| ****UNITED    STATES****                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               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| ****SECURITIES    AND EXCHANGE COMMISSION****                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                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| ****Washington,    DC 20549****                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        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| **Form 10-QSB**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        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|                                  (Mark one)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            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| [ X ] QUARTERLY REPORT UNDER    SECTION 13 OR 15 (d) OF THE 
SECURITIES EXCHANGE ACT OF 1934** **
For the quarterly period ended:    June 30, 2001  
[    ]    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 incorporation or organization) 
(IRS Employer    Identification No.)  
110 North Center Street,    Suite 202, Hickory, NC
28601
(Address of    principal executive offices)
(Zip Code)828-322-2044(Issuer’s    telephone number)_____________________________________________________________(Former name, former    address and former fiscal year, if changed since last report)
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: 427,562,358 shares issued as of August 6,  2001Transitional Small    Business Disclosure Format: Yes __ No X
 

 

 

 

 

 

 

 

**PART I. FINANCIAL    INFORMATION**
Page  Item 1. Consolidated Financial Statements    (Unaudited)2Item 2. Management’s Discussion and    Analysis6  
**PART II. OTHER    INFORMATION**Item 1. Legal Proceedings8Item 2. Changes in Security8Item 3. Default Upon Senior Securities9Item 4. Submission of Matters to a Vote of    Security Holders9Item 5. Other Information9Item 6. Exhibits and Reports on Form 8-K9
 

**PART I FINANCIAL INFORMATION**

**Item 1. Financial Statements**

Page Consolidated Balance Sheets (Unaudited) as of    June 30, 2001 and December 31, 2000.2Consolidated Statements of Income ( Loss)    (Unaudited) for the Three and Six months ended June 30, 2001 and 2000.3Consolidated Statements of Cash Flows    (Unaudited) for the Six months ended June 30, 2001 and 2000.4Notes to Consolidated Financial Statements.5
 
AMERICAN DIVERSIFIED GROUP, INC. AND    SUBSIDIARIESCONSOLIDATED BALANCE SHEETS (UNAUDITED)         
June 30, 2001
Dec. 31, 2000
**ASSETS****CURRENT ASSETS**   Cash and cash    equivalents 
$16,132
$12,693   Accounts    receivable, less allowance for doubtful accounts of $303,854
807,282
888,708   Note receivable    from customer500,000-   Receivable from    related parties 
242,805
223,535   Prepaid expenses 
- 
11,519     **TOTAL    CURRENT ASSETS**
1,566,219
1,136,455PROPERTY AND EQUIPMENT (Net of    $207,997 and $176,157 accumulated depreciation) 
863,379
895,218  OTHER ASSETS   Goodwill7,5007,500  Organization costs, net509565   Deposits 
320,520
316,200   Miscellaneous    receivable (less $125,000 allowance for uncollectibility) 
- 
-      **TOTAL    OTHER ASSETS**
328,529
324,265  **TOTAL ASSETS**
$2,758,127
$2,355,938  
**LIABILITIES    AND STOCKHOLDERS' EQUITY****LIABILITIES**   Accounts payable 
$337,727
$349,383   Current portion of    capital lease obligation58,795
44,354   Accrued payroll    and related taxes174,376
64,200   Accrued expenses    and other liabilities 
75,532
79,849   Deferred revenues
75,500
59,307   Accrued income    taxes payable
47,935
47,935   Related party    payable
208,201
60,851     **TOTAL    CURRENT LIABILITIES**
978,066
705,879  LONG-TERM LIABILITIESCapital lease obligations$220,342$230,391Notes payable-stockholders63,00083,000    **TOTAL    LONG-TERM LIABILITIES**283,342313,391    **TOTAL    LIABILITIES**1,761,4081,019,270  **STOCKHOLDERS' EQUITY**   Preferred stock,    Series A, $10 par value, 50,000 shares authorized;      none    issued and outstanding - -    Common stock,    $.001 par value, 700,000,000 shares authorized;         427,562,358 and 422,439,560 shares issued and outstanding 
427,563
422,440   Additional paid-in    capital 
21,956,047
21,594,270   Deferred    consulting fees
(106,250)
(212,500)   Accumulated    deficit
(20,780,641)
(20,467,542)     **TOTAL    STOCKHOLDERS' EQUITY**
1,496,719
1,336,668**TOTAL LIABILITIES AND    STOCKHOLDERS' EQUITY**
$2,758,127
$2,355,938See accompanying notes. 
 
AMERICAN DIVERSIFIED    GROUP, INC. AND SUBSIDIARIES**CONSOLIDATED    STATEMENTS OF INCOME (LOSS) (UNAUDITED)**    
For    the 
For    the 
For    the 
For    the Six MonthsSix MonthsThree MonthsThree Months
Ended    
Ended    
Ended    
Ended    
June    30, 2001
June    30, 2000
June    30, 2001
June    30, 2000**REVENUES**   Sales $1,159,606$1,959,677
$900,673
$826,666   Cost of sales 918,8071,108,615
318,855
401,855     **GROSS    MARGIN**240,799851,062
581,818
424,197  **EXPENSES**   Payroll and    related taxes85,416202,43744,08990,191   Professional fees70,66864,93511,28437,662   Officers' salary 157,500153,24078,75094,600   Consulting fees408,23352,99055,54035,190   Bad debts84,166-84,166-   Other operating    expenses38,92569,89818,57848,350   Marketing- 49,749- 49,749   Telephone and    communications42,83263,21416,89333,468   Travel and related    expenses 27,54359,2109,29931,040   Rents 56,90136,35324,82125,866   Insurance and    employee benefits46,50327,25126,81819,326   Depreciation and    amortization17,2816,3918,6413,375     **TOTAL    EXPENSES**1,035,968785,668378,879468,817  **INCOME (LOSS) FROM    OPERATIONS**(295,169)65,394202,939(44,620)  **OTHER INCOME (EXPENSE)**   Interest income 10,3939,412
5,147
7,386   Interest expense (28,323)(42,212)(13,120)(21,994)**NET OTHER INCOME    (EXPENSE)**(17,930)(32,800)
(7,973)
(14,608)  **INCOME (LOSS) BEFORE    INCOME TAXES**
(313,099)
32,594
194,966
(59,228)  **INCOME TAXES**- - - -   **NET INCOME (LOSS)**
$(313,099)
$32,594
$194,966
$(59,228)  WEIGHTED AVERAGE NUMBER OF    COMMONSHARES OUTSTANDING 
422,983,491
243,806,758
427,067,853
304,191,076(BASIC AND DILUTED)   BASIC NET LOSS PER SHARE (BASIC    AND DILUTED) 
$(0.00)
$0.00
$0.00
$(0.00)See accompanying    notes. 
 
AMERICAN DIVERSIFIED    GROUP, INC. AND SUBSIDIARIESCONSOLIDATED    STATEMENTS OF CASH FLOWS (UNAUDITED)   
For the
For the
Six     Months Ended
Six     Months Ended
June 30, 2001
June 30, 2000**CASH FLOWS FROM    OPERATING ACTIVITIES**   Net loss
$(313,099)
32,594   Adjustments to    reconcile net loss to net    cash used by    operating activities:         Depreciation and amortization
31,895
88,425        Amortization of deferred consulting fees 
106,250
-      Common    stock exchanged for services 
324,000
5,000   (Increase) decrease    in assets:         Accounts receivable
81,426
(727,770)     Note    receivable from customer(500,000)-      Prepaid    expenses 
11,519
94,000   Increase (decrease)    in liabilities:         Accounts payable 
(11,656)
342,578     Accrued    payroll and related taxes
110,176
-      Accrued    expenses and other liabilities(4,317)20,200      Deferred    revenues
16,193
(12,534)     **NET    CASH USED BY OPERATING ACTIVITIES**
(147,613)
(157,507)**CASH FLOWS FROM    INVESTING ACTIVITIES**   Acquisition of    property and equipment 
- 
(722,438)   Payments for    related party receivables, net
(27,610)
(48,700)   Deposits
(4,320)
(86,038)    **NET CASH USED BY INVESTING ACTIVITIES**
(31,930)
(857,176)**CASH FLOWS FROM    FINANCING ACTIVITIES**   Sale of common    stock 
22,900
400,000   Payments on capital    lease financing
4,392
-    Proceeds from    related party payable
170,690
200,000   Payments on related    party payables
(15,000)
-    Proceeds from notes    and loans payable
- 
639,000   Payments on notes    and loans payable- (113,333)   Proceeds from notes    payable to shareholders, net 
- 
3,155        **NET    CASH PROVIDED BY FINANCING ACTIVITIES**
182,982
1,128,822  **NET INCREASE IN CASH AND    EQUIVALENTS**
3,439
114,139  **CASH AND EQUIVALENTS -    BEGINNING**
12,693
123,186  **CASH AND EQUIVALENTS -    ENDING**
$16,132
$237,325  **SUPPLEMENTAL DISCLOSURES**Cash paid during the period for:            Interest 
$28,323
$10,437     Income    taxes 
$ - 
$20,000  In addition to amounts reflected    above, common stock was issued for:         Settlement of debt 
$20,000
$468,421        Consulting services 
$324,000
$5,000See accompanying    notes. 
 
  
**AMERICAN DIVERSIFIED GROUP, INC.    AND SUBSIDIARIES**
NOTES TO CONSOLIDATED FINANCIAL    STATEMENTS (Unaudited)
June 30, 2001

**NOTE 1 - BASIS OF PRESENTATION**

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

Certain financial information and footnote disclosureswhich are normally included in financial statements prepared in accordance with generallyaccepted accounting principles, but which are not required for interim reporting purposes,have been condensed or omitted. The accompanying financial statements should be read inconjunction with the Consolidated Financial Statements and notes thereto as of December31, 2000 contained in the Company's Form 10-KSB.

**NOTE 2 – PRINCIPLES OF CONSOLIDATION**

The consolidated financial statements include the accountsof American Diversified Group, Inc. (ADGI) and its two wholly-owned subsidiaries, GlobalTransmedia Communications Corporation (Global) and NCI Telecom (NCI). All materialintercompany accounts and transactions have been eliminated.

**NOTE 3 - NOTE RECEIVABLE FROM CUSTOMER**

The company, through Global, entered into a networkprovisioning agreement with a customer for an agreed upon price of $500,000. The customerissued a promissory note payable to Global for $500,000, due on or before July 16, 2001.The parties subsequently agreed to extend the payment schedule. In August 2001 Globalreceived $100,000 as partial payment on this obligation. The company anticipates the$400,000 balance due will be received in the near term.

**NOTE 4 - INCOME TAXES**

The company has accumulated net operating losses, whichcan be used to offset current earnings. Accordingly, the current income tax provision isoffset by benefit from net operating loss carryforwards.

**NOTE 5 – EARNINGS (LOSS) PER SHARE**

Per share information is computed based on the weighted average numberof common shares outstanding (basic and diluted) during the period.

 

**Item 2. Management’s Discussion and Analysis**

Forward-Looking Statements; Market Data

Forward-Looking Statements: This Form 10-QSB and otherstatements issued or made from time to time by American Diversified Group, Inc. containstatements which may constitute "Forward-Looking Statements" within the meaningof the Securities Act of 1933, as amended and the Securities Exchange Act of 1934 by thePrivate Securities Litigation Reform Act of 1995, 15 U.S.C.A. Sections  77Z-2 and78U-5 (SUPP. 1996). Those statements include statements regarding the intent, belief orcurrent expectations of the Company, its officers and directors and the officers anddirectors of the Company's subsidiaries as well as the assumptions on which suchstatements are based. Prospective investors are cautioned that any such forward-lookingstatements are not guarantees of future performance and involve risks and uncertainties,and that actual results may differ materially from those contemplated by suchforward-looking statements. 

We make forward-looking statementsin this Item 2. These forward-looking statements include, but are not limited to,statements about our plans, objectives, expectations, intentions and assumptions and otherstatements that are not historical facts. We generally intend the, words"expect", "anticipate", "intend", "plan","believe", "seek", "estimate" and similar expressions toidentify forward-looking statements.

This Quarterly Report contains certain estimates andplans related to the telecommunications industry in which our subsidiaries, GlobalTransmedia Telecommunications Corporation, a Delaware corporation ("Global") andNCI Telecom, Inc., a Missouri corporation ("NCI") operate. The estimates andplans assume that certain events, trends and activities will occur, of which there can beno assurance. In particular, we do not know what level of growth in the telecommunicationsindustry, and particularly in those Voice over Internet Protocols ("VoIP")markets in which Global operates and to a lesser extent the growth, if any, in thedeclining Wide Area Network ("WAN") and Local Area Network ("LAN")business in which NCI operates. If our assumptions are wrong about any events, trends andactivities, then our estimates for future growth from Global and our consolidated businessoperations may also be wrong. There can be no assurance that any of our estimates as toour business growth will be achieved.

Results of Operations

American Diversified Group, Inc. is also referred to as"we", "us" and "our". We are no longer considered  adevelopment stage company, because significant revenue generating operations havecommenced and are anticipated to continue. We completed the acquisition of Global inFebruary, 2000 and the acquisition of NCI in June, 2000. The period comparisons belowinclude the Company, Global and NCI.

Results of Operations - Comparison of Three Months Ended June 30, 2001and 2000 
*Revenues. Our sales increased to $900,673 or 9.1% for the threemonths ended June 30, 2001 compared to sales of $825,666 for the three months ended June30, 2000. This increase is primarily attributable to revenues related to proving access toour VoIP network to an affiliated party. Growth of our network and our retail customerbase did not contribute to our increased revenues.
*Cost of Sales. Our cost of sales consists primarily of the costs oftermination of long distance traffic over our networks and the wholesale cost of buyingbandwidth purchased for resale by us. Our cost of sales decreased to $318,855 or 21% forthe three months ended June 30, 2001 compared to cost of sales of $401,469 during thethree months ended June 30, 2000. We expect cost of sales to increase in future periods tothe extent that our sales volume increases. 
*Gross Margin. For the three months ended June 30, 2001, we improvedour gross profit margin to 65% compared to a gross profit margin of 51% during the threemonths ended June 30, 2000. This improvement is not related to the increase in trafficover our own VoIP network. As discussed above under revenues, we received $500,000 forproviding access to our VoIP network and the increase in margin is mainly attributable tosuch access fees.
*Operating Expenses. Our operating expenses consist primarily ofpayroll and related taxes, expenses for executive and administrative personnel, facilitiesexpenses, professional and consulting services expenses, travel and other generalcorporate expenses. Our operating expenses for the three months ended June 30, 2001decreased to $378,879 or 19% for the three months ended June 30, 2001 compared to $468,817for the same period in 2000. During the three months ended June 30, 2001, we undertookseveral changes in our operations and management structure, which had already a positiveimpact on our operating expenses.

The decrease in operating expenses is primarily due to a decrease ofapproximately $46,000 in payroll and related taxes and $49,000 decrease in marketingexpenses. Other operating expenses decreased from $48,350 during the three months endedJune 30, 2000 to $18,578 during the three months ended June 30, 2001. We incurred anincrease in depreciation and amortization expenses to $8,641 for the three months endedJune 30, 2001 compared to $3,375 in the same period in 2000. This increase is primarilydue to the increase in depreciation from assets leased for the expansion of our VoIPnetwork.

Our operating expenses are expected to decrease as a percentage ofrevenue in future periods because our existing operating infrastructure will allowincreases in revenues without having to incrementally add operating expenses. However, weexpect these expenses to increase in absolute dollars as we continue to expand our networktermination locations worldwide and incur additional costs related to the growth of ourbusiness and being a public company.
*Income (Loss) from Operations. We had an income from operations of$202,939 for the three months ended June 30, 2001 compared to a loss from operations of$44,620 for the same period in the prior year. The income from operations is mainlyattributable to our improved gross profit margin and reduced operating expenses. 
*Other Income (Expense). Interest income (expenses) consists ofinterest expense on our borrowings and interest income earned on our cash and cashequivalents. We received interest income of $5,147 during the three months ended June 30,2001 compared to $7,386 during the same period in the prior year. Interest expenses duringthe three months ended June 30, 2001 were $13,120 compared to $21,994 during the sameperiod in the prior year. 
*Net Income (Loss). Our net income for the three months ended June30, 2001 was $194,966 or an increase by 429% compared to a net loss of $59,228 during thesix months ended June 30, 2000. 

Liquidity and Capital Resources.

As of June 30, 2001, we had $16,132 of cash and cash equivalentscompared to $12,693 at December 31, 2000. We had $807,282 or 9.1% less in accountsreceivable on June 30, 2001 compared to $888,708 on December 31, 2000. We believe that ouraccounts receivable are fully collectable. Our receivables from related parties increasedslightly from $223,535 at December 31, 2000 to $242,805 at June 30, 2001. During the threemonths ended June 30, 20001, we were issued a note in the amount of $500,000 from acustomer related to providing access to our VoIP network. (See also Note 3 of the Notes tothe Consolidated Financial Statements.) As of June 30, 2001, we had current assets of$1,566,219 compared to current assets of $1,136,455 as of December 31, 2000 or an increaseby 38%. We had a working capital of $588,153 as of June 30, 2001.

We had non-current assets of $328,529 as of June 30, 2001, which assetsdid not change significantly. Total assets increased by 20% from $2,355,938 at December31, 2000 to $2,758,127 at June 30, 2001.

Our total current liabilities increased to $978,066 or 38% at June 30,2001 compared to total current liabilities of $705,879 at December 31, 2000. This increasewas principally due to an increase in accrued payroll and related taxes and payables torelated parties. Our long-term liabilities decreased from $313,391 at December 31, 2001 to$283,342 at June 30, 2001, or by 10%. Total liabilities increased by 24% from $1,019,270at December 31, 2000 to $1,261,408 at June 30, 2001.

Net cash used in operating activities was $147,613 for the six monthsended June 30, 2001 compared to $157,507 during the same period in the prior year. Thisuse of cash resulted from our net loss, which included $31,895 in non-cash depreciationand amortization expense, $106,250 in amortization of deferred consulting fees and$324,000 in equity related compensation. The $500,000 in notes receivable during thesix-month period ended June 30, 2001 significantly increased our cash used in operatingactivities. The increase in accrued payroll and related taxes offset our cash used inoperating activities.

Net cash used in investing activities decreased from $857,176 duringthe six months ended June 30, 2000 to $31,930 during the six months ended June 30, 2001.We did not acquire any property or equipment including computer equipment and equipmentfor Internet gateways for voice over the Internet transmission during the six months endedJune 30, 2001 compared to capital expenditures of $722,438 during the three months endedJune 30, 2000. We made payments of $27,610 on related party receivables during the sixmonths ended June 30, 2001.

Net cash provided by financing activities was $182,982 for the sixmonths ended June 30, 2001 compared to $1,128,822 for the same period in the prior year.We financed our negative cash flow from operations through the sale of common stock,capital lease financing and the issuance of notes to related parties. We received proceedsin the amount of 22,900 during the six months ended June 30, 2001 from the issuance ofrestricted shares of common stock. We also received $170,690 in proceeds from the issuanceof notes to related parties. These proceeds were offset by payments of $15,000 on relatedparty payables. 

We do not have existing capital resources or credit lines availablethat are sufficient to fund our operations and capital requirements as presently plannedover the next twelve months. We are actively pursuing additional funds through theissuance of debt and/or equity instruments. 

 

**PART II. OTHER INFORMATION**

**Item 1. Legal Proceedings**

Reference is made to our Quarterly Report on Form 10-QSB for the periodended March 31, 2001.
**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

(a) Exhibits:

Exhibit No.
Document Description
3(i)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(ii)Bylaws (filed as Exhibit 3.4 to the Company's    Registration Statement on Form 10-SB and incorporated herein by reference)
13Quarterly Report on Form 10-QSB for the period    ended March 31, 2001 and incorporated herein by reference.
(b) Form 8-K.

During the quarter ended June 30, 2001, we did not filea Current Report on Form 8-K.
**SIGNATURES**
In accordance with Section 12 or 15(d) of the Exchange Act, the smallbusiness issuer has caused this report to be signed on its behalf by the undersigned,thereunto duly authorized.
AMERICAN DIVERSIFIED GROUP, INC.By: /s/ Jerrold R. HintonJerrold R. Hinton, President, Chief Executive Officer and    DirectorDated: August 14, 2001Hickory, NC
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