<PAGE>

                          UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC  20549
                           Form 10-QSB

(Mark one)

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

             For the quarterly period ended: September 30, 1998

[ ]          TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF  THE
             SECURITIES EXCHANGE ACT OF 1934

             For the transition period from _________ to_________

                   Commission file number: 0-023532

                AMERICAN DIVERSIFIED GROUP, INC.
            (Exact name of small business issuer as specified in its charter)

                   Nevada                             88-0292161
       (State or other jurisdiction of        (IRS Employer Identification No.)
       incorporation or organization)


            110 North Center St. Suite 202, Hickory, NC 28601
            (Address of principal executive offices)

                         (704) 322-2044
                   (Issuer's telephone numbe
            __________________________________________________
            Former name, former address and former fiscal year, 
            if changed since last report)

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

              APPLICABLE ONLY TO CORPORATE ISSUERS
        State the number of shares outstanding of each of the
issuer's   classes  of  common  equity,  as  of  the   latest
practicable date:

        Common  Stock,  $.001  par value  230,762,560  shares
outstanding as of September 30, 1998.

Transitional Small Business Disclosure Format:  Yes __  No  X

</page>

<PAGE>

                              INDEX


                AMERICAN DIVERSIFIED GROUP, INC.


PART I FINANCIAL INFORMATION


Item 1.      Financial Statements (Unaudited)

             Balance Sheet - September 30, 1998 (Unaudited).

             Statements of Operations - Three months and nine
             months ended September 30,    1998 and 1997 (Unaudited).

             Statements of Cash Flows - Three months and nine
             months ended September 30,    1998 and 1997 (Unaudited).

             Notes to Financial Statements
</page>
<PAGE>

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

                Except  for  the  historical  information
       contained  herein, the matters discussed  in  this
       Management's Discussion and Analysis  as  part  of
       the  Quarterly Report on Form 10-QSB for  the  3rd
       quarter    of   1998,   includes   forward-looking
       statements that may involve a number of risks  and
       uncertainties that could alter actual  results  to
       differ  materially. Actual results may vary  based
       upon  a  number  of  factors, including,  but  not
       limited   to,  risks  in  product  and  technology
       development, market acceptance of new products and
       continuing   demand,  the  impact  of  competitive
       products and pricing, changing economic conditions
       in the markets where the Company is conducting and
       seeking  to  conduct  it and  other  risk  factors
       detained  in  the  Company's  most  recent  annual
       report  and other filings with the Securities  and
       Exchange Commission.

       Results of Operations
          American Diversified Group, Inc. (the "Company")  is
  a  development stage company. During the Company's three and
  nine  month  periods ended September 30, 1998,  the  Company
  incurred  net  losses  of $638,996 ($.0028  per  Share)  and
  $1,511,352 ($.0074 per share) compared to losses of $892,422
  ($0.0077  per Share) and $1,858,184 ($0.0201 per share)  for
  the  comparable three and nine month periods  of  the  prior
  fiscal  year. The Company reported sales of $0  and  $66,422
  for  the  three  and nine month periods ended September  30,
  1998, compared to sales of $25,330 and $25,330 for the three
  and ninth month periods for the prior fiscal year. The sales
  reported  for  the  three  and  nine  month  periods   ended
  September  30,  1998,  represented the  sales  revenues  and
  receivables     from     generic     pharmaceuticals     and
  telecommunication  sales,  and  miscellaneous   income,   as
  discussed below.
       
       The  Company's net loss for the nine month period ended
  September  30,  1998,  was principally  the  result  of  the
  limited  sales  revenues during the quarter,  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
  three  month period ended September 30, 1998, was  $632,971,
  compared  to  $854,681 during the same period in  the  prior
  fiscal  year. In order for the Company to pay its  operating
  expenses,  including  office rents, communication  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.
</page>
<PAGE>
       
       During  the recent quarter, Company continued to pursue
  orders  for  pharmaceutical  products  in  West  Africa  and
  elsewhere,  which  efforts  the  Company  believes  will  be
  enhanced as a result of recent distribution agreements  that
  the Company entered into with generic drug manufacturers  in
  India.  In  addition during the quarter ended September  30,
  1998, the Company also entered into agreements to distribute
  on  an  exclusive  basis a Hepatitis-B  vaccine,  at  highly
  advantageous  and competitive pricing, pursuant  to  a  long
  term  arrangement with the manufacturer. To  assist  in  the
  efforts  to market and sell these products, the Company  has
  also  entered  into  agreements  to  use  the  services   of
  additional representatives, including a company specializing
  in  the sale of a wide variety of medical and other products
  to Brazil.
       
       The  Company  believes that these  new  agreements  and
  arrangements shall place the Company in a sound position  to
  generate  significantly increased orders from a far  broader
  product line over the next twelve months, beginning  in  the
  fourth  quarter of 1998. The Company has also been  informed
  that  the  dengue fever test kit that was submitted  to  the
  National   Health  Foundation,  Brazil,  for   registration,
  approval and sale should begin to generate sales revenues in
  the  very  near term, and as early as the fourth quarter  of
  fiscal 1998, with increasing sales during fiscal 1999.

            With  respect  to the Company's telecommunications
  business,  the Company during the second quarter  of  fiscal
  1998  reported the pending acquisition of an equity interest
  in  Global  Transmedia  Communications  Corporation,  Miami,
  Florida  ("GTCC"),  and during the third quarter  of  fiscal
  1998  the  Company and GTCC have continued to negotiate  the
  terms  of  the potential acquisition. The GTCC operation  to
  date has not yet generated any revenues. With respect to the
  Company's call-back venture in West Africa, the Company  did
  not  generate any revenues or receivables during  the  third
  quarter  of  fiscal  1998 because of technical  difficulties
  encountered in West Africa with regarding line interruption.
  The  Company  and  Emerging Trends Linkages Corp.  ("ETLC"),
  subsequent  to  the end of the quarter ended  September  30,
  1998, negotiated the sale by the Company back to ETLC of the
  Company's rights under the call-back agreement, effective as
  of   September  30,  1998.  In  consideration   for   ETLC's
  repurchase  of  all  call-back rights and  receivables,  the
  Company received back from ETLC rights to 17,000,000  Shares
  of  the Company's common stock. In addition, the Company and
  ETLC  agreed  that the Company will have use of  offices  at
  Rockefeller Plaza for its Investor Relations office, with no
  office   rental   expense  to  the   Company.   In   further
  consideration for the agreement with ETLC, ETLC was assigned
  by the Company and ETLC assumed the call-back receivables of
  approximately  $17,400,  as well  as  the  receivables  from
  generic  pharmaceutical invoices of $18,100 and $7,500  from
  West  Africa,  which  have  not  been  paid  to  date.  This
  aggregate sum of approximately $43,000 has been offset  from
  ADGI's  accounts payable to ETLC, which had totaled  $65,707
  at   September  30,  1998.  ETLC  further  agreed   to   the
  cancellation  of  the  remainder of the  Company's  accounts
  payable  to ETLC, effective as of September 30, 1998.  As  a
  result,   at  September  30,  1998,  the  Company's   income
  statement  reflects a reduction in rent expense of  $22,707,
  and  its  balance  sheet  reflects  a  decrease  in  current
  liabilities  of of $65,707 and a decrease in current  assets
  of  $43,000.  The difference is deemed to be a reduction  in
  rent expense previously accrued.
</page>
<PAGE>  
          With  the  assistance of the Company's  consultants,
  the  Company's management determined during the fiscal  year
  ended  December 31, 1997 and the nine months ended September
  30,   1998,  that  its  best  business  opportunities   were
  principally in the area of medical-pharmaceutical  products,
  and  other  products, to countries in South America,  Africa
  and  the  Asia. The Company, during fiscal 1997 and  through
  September 30, 1998, engaged the services of consultants  and
  entered into contracts for third parties for the purpose  of
  increasing  the  Company's product lines and  its  level  of
  sales   representation,  resulting  in  continuing  purchase
  orders   and  sales  from  the  sale  of  medical  products,
  including  generic  pharmaceuticals, diagnostic  test  kits,
  Hepatitis-B vaccine and other medical products and  supplies
  in its markets.

           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 fiscal 1997 and through the nine
  month period ended September 30, 1998, the Company, with the
  direct  assistance of its consultants and with third parties
  has  developed  sources  for generic pharmaceuticals  and  a
  Hepatitis-B  vaccine,  at highly competitive  pricing,  from
  manufacturers  in India. The Company does not believe,  with
  respect  to  generic pharmaceuticals, 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. However, the Company has  only  one
  source  for the Hepatitis-B vaccine and for that reason  has
  entered  into  a long term exclusive distribution  agreement
  with   the  manufacturer,  Shantha  Biotechnics,  Hyperabad,
  India,  which  grants  the Company the exclusive  rights  to
  distribute this vaccine in South America, Africa and Asia.

          In  addition, after the quarter ended September  30,
  1998, the Company through its contacts in Brazil, determined
  to  pursue  a  business opportunity in connection  with  the
  import  from  Brazil and the sale in the  United  States  of
  certain  commodity products. Pursuant to  a  purchase  order
  dated  November  3, 1998, and a letter of credit  posted  on
  November  6,  1998, the Company completed a transaction  for
  the  sale  of  the  commodity products and  generated  sales
  revenues  for  the Company of approximately $220,000,  which
  will be recognized by the Company during the last quarter of
  the  fiscal  year. The amount of the profits to the  Company
  shall  be determined upon the arrival and completion of  the
  commodity  shipment, scheduled to leave Brazil on  or  about
  November 12, 1998, with arrival and delivery of the products
  within  ten  days. The Company will continue to pursue  such
  sale  opportunities, as they arise, during the coming fiscal
  year, involving a variety of products, specifically in those
  areas  where  the  Company is conducting  business  and  has
  representatives, including Brazil, West Africa, and Asia.
</page>
<PAGE>

       The  Company's ability to continue to ship medical  and
  pharmaceutical  products to West Africa and  begin  to  ship
  such products to South America is essential to the Company's
  goal  of  generating increased levels of operating  revenues
  from  its core pharmaceutical and medical products business.
  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  services of the Company's consultants, together
  with  that  of  the Company's management, while  not  having
  generated  any  revenues  during  the  third  quarter  ended
  September 30, 1998, have enabled the Company to develop  and
  expand  its  business during the last quarter of the  fiscal
  year.  As  a  result  the Company can report  the  following
  business developments:
           (i)   generated  sales  revenues  of  approximately
  $220,000 from the import from Brazil and sale in the  US  of
  commodity products, which represent the single highest  sale
  transaction  in the Company's operating history,  and  which
  sale will generate a profit to the Company. The revenues and
  profits  from  this sale will be reported  during  the  last
  quarter of fiscal 1998, with a letter of credit being issued
  effective  November 9, 1998 for 20% ($44,000) of  the  total
  $220,000   sale,  with  the  remainder  being  paid   during
  November, 1998 upon shipment;
          (ii) secured third party manufacturers from whom the
  Company  can  continue to source generic pharmaceuticals  at
  competitive pricing so as to enable it to sell such products
  at  satisfactory profit margins during fiscal 1999,  in  the
  highly  competitive  and  price sensitive  developing  world
  markets;
          (iii)  secured final approvals of dengue fever  test
  kits,  which  are prerequisite for the imminent  receipt  of
  purchase orders for dengue fever test kits from the National
  Health Foundation of Brazil;
          (iv) entered into a distribution agreement with  the
  manufacturer of a Hepatitis B vaccine, approved by the World
  Health  Organization,  granting the  Company  the  right  to
  market at highly competitive pricing the Hepatitis B vaccine
  in South America, Africa and Asia; and
       (v)  commenced business relationship with manufacturers
  of complete lines of generic pharmaceuticals for the purpose
  of  satisfying the Company's anticipated purchase orders  in
  West Africa and South America.
</page>
<PAGE>
  
        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. However,
  with the recent sale of approximately $220,000 in the United
  States of an imported Brazilian commodity product, with  the
  potential for additional commodity product sales both before
  and  after the end of the fiscal year, and renewing  efforts
  for the sale of generic pharmaceutical products pursuant  to
  letters of credit, and anticipated expanded product lines in
  the  coming  months, the Company hopefully will be  able  to
  become  operational and therefore may permit  the  Company's
  independent  auditors  to  remove  from  their  report   the
  qualification  regarding the Company as  a  "going  concern"
  during subsequent fiscal periods.
  
  Liquidity and Capital Resources
  
       The  Company, at September 30, 1998, had current assets
  of   approximately  $7,500,  compared  to  $35,330  at   the
  September  30,  1997, and $64,460 at the end of  the  fiscal
  year  ended December 31, 1997. To assist the Company in  its
  cash  flow  requirements  which are presently  estimated  at
  $10,000 per month, the Company may determine to continue  to
  seek  subscription proceeds from private investors, as  well
  as  revenues  from  sales  of  a  variety  of  products  and
  services,  and  anticipated commencement of  sales  revenues
  from  dengue  fever  test  kits, among  other  products,  to
  Brazil.
  
       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,  professional/accounting  fees,  transfer
  agent and printing service fees, and certain other expenses,
  and  based  upon its present monthly operating  expenses  of
  $10,000,   the   Company  will  be  able  to   operate   for
  approximately three months, which include gross profits from
  the  sale  during the last fiscal quarter if  no  additional
  revenues are generated from operations.
  
        The  Company's  monthly  operating  expenses  for  the
  quarter  ended  September 30, 1998 and  during  the  present
  quarter  include rent for executive office space in Hickory,
  NC,  professional/accounting fees, telephones,  but  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  positive
  cash  flow from operations. During fiscal 1997 and the first
  three  quarters  of  fiscal 1998,  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.  After  the end  of  the  quarter  ended
  September  30,  1998, the Company and ETLC agreed  that  the
  Company  would  not  incur  any expense,  other  than  phone
  expense in connection with use of conference facilities  for
  its Investor Relations offices at Rockefeller Center in NYC.
       
           The   Company's  net  loss  for  the  period  ended
  September 30, 1998, was principally the result of  the  lack
  of  any  revenues during the quarter, 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.  In order for the Company to pay its  operating
  expenses,  including  office rents,  salaries  to  its  non-
  executive   employee  during  a  portion  of  the   quarter,
  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. During the period  from  July  1,  1998
  through September 30, 1998, the Company did not receive  any
  investment proceeds from private investors.
</page>
<PAGE>
  

PART II.       OTHER INFORMATION


Item 1.Legal Proceedings


       See Footnote E to Financial Statements


Item 2.Changes in Securities


       NONE


Item 3.Defaults upon Senior Securities


       NONE


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


       NONE


Item 5.Other Information


       NONE


Item 6.Exhibits and Reports on Form 8-K



       Exhibit 27

</page>
<PAGE>


EXHIBIT 27

ARTICLE 5
THIS   SCHEDULE   CONTAINS  SUMMARY   FINANCIAL   INFORMATION
EXTRACTED  FROM  THE  BALANCE  SHEET  (UNAUDITED)   AND   THE
OPERATIONS  FOR THE PERIOD ENDED JUNE 30 (UNAUDITED)  AND  IS
QUALIFIED  IN  ITS  ENTIRETY BY REFERENCE TO  SUCH  FINANCIAL
STATEMENTS.
</page>
<PAGE>
                           SIGNATURES

       In accordance with the requirements of the Securities
Exchange Act of 1934, the registrant caused this report
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                             AMERICAN DIVERSIFIED GROUP, INC.
                             (Registrant)





November 15, 1998            By:  /s/Jerrold R. Hinton
                                  Jerrold R. Hinton
                                  President, Chief Executive Officer and
                                  Chief Financial Officer


</page>
<PAGE>       
                      AMERICAN DIVERSIFIED GROUP, INC.
                      FORMERLY TERA WEST VENTURES, INC.
                      (A DEVELOPMENT STAGE COMPANY)
                      FINANCIAL STATEMENTS
                      (UNAUDITED)
                      SEPTEMBER 30, 1998
</page>
<PAGE>

                      AMERICAN DIVERSIFIED GROUP, INC.
                      FORMERLY TERA WEST VENTURES, INC.
                      (A DEVELOPMENT STAGE COMPANY)
                      FINANCIAL STATEMENTS
                      (UNAUDITED)
                      SEPTEMBER 30, 1998



                                                        Page


Balance Sheet                                             1

Statements of Operations                                  2

Statements of Cash Flows                                  3

Notes To Financial Statements                             5
</page>
<PAGE>

                       AMERICAN DIVERSIFIED GROUP, INC.
                      FORMERLY TERA WEST VENTURES, INC.
                        (A DEVELOPMENT STAGE COMPANY)
                                BALANCE SHEET
                                 (UNAUDITED)
                           AS OF SEPTEMBER 30, 1998
                                       
<TABLE>
<CAPTION>                                                                              
ASSETS
------
<S>                                                 <C>            <C>
Current Assets:                                                               
    Cash                                                 $2,515               
    Accounts Receivable (Net)                             5,000               
                                                    -----------
        Total Current Assets                                             7,516
                                                                              
Fixed Assets:                                                                 
    Property and Equipment
    (Net of $18,579 Accum. Depr.)                                       17,295
                                                                              
Other Assets:                                                                 
    Deposits                                                570               
    Advance to Affiliate                                 15,000               
    Miscellaneous Receivable
    (Net of $100,000 Allowance)                            -
                                                     ----------
        Total Other Assets                                              15,570
                                                                     ---------
        Total Assets                                                   $40,381
                                                                     =========
LIABILITIES AND SHAREHOLDERS'(DEFICIT) EQUITY
Current Liabilities:                                                          
    Accounts and Accrued
     Expenses Payable                                   $15,609               
    Accounts and Accrued                                               
    Expenses Payable to Related Parties                 200,000
    Notes Payable to Related Parties                    166,463               
                                                     ----------
        Total Current Liabilities                                      382,072

                                                                              
Shareholders' (Deficit) Equity:                                               
    Preferred Stock, Series A,                                                
     $10 par value authorized 50,000 shares;                    
     none outstanding                                      -
    Common Stock, par value $0.001 per share,
     authorized 350,000,000 shares; issued and
     outstanding 230,762,520 shares                     230,762      
    Additional Paid-In Capital                       18,235,119               
    Stock Subscriptions Receivable                     (10,500)               
    Deferred Consulting Fees                          (731,363)               
    Deficit Acc. During Develop. Stage              (9,253,920)               
    Deficit Acc. Prior to Develop. Stage            (8,811,789)               
                                                    ----------- 
       Total Shareholders' (Deficit) Equity                           (341,691)
                                                                              
       Total Liabilities and Shareholders' (Deficit) Equity            $40,381
                                                                      ========
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
</Page>
                                                                              
                                         1                                    
<PAGE>
                            AMERICAN DIVERSIFIED GROUP, INC.
                           FORMERLY TERA WEST VENTURES, INC.
                             (A DEVELOPMENT STAGE COMPANY)
                                STATEMENTS OF OPERATIONS
                                      (UNAUDITED)
                                            
<TABLE>
<CAPTION>
<S>                              <C>            <C>           <C>          <C>                                              
                                        9 MONTHS     9 MONTHS     3 MONTHS     3 MONTHS
                                        ENDED        ENDED        ENDED        ENDED
                                        SEP 30,      SEP 30,      SEP 30,      SEP 30,
                                        1998         1997         1998         1997
                                                                                        
Revenues                                $66,422      $25,330           $0      $25,330
                                                                                        
Cost of Revenues                        56,630        31,961            0       31,961
                                                                                        
Gross Profit                             9,792        (6,631)                   (6,631)
                                                                                        
Selling, Gen. and Adm. Expenses      1,528,946     1,851,553      638,996      891,791
                                     ---------     ---------      -------      ---------
                                                                                        
Loss From Operations                (1,519,154)   (1,858,184)    (638,996)    (898,422)
               
                                                                                        
Other Income:                                                                           
   Reimbursement of Losses               7,802             0            0             0
                                    -----------   -----------   ----------   ----------                                          
Net Loss                           ($1,511,352)  ($1,858,184)   ($638,996)   ($898,422)
                                    ===========   ===========   ==========   ==========                             
                                                                                        
Net Loss Per Share                    ($0.0074)     ($0.0201)    ($0.0028)    ($0.0077)
                                    ===========   ===========   ==========   ==========         
                                                                                        
Average N0. of Shares Outst.       205,095,892    92,451,938  224,306,038  115,925,603
                                   ============   =========== ===========  ============
</TABLE>                                                                  
                                                                            
SEE NOTES TO FINANCIAL STATEMENTS
                                                                    

                                                2                
</PAGE>
<PAGE>
                            AMERICAN DIVERSIFIED GROUP, INC.
                           FORMERLY TERA WEST VENTURES, INC.
                             (A DEVELOPMENT STAGE COMPANY)
                                STATEMENTS OF CASH FLOWS
                                      (UNAUDITED)
                                                     
<TABLE>
<CAPTION>                                                                                        
<S>                                 <C>            <C>          <C>          <C>                                                  
                                       9 MONTHS     9 MONTHS     3 MONTHS     3 MONTHS
                                         ENDED        ENDED        ENDED        ENDED
                                         SEP 30,      SEP 30,      SEP 30,      SEP 30,
                                         1998         1997         1998         1997
                                                                                        
Cash Flows From Operating                                                               
Activities:
    Net Loss                          ($1,511,352)  ($1,858,184)  ($638,996)   ($898,422)
    Depreciation                            5,281         4,638       1,794        1,688
    Gen. and Adm. Exp. Paid by Stock    1,423,313     1,630,043     632,971      854,681
    (Increase)Decrease in Accoun. Rec.     48,391       (25,330)     24,891      (25,330)
    Decrease in Due from Customer                                    18,100   
    Decrease in Prepaid Expenses                                        533   
    (Increase) Decrease in Deposits                         570                   30,303
    Increase/ (Decrease) In
     A/P and Accrued Expenses              30,996        72,941     (29,856)      33,723 
         Net Cash Flows f. Operat. Act.    (3,371)     (175,322)      9,437       (3,357)
                                                                                        
                                                                                        
Cash Flows From Investing                                                               
Activities:
   Advances to Affiliates                 (15,000)                             
   Increase in Due from                                                          
   Related Party                                         (5,000)  
   Acquisition of Property                                          
   and Equipment                           (2,124)       (9,135)
                                          --------       -------     --------     --------
    Net Cash Flows From         
    Investing Activities                  (17,124)      (14,135)          0             0
                                          --------      --------     --------     --------     
</TABLE>
                                                                        
                                                3           
</page>
<PAGE>
                            
                            AMERICAN DIVERSIFIED GROUP, INC.
                           FORMERLY TERA WEST VENTURES, INC.
                             (A DEVELOPMENT STAGE COMPANY)
                                STATEMENTS OF CASH FLOWS
                                      (UNAUDITED)
<TABLE>
<CAPTION>
<S>                                 <C>           <C>         <C>            <C>                                          
                                                                                        
                                        9 MONTHS     9 MONTHS     3 MONTHS     3 MONTHS
                                        ENDED        ENDED        ENDED        ENDED
                                        SEP 30,      SEP 30,      SEP 30,      SEP 30,
                                        1998         1997         1998         1997
Cash Flows From Financing                                                               
Activities:
   Sales of Common Stock                              150,500                    15,000
   Brokers' Fee Paid on Sales                                                  
    of Common Stock                     (6,000)
   Proceeds from Notes                          
    Payable to Related Parties          50,942         50,000
   Payments on Notes Payable                              
    to Rel. Parties                    (15,000)        (9,000)
Stocks issued to Pay Notes                                                              
Payable to Related Parties             (18,000)                    (18,000)             
   Cash Overdraft                                      (2,043)                  (11,643)
                                       --------        -------     --------     --------   
      Net Cash Flows From         
      Financing Activities              11,942        189,457      (18,000)        3,357
                                       -------        --------     --------     --------       
                                                                                        
Net Increase (Decrease) In Cash         (8,553)            0        (8,563)            0
                                                                                  
Cash, Beginning of Period               11,069             0        11,079             0
                                       -------        --------     --------     --------                                      
Cash, End of Period                     $2,516            $0        $2,516            $0
                                       =======        ========     ========     ========      
</TABLE>
                                                                        
Non-Cash Transactions in 1998:
1.  Issued 54,700,000 shares commmon stock for services
of $1,396,400.
                                                                     
Non-Cash Transactions in 1997:
1.  Issued 61,100,000 shares common stock for services
of $1,914,000.
                                                          
SEE NOTES TO FINANCIAL STATEMENTS
                                                                  
                                                4           
</page>
<PAGE>
                AMERICAN DIVERSIFIED GROUP, INC.
                FORMERLY TERA WEST VENTURES, INC.
                  (A DEVELOPMENT STAGE COMPANY)
                  NOTES TO FINANCIAL STATEMENTS
                           (UNAUDITED)
                       SEPTEMBER 30, 1998





NOTE 1 - BASIS OF PRESENTATION

The  accompanying  unaudited  financial  statements  reflect  all
adjustments,  which, in the opinion of management, are  necessary
for a fair presentation of the financial position and the results
of  operations for the interim period presented.  All adjustments
are of a normal recurring nature.

Certain  financial information and footnote disclosures which are  normally
included  in  financial  statements prepared in accordance  with  generally
accepted  accounting  principles, but which are not  required  for  interim
reporting  purposes,  have  been condensed or  omitted.   The  accompanying
financial  statements  should  be read in conjunction  with  the  financial
statements  and  notes  thereto as of December 31, 1997  contained  in  the
Company's Form 10-KSB.


NOTE 2 - EARNINGS (LOSS) PER SHARE

Per  share information is computed based on the weighted  average
number of shares outstanding during the period.
</page>