<PAGE>

                            UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C.  20549

                            Form 10-QSB/A

(Mark one)

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

      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  July  15,
1998
 
  Transitional  Small Business Disclosure Format:   Yes  __   No   X


                                Page 1
<PAGE>
      
                                INDEX

                AMERICAN   DIVERSIFIED  GROUP,   INC.

PART I   FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

         Balance Sheet - 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 2
<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 $600,472 ($.0032 per Share)
compared to a loss of $699,662 ($.0093 per Share) for the  comparable
three month period for the  prior  fiscaly year.
The  Company reported sales revenues of $52,750 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 public company,  which  expenses
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 3
<PAGE>
The  Company, subsequent to the end of the quarter on March 31,  1998,
also  shipped  additional  generic  pharmaceuticals  to  West  Africa,
resulting in additional sales revenues and receivables which  will  be
reported  in  the  Company's quarterly report for the second  quarter.
Furthermore,  following the installation of additional  communications
hardware and software in West Africa, which should be completed during
the  third  quarter  of fiscal 1998, 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 $500 to $1,000 per customer per month
during  the 3-6 month call-back start-up period during which time  the
Company will actively seek to resign to its enhanced service up to 200
or more customers prior to fiscal year end. The Company had previously
signed  and serviced approximately 100 customers for call-back service
in  West Africa but has had only limited revenues and receivables from
call-back  because of service interruption that has  necessitated  the
requirement  to install the enhanced hardware and software,  scheduled
for  completion  during the third quarter of 1998.  This  installation
shall permit the Company to expand the market penetration for its call-
back telecommunications service in West Africa.


                                Page 4
<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 $192,000 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;

(viii) entered into a joint venture and equity participation agreement
with Global Transmedia Communication Corporation, Miami, FL, which  is
engaged  in the sale of Internet telephony products and services,  and
on-hold messaging and advertising products and services; and

(ix)  entered  into exclusive agreements with a generic pharmaceutical
manufacturer as well as an international medical products distributor,
giving  the  Company exclusive rights to sell in Africa, Asia,  Europe
and  South  America  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 5
<PAGE>
Liquidity and Capital Resources
-------------------------------
The  Company, at March 31, 1998, had current assets  of  $97,486,
compared  to $6,336 at the March 31, 1997, and $64,460 at  the  fiscal
year  ended December 31, 1997. To assist the Company in its cash  flow
requirements which are presently estimated at $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.There can be no assurance  that
additional  subscriptions shall be received  under  the  unit  private
placement,  and  in  fact  the  Company has  not  received  additional
subscriptions since the end of the 1997 fiscal year, during  which  it
received private placerment proceeds of $192,000. The trading price of
shares of the Company's common stock during the six months ended  June
30, 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 $.10 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. The Company shall be dependent upon  the
continued  shipment  of  orders,  including  potential  revenues  from
participation in recent requests fro products from West Africa,  which
if  accepted  could lead to significantly increased sales levels.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 $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,
commencing  as  early  as  July 1998.The Company's  monthly  operating
expenses  of approximately $15,000 during the quarter ended March  31,
1998  and during the second 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 6
<PAGE>
PART II. OTHER INFORMATION

Item 1. Legal Proceedings

        See Footnote 3 to  Notes to Financial Statement for Fiscal Year Ended
        December  31,  1997.

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 7
<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 8
<PAGE>

SIGNATURES

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

                           AMERICAN DIVERSIFIED GROUP, INC..
                           (Registrant)


July 16, 1998              By: /s/Jerrold R. Hinton
                               --------------------
                               Jerrold R. Hinton
                               President, Chief Executive Officer and
                               Chief Financial Officer

                                Page 9
<PAGE>

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


                                PAGE 10

<PAGE>




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



                                               PAGE
BALANCE SHEET                                  12 

STATEMENTS OF OPERATIONS                       13

STATEMENTS OF CASH FLOWS                       14

NOTES TO FINANCIAL STATEMENTS                  15


                                Page 11
<PAGE>

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

<S>                                             <C>         <C>
ASSETS
------
Current Assets:
    Cash                                          $30,631
    Accounts Receivable (Net)                      61,855
    Inventories                                     5,000
                                                --------- 
       Total Current Assets                                  97,486

Fixed Assets:
    Property and Equipment
    (Net of $15,009 Accum. Depr.)                            19,257

Other Assets:
    Deposits                                          570
    Miscellaneous Receivable
    (Net of $100,000 Allowance)                        -
                                                ---------
                                                                570
                                                           --------   
        Total Assets                                       $117,313
                                                           ========
</TABLE>


<TABLE>
<CAPTION>

<S>                                            <C>         <C>
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY

Current Liabilities:
    Accounts and Accrued Expenses Payable          $30,622
    Accounts and Accrued Expenses Payable
    to Related Parties                             176,179
    Notes Payable to Related Parties               206,463
                                                   ------- 
      Total Current Liabilities                             413,264
                                                            -------
Shareholders' (Deficit) Equity:
    Preferred Stock, Series A, $10 par value
       authorized 50,000 shares; none outstandi      -
    Common Stock, par value $.001 per share,
       authorized 350,000,000 shares; issued
       and outstanding 212,062,520 shares         212,062
    Additional Paid-In Capital                 17,846,819
    Stock Subscriptions Receivable                (10,500)
    Deferred Consulting Fees                   (1,197,305)
    Deficit Accumulated During
    Development Stage                          (8,335,238)
    Deficit Accumulated Prior to
    Development Stage                          (8,811,789)
                                               -----------
       Total Shareholders' (Deficit) Equity                (295,951)
                                                           ---------
       Total Liabilities and Shareholders'
       (Deficit) Equity                                    $117,313
                                                           ========
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS 
 
                                Page 12
<PAGE> 

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



<TABLE>
<CAPTION>
<S>                                          <C>          <C> 
                                               1998           1997
                                               ----           ----

Revenues                                       $52,750            $0

Costs of Revenues                               45,495             0
                                               -------       -------
Gross Profit                                     7,255             0

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

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


Other Income:
   Reimbursement of Losses                       7,802          -

Net Loss                                     ($592,670)    ($699,662)
                                             =========     =========
Net Loss Per Share                            ($0.0032)     ($0.0093)
                                             =========     =========

Average Number of Shares Outstanding       182,459,226    75,090,337
                                           ===========    ==========       

</TABLE>


SEE NOTES TO FINANCIAL STATEMENTS
                               
                                Page 13

<PAGE>

                      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


<TABLE>
<CAPTION>

<S>                                           <C>           <C> 
                                                  1998          1997
                                                  ----          ----
Cash Flows From Operating Activities:
    Net Loss                                   ($592,670)     ($699,662)
    Depreciation                                   1,711          1,303
    Amortization of Deferred Consulting Fees      168,971       175,181
    General and Administrative Expenses Paid
    by Stock                                      388,400       425,000
    Increase In Accounts Receivable               (13,464)         -
    Increase In Accounts Payable and Accrued
    Expenses                                       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 Parties   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
                                                =========      ========                                    

</TABLE>

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

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

SEE NOTES TO FINANCIAL STATEMENTS

                                Page 14
<PAGE>

                      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 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 disclosure 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/A.

Note 2 - EARNINGS ( LOSS) PER SHARE

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

                                 Page 15

<PAGE>