UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  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: March 31, 1998

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

          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 Street, Suite 202, Hickory, NC 28601
       ---------------------------------------------------------------
                   (Address of principal executive offices)

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

             437 Main Avenue, SW, Hickory, NC 28602
             -------------------------------------- 
      (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 210,212,560
shares outstanding as of May 1, 1998

Transitional Small Business Disclosure Format:  Yes __  No  X
<PAGE>













                              INDEX


                AMERICAN DIVERSIFIED GROUP, INC.


PART I FINANCIAL INFORMATION


Item 1.      Financial Statements (Unaudited)

       Balance  Sheets  - December 31, 1997 (Unaudited) and
       March 31, 1998 (Unaudited).

       Statements of Operations - Three months and ended
       March 31, 1998 and 1997 (Unaudited).

       Statements of Cash Flows - Three months ended March
       31, 1998 and 1997     (Unaudited).

       Notes to Financial Statements
<PAGE>
Item 2.      Management's Discussion and Analysis of Financial
       Condition and Results of Operations

       Results of Operations
       American Diversified Group, Inc. (the "Company")  is
  a  development  stage  company. During the  Company's  three
  month  period ended March 31, 1998, the Company  incurred  a
  net loss of $($592,670)($.0032per Share) compared to a loss of
  $699,662 ($0.0093 per Share) for the comparable three  month
  period for the prior fiscal year. The Company reported sales
  of  $50,750 for the three month period ended March 31,  1998,
  represented  by  the  sales revenues  and  receivables  from
  generic pharmaceuticals and telecommunication sales compared
  to   no  sales  revenues  or  accounts  receivable  for  the
  comparable period of the prior year.
       
       The  Company's net loss for the period ended March  31,
  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 March  31,  1998,  was  $996,400
  compared  to $975,000 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.
       
       The  Company  has continuing orders for  pharmaceutical
  products in West Africa, which will increase in size  during
  successive quarters in fiscal 1998, and projects  to  expand
  its  orders to other West African countries. The Company  is
  increasing its product lines to include a broad spectrum  of
  generic  pharmaceuticals  and  diagnostic  test  kits.   The
  Company  is in the final stages of testing and approval  for
  dengue  fever test kits in Brazil, and with final  approvals
  should   generate  projected  gross  sales  of  $5   million
  annually.

       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 business 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.
<PAGE>       
       The  Company, subsequent to the end of the  quarter  on
  March    31,   1998,   also   shipped   additional   generic
  pharmaceuticals to West Africa. Furthermore,  following  the
  installation  of  additional  communications  hardware   and
  software  in  West Africa, the Company projects  significant
  increases  in  call-back revenues during  the  remainder  of
  fiscal  1998,  as  well as higher profit  margins  from  the
  increased  revenues. The higher profit margins shall  result
  from  the  fact  that  the new hardware  and  software  will
  facilitate  greater  use  of  the  multiple  lines  by  more
  customers,  simultaneously,  without  increased  costs.  The
  Company presently projects that following such installation,
  monthly  call-back  revenues should  be  approximately  $20-
  30,000  per  month  during the 3-6 month call-back  start-up
  period.
       
        The   Company   projects  from  call-back   sales   to
  international  and  domestic  mining  companies,   financial
  institutions, oil companies and foreign embassies in  Guinea
  and  Mali, that it should be able to generate from  $200,000
  to  $400,000  in gross revenues monthly, after the  start-up
  period  of three to six months. The Company further projects
  that  it will have over 200 customers in or about the summer
  of  fiscal 1998 and up to 400 customers by fiscal  year  end
  1998,  with estimated usage of $500 to $1,000 per  customer.
  To date, the Company has signed 50 to 100 customers for call-
  back  service  in  West  Africa but  has  had  only  limited
  revenues  and  receivables  from call-back  because  of  the
  requirement  to install the enhanced hardware and  software,
  which  is  planned  for May, 1998. This  installation  shall
  permit the Company to expand the market penetration for  its
  call-back telecommunications service in West Africa.
<PAGE>  
          The  services of the Company's consultants, together
  with  that  of  the Company's management, have  enabled  the
  Company  to  reach  its present stage of development,  which
  includes having:
           (i)   shipped   additional  generic  pharmaceutical
  products   subject  to  orders  from  West   Africa,   after
  generating its purchase orders for such products  in  fiscal
  1997  and  its first shipments during the third  quarter  of
  fiscal 1997;
          (ii)  received a letter of credit in  the  aggregate
  initial  amount  of approximately $70,000, which  sums  were
  paid to the Company during the first and second quarters  of
  fiscal  1998, as payment of generic pharmaceutical  products
  from West Africa;
          (iii) received approximately $1,703,500 from private
  investors  in  the  Company's unit private placement  during
  fiscal 1997;
          (iv) 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 1998,  in  the
  highly  competitive  and  price sensitive  developing  world
  markets;
           (v)   secured   all   preliminary   approvals   and
  preliminary testing results of dengue fever test kits, which
  are  prerequisite  for the anticipated purchase  orders  for
  dengue  fever test kits from the National Health  Foundation
  of Brazil, State of Roraima, and in Brazil nationally;
           (vi)   established  a  business  venture  that   is
  presently marketing call-back telecommunication services  to
  major    multinational   corporations,   domestic   business
  corporations  and  foreign embassies in  West  Africa,  from
  which   the   Company  first  began  to  generate   accounts
  receivable  commencing in September, 1997,  with  increasing
  revenues  and accounts receivable being generated subsequent
  to the quarter ending June 30, 1998;
            (vii)   commenced   business   relationship   with
  manufacturers  of complete lines of generic  pharmaceuticals
  for   the  purpose  of  satisfying  the  Company's  existing
  purchase orders and its expected increasing level of  orders
  in West Africa; and
       (viii)   entered  into  a  joint  venture  and   equity
  participation   agreement   with   Telephonetics    Overseas
  Corporation,  Miami, FL, which is engaged  in  the  sale  of
  Internet  and Telephony products and services,  and  on-hold
  messaging and advertising products and services.
  
        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.  As  a
  direct result of the foregoing business advances and pending
  business  developments, the Company has been able  to  raise
  $150,000  through  September  30,  1997,  from  the  private
  placement of its units, at the unit offering price of  $.04.
  This  funding, together with the recent payments for generic
  pharmaceutical  products from the letter of credit  for  the
  shipments  to West Africa, and anticipated increased  levels
  of  telecommunications revenues in the coming months, should
  enable the Company to become operational and hopefully  will
  permit  the  Company's independent auditors to  remove  from
  their  report the qualification regarding the Company  as  a
  "going concern" during subsequent fiscal periods, perhaps as
  early as the second quarter of 1998.
<PAGE>  
      Liquidity and Capital Resources
  
       The  Company, at March 31, 1998, had current assets  of
  approximately $97,486, compared to $6,336 at the  March  31,
  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 $10-15,000 per
  month,  the  Company  may  determine  to  continue  to  seek
  subscription  proceeds from private investors,  as  well  as
  revenues  from  sales  of  products  and  telecommunications
  products and services, and anticipated commencement of sales
  revenues from dengue fever test kits in Brazil. Further, the
  Company projects that with the increased revenues from call-
  back     following    the    installation    of     enhanced
  telecommunications hardware and software, the Company  shall
  also  have  higher profit margins on such revenues  for  the
  reasons stated above.
  
       Notwithstanding indications of interest from  investors
  for additional subscriptions, there can be no assurance that
  additional  subscriptions shall be received under  the  unit
  private  placement.  The  trading price  of  shares  of  the
  Company's  common stock during the three months ended  March
  31,  1998, has been primarily in the range of $.025 to $.05,
  but  during  several days in March, 1998, the trading  range
  increased to the level of $.06 to $.08 range. Following  the
  end  of the quarter ended March 31, 1998, the trading  price
  of  the shares has again been in the range of $.025 to  $.05
  per  share. While the Company has been successful in raising
  capital  in  the  unit private placement, there  can  be  no
  assurance that the Company will be able to continue to raise
  private  capital,  whether  or  not  the  Company's   shares
  continue  to trade at the levels that have 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,  professional/accounting  fees,  transfer
  agent and printing service fees, and certain other expenses,
  and based upon its present monthly operating expenses of $10-
  15,000,   the   Company  will  be  able   to   operate   for
  approximately  four  months if no  additional  revenues  are
  generated   from   operations.  However,  the   Company   is
  generating increased operating revenues during the first and
  second  quarters of fiscal 1998, as a result  of  additional
  shipments  of  generic pharmaceuticals to West  Africa,  and
  projects  increasing  receivables from  sales  of  call-back
  service in West Africa and anticipates revenues from Brazil.
  
        The  Company's  monthly  operating  expenses  for  the
  quarter  ended March 31, 1998 and during the present quarter
  include rent for executive office space in Hickory, NC,  use
  of  conference facilities for its Investor Relations offices
  at  Rockefeller Center in NYC, 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 quarter 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.
<PAGE>

  



PART II.       OTHER INFORMATION


Item 1.Legal Proceedings


     See Footnote E to Financial Statement


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>
EXHIBIT 27


ARTICLE 5
THIS   SCHEDULE   CONTAINS  SUMMARY   FINANCIAL   INFORMATION
EXTRACTED  FROM  THE  BALANCE  SHEET  (UNAUDITED)   AND   THE
OPERATIONS  FOR  THE THREE MONTHS ENDED MARCH 31  (UNAUDITED)
AND  IS  QUALIFIED  IN  ITS ENTIRETY  BY  REFERENCE  TO  SUCH
FINANCIAL                                         STATEMENTS.
<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)





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


AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 1998


                                        PAGE
BALANCE SHEET                            1
STATEMENTS OF OPERATIONS                 2
STATEMENTS OF CASH FLOW                  3
NOTES TO FINANCIAL STATEMENTS            4


AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
(UNAUDITED)
AS OF MARCH 31, 1998


ASSETS
------

Current Assets:
    Cash                                             $30,631
    Accounts Receivable                               61,855
    Inventories                                        5,000
                                                    -------- 
      Total Current Assets                                        97,486

Fixed Assets:
    Property and Equipment (Net of $15,009 Accum. Depr.)          19,258

Other Assets:
    Deposits                                            570
    Miscellaneous Receivable (Net of $100,000 Allowance) -
                                                   --------
        Total Other Assets                                           570
                                                                --------
        Total Assets                                            $117,314
                                                                --------
                                                                --------

LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
----------------------------------------------

Current Liabilities:
    Accounts and Accrued Expenses Payable          $30,622
    Accounts and Accrued Exp. Pay.-Related Parties 172,190
    Notes Payable to Related Parties               206,463
                                                   -------
        Total Current Liabilities                                409,275

Shareholders' (Deficit) Equity:
    Preferred Stock, Series A, $10 par value
       authorized 50,000 shares; none outstand         -
    Common Stock, par value $.001 per share,
       auth.200,000,000 shares; issued and
       outstanding 212,062,520 shares             212,062
    Additional Paid-In Capital                 17,838,319
    Deferred Consulting Fees                   (1,197,305)
    Deficit Accumulated During Develop. Stage  (8,333,248)
    Deficit Accumulated Prior to Develop. Stage(8,811,789)
                                              -----------
          Total Shareholders' (Deficit) Equity                  (291,961)
                                                                ---------

          Total Liabilities and Shareholders' (Deficit)         $117,314
                                                                ---------
                                                                ---------
SEE NOTES TO FINANCIAL STATEMENTS
                                     1


                       AMERICAN DIVERSIFIED GROUP, INC.
                       FORMERLY TERA WEST VENTURES, INC.
                       (A DEVELOPMENT STAGE COMPANY)
                       STATEMENTS OF OPERATIONS
                       (UNAUDITED)
                       FOR THE THREE MONTHS ENDED MARCH 31



                                                             
                                                             
                                                 1998       1997


Sales                                         $52,750         $0


Costs of Sales                                 45,495          0
                                              -------    -------           

Gross Profit                                    7,255          0

 
General and Administrative Expenses           607,727    699,662
                                             --------    -------

Loss From Operations                         (600,472)  (699,662)


Other Income:
   Reimbursement of Loss                        7,802       -
                                             --------   ---------   

Net Loss                                    ($592,670) ($699,662)
                                            ---------- ----------
                                            ---------- ----------



Net Loss Per Share                           ($0.0032)  ($0.0093)
                                            ----------  ---------
                                            ----------  ---------

Average Number of Shares Outstanding      182,495,226  75,090,337
                                          -----------  ----------
                                          -----------  ----------  




SEE NOTES TO FINANCIAL STATEMENTS
                                     2


                       AMERICAN DIVERSIFIED GROUP, INC.
                       FORMERLY TERA WEST VENTURES, INC.
                       (A DEVELOPMENT STAGE COMPANY)
                       STATEMENTS OF CASH FLOWS
                       (UNAUDITED)
                       FOR THE THREE MONTHS ENDED MARCH 31



                                                     1998        1997

Cash Flows From Operating Activities:
    Net Loss                                   ($592,670)  ($699,662)
    Depreciation                                   1,711       1,303
    General and Administ. Exp. Paid by  Stock    557,371     600,181
    Increase In Accounts Receivable              (13,464)       -
    Increase In Accounts Pay. and Accrued Exp.    22,188      10,755
                                               ---------   ---------
         Net Cash Used In Operating Activities   (24,864)    (87,423)
                                               ---------   ---------
                                               
Cash Flows From Investing Activities:
  Acquisitions of Property and Equipment            (516)     (3,801)
  Decrease In Deposits                              -            570
                                               ---------   ---------  
         Net Cash Used In Investing Activities      (516)     (3,231)
                                               ---------   ---------    

Cash Flows From Financing Activities:
  Sales of Common Stock                             -        100,000
  Brokers' Fees Paid on Sales of Common Stock     (6,000)
  Proceeds from Notes Payable to Related Parti    50,942        -
  Payments on Notes Payable to Related Parties      -         (4,000)
  Cash Overdraft                                    -         (4,010)
                                               ---------   ---------
         Net Cash Provided By Financing Activit.  44,942      91,990
                                               ---------   ---------
                                     

Net Increase in Cash                              19,562       1,336

Cash, Beginning of Period                         11,069        -
                                               ---------   ---------   
Cash, End of Period                              $30,631      $1,336
                                               ---------   ---------
                                               ---------   ---------  

Non-Cash Transactions in 1998:
------------------------------
1.  Issued 52,700,000 shares of common stock for services of $996,400.

Non-Cash Transactions in 1997:
------------------------------
1.  Issued 19,500,000 shares of common stock for services of $975,000.




SEE NOTES TO FINANCIAL STATEMENTS
                                     3

                       AMERICAN DIVERSIFIED GROUP, INC.
                       FORMERLY TERA WEST VENTURES, INC.
                       (A DEVELOPMENT STAGE COMPANY)
                       NOTES TO FINANCIAL STATEMENTS
                       (UNAUDITED)
                       MARCH 31, 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
on 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