of the Exchange Act:
                         COMMON STOCK, PAR VALUE $.001
                         -----------------------------
                               (Title of class)
                         
                                 Page 1 of 35.

Check whether the issuer: (i) filed all reports required to be filed  by
Section 13 or 15(d) of the Exchange Act during the past 12 months  (  or
for  such  shorter period that the registrant was required to file  such
reports), and (ii) has been subject to the filing requirements  for  the
past 90 days.
<PAGE>

                              Yes    XX    No
                                     --    --

Check if there is no disclosure of delinquent filers in response to Item
405  of  regulation S-B is not contained in this form, and no disclosure
will  be  contained,  to  the  best of the  registrant's  knowledge,  in
definitive proxy or information statements incorporated by reference  in
Part III of this Form 10-KSB/A or any amendment to this Form 10-KSB/A.

[ ] The Registrant had revenues of $70,069 during its recent fiscal year
ended  December 31, 1997. The aggregate market value of the voting stock
held by non-
affiliates(*)  of  the  Registrant based on the average  bid  and  asked
prices of $.027 and $.029 respectively, of such common stock as of  July
15,  1998  is  $560,000, based upon an average of  $.028  multiplied  by
200,762,560  shares  of  common stock as  of  such  date  held  by  non-
affiliates.  As  of  July  15,  1998, the  Registrant  had  a  total  of
210,762,560 shares of common stock, par value $.001 outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

There are no documents incorporated by reference in this report on  Form
10-  KSB/A  except for certain previously filed exhibits  identified  in
Part III, Item 13, hereof.
------------------
(*)  Affiliates  for the purposes of this Item refer  to  the  officers,
directors
and/or  persons  or  firms owning 5% or more of the Registrant's  common
stock, both
record and beneficially.














                                Page 2

<PAGE>
PART I

ITEM 1.   DESCRIPTION OF BUSINESS

Background-Prior to Fiscal 1997
-------------------------------

American Diversified Group, Inc., a Nevada corporation (hereinafter  the
"Company" or the "Registrant"), was incorporated under the laws  of  the
State  of  Nevada  as  Terra West Homes, Inc. on January  16,  1979.  In
October, 1991, the Company changed its name to Gerard Enterprises,  Ltd.
and  in November, 1991, changed its name to Tera West Ventures, Inc.  On
March  15  1995, the Company's name was changed to American  Diversified
Group, Inc. During 1995 and 1996, the Company's activities involved  the
search of a business or assets that it could acquire, in order to become
an  operating company, or in the alternative, efforts to develop its own
business  operations, principally with the assistance of third  parties.
To that end, the Company entered into several consulting agreements with
unaffiliated third parties for the purpose of assisting the  Company  in
developing  product  lines,  as  well as hopefully  generating  purchase
orders  for  such  products, with the view  to  making  the  Company  an
operating  company.  See  "Recent Business Developments  and  Consulting
Agreements" below.

Recent Business Developments and Consulting Agreements
------------------------------------------------------
The  Company's  business developments, during fiscal  1996  and  through
fiscal  1997,  have  principally resulted from  the  engagement  by  the
Company in February, 1996, of Emerging Trends Linkages Corp., a New York
corporation ("ETLC"), as consultant. ETLC. The Company entered  into  an
initial  consulting  agreement with ETLC  in  February,  1996,  for  the
purpose of seeking purchase orders from West Africa for the distribution
and sale of a variety of medical/pharmaceutical products.
Following  execution of the initial February, 1996, consulting agreement
with  ETLC,  the  Company received its first purchase  orders  from  the
Republic of Guinea. These orders were for Human Serum Albumin (HSA)  and
cholera  diagnostic test kits. During fiscal 1996, the  Company  pursued
efforts  to  source  HSA  from manufacturers that  had  previously  been
involved in the distribution and sale of HSA, including manufacturers in
China  and Argentina, among other sources. However, HSA was and  remains
in short supply worldwide, and the Company has not been able to fill the
orders for HSA for that reason. In fact, the Company has determined  not
to  pursue  efforts  to market and sell HSA in West  Africa  because  of
sourcing difficulty.
Thereafter,  in about August, 1996, the Company received  requests  from
the Republic of Guinea for generic pharmaceuticals and vitamin products,
which were followed by the Company's receipt of purchase orders for such
products. The Company and in May, 1997, the Company requested that  ETLC
begin  efforts  to  source the products that were  subject  to  purchase
orders from Guinea.




                                Page 3
<PAGE>

The Company during 1997 and during the first two quarters of fiscal 1998
has continued to utilize the services of ETLC for, among other purposes,
seeking  the  supply of these medical related products from unaffiliated
third parties in order to fulfill purchase orders from the Republics  of
Guinea  and  Mali  that were generated by ETLC for the  benefit  of  the
Company  and  to  secure approvals and product registration  for  dengue
fever  diagnostic  test  kits in Brazil. In addition,  during  the  last
quarter of fiscal 1997, the Company and ETLC entered into a venture  for
the  purpose  of marketing telecommunications products and  services  in
West Africa, which efforts are continuing. See the discussions below.

During  the last six months of fiscal 1996 and continuing through fiscal
1997  and  the first quarter of fiscal 1998, the Company and  ETLC  have
devoted virtually all of their efforts and business time for the purpose
of   generating   purchase  orders  for  a  variety   of   medical   and
pharmaceutical  products  for  the Company,  after  first  securing  the
requisite approvals for the registration, distribution and sale of  such
products,  and  filling  purchase orders as they  are  generated.  These
efforts  have principally involved the Republics of Guinea and  Mali  in
West  Africa. During fiscal 1997 and through the first quarter of fiscal
1998, ETLC has also devoted its efforts for securing purchase orders and
approvals from the National Health Foundation of Brazil for the sale  of
dengue  fever  diagnostic test kits. The Company has been informed  that
Brazil  has given final approval for registration and sale of the dengue
fever test kit, with first sales expected for July 1998.

In connection with its efforts on behalf of the Company, which commenced
during  fiscal  1996, ETLC generated the first purchase  orders  in  the
Company's  history, including purchase orders for HSA and  cholera  test
kits, and thereafter, for a wide variety of generic pharmaceuticals  and
vitamins.  All  these  orders  were from the  Central  Pharmacy  of  the
Republic  of  Guinea, which the Company at that time  believed  that  it
could  source and fill. The aggregate value of the orders  for  HSA  and
test  kits was approximately $200,000 and the order for generics totaled
approximately $750,000.

However,  the Company was unable to source and supply the HSA  that  was
the subject to the initial order from the Central Pharmacy of Guinea for
the  reason  that the suppliers of HSA that the Company  sought  to  use
either  had  continued  difficulty in  manufacturing  and  assuring  the
quality  of their HSA products or had ceased manufacturing this product.
Further,  the  Company  also  had difficulty  in  sourcing  the  generic
pharmaceuticals  subject  to the second Guinean  order  because  of  the
pricing parameters set forth in such order from the Central Pharmacy  of
Guinea.  At the time the order for generic pharmaceuticals was  received
from Guinea in about September, 1996, the Company believed that it could
in fact source these products.








                                Page 4

<PAGE>
During the last fiscal quarter of fiscal 1996 and through the first  six
months of fiscal 1997, the Company discovered that it could not source a
significant  portion  of the generic pharmaceutical  order  from  Guinea
because  the  pricing from sources available to the Company, principally
from  US manufacturers, could not meet the pricing structure that Guinea
had  previously  used from various European sources. As  a  result,  the
Company determined to utilize ETLC, not just to secure orders, but  also
to  source  products  from manufacturers to fulfill these  orders.  Such
determination,  however,  was not made by the  Company  until  February,
1997, as discussed more fully below.

The   Company   is   aware   that   the   market   for   the   sale   of
medical/pharmaceutical products is extremely competitive. In  order  for
the Company to compete successfully, of which there can be no assurance,
the Company must be able to have certain competitive advantages, whether
on  the basis of price, with respect to certain products, or as a result
of  its unique marketing niche gained from its agreement with ETLC which
has enabled the Company to generate and receive purchase orders from the
Republics  of Guinea and Mali. the Company is continuing to  devote  its
efforts  to pursue orders for generic pharmaceuticals/vitamins, and  for
diagnostic test kits, among other products. However, the Company must be
able  to  source such products at pricing levels in order  to  meet  the
requirements for the orders received from and required by the developing
countries in West Africa and elsewhere. The Company continued to  pursue
efforts   with  ETLC  to  fulfill  the  purchase  orders   for   generic
pharmaceuticals from the Central Pharmacy of the Republic of Guinea, but
it  was not until July, 1997, that the Company was able with the efforts
of  ETLC to source and commence shipment of the initial products subject
to  the  purchase order for generic pharmaceuticals and vitamins to  the
Central  Pharmacy  of Guinea. The Company thereafter,  during  the  last
quarter  of  fiscal  1997,  shipped  additional  generic  pharmaceutical
products to West Africa under purchase orders as discussed below.

In  addition, ETLC during 1997 established a business representative  in
Brazil,  where the Company has pursued the registration and approval  of
diagnostic  test kits for dengue fever, also as discussed  below,  which
the Company believes will lead to purchase orders commencing in or about
July 1998.

Historically,  generic pharmaceutical products had  been  only  a  small
percentage  of the total pharmaceutical product market in the developing
countries  of West Africa (less than 10% of the total market).  However,
with  the  efforts  of ETLC, generic pharmaceuticals have  begun  to  be
demanded  in the Republics of Guinea and Mali, and the Company  believes
generics  are becoming increasingly in demand elsewhere in West  Africa,
as   compared  to  brand  name  pharmaceuticals  that  have   previously
controlled  the market. The cost of pharmaceutical products, and  indeed
all products sold to West Africa, have increased significantly following
the devaluation of the West African currencies.






                                Page 5
<PAGE>

The  devaluations  have  led many West African  governments  to  seek  a
variety of products from suppliers other than France and Belgium,  which
had  traditionally been the major suppliers of almost all products  sold
to  their former colonies in West Africa. The determination by the  West
African  governments and particularly the Ministries of Health  to  seek
alternative sources of supply has presented opportunities to  companies,
such as ADGI, to generate purchase orders and penetrate new markets.

Price   has  become  the  critical  factor  in  the  supply  of  generic
pharmaceuticals. With the continued efforts and contacts of ETLC  during
fiscal  1997  and through the first quarter of fiscal 1998, the  Company
believes  that  it has now developed sources of supply of generics  from
manufacturers that will continue to offer the Company an opportunity  to
penetrate  a previously "closed" market in West Africa. The Company  has
also  expanded its product line of generic pharmaceutical  products  and
diagnostic  test  kits, which the Company believes  will  permit  it  to
increase  its level of orders and its profitability during fiscal  1998.
However, ADGI does not have the resources of many of its competitors and
is  a  newcomer  to the industry. Therefore, the Company  will  have  to
continue  to  rely  upon  its  consultants  in  order  to  be  able   to
successfully compete in West Africa as well as in Brazil, because of the
expertise  and  relationships of its consultants  and  their  respective
representatives,   described  more  fully   below.   See   "Management's
Discussion   and  Analysis  of  Financial  Condition  and   Results   of
Operations".

The  Company,  in August, 1997, following conferences and meetings  with
ETLC,  and for the intended purpose of generating cash flow on a monthly
basis,  entered  into  a  joint venture with ETLC  for  the  purpose  of
marketing telecommunications services and products in West Africa, where
it  has  existing  pharmaceutical distribution business  operations  and
representatives.  The Company commenced marketing the call-back  service
to  international and domestic mining companies, financial institutions,
oil  companies  doing business in West Africa, as  well  as  to  certain
foreign embassies in Guinea and Mali

Following  the installation by the Company of certain telecommunications
hardware  and software enhancements during the third quarter  of  fiscal
1998, the Company believes that that it will begin to generate increased
revenues  of  from  $500  to $1,000 per month  per  customer  using  its
service. This installation should permit the Company to properly develop
the customer base and generate the projected revenues from call-back. As
a  result of the amount of time it has taken to complete the enhancement
of  call-back equipment, the Company and ETLC have agreed to extend  the
term of the call-back agreement to better permit the Company to secure a
satisfactory  revenue stream from call-back, which  to  date  have  been
minimal.  This requirement to install additional hardware  and  software
has  had  the effect of extending the start-up period for call-back  but
should  permit the Company to serve more customers, without interruption
and line interference. To that end, after completion of the installation
of  such enhanced computer equipment, the Company believes that it  will
be  able  to meet the projections for call-back and also achieve  higher
profit margins from the West African call-back revenues.





                                Page 6
<PAGE>

Higher profit margins should also permit far greater volume of usage and
reduce  fixed  costs.  Further,  with  this  installation,  the  Company
believes  that  it  will  be able to again sign large  corporations  and
institutions  fro its call-back service. These customers have  not  used
the  Company's  call-back service to any significant extent  because  of
service  interruption and line interference, which the installations  in
about  July  should remedy. At that time the Company will again  solicit
and believes it will be successful in signing up to 200 customers by the
end  of the 1998. This is based upon the fact that from September  1997,
when service was first offered, the Company was able to sign almost  100
customers  for  call-back  service,  but  without  installation  of  the
computer  equipment, it has not been able to generate adequate  revenues
from  call-back because of local telephone interference from  the  PTTs.
Since the inception of the Company's call-back service, it has generated
only  limited  revenues  due to the above referenced  interference  from
PTTs.

In  addition,  during fiscal 1997 and continuing during fiscal  1998  to
date,  the  Company  utilized the services  of  its  other  consultants,
including  Ashco International, Ltd., Higher Ground, Inc., and Corporate
Seminar Advisors, Ltd., for the purpose of providing continuing services
to  the  Company,  as more fully described below, and specifically  with
regard  to  services  intended to promote  the  Company,  its  expanding
business  lines,  areas  of development, and to evaluate  the  Company's
potential acquisitions and joint ventures. See the discussion below with
respect  to  the  Company's joint venture and equity participation  with
Global  Transmedia  Communication  Corporation,  formerly  Telephonetics
Overseas  Corporation, which was announced in March, 1998. In connection
with the initial February, 1996 consulting agreement between the Company
and  ETLC, as noted above, ETLC agreed to use its best efforts to secure
approvals for product registration, and obtain purchase orders  for  the
distribution and sale of HSA, which ADGI believed it could source as its
principal product at that time, within West Africa. ETLC also agreed  to
use  the  services of ETLC's West African representatives to secure  and
service any purchase orders generated for ADGI.

In  consideration  for the February 12, 1996 consulting  agreement  with
ETLC,  the  Company issued to ETLC shares of the Company's common  stock
(the  "Shares") and granted to ETLC a common stock purchase option  (the
"Option")  to  acquire additional Shares (the "Option  Shares")  for  an
adjusted  price  of $.18 per Option Share. The grant of the  Option  was
deemed by the Company as ETLC's consideration and payment for the rights
to  market the Company's products, as such product line may be from time
to  time, within ETLC's territory in West Africa, which includes Guinea,
Mali, Ivory Coast, Senegal, Burkina Faso, and Niger. This agreement  was
amended  in  to  also provide for the sale by ETLC,  on  behalf  of  the
Company,  of  diagnostic  test  kits for strep,  cholera,  syphilis  and
gonorrhea   in   the  above  referenced  West  African   countries,   in
consideration for the issuance of additional Shares.







                                Page 7
<PAGE>

The Company, in July, 1997, with the assistance of ETLC was able to ship
an  initial  portion of generic pharmaceuticals subject to  the  overall
order  from  the  Central Pharmacy of the Republic of  Guinea.  However,
because the Company's other consultants that it had utilized in 1995 and
1996,  not  including ETLC, Ashco, Higher Ground and Corporate Seminars,
the  Company was unsuccessful in sourcing products to fill the  complete
orders  and  be able to continue shipment of products pursuant  to  both
purchase orders from the Central Pharmacy of the Republic of Guinea.  As
a result, during fiscal 1997, because the Company was unable to generate
revenues  from  the  purchase orders because it  could  not  source  the
products  at satisfactory pricing during fiscal 1997. During  1997,  the
Company  was  not  able  to  find  manufacturing  sources  with   prices
comparable to those Guinea had previously obtained from certain  Eastern
European countries, which sources were able to deliver products at lower
prices then were then available to the Company.

With the assistance of ETLC and other ongoing and continuing consultants
to  the  Company, the Company continued to seek out sources for  generic
pharmaceutical  from several countries, including India,  where  quality
generic pharmaceuticals could be obtained at highly competitive pricing.
During  fiscal 1997 and the first six months of fiscal 1998, the Company
continues to believe that it will be able to secure advantageous pricing
for  the  generic pharmaceutical products and continued to utilize  ETLC
and  other  consultants,  including the private individuals  to  develop
better  sourcing  for these products. The Company received  revenues  of
$70,769  during  fiscal 1997, compared to no revenues during  the  prior
year.

Further, during fiscal 1997, in connection with the Company's receipt of
the  first  of several generic pharmaceutical purchase orders  from  the
Republic of Mali, the Company was issued an irrevocable letter of credit
in the amount of approximately $70,000 from the Banque de Development du
Mali,  Bamako, Mali, through Natexis Banque, Paris, France. This  letter
of  credit  was used to payable to the Company for the products  shipped
during  fiscal 1997, with certain additional shipment being  made  after
the  fiscal  year.  The initial purchase orders generated  by  ETLC  for
delivery to Mali on behalf of the Company under its agreements with  the
Company.  At the Company's request made in about March 1997, ETLC  began
to  source  the  generic  pharmaceutical products  for  this  and  other
anticipated  orders  for generic pharmaceuticals, including  Diclofinac,
Furosemide, Paracetamol and Methyldopa, which products were sourced from
manufacturers  in Canada, India, Holland and Belgium, respectively,  all
of  which  products were shipped during the first four months of  fiscal
1998.  During April, 1998, the entire proceeds of this letter of  credit
were paid through Natexis Banque to and at the Company's direction.









                                Page 8
<PAGE>

Following  receipt of this initial order from PERGUE S.A.R.L.  that  was
subject  to  the letter of credit, the Company received a further  order
for   additional   generic   pharmaceuticals,   including   Amoxycillin,
Paracetamol  and Diclofinac. This order was generated as a result  of  a
"shortage" in Mali for these products that PERGUE S.A.R.L filled through
the  Company,  as  a result of the Company's contacts  with  ETLC.  This
further   order,  which  was  intended  to  fill  the  Malian  shortage,
aggregated  approximately $31,000, and was delivered by the  Company  to
Bamako,  Mali, and was sourced through a manufacturer in India, in  late
1997.

Additionally,  in consideration for the services to the  Company  during
the  two year period from June 1995 through mid 1997, the Company issued
to  Ms.  Judith Grossman, a consultant, Shares during late 1996  and  in
1997  in  consideration for continued consulting services to the Company
at  a  time  during which it had no cash flow to pay for such  services.
Further,  the  Company,  in  lieu of any cash  compensation,  issued  to
Jerrold  Hinton,  the Company's president, CEO and a  director,  and  to
Thomas J. Craft, Jr., Esq., the Company's corporate secretary, corporate
counsel  and a director, and to persons who served as Mr. Craft's  staff
and consultants, Shares for providing continued services to the Company.

The  Company  has  also  agreed  to  negotiate  with  present  officers,
directors  and  consultants, as well as with  other  persons  and  firms
providing  continuing services to the Company, including  those  persons
who  provided export financing and who brought the Indian pharmaceutical
manufacturer  to the Company and were instrumental in securing  for  the
Company certain credit lines to pay for products used for export to West
Africa,  and  persons  who  conducted investor  education  seminars  and
conferences for the Company, for the issuance of additional  Shares  and
the grant of Options. The issuance of shares and/or any grant of options
will  be  included in one or more registration statements  on  Form  S-8
and/or  Form  S-1,  whichever  form  shall  be  appropriate,  under  the
Securities Act of 1933, as amended (the "Act"). This will be in order to
compensate  such  parties for continuing services performed  and  to  be
performed  on  behalf  of the Company in developing  its  pharmaceutical
products    business,   its   diagnostic   test   kit   business,    its
telecommunications  business  and  other  services  necessary  for   the
Company's continued operations prior to its generating any material cash
flow  from operations. The Company believes that during fiscal 1998,  it
will begin to generate a cash flow from operations that should permit it
to  commence paying certain persons in cash as well as in Shares  rather
than  just  in  Shares. See the discussion below  with  respect  to  the
agreement   to   acquire  equity  in  Global  Transmedia  Communications
Corporation of Florida for cash compensation.










                                Page 9
<PAGE>

The Company firmly believes that it will be able, during fiscal 1998, to
continue  to  supply  generic drugs and vitamins at  prices  that  shall
permit the Company to generate a profit. Further, through the efforts of
ETLC's  representative  in  Brazil, the Company  has  recently  received
approvals for the registration and sale of dengue fever test kits to the
National  Health  Foundation, State of Roraima, Brazil, and  anticipates
purchase  orders  nationally in Brazil for  this  diagnostic  test  kits
commencing  in or about July, 1998. The Company believes  that  it  will
receive  the  initial  purchase orders, after the recent  completion  of
final  human testing in Brazil. The Company has been informed  that  the
initial order shall be from $60,000 to $100,000 and the potential market
for  dengue  fever  diagnostic  test  kits  in  Brazil,  nationally,  is
approximately  1  million test kits or more per year. The  Company  will
share  gross  revenues  with  the  US  manufacturer  and  the  Brazilian
distributor of the registered and approved dengue fever diagnostic  test
kits.

The  Company  in  March 1998 entered into a joint  venture  with  global
Transmedia  Communication Corporation, formerly  Telephonetics  Overseas
Corporations ("GTCC") of Miami, FL. GTCC is engaged in the  business  of
providing state of the art telecommunications hardware and audio content
for on-hold and website messaging and advertising. GTCC also distributes
Internet  telephony equipment and services for sale in the domestic  and
foreign markets. Under the Company's joint venture agreement with  GTCC,
the Company paid to GTCC $50,000 with an obligation to pay an additional
$100,000 to acquire a 9% interest in GTCC with the right upon payment of
additional cash consideration to acquire additional 9% interests for  up
to 45% total equity in GTCC.

Following  its initial investment in GTCC, initial orders were announced
by  GTCC for the distribution and sale of GTCC 's telecommunications and
Internet  telephony products and services, pursuant  to  which  GTCC  's
distributor in Canada is required to sell a minimum of $400,000 in  GTCC
's products and services during the next 12 months. The Company believes
that its agreement with GTCC and the products and services provided  and
to  be provided by GTCC will integrate well with the Company's call-back
and telecommunications business in West Africa.















                                Page 10
<PAGE>

Discontinued Project
--------------------

Registrant,  during  fiscal 1996, entered into purchase  agreement  with
Imaging  Systems  Synergies Inc. ("ISS") with offices located  at  North
Miami Beach, FL for the purpose of acquiring ISS, which purported to  be
an  internet  gateway  provider  and of  related  satellite  technology,
including  earth station for global communication services. in Wisconsin
and  Illinois.  During  the negotiations with respect  to  the  proposed
acquisition  of  ISS,  the  Company advanced approximately  $100,000  to
assist ISS in continuing its operations, while the Company continued its
due  diligence  efforts. Following the completion of due diligence  with
respect  to  ISS, and the discovery of facts that the Company considered
to  constitute misrepresentations by ISS, the Company determined not  to
acquire  ISS but rather limit its efforts to the anticipated growth  and
the  potential  it  believed and continues  to  believe  exists  in  the
pharmaceutical  business and related medical products business  in  West
Africa and South America, and in other developing countries.

The  Company,  after consulting with counsel in Florida,  determined  to
pursue a cause of action against ISS for damages, including recovery  of
the  $100,000  in interim capital advanced to ISS. See  "Item  3.  Legal
Proceedings"  below.  The  Company's action was  moved  to  Dade  County
Superior Court and the Company cannot determine at this time whether  it
will  prevail  against ISS and if so, whether it will be  successful  in
recovering  any  damages against ISS. The entire board of  directors  of
ADGI agreed unanimously not to acquire ISS, and the Company generated no
income from its involvement with ISS.

ITEM 2.   DESCRIPTION OF PROPERTY

The  Company presently leases approximately 600 square feet of executive
office  space at 110 North Center Street, Suite 202, Hickory, NC  28601,
for  $570  per  month. During the first six months of fiscal  1997,  the
Company  leased  approximately 250 square feet of office  space  at  700
Canal Street, 3rd Floor, Stamford, CT 06902 as its executive offices for
$800 per month. In addition, the Company has use of warehouse facilities
at JFK International Airport, New York City and utilizes as its investor
relations  and conference room facilities office space at 45 Rockefeller
Plaza, International Building- Rockefeller Center, New York City, NY, at
a  cost of $2,000 per month, on a month-to-month basis. The condition of
the Company's leased facilities in Hickory, NC and New York City, NY  is
excellent,  and  are  at  advantageous terms because  of  the  Company's
relationship with ETLC.









                                Page 11
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

The  Company  has  pending  a cause of action  against  Imaging  Systems
Synergies  Inc. ("ISS") for damages, including recovery of the  $100,000
in  interim  capital  advanced  to ISS  in  connection  with  a  planned
acquisition that was not completed. The venue for the Company's  action,
American Diversified Group, Inc. v. Imaging Systems Synergies, Inc.,  et
al.,  was moved to the 11th Judicial Circuit, Dade County, Florida, Case
No.  97-001983AN,  from  Palm Beach County,  where  the  proceeding  was
initially   commenced.  The  Company  believes  that  this   action   is
meritorious  but cannot determine at this time whether it  will  prevail
against and be successful in recovering any damages from ISS. The entire
board  of  directors  of  ADGI agreed unanimously  not  to  acquire  ISS
following  its due diligence in connection with this determination.  The
Company generated no income from its involvement with ISS.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No  matters  were  submitted to a vote of security  holders  during  the
fiscal year ending 1997.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The  Company's  common  stock  is traded  over-the-counter  in  what  is
referred to as the "NASDAQ Bulletin Board". As of April 15, 1998,  there
were 15 markets makers in the Company's stock. The following information
with  respect  to the high and low market prices was obtained  from  the
Company's records.


















                                Page 12
<PAGE>

                                 Bid Prices
                             -----------------
           1994                High      Low
-------------------------    --------  -------
Quarter Ending March 31      $ 8- 1/4    $6
Quarter Ending June 30       $ 8- 3/4    $8
Quarter Ending Sept. 30      $ 10        $6- 3/4
Quarter Ending Dec. 31       $ 7- 1/4    $4- 1/4

                                 Bid Prices
                             -----------------
           1995                High      Low
-------------------------    --------  -------
Quarter Ending March 31      $ 5- 5/8  $   1/8
Quarter Ending June 30       $   5/16  $  1/32
Quarter Ending Sept. 30      $   7/16  $   1/4
Quarter Ending Dec. 31       $   7/16  $   1/4

                                 Bid Prices
                             -----------------
           1996                High      Low
-------------------------    --------  -------
Quarter Ending March 31      $  11/32  $   1/8
Quarter Ending June 30       $    1/2  $  3/16
Quarter Ending Sept. 30      $   5/16  $  3/16
Quarter Ending Dec. 31       $    1/8  $  1/32

                                 Bid Prices
                             -----------------
           1997                High      Low
-------------------------    --------  -------
Quarter Ending March 31      $   3/16  $   1/8
Quarter Ending June 30       $.03      $.01
Quarter Ending Sept. 30      $.04      $.01
Quarter Ending Dec. 31       $.04      $.02

                                 Bid Prices
                             -----------------
           1998                High      Low
-------------------------    --------  -------
Quarter Ending March 31      $.10       $.02
Quarter Ending June 30       $.04       $.025
Period Ending July 15        $.03       $.025

                                Page 13
<PAGE>

As  of  July  15, 1998, there were 1155 holders of the Company's  common
stock, and no holders of the Company's preferred stock. The Company  has
never paid a dividend and does not anticipate that any dividends will be
paid in the near future.

ITEM  6.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION  AND
RESULTS OF OPERATIONS

Results of Operations
---------------------
The  financial  statements  included in the Form  10-KSB/A/A  have  been
audited  and supersede the unaudited financial statement in the  initial
Form  10-KSB/A.  The  Company  believes that  the  financial  statements
accurately  reflect is financial condition and statement  of  operations
for the fiscal year.

The Company during prior fiscal years through fiscal 1996, never had any
revenues  whatsoever from any operations or business endeavors.  Further
despite its receipt of initial revenues and generating its initial sales
and  accounts  receivable during fiscal 1997, the  Company  is  still  a
development stage company. In fact, this is the first Annual  Report  in
the  Company's operating history in which it is disclosing  in  Item  6.
"Management's Discussion and Analysis of Financial Condition and Results
of  Operations" as compared to "Management's Plan of Operations",  which
is  reserved  for  issuers who are reporting no revenues.  This  is  the
result  of  the  fact that for the first fiscal year  in  the  Company's
history,   it   is  reporting  initial  sales  revenues   and   accounts
receivables.

During  the  Company's fiscal year ended December 31, 1997, the  Company
incurred a net loss of $3,410,313 ($0.032 per Share) compared to a  loss
of  $4,279,670 ($0.079 per Share) for the prior fiscal year. The Company
reported  sales  revenues and accounts receivable  of  $70,069  for  the
fiscal  year  ended  December 31, 1997, which  represented  the  initial
shipments of generic pharmaceuticals and limited telecommunication sales
(which  sales  commenced in the last two weeks of the third  quarter  of
1997)  from  West  Africa.  This is compared to  no  sales  revenues  or
accounts receivable for the prior fiscal year. In fact, the Company  has
never  before reported any sales or accounts receivable for  any  fiscal
period. The Company's net loss for the year ended December 31, 1997, was
principally  the  result  of the limited sales revenues,  the  continued
expenses associated with continuing to operate and maintain its  offices
and  expenses  associated with being a reporting company, which  include
professional, accounting and printing/EDGAR preparation and filing fees,
and  the non-cash expenses associated with the issuance of shares to its
executive  officer, directors and consultants for continued services  to
the  Company in lieu of cash compensation during the period.  Such  non-
cash  compensation expensed during the year ended December 31, 1997  was
$3,307,500, compared to $3,963,500 during the fiscal 1996.






                                Page 14
<PAGE>

In order for the Company to pay its operating expenses, including office
rents,  salaries  to  its non-executive employee during  the  first  six
months  of fiscal 1997, prior to the move of its corporate headquarters,
telephone expenses, accounting and bookkeeping fees, printing and  EDGAR
preparation   costs,   publication  costs,   and   other   general   and
administrative  expenses,  the  Company was  dependent  upon  the  funds
provided  by  non-interest bearing loans from  the  Company's  executive
officer  and  directors, from a consultant, as well as from the  private
placement of its securities to private investors.

The   Company   projects  significant  additional  call-back   revenues,
following  the  installation  of  new  telecommunications  hardware  and
software scheduled during the third quarter of fiscal 1998, after the 3-
6  month  call-back  start-up period in which  it  will  conduct  active
marketing  to  the  major domestic and multi-national  corporations  and
institutions in West Africa, based upon anticipated usage of  from  $500
to  $1,000  per month per customer. Following the start-up  period,  the
Company  should  reasonably expect to reach and  maintain  200  or  more
customers for this telecommunication service by the end of fiscal 1998.

The  Company in late 1997 was issued and received a letter of credit for
approximately  $70,000  from West Africa, to guarantee  payment  to  the
Company for generic pharmaceuticals subject to an order for delivery  to
Mali.  The  Company  was  sourcing  the  products  for  this  order  and
endeavored to ship this order prior to the end of the 1997 fiscal  year.
In  fact,  the  products underlying this letter of credit  were  shipped
during the first four months of fiscal 1998 and thus these sales will be
reported in the Company's quarterly report on Form 10-QSB for the  first
and second quarters of fiscal 1998. Furthermore, the Company has sourced
the  remaining  generic pharmaceutical products for  its  existing  West
African  orders  from  manufacturer/suppliers at costs  that  will  also
provide  gross  profit  margins  that the  Company  estimates  shall  be
approximately 10% to 20%.

The  Company  has  been in receipt of continuing requests  fro  products
which   is  the  last  process  for  receipt  of  purchase  orders   for
pharmaceutical  products from West Africa, which will increase  in  size
during  successive quarters in fiscal 1998, especially with  respect  to
the   Republic  of  Mali.  Further,  the  Company  projects   that   its
relationship with PERGUE S.A.R.L. will permit the Company  to  begin  to
receive  purchase  orders for generic pharmaceuticals  from  other  West
African countries, including Burkina Faso and Niger.

In  order  to  enhance its ability to increase the size of its  purchase
orders and indeed its ability to source generic pharmaceutical products,
the Company has recently entered into two exclusive agreements, one with
a manufacturer of generic pharmaceuticals in India, granting the Company
the exclusive right to distribute the products in Africa, South America,
Europe  and  Asia, and a second agreement with a Indian firm engaged  in
the  marketing  and sale of pharmaceuticals, medical products  and  test
kits,  for  the  purpose  of generating additional  sales  revenues  and
customers for the Company.





                                Page 15
<PAGE>

The  Company during fiscal 1997 and the first six months of fiscal  1998
has  continued to increase its product lines to include a broad spectrum
of  generic pharmaceuticals, additional diagnostic test kits, from which
it  projects increased sales revenues before the end of fiscal 1998. The
Company has been informed of the completion of the final stage of  human
testing and the registration by the National Health Foundation, Brazil's
equivalent of the FDA, for dengue fever test kits. The dengue fever test
kits  have already been registered and approved by the State of  Roraima
in Brazil. Initial orders are anticipated in or about July, 1998, in the
approximate  amount  of $60,000 to $100,000. With final  approvals  from
Brazil for the entire country, the Company could generate sales of up to
1 million dengue fever test kits annually. The Company has been informed
that  at  present dengue fever is becoming an increasingly more  serious
disease  in Brazil (and elsewhere in the world's tropical climates)  and
the  Company  believes  that it should be able to  generate  orders  for
dengue  fever test kits from West Africa as well as Brazil during fiscal
1998 and thereafter.

Generic   pharmaceuticals  are  an  extremely  cost  sensitive   market,
especially in developing countries where the Company is doing  business.
This  has  led  the Company and its consultants to devote a  significant
period of time during fiscal 1997 to sourcing generic pharmaceuticals at
competitive  pricing. During and immediately following the fiscal  1997,
the  Company,  with  the  direct  assistance  of  its  consultants,  has
developed  sources  for generic pharmaceuticals, at  highly  competitive
pricing,  from  foreign manufacturers. Further,  and  is  continuing  to
develop  additional sources for products in order to  fill  present  and
anticipated  future  purchase  orders received  from  West  Africa.  The
Company  does  not believe that it is presently dependent upon  any  one
source,  nor  does  it believe that it will become  dependent  upon  any
manufacturer  of generic pharmaceutical products or other products  that
it is presently marketing.

The  Company's  ability to continue to ship the products  that  are  the
subject  of  the  purchase orders from West Africa is essential  to  the
Company's goal of generating increased levels of operating revenues from
its  pharmaceutical and medical products businesses in West Africa.  The
Company  is presently outsourcing these generic pharmaceutical  products
from  several third party manufacturers and distributors located in  the
United  States, Canada, Mexico, South America, Europe, and India,  which
have   provided  quality  generic  pharmaceutical  products  at   highly
competitive  prices  necessary  for the Company  to  profitably  fulfill
existing  and  future  orders for such products  from  West  Africa  and
elsewhere.   The  Company's  recent  agreements  with  a  pharmaceutical
manufacturer  located  in  India  and  a  separate  agreement   with   a
pharmaceutical marketing and sales firm with offices in India  will  not
make the Company dependent upon any one manufacturer or distributor, and
its  agreements  permit the Company to source and sell products  through
any party.








                                Page 16
<PAGE>

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

The  Company, at December 31, 1997, had current assets of $64,460.  This
is  compared  to $5,000 in current assets at the end of the 1996  fiscal
year.  To  assist  the Company in its cash flow requirements  which  are
presently  estimated  at $15,000 per month, the  Company  during  fiscal
1997,  received  $192,000  from  the  private  placement  of  units,  as
described  above. The units were priced at $.04 per unit (the  price  of
the  Company's  Shares  on January 15, 1997, the  date  of  the  private
placement subscription agreement), each unit consisting of one Share and
one  common  stock purchase option exercisable to purchase an additional
Share at $.08. The Company has undertaken to register the shares and the
shares  underlying  the  options in a registration  statement  that  the
Company  intends to file with the Securities and Exchange Commission  as
soon as possible.

The  Company  continues  to be dependent upon  the  willingness  of  the
Company's  executive officer, directors and each of its  consultants  to
accept shares in lieu of cash compensation for continued services to the
Company.  The  trading  price of shares of the  Company's  common  stock
during  the past two months has been primarily in the range of $.025  to
$.04,  but  during  several  days  in March,  1998,  the  trading  range
increased  to the level of $.05 to $.08 range and was as high  as  $.10.
However, the trading price of the shares has again been in the range  of
$.025  to  $.04  per share during the period from April, 1998  to  date.
While  the Company has been successful in raising $192,000 in investment
capital in the unit private placement during fiscal 1997, there  can  be
no  assurance that the Company will be able to continue to raise private
capital,  whether or not the Company's shares once again  trade  at  the
levels that prevailed during March, 1998.

Based  upon  the Company's present liquid resources after  the  expenses
that   were  paid  by  the  Company following  receipt  of  the  private
placement  funds,   which expenses included office expenses,  relocation
expenses  for  the  move  of   the executive  offices  to  Hickory,  NC,
professional/accounting fees, transfer  agent and printing service fees,
and  certain  other  expenses,  and  based  upon   its  present  monthly
operating expenses of $15,000, the Company will be able to  operate  for
approximately  four months if no additional revenues are generated  from
operations or any other sources.

However,  the  Company  believes that it will  be  generating  increased
operating  revenues during the remainder of fiscal 1998, as a result  of
additional   shipments  of  generic  pharmaceuticals  to  West   Africa,
commencement of shipments and sales of dengue fever test kits to Brazil,
an  increasing level of revenues from sales of call-back service in West
Africa, revenues from the affiliation with GTCC and as a result  of  the
recent  agreements with an Indian pharmaceutical manufacturer and  sales
and marketing firm.






                                Page 17
<PAGE>

The Company's monthly operating expenses of approximately $15,000 do not
reflect  any  salary  to  Dr.  Jerrold R.  Hinton,  the  Company's  sole
executive  officer.  The Company is accruing but  does  not  contemplate
commencing  payment  to Dr. Hinton of the monthly  salary  of  $8,333.33
provided  in  his three year employment agreement unless  and  until  it
begins  to  generate revenues from operations. The monies received  from
the  Company's  unit  private placement and has not  been  used  to  pay
salaries  to  its  chief  executive officer  or  fees  to  directors  or
consultants, each of whom have agreed receive compensation for  services
by  the  issuance of shares. During fiscal 1997, the Company's executive
officer,  directors and consultants were issued shares  in  registration
statements on Form S-8 in consideration for their continued services  to
the Company and in lieu of any cash compensation.

ITEM 7. FINANCIAL STATEMENTS

The financial statements for the fiscal year ended December 31, 1997 are
attached hereto with comparative financial statements for fiscal 1996.

ITEM  8. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING  AND
FINANCIAL DISCLOSURE.

On May 24, 1996, Registrant engaged the firm of Rachlin, Cohen and Holtz
to perform the audit for the fiscal year ended December 31, 1995. A copy
of  this  engagement  was  attached as an exhibit  to  the  Registrant's
Current  Report  on Form 8-K on July 5, 1996. However, by  letter  dated
June  24,  1996, as a result of the inability of Registrant and Rachlin,
Cohen and Holtz to agree on the amount of time that the accounting  firm
could  devote to Registrant as a new client, and the cost of  conducting
the  audit,  the  Registrant  and Rachlin  Cohen  and  Holtz  agreed  to
discontinue  the engagement of Rachlin Cohen and Holtz. A copy  of  this
letter  was also attached as an exhibit to such Current Report. In  that
letter, Registrant informed Rachlin Cohen and Holtz that Registrant  had
retained the accounting firm of Grant-Schwartz Associates, CPA's, as its
auditors,  and  Rachlin  Cohen  and  Holtz  agreed  to  cooperate   with
Registrant  in  transmitting copies of all records necessary  for  Grant
Schwartz   Associates   to  complete  the  1995  audit.   Grant-Schwartz
Associates has recently merged its practice with the accounting firm  of
Beck Villata & Co., P.C., independent public accountants, which combined
firm has conducted the audit for fiscal 1996. The Registrant's audit for
fiscal  1996  was completed by Grant-Schwartz Associates,  CPA's,  which
firm  conducted the audit for fiscal 1997 which are part of this  Annual
Report on Form 10-KSB/A.

During  the past two years there were no disagreement with either former
accountant   on  any  matter  of  accounting  principles  or  practices,
financial  statement  disclosure, or auditing scope  of  procedure.  The
engagement  of Grant- Schwartz Associates, CPA's, 40 SE 5th Street-Suite
500,  Boca  Raton, FL 33432 was attached as an exhibit  to  the  Current
Report referenced above.





                                Page 18
<PAGE>

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
(a) The directors and executive officers are:
<TABLE>
<CAPTION>

        Name                 Age    Title
       ------                ---    -----
<S>                          <C>    <C>
Jerrold  R.  Hinton           55     President,  Chief  Executive
                                     Officer, and a Director

Thomas J. Craft, Jr., Esq.    32     Secretary, Corporate Counsel and a
                                     Director
</TABLE>

All  directors hold office until the next annual meeting of stockholders
of  the  Company and until their successors have been elected and  shall
qualify. Officers serve at the discretion of the Board of Directors, but
the  Company  contemplates that it may elect during the  current  fiscal
year  to  enter into employment agreements with certain of its executive
officers  and employees, the terms of which have not been determined  as
of the date of this Report on Form 10-KSB/A.

Jerrold R. Hinton has served as President, Chief Executive Officer and a
Director  of the Company from March 1995 to the present in a  full  time
capacity, following the change of the Company's operations from that  of
Tera  West  Ventures to that of ADGI. Dr. Hinton, a graduate of  Florida
State  University,  holds bachelors, masters and  doctorate  degrees  in
management,  engineering, surveying, real estate and construction.  From
1992  to early 1995, prior to joining Registrant in his present capacity
Dr.  Hinton  served as an officer of United Biomedical,  Inc.  (UBI),  a
private company. Dr. Hinton was not a shareholder of UBI.

Thomas J. Craft, Jr., Esq., is an attorney practicing law under the laws
of the State of Florida. Mr. Craft has been Secretary, Corporate Counsel
and  a  Director  of the Company since March, 1996. From  July  1994  to
December, 1997, Mr. Craft was also Counsel, Secretary and a Director  of
Phoenix  International  Industries, Inc.,  a  development  stage  public
company  located  in West Palm Beach, FL. During the  past  five  years,
prior  to his present positions with the Company, Mr. Craft was  engaged
in  the  private  practice of law in West Palm Beach, FL.  In  addition,
prior  to joining the Company, Mr. Craft served as an Intern for  United
States Senator, Bob Graham, Florida.

(B) COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

Section  16(a) of the Securities Exchange Act of 1934 requires that  the
Company's  officers and directors, and persons who  own  more  that  ten
percent  of  a  registered class of the Company's equity securities,  to
file  reports of ownership and changes in ownership with the  Securities
and  Exchange  Commission and with any exchange on which  the  Company's
securities are traded. Officers, directors and persons owning more  than
ten percent of such securities are required by Commission regulation  to
file  with  the  Commission and furnish the Company with copies  of  all
reports  required under Section 16(a) of the Exchange Act. Based  solely
upon  its  review of the copies of such reports received from  officers,
directors and greater than ten percent shareholders, the Company reports
the  following  failures  to file reports under  Section  16(a)  of  the
Exchange Act:

                                Page 19
<PAGE>

       Name of Filer                  Report Not Filed
       -------------                  ----------------

       Jerrold R. Hinton              Forms 4 and 5
       Thomas J. Craft, Jr.           Forms 4 and 5



ITEM 10.   EXECUTIVE COMPENSATION

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>

                                                Long Term Compensation
                                                ----------------------

                        Annual Compensation                Awards                         Payouts
                        --------------------------------------------------------

(a)             (b)         (c)     (d)        (e)         (f)            (g)       (h)    (i)

                                    Other
Name and                            Annual     Restricted  Securities                      All other     
Principal                           Compen-    Stock       Underlying     LTIP             Compen-  
Position(*)     Year         Salary sation     Award(s)    Options/SAR's  Payouts          sation 
                                    Bonus($)   ($)         (#)            ($)       ($)    ($)   
--------------  ----         ------ --------   ----------  -------------  -------   ---    --------           
<S>             <C>          <C>    <C>        <C>         <C>            <C>       <C>    <C>  
--------------------------------------------------------------------------------------------------------------------
Jerrold Hinton
President, CEO  1997          0      0          0           0              0         0      0

Jerrold Hinton
President, CEO  1996          0      0          0           0              0         0      0

Jerrold Hinton
President, CEO  1995          0      0          0           0              0         0      0
</TABLE>

(*)       Mr. Hinton has served as the Company's chief executive officer
and  president during the respective years set forth above.  Mr.  Hinton
was  issued shares in registration statements on Form S-8 during  fiscal
1997  and  1996  in  consideration for his  continued  services  to  the
Company, in lieu of cash compensation.

                                Page 20
<PAGE>

The  Company has not had sufficient funds to pay its executive  officers
or  directors during fiscal 1997 and 1996. To date, the Company has  not
commenced  payment of any salaries, but has executed a  three  (3)  year
employment agreement with Dr. Jerrold R. Hinton, who has agreed to serve
the  Company  in  a full time capacity of President and Chief  Executive
Officer, as well as a director of the Company. The agreement as amended,
provides  for  the payment to Mr. Hinton of $100,000, which  salary  has
been  accrued  but  unpaid  during the past  two  years,  and  presently
provides for the issuance of 5 million Shares per year in 1998 and 1999,
and  the grant of an option to purchase a total of 5 million Shares (the
Option  Shares"), which Options are exercisable the lower of  $1.00  per
Share  or  50%  of the closing bid price of the Shares  during  the  ten
business  days  prior to the notice by Mr. Hinton  of  his  election  to
exercise  all or a portion of the Options. The payment to Dr. Hinton  of
the  cash  salary portion of the Employment Agreement shall not commence
until the Company begins to generate sufficient revenues from operations
to  permit payment of such cash compensation, of which there can  be  no
assurance.  The Company, during fiscal 1997, issued to Dr.  Hinton,  its
president and chief executive officer a total of 15.5 million Shares and
issued to Thomas J. Craft, Jr., Esq., the Company's corporate secretary,
securities  counsel  and  a director a total of  10  million  Shares  in
registration  statements  on  Form S-8.  These  Shares  were  issued  in
consideration  of the continued and valuable services  provided  to  the
Company by such persons, neither of whom were paid any cash compensation
in 1997.

ITEM  11.     SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS   AND
MANAGEMENT.

As  of  July, 1998, the security ownership of the following persons  and
entities,  who  were either executive officers of the  Company  or  were
known to the Company to own more than five percent (5%) of the Company's
outstanding voting securities was as follows:

<TABLE>
<CAPTION>
                    (1)        (2)                          (3)                    (4)

 
             Title  of Class   Name and Address of          Amount and             Percent
                               Beneficial Owner             Nature of              of
                                                            Beneficial Ownership   Class (1)
--------------------------------------------------------------------------------------------
<S>                            <C>                          <C>                    <C>  
        Common  Stock          Jerrold R. Hinton             6,000,000              2.9%
                               110 N. Center St.
                               Suite 202
                               Hickory, NC 28601

        Common  Stock          Thomas J. Craft, Jr.          3,000,000              1.5%
                               11000 Prosperity Farms Rd.
                               Palm Beach Gardens, FL
                               33440
</TABLE>
________________
(1)  Based  upon 210,212,560 shares issued and outstanding at  July  15,
1998.
                                PAGE 21
<PAGE> 
ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

        During fiscal 1997, the Company had no transactions with related
parties.

  ITEM 13.          EXHIBITS AND REPORTS ON FORM 8-K.


                                           Sequential
Exhibit No.         Document Description   Page No.
-----------         --------------------   ----------

    3.1             Articles of Incorporation (filed as
                    Exhibits 3.1, 3.2 and 3.3 to the
                    Company's Registration Statement on
                    Form 10-SB and incorporated herein
                    by reference)

    3.2             Bylaws (filed as Exhibit 3.4 to the
                    Company's Registration Statement on
                    Form 10-SB and incorporated herein
                    by reference)

    10(iii)         Material Contracts-Consulting Agreements
                    and Employment Agreement (filed as
                    Exhibits to Registration Statements of
                    Form S-8 and post-effective amendments
                    thereto and incorporated herein by reference)

    23              Consent of Grant-Schwartz Associates, CPA's


(b) During fiscal 1997, the Company filed Reports on Form 8-K on
   January 21, 1997 and September 9, 1997, respectively. The Company has
   not filed any report on Form 8-K during the quarters ended March 31, 1998
   or June 30, 1998.







                                Page 22
<PAGE>
                                SIGNATURES
                                ----------

       In accordance with Section 12 or 15(d) of the Exchange Act, the
  Registrant has caused this report to be signed on its behalf by the
  undersigned, thereunto duly authorized.

                                        AMERICAN DIVERSIFIED GROUP, INC.


                                        By: /s/ Jerrold R. Hinton
                                           -----------------------
                                         Jerrold Hinton,President,Chief
                                         Executive Officer and Director


                                        Date: July 15, 1998



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


                                              /s/ Thomas J. Craft, Jr.
                                              ------------------------
                                                Thomas  J.  Craft   Jr.,
                                                Secretary and Director














                                Page 23
<PAGE>






                American Diversified Group, Inc.
                Formerly Tera West Ventures, Inc.
                  (A Development Stage Company)

                      FINANCIAL STATEMENTS

                   December 31, 1997 and 1996









<PAGE>


                American Diversified Group, Inc.
                Formerly Tera West Ventures, Inc.
                  (A Development Stage Company)
                   December 31, 1997 and 1996

<TABLE>
<CAPTION>
                        Table of Contents


                                                 Page

<S>                                               <C> 
Independent Auditor's Report                        1

Financial Statements:

  Balance Sheets                                    2

  Statements of Operations                          3

  Statement of Stockholders' Equity                 4

  Statements of Cash Flows                          5

Notes to Financial Statements                       6  - 11

</TABLE>

<PAGE>

                GRANT-SCHWARTZ ASSOCIATES, CPA'S
               2263 N.W. Second Avenue, Suite 210
                      Boca Raton, FL  33431




                 REPORT OF INDEPENDENT AUDITORS




Boards of Directors
American Diversified Group, Inc.


We  have  audited the accompanying balance sheets  of  American
Diversified Group, Inc. (formerly Tera West Ventures, Inc.)  as
of  December  31, 1997 and 1996, and the related statements  of
operations, stockholders' equity, and cash flows for the  years
then ended and for the period January 1, 1996 (Commencement  of
Development  Stage)  to  December 31,  1997.   These  financial
statements  are the responsibility of the Company's management.
Our  responsibility is to express an opinion on these financial
statements based on our audits.

We  conducted our audits in accordance with generally  accepted
auditing  standards.  Those standards require that we plan  and
perform  the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An
audit  includes examining, on a test basis, evidence supporting
the  amounts  and disclosures in the financial statements.   An
audit  also  includes assessing the accounting principles  used
and  significant  estimates  made by  management,  as  well  as
evaluating  the  overall financial statement presentation.   We
believe our audits provide a reasonable basis for our opinion.

In  our  opinion,  the financial statements referred  to  above
present   fairly,  in  all  material  respects,  the  financial
position  of  American Diversified Group, Inc.  (formerly  Tera
West Ventures, Inc.) as of December 31, 1997 and 1996, and  the
results of its operations and its cash flows for the years then
ended  and  for  the  period January 1, 1996  (Commencement  of
Development  Stage)  to December 31, 1997  in  conformity  with
generally accepted accounting principles.

The   accompanying  financial  statements  have  been  prepared
assuming that the Company will continue as a going concern.  As
discussed  in Note 4 of the financial statements,  the  Company
has   suffered  recurring  losses  from  operations  and  other
transactions.   At  December  31,  1997,  the  Company  has  an
accumulated   deficit  of  $16,554,357.   These  issues   raise
substantial  doubt  about its ability to continue  as  a  going
concern.   Management's plans in regard to  these  matters  are
also  described  in  Note 4.  The financial statements  do  not
include  any adjustments that might result from the outcome  of
this uncertainty.



GRANT-SCHWARTZ ASSOCIATES, CPA'S
Boca Raton, Florida
July 1, 1998

<PAGE>



                American Diversified Group, Inc.
                Formerly Tera West Ventures, Inc.
                  (A Development Stage Company)
                         Balance Sheets
                As of December 31, 1997 and 1996
<TABLE>
<CAPTION>

ASSETS                                               1997              1996
------                                            -------           -------     
<S>                                              <C>               <C> 
Current assets
 Cash                                             $11,069           $   -
 Accounts receivable (net           )              48,391               -
 Inventories                                        5,000            5,000
                                                 --------          -------      
   Total current assets                            64,460            5,000
                                                 --------          -------
Fixed assets
 Property and equipment (net)                      20,452           17,642
                                                 --------          -------
Other assets
 Deposits                                             570              570
 Miscellaneous receivable
 (net of $100,000 allowance)                           -                - 
                                                 --------          ------- 
   Total other assets                                 570              570
                                                 --------          -------

TOTAL ASSETS                                      $85,482          $23,212
                                                 --------          -------
                                                 --------          -------
</TABLE>

<TABLE>
<CAPTION>


LIABILITIES AND STOCKHOLDERS' DEFICIT
<S>                                          <C>              <C>
Current liabilities
 Cash overdraft                                  $    -           $ 4,010
 Accounts payable and accrued expenses            184,613          68,494
 Notes payable to related parties                 155,521         125,521
                                             ------------     -----------     
   Total liabilities - all current                340,134         198,025
                                             ------------     ----------- 

Commitments and Contingencies

Stockholders' deficit
 Preferred stock, Series A, $10 par value,
  authorized 50,000 shares; none outstanding            -               -
 Common stock, par value $.001 per share,
  authorized 200,000,000 shares; issued and
  outstanding 157,812,520 shares at
  December 31, 1997 and 63,562,520 shares at
  December 31, 1996                               157,812          63,562
 Additional paid-in capital                    16,848,669      13,513,419
 Stock subscriptions paid in advance               51,500              -
 Deferred consulting fees                        (758,276)       (607,750)
 Deficit accumulated prior to
  development stage                            (8,811,789)     (8,811,789)
  Deficit accumulated during
  development stage                            (7,742,568)     (4,332,255)
                                              ------------     -----------
   Total stockholders' deficit                   (254,652)       (174,813)
                                              ------------     -----------

TOTAL  LIABILITIES AND STOCKHOLDERS' DEFICIT      $85,482         $23,212
                                              ------------     -----------
                                              ------------     -----------
</TABLE>

The  accompanying notes are an integral part of  these  financial
statements.
<PAGE>

                American Diversified Group, Inc.
                Formerly Tera West Ventures, Inc.
                  (A Development Stage Company)
                    Statements of Operations
       For the Years Ended December 31, 1997 and 1996 and
   For the Period January 1, 1996 (Commencement of Development
                   Stage) to December 31, 1997

<TABLE>
<CAPTION>

                               Year Ended December 31,        January 1, 1996 to
                               1997               1996        December 31, 1997
                               -----------------------        ------------------
<S>                            <C>          <C>                  <C>
Revenues                         $   70,769   $     -              $   70,769
Cost of goods sold                   67,933         -                  67,933     
Gross profit                          2,836         -                   2,836

Expenses
   Selling, general and
   administrative                 3,413,149   4,279,670             7,692,819
                                 ----------   ---------            ----------      
Loss from operations             (3,410,313) (4,279,670)           (7,689,983)
                                 ----------   ---------            ----------
Other income (expense)
  Debt forgiveness income              -         50,000                50,000
  Gain on settlements                  -          4,795                 4,795
  Loss on abandoned acquisitions       -       (107,380)             (107,380)
                                 ----------   ---------            ----------
     Net other expenses                -        (53,585)              (52,585)
                                 ----------   ---------            ----------
Net loss                       ($3,410,313) ($4,332,255)          ($7,742,568) 
                                 ----------   ---------            ----------
                                 ----------   ---------            ----------

Net loss per share                 ($0.032)     ($0.079)              ($0.095)
                                 ----------   ---------            ---------- 
                                 ----------   ---------            ----------
Average number of shares
outstanding                    107,997,315   54,588,325            81,256,288
                               -----------   ----------            ----------
                               -----------   ----------            ----------

</TABLE>

The  accompanying notes are an integral part of  these  financial
statements.

<PAGE>
                American Diversified Group, Inc.
                Formerly Tera West Ventures, Inc.
                  (A Development Stage Company)
               Statements of Stockholders' Equity
 For the Period from January 1, 1996 (Commencement of Development
                   Stage) to December 31, 1997

<TABLE>
<CAPTION>

                                                                                                 DEFICIT        DEFICIT
                                                                                                 ACCUMULATED    ACCUMULATED
                                                 COMMON  STOCK       ADDITIONAL   DEFERRED       PRIOR TO       DURING
                                                                     PAID-IN      CONSULTING     DEVELOPMENT    DEVELOPMENT
                                               SHARES      AMOUNT    CAPITAL      FEES           STAGE          STAGE
                                           ------------   ---------  -----------  -------------  -------------- ------------
<S>                                        <C>            <C>        <C>          <C>            <C>            <C>     
Balance,January 1,1996 - as previously                                                    
reported                                     42,542,520     $42,542    $9,408,939     (630,000)     ($8,811,789)    $    -   
Shares issued prior January 1, 1996             100,000         100          (100)        -                -             -
                                           ------------   ---------  ------------  ------------   ------------- ------------
Balance  January 1, 1996 (restated)          42,642,520      42,642     9,408,839     (630,000)      (8,811,789)         -
Issued shares for services                   26,550,000      26,550     3,936,950   (3,034,500)            -             -
Amortization of deferred consulting fees           -           -             -       3,056,750             -             - 
Issued shares for possible acquisitions       2,000,000       2,000        (2,000)        -                -             - 
Canceled shares per settlement               (8,530,000)     (8,530)        8,530         -                -             - 
Issued shares for cash                          900,000         900       161,100         -                -             -
Net loss for year ended December 31, 1997          -           -             -            -                -        (4,332,255)
                                            -----------    --------  ------------  ------------   ------------- -------------
Balance, December 31, 1996                   63,562,520      63,562    13,513,419     (607,750)      (8,811,789)    (4,332,255)
Issued  shares  for  services                91,000,000      91,000     3,216,500     (985,000)            -              -   
Amortization of deferred consulting fees           -           -             -         834,474             -              -
Issued shares for cash                        3,250,000       3,250       118,750         -                -              -
Net loss for year ended December 31, 1997          -           -             -            -                -        (3,410,313)
                                            -----------    --------  ------------  ------------   ------------- --------------
Balance, December 31, 1997                  157,812,520    $157,812   $16,848,669    ($758,276)     ($8,811,7


489)   ($7,742,568
                                            -----------    --------  ------------  ------------   ------------- --------------  
</TABLE>
In  addition  to  the  above, the Company has  authorized  50,000
shares of Preferred Stock; no shares are outstanding.

The  accompanying notes are an integral part of  these  financial
statements.


<PAGE>






                American Diversified Group, Inc.
                Formerly Tera West Ventures, Inc.
                  (A Development Stage Company)
                    Statements of Cash Flows
       For the Years Ended December 31, 1997 and 1996 and
   For the Period January 1, 1996 (Commencement of Development
                   Stage) to December 31, 1997

<TABLE>
<CAPTION>
                                          Year Ended December 31,            January 1, 1996 to
                                          1997               1996            December 31, 1997
                                          ----               ----            -------------------  
<S>                                       <C>                <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net  loss                               ($ 3,410,313)      ($4,332,255)    ($7,742,568)
   Depreciation                                   6,324             4,482          10,806
   Amortization  of  deferred consulting 
   fees                                         834,474         3,056,750       3,891,224
   General  and  administrative expenses
   paid by stock                              2,322,500           929,000       3,251,500
   Loss on abandoned acquisitions                  -              107,380         107,380
   Debt forgiveness                                -              (50,000)        (50,000)
   Increase in accounts receivable              (48,391)             -            (48,391)
   Increase in accounts payable and
   accrued expenses                             116,119            50,668         166,787
                                            -----------        ----------      ----------   
     Net cash used in operating activities     (179,287)         (233,975)       (413,262)
                                            -----------        ----------      ----------

CASH FLOWS FROM INVESTING ACTIVITIES
   Acquisition of property and equipment         (9,134)             (550)         (9,684)
   Payments for possible acquisitions              -             (107,380)       (107,380)
   Deposits                                        -                 (570)           (570)
                                            -----------        ----------
   Net cash used in investing activities         (9,134)         (108,500)       (117,634)
                                            -----------        ----------      ---------- 

CASH FLOWS FROM FINANCING ACTIVITIES
  Sales of common stock                         173,500           162,000         335,500
  Proceeds from notes payable
  to related parties                             55,000           175,521         230,521
  Reduction of notes payable
  to related parties                            (25,000)             -            (25,000)
  Cash overdraft                                ( 4,010)            4,010            -
                                            -----------        ----------      -----------   
    Net cash provided by financing activities   199,490           341,531         541,021
                                            -----------        ----------      ----------- 
Net increase (decrease) in cash                  11,069              (944)         10,125

CASH  -  beginning of year                         -                  944             944
                                            -----------        ----------      ----------
CASH  -  end of year                            $11,069          $   -            $11,069
                                            -----------        ----------      ----------
                                            -----------        ----------      ----------
</TABLE>

Non-cash Transactions in 1997:
------------------------------
1.  Issued  91,000,000  shares of common stock  for  current  and
    future services of $3,307,500.

Non-cash Transactions in 1996:
------------------------------
1.  Issued  26,550,000  shares of common stock  for  current  and
    future services of $3,963,500.
2.  Issued   2,000,000  shares  of  common  stock  for   possible
    acquisition; recorded at par value ($.001 per share).
3.  Canceled  8,530,000 shares per settlement agreement; recorded
    at par value.
4.  Note payable of $50,000 was forgiven.

    The accompanying notes are an integral part of  these  financial 
    statements.
<PAGE>
                American Diversified Group, Inc.
                Formerly Tera West Ventures, Inc.
                  (A Development Stage Company)
                  Notes to Financial Statements
                   December 31, 1997 and 1996

NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES:

Organization and Capitalization
-------------------------------
The  Company was organized January 16, 1979 under the laws of the State  of
Nevada  as Terra West Homes, Inc.  On October 5, 1991, the Company  changed
its  name  to  Gerard Enterprises, Ltd. in connection with a  merger.   The
merger  was not consummated, and on November 23, 1991, the name was changed
to Tera West Ventures,Inc. On March 15, 1995, the  Company number of shares 
of common  stock  was
increased  from 25,000 shares to 25,000,000 shares and the  par  value  was
changed  from  $1 per share to $.001 per share, and on the  same  date  the
Company approved a 40 for 1 stock split on outstanding shares.  On November
22,  1992,  the authorized shares were increased to 50,000,000 shares.   On
July  17, 1996, the authorized shares were increased to 200,000,000 shares.
On  March  6,  1998,  the authorized shares were increased  to  300,000,000
shares.

On  April  7,  1993, the Company amended its Articles of Incorporation  and
authorized  50,000 shares of preferred Series A stock with a par  value  of
$10 per share.  No shares of preferred Series A stock are outstanding.

Nature of Operations
--------------------
Effective  1996,  the Company became a development stage  company.   During
1997, the Company generated its initial sales revenues and receivables from
the  shipment of orders for generic pharmaceuticals to West Africa and  the
sale  of  telecommunication  services  in  West  Africa.   The  Company  is
presently  engaged  in  the marketing and sale of generic  pharmaceuticals,
medical  diagnostic test kits, and telecommunications products and services
in  West  Africa and Brazil.  In 1997, pharmaceutical products  represented
72.5% of sales and telecommunication services 27.5% of sales.

Uncollectible Accounts
-----------------------
Management believes that no allowance for uncollectible accounts is needed.

Inventories
-----------
Inventories consist of medical supplies and equipment held for  resale  and
are  stated at the lower of cost or market.  Cost is determined on a first-
in, first-out basis.

Property and Equipment
----------------------
Property  and equipment is recorded at cost.  Depreciation of property  and
equipment  is  computed on a straight line basis and depreciated  over  the
estimated useful life of the assets which is 5 years.

Fair Value of Financial Instruments
-----------------------------------
The  fair  values  of  current  assets and  liabilities  approximate  their
reported carrying amounts.

Accounting Estimates
--------------------
The  preparation  of  financial  statements in  conformity  with  generally
accepted accounting principles (GAAP) requires management to make estimates
and  assumptions that affect the reported amounts of assets and liabilities
and  disclosure  of contingent assets and liabilities at the  date  of  the
financial  statements  and the reported amounts of  revenues  and  expenses
during the reported period.

Deferred Consulting Fees
------------------------
The  Company  has  issued  shares of its common stock  to  consultants  for
services rendered and to be rendered.  The fair market value of the  shares
issued  for future services is recorded as deferred consulting fees and  is
shown  as a separate component of stockholders' equity.  The deferred  fees
are  amortized  to  expense  over the term  of  the  respective  consulting
agreements.

<PAGE>
                American Diversified Group, Inc.
                Formerly Tera West Ventures, Inc.
                  (A Development Stage Company)
                  Notes to Financial Statements
                   December 31, 1997 and 1996


NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (CONTINUED):

Income Taxes
------------
The  Company  accounts  for  income  taxes  under  Statement  of  Financial
Accounting  Standards  No. 109 (SFAS 109),  Accounting  for  Income  Taxes.
The  statement  requires that the Company follow the  liability  method  of
accounting for income taxes and requires an adjustment to the provision for
income  taxes  for the effect on deferred income taxes of  any  changes  in
corporate income tax rates.

Through December 31, 1997, the Company has accumulated net operating losses
which can be used to offset future earnings.  Accordingly, no provision for
income taxes is recorded in the financial statements.  A deferred tax asset
for  the  future  benefits of net operating losses  is  offset  by  a  100%
valuation  allowance  due to the uncertainty of the  Company's  ability  to
utilize the losses.

Net Loss Per Common Share
-------------------------
Loss  per  common  share has been computed based upon the weighted  average
number  of shares of common stock outstanding.  The weighted average number
of  shares outstanding for the years ended December 31, 1997 and  1996  was
107,997,315 and 54,588,325, respectively.

NOTE 2:  PROPERTY AND EQUIPMENT:

Property and equipment are as follows:
<TABLE>
<CAPTION>
                                       1997              1996
                                       -----------------------
<S>                                    <C>               <C>
      Medical equipment                 $21,656           $21,656
      Office furniture and equipment     12,094             2,960
                                        -------           -------
                                         33,750            24,616

      Less: Accumulated depreciation     13,298             6,974
                                        -------           -------
        Net property and equipment      $20,452           $17,642
                                        -------           ------- 
                                        -------           -------
</TABLE>


Depreciation expense was $6,324 for 1997, and $4,482 for 1996.

NOTE 3:  MISCELLANEOUS RECEIVABLE:

During  1996,  the  Company entered into an agreement  to  acquire  Imaging
Systems Synergies, Inc. ( ISS ).  During negotiations with respect  to  the
proposed  acquisition,  the  Company advanced $100,000  to  assist  ISS  in
continuing  its  operations  while the Company pursued  its  due  diligence
efforts.

Following  the completion of due diligence, the Company concluded  that  it
should not acquire ISS and, after consulting with counsel, pursued a  cause
of  action  against  ISS for damages, including recovery  of  the  $100,000
advance.  It cannot be determined at this time whether the Company will  be
successful in recovering any damages against ISS.
<PAGE>







                American Diversified Group, Inc.
                Formerly Tera West Ventures, Inc.
                  (A Development Stage Company)
                  Notes to Financial Statements
                   December 31, 1997 and 1996


NOTE 4:  COMMITMENTS AND CONTINGENCIES:

Going Concern
-------------
As  shown  in the accompanying financial statements, during the year  ended
December  31, 1997, the Company had no significant revenues and incurred  a
net  loss  of  $3,410,313  and,  as of December  31,  1997,  the  Company's
accumulated  deficit  is  $16,554,357.   These  factors,  as  well  as  the
uncertain   conditions  the  Company  faces  regarding   its   ability   to
successfully   acquire,  develop  and  distribute  and/or  market   medical
products, including generic pharmaceuticals, vitamins, and diagnostic  test
kits,  and  be  able  to  successfully offer  and  sell  telecommunications
products and services, create substantial doubt about the Company's ability
to continue as a going concern.

The Company's management has determined its best business opportunities are
in  the  export  and  sale of products manufactured and supplied  by  third
parties.   During  1996  and  1997,  the Company  entered  into  consulting
agreements   to   assist  in  entering  into  the  medical   products   and
telecommunications fields and becoming an operating company.

Management's  plans also include seeking to raise funds  through  sales  of
stock  in  private placements and public sales of securities.   During  the
year ended December 31, 1996, the Company sold 900,000 shares of stock  for
cash  of  $162,000.  During the year ended December 31, 1997,  the  Company
sold  3,250,000  shares of stock for cash of $122,000.   During  1997,  the
Company   also   received  cash  of  $51,500  in  partial   prepayment   of
subscriptions  for 1,550,000 shares of stock issued in 1998.   The  Company
has  been  actively  seeking to acquire and/or merge  with  other  suitable
businesses   in   the   fields   of  medical  products   distribution   and
telecommunications.  Toward this end in March 1998, the Company acquired an
option  to  purchase an equity interest in Global Transmedia Communications
Corporation,  which  is  engaged in internet telephony  and  other  related
products  and services, in the United States, Canada, Mexico, Columbia  and
South Africa.

Other Risks
-----------
The  Company has not obtained insurance for general liability.  Because the
Company is currently in the Development stage, it does not expect to  incur
any losses in connection with uninsured risks.  Therefore, no provision for
any such loss has been provided in the accompanying financial statements.

Leases
------
Effective  February 1998, the Company leases its office premises  in  North
Carolina  under a one year lease agreement.  Office premises  in  New  York
City  are rented on a month-to-month basis.  Rent expense for 1997 and 1996
was $23,780 and $14,780, respectively.

NOTE 5:  SHAREHOLDERS' EQUITY:
------------------------------
Shares Issued and Canceled in Connection with Possible Acquisitions
Effective  February  27, 1995, the Company entered  into  an  agreement  to
acquire  all  of  the issued and outstanding stock of American  Diversified
Medical  Corp.  (  ADMC  ), a Delaware corporation,  in  exchange  for  the
issuance  of  12  million shares of the Company's common stock  (restricted
under  Rule  144),  of  which 10.53 million shares were  issued  to  ADMC's
principal  shareholder, Ameril Corp.  The agreement was never  consummated,
and  on April 4, 1996, the Company entered into a settlement agreement with
Ameril, which, among other things, terminated the agreement  ab initio,  as
if the agreement had never been entered into.

The  settlement provided for Ameril, as the corporate seller  of  ADMC,  to
retain 2 million shares of the Company's common stock in consideration  for
the  cancellation of 8.53 million shares held by Ameril, which 8.53 million
shares were returned to the Company's transfer agent for cancellation.
<PAGE>



                American Diversified Group, Inc.
                Formerly Tera West Ventures, Inc.
                  (A Development Stage Company)
                  Notes to Financial Statements
                   December 31, 1997 and 1996


NOTE 5:  SHAREHOLDERS' EQUITY (CONTINUED):

Shares  Issued  and  Canceled  in  Connection  with  Possible  Acquisitions
(Continued)
---------------------------------------------------------------------------
The  settlement  also  provides for mutual releases  of  all  parties,  and
accordingly, during the year ended December 31, 1996, the Company  recorded
a gain of $4,795 for net amounts due to the seller, and from ADMC.

In  January  1996,  the  Company issued 2 million shares  of  common  stock
(restricted under Rule 144) in connection with the possible acquisition  of
a company.  The acquisition was never consummated and the other company has
agreed  to  return  the 2 million shares to the Company  for  cancellation.
The shares were returned and canceled subsequent to the audit date.

Shares Issued for Services
--------------------------
In  March  1996,  the Company issued a total of 17.850  million  shares  of
common  stock for consulting services and professional fees rendered during
the  fiscal  year  and  to be rendered during future periods.   The  shares
issued were valued by the Company at $3,034,500, based upon the average  of
the bid and ask price of the shares on the date of issuance.  In connection
with  services  rendered,  the Company has charged  $2,426,750  to  expense
during the year ended December 31, 1996, and in connection with services to
be rendered during future periods, the Company charged $607,750 to deferred
consulting  fees, of which amount, $566,031 was charged to  expense  during
1997.

In  December  1996,  the Company issued a total of 4.7  million  shares  of
common  stock  for  consulting services, professional  fees  and  executive
compensation for services rendered during the year ended December 31, 1996.
The  shares  issued were valued by the Company at $329,000 based  upon  the
average  bid and ask price of the shares on the date of issuance,  and  the
Company  charged this amount to expense during the year ended December  31,
1996.

In  December 1996, the Company agreed with a shareholder to issue 4 million
shares  of  common  stock (restricted under Rule 144) as reimbursement  for
shares  advanced by the shareholder to third parties for services  rendered
on  the  Company's behalf during fiscal 1996.  The shares  were  valued  at
$600,000,  based  upon  the estimated fair market  value  of  the  services
rendered and the value of the shares on the dates the shares were advanced,
and  the  Company has charged this amount to expense during the year  ended
December  31, 1996.  The Company has also agreed to register these  shares,
as  soon  as  practicable, and to issue additional shares as  necessary  to
equal a total market value of $600,000, based upon the average bid and  ask
price of the shares on the effective date of the registration statement.

In January 1997, the Company issued 4 million shares to a consultant and  1
million shares to its chief executive officer for continued services to the
Company.   The  shares issued were valued by the Company at $250,000  based
upon  the  average bid and ask price of the shares on the date of issuance,
and  the  Company  charged this amount to expense  during  the  year  ended
December 31, 1997.

In  February 1997, in consideration for the services of two consultants, as
well  as  its corporate counsel, director and officers, the Company  issued
14.5  million  shares.  These shares issued were valued by the  Company  at
$725,000 based upon the average bid and ask price of the shares on the date
of issuance, and the Company charged this amount to expense during the year
ended December 31, 1997.

In  July  1997, in consideration for the services of three consultants,  as
well  as  its corporate counsel, director and officers, the Company  issued
25.5  million  shares.  These shares issued were valued by the  Company  at
$637,500 based upon the average bid and ask price of the shares on the date
of issuance, and the Company charged this amount to expense during the year
ended December 31, 1997.

<PAGE>


                American Diversified Group, Inc.
                Formerly Tera West Ventures, Inc.
                  (A Development Stage Company)
                  Notes to Financial Statements
                   December 31, 1997 and 1996


NOTE 5:  SHAREHOLDERS' EQUITY (CONTINUED):

Shares Issued for Services (Continued)
--------------------------------------
In  August 1997, the Company issued a total of 15 million shares of  common
stock  for  consulting services rendered during the fiscal year and  to  be
rendered  during  future periods.  The shares issued  were  valued  by  the
Company at $300,000, based upon the average of the bid and ask price of the
shares on the date of issuance.  In connection with services rendered,  the
Company has charged $100,000 to expense during the year ended December  31,
1997, and in connection with services to be rendered during future periods,
the Company has charged $200,000 to deferred consulting fees.

In  October 1997, the Company issued a total of 31 million shares of common
stock for consulting services, professional fees and executive compensation
for  services rendered during the year ended December 31, 1997  and  to  be
rendered  during  future periods.  The shares issued  were  valued  by  the
Company  at  $1,395,000 based upon the average bid and  ask  price  of  the
shares  on  the  date  of issuance, and the Company charged  $1,293,750  to
expense  during  the  year ended December 31, 1997 and in  connection  with
services  to  be  rendered during future periods, the Company  has  charged
$101,250 to deferred consulting fees.

Stock Issued for Cash
---------------------
During  the  year  ended December 31, 1996, a shareholder  exercised  stock
options  to purchase 900,000 shares of common stock of the Company at  $.18
per share, for which the Company received $162,000.

Common Stock Purchase Options
-----------------------------
In  connection with the Company's unit private placement in April 1997, the
Company issued a total of 3,250,000 shares at $.04 per share together  with
3,250,000  common  stock purchase options exercisable  by  the  holders  to
purchase  additional 3,250,000 shares at a price of $.08  per  share.   The
Company  has  agreed to register the shares and the shares  underlying  the
options  in  a  registration statement of Form S-1 as  soon  as  reasonably
practicable.
In  March 1998, the Company issued an additional 1,550,000 shares under the
same terms as the April 1997 private placement.

In  connection with the Company's consulting agreement with one consultant,
the  Company granted options exercisable to acquire shares of the Company's
common  stock.   The consultant was granted options to acquire  10  million
shares  per  year, for up to five years, provided that the shareholder  was
continuing  to  provide services to the Company during  each  of  the  five
years.   This  agreement was amended in March 1998, and the consultant  now
has  the  option to acquire 20 million shares, with 10 million  exercisable
through  November  1998  and  an additional 10 million  shares  exercisable
through  November 1999.  The options are exercisable at the lower of  $1.00
per  share  or 50% of the average bid price of the shares on  the  10  days
prior to the exercise of the options.

<PAGE>






                American Diversified Group, Inc.
                Formerly Tera West Ventures, Inc.
                  (A Development Stage Company)
                  Notes to Financial Statements
                   December 31, 1997 and 1995


NOTE 6:  RELATED PARTY TRANSACTIONS:

Notes Payable to Related Parties
--------------------------------
As  of  December 31, 1997, the Company is obligated under five  convertible
promissory notes as follows:
<TABLE>
<CAPTION>
<S>                                     <C>
        Shareholder and former director   $75,000
        Shareholder and current officer    35,521
        Shareholder and consultant         10,000
        Shareholder and consultant          5,000
        Shareholder and consultant         30,000
                                        ---------
                                         $155,521
                                        ---------
                                        ---------
</TABLE>

The  notes  are due and payable, without interest, on January 1, 1999,  and
are  convertible  at the discretion of the holder, on the basis  of  twelve
(12) shares for each $1.00 of indebtedness.

During  the  year ended December 31, 1996, a consultant loaned the  Company
$50,000 pursuant to a convertible promissory note, with interest at 12% per
annum.   The  principal  and interest under the note was  convertible  into
shares  at  a  price of $.25 per share.  Subsequent to the  Company's  year
ended  December  31,  1996, the $50,000 note was  forgiven,  based  upon  a
written letter agreement between the Company and the consultant.

Employment Agreement
--------------------
Effective  October  1,  1996, the Company entered into  a  three  (3)  year
employment  agreement with an employee/officer/director pursuant  to  which
the  Company  agreed  to pay compensation of $100,000  per  annum,  payable
monthly  at  the  rate of $8,333.  In accordance with the agreement,   this
compensation  was  accrued  but unpaid because of  the  Company's  lack  of
positive  cash flow.  During 1996, the executive was issued 500,000  shares
and  during 1997 he was issued 15.5 million shares for continuing to  serve
the Company on a full time basis without payment of the above salary.

NOTE 7:  SUBSEQUENT EVENTS:

In  February  1998, the Company issued 39.7 million shares of common  stock
for  consulting services, professional fees and executive compensation  for
services  rendered  and  to be rendered to the Company.   The  shares  were
valued  at $476,400 based on the average bid and ask price on the  date  of
issuance  and  the  Company charged $248,400 to  expense  and  $228,000  to
deferred consulting fees in the first quarter of 1998.

In  March  1998, the Company issued 13 million shares of common  stock  for
consulting services and professional fees for services rendered and  to  be
rendered to the Company.  The shares were valued at $520,000 based  on  the
average  bid and ask price on the date of issuance and the Company  charged
$140,000  to expense and $380,000 to deferred consulting fees in the  first
quarter of 1998.

The  Company  has  been dependent upon the willingness of its  consultants,
officers,   directors  and  professionals  to  accept  shares   issued   in
registration  statements  of  Form  S-8  for  services,  in  lieu  of  cash
compensation.   The  Company  shall  continue  to  be  dependent  upon  the
willingness of persons to accept shares as compensation for services, until
such  time,  if  ever,  that it shall generate a positive  cash  flow  from
operations.

<PAGE>



       CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT




As  Independent  Public Accountants, we consent to the use  of  our  report
dated July 1, 1998 to all references to our firm included in or made a part
of  the Form 10-KSB of American Diversified Group, Inc. (Formerly Tera West
Ventures, Inc.)





GRANT-SCHWARTZ ASSOCIATES, CPA's
Boca Raton, Florida
July 1, 1998

<PAGE>