UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC 20549

                                  FORM 10-QSB/A

                 Quarterly Report Under Section 13 or 15(d) of
                      the Securities Exchange Act of 1934


For the Quarter Ended                             Commission File Number
  SEPTEMBER 30, 1996                                   0-23812

                            THE QUANTUM GROUP, INC.
            (Exact name of registrant as specified in its charter)

                                    NEVADA
                                    -------
         (State or other jurisdiction of incorporation or organization

                                  95-4255962
                     (I.R.S. Employer Identification No.)

                          PARK IRVINE BUSINESS CENTER
                         14771 MYFORD ROAD,  BLDG. B.
                               TUSTIN, CA, 92780

                   (Address of principal executive offices)

                                (714)-508-1475
             (Registrant's telephone number, including area code)



Securities registered pursuant to Section 12 (b) of the Act:

                                     None
                                     ----


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

            X  Yes       No
          -----          -----

State the number of shares outstanding of each of the registrants classes of
common equity, as of the latest practicable date.

          Common stock, par value $.001; 9,456,696 shares outstanding
                           as of November 15, 1996 <PAGE>

                        PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

See pages F-1 to F-8 attached

The attached financial statements are unaudited. However, management believes
that any and all adjustments necessary, have been made to insure that they are
not misleading.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS
   

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 1996, the Company had cash of $25,767 on hand.

The management of the Company made the decision at year end 1992 to concentrate
its resources and management efforts on the Company's tire recycling operations.
This start up effort eliminated the Company's ability to generate revenue
throughout of 1993 and 1994, as sales take six to twenty months to complete. As
such the Company experienced cash flow difficulties through 1993, 1994 and most
of 1995.

Equipment sales of the Second Saudi Unit and deposits on Phase Two of the Saudi
project provided an increase in working capital.

During the nine months ended September 30, 1996, the Company's net cash 
generated from operations was $55,148 compared to cash utilized of $4,992 in 
the same period of 1995. This is due to the a number of factors within the 
accounting for cash format. The Company wrote off it's Accounts Receivable 
from the Canadian licensee during the three months ended June 30, 1995, this 
results in an addition to operating loss and a "source" of funds which are 
practically offsetting.  Additionally, the effect of the write off in 
decreasing minority interest becomes a "use" of funds which is offset by the 
increase in accounts payable which was the Company's cash flow source for the
period. The write off was a total of $882,498, the net loss for the three 
months ended June 30, 1995 was $814,792. 

In the nine months ended September 30, 1996, Receivables increased $400,421, due
primarily to the addition of retainage on projects   shipped.  Accounts payable
in the nine months ended September 30, 1996 decreased by $176,500 and accrued
expenses deceased $45,759 compared to increases of $178,096 and $30,000
respectively, in the nine months ended September 30, 1995 

The Company purchased a license for tile manufacturing for $497,547, $144,000 of
which was cash.<PAGE>

Customer deposits were applied to purchases resulting in only a minor change
$488. The utilization of deposits on inventory of $424,829 partially offset the
cash outflows. 

Investing Activities consisted of the proceeds from the sale of the Company's
residential property in Miami, Florida, during the first quarter, and the
purchase furniture and fixtures of $11,089 in the third quarter of 1996. This
purchase was of telephone and computer equipment for the new office.  The
purchase of the license for tile manufacturing is included in Investment
Activities as it is a depreciable asset. 

Financing activity in the nine months ended September 30, 1996 consisted of cash
sources from an advances from officers of $31,1620 and $1,600 from contributed
capital. The note portion of the purchase of the tile manufacturing license was
$353,547. Cash was utilized in the payoff of the mortgage on the sale of the
Company's Miami property ($165,000) and the payoff of the vehicle note ($4,781).
During the nine months ended September 30, 1995, financing activity consisted of
an increase in the amounts due offices of $9,365 reduced by a pay down of $1,300
on the vehicle note.

    
The Company has no material commitments for capital expenditures.


RESULTS OF OPERATIONS

Comparison of the three months ended September 30, 1996, and the three months
ended September 30, 1995.

The Company had revenue of $1,697,149 during the three months ended September 
30, 1996 compared to $19,401 for the same three months of 1995. The 1996 Revenue
consisted of Equipment sales to Saudi Arabia of $1,1662,149 and the sale of a
license in Florida for $35,000.

Depreciation expense of $3,159 is only slightly less than the comparable period
last year because of the sale of the residential property in the prior quarter,
offset by adding depreciation for the furniture and fixtures purchased during 
the third quarter of 1996. Amortization expense of $12,439 in the current 
quarter is due to the signing of the tile license agreement. This agreement 
is perpetual, but is being amortized over a ten year period. Management believes
that ten years is the useful life of the technology. No such charge was made in 
the prior year.

Travel Expense ($26,122 vs. $7,730), Office Expense ($19,312 vs. $986),
Administrative Expense ($23,247 vs. $9,488) and Consulting Fees ($62,377 vs.
$51,803) all increased in the quarter ended September 30, 1996 as compared with
the same quarter 1995. This increase is do to an increased level of sales
activity in the existing product line and addition activities due to starting 
the tile molding activities.<PAGE>

In the second quarter of 1995, Accounts Receivable in the amount of $882,498 
were written off. No write offs were incurred in the current year.

Minority Interest is a charge of $52,493 in the third quarter of 1996, which
compares to a credit of $13,241 for the same quarter of 1995 because of the
profit in 1996 rather than the loss for the same quarter 1995.                

Tax expense of $23,345 is provided in the third quarter of 1996. This provision
is for state taxes only, as California does not have loss carry back provisions
similar to federal tax rules. No provision was made in 1995 due to the loss.

Comparison of the nine months ended September 30, 1996, and the nine months 
ended September 30, 1995

Revenues for the nine months ended September 30, 1996 are $1,697,149 compared to
$57,201 in the comparable 1995 period. This is due to the delivery of Eurectec,
Inc., Equipment to Saudi in 1996, and the sale of a license in Florida. The cost
of goods sold is larger in  1996 for the same reason.

Amortization Expense of $20,731 in 1996 has no comparable expense in 1995.

As with the current quarter, travel expense, office expense, administrative
expense and consulting fees are larger in the nine months ended September 30,
1996 as compared to the nine months ended September 30, 1995 due to increased
sales activities and to the preparation of the molded tile line.

Because there were no significant sales in the nine months ended September 30,
1995,  no commissions were paid. The delivery of the Saudi equipment in 1996
caused  $117,936 of commission expense to be paid or accrued in the nine months
ending September 30, 1996.

The company recognized a $12,500 gain on the sale of previously written off
securities in the first quarter of 1995. No comparable gain occurred in 1996,
however, the company realized a gain of $25,850 on the sale of the Miami 
property in 1996 with no comparable 1995 gain.
<PAGE>


                            THE QUANTUM GROUP, INC.
                                       &
                                 Subsidiaries


                             FINANCIAL STATEMENTS














             Three Months and Nine Months ended September 30, 1996
             Three Months and Nine Months Ended September 30, 1995

<PAGE>
                          THE QUANTUM GROUP, INC.                        (F-1)
                              BALANCE SHEETS
                                (UNAUDITED)
<TABLE>
<CAPTION>

                                          SEPTEMBER     SEPTEMBER      DECEMBER 
                                           30, 1996      30, 1995      31, 1995 
                                        ------------  ------------  ------------
<S>                                     <C>           <C>           <C>         
     ASSETS

CURRENT ASSETS
 Cash                                       $25,767        $3,895       $26,140 
 Accounts Receivable                        580,384        76,896       179,963 
 Inventory                                  490,579       503,479       490,579 
 Deposit on Inventory                             0       424,820       424,820 
 Note Receivable                             83,960             0        83,960 
                                        ------------  ------------  ------------
     Total Current Assets                 1,180,690     1,009,090     1,205,462 

PROPERTY & EQUIPMENT
 Furniture & Fixtures                        15,363        12,780        10,693 
 Residential Property                             0       236,519       236,586 
 Vehicles                                       299         2,996         2,248 
                                        ------------  ------------  ------------

     Total Property & Equipment              15,662       252,295       249,527 

OTHER ASSETS
 Accounts Receivable                        254,221             0       254,221 
 Loan Receivable                             38,750        38,750        38,750 
 Securities                                   6,250         6,250         6,250 
 License Rights                             476,816             0             0 
 Deposit                                        661           660           661 
 Prepaid Commissions                         67,415       273,500             0 
 Tax Benefit Deferred                            80             0            80 
                                        ------------  ------------  ------------
     Total Other Assets                     844,193       319,160       299,962 
                                        ------------  ------------  ------------
     TOTAL ASSETS                       $ 2,040,545   $ 1,580,545   $ 1,754,951 
                                        ============  ============  ============


/TABLE
<PAGE>
                          THE QUANTUM GROUP, INC.                        (F-2)
                              BALANCE SHEETS
                                (UNAUDITED)
<TABLE>
<CAPTION>
                                          September     September      DECEMBER 
                                           30, 1996      30, 1995      31, 1995 
                                        ------------  ------------  ------------
<S>                                     <C>           <C>           <C>         
   LIABILITIES & SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
 Accrued Expenses                          $181,127      $120,277      $226,886 
 Accounts Payable                           299,879       703,692       476,379 
 Due Officers                                89,863       137,966        58,701 
 Customer Deposits                          243,986       488,938       244,474 
 Franchise Tax Payable                       23,345             0             0 
 Capitalized Leases                          16,741        16,741        16,741 
 Current Maturities                         266,871         1,964       268,835 
                                        ------------  ------------  ------------
   Total Current Liabilities              1,121,812     1,469,578     1,292,016 

LONG TERM LIABILITIES
 Note Payable                               620,418             0       266,871 
 Vehicle Note Payable                             0         5,478         4,781 
 Mortgage Payable                                 0       165,000       165,000 
 Less Current Maturities                   (266,871)       (1,964)     (268,835)
                                        ------------  ------------  ------------
   Total Long Term Liabilities              353,547       168,514       167,817 

Minority Interest in Subsidiary             133,542        58,384        97,782 

STOCKHOLDERS' EQUITY
 Common Stock, 50,000,000
  shares authorized
  9,456,696 shares
  outstanding in 1996 & 1995                  9,457         9,457         9,457 
 Paid In Capital                          1,678,363     1,676,763     1,676,763 
 Accumulated Deficit                     (1,256,176)   (1,802,151)   (1,488,884)
                                        ------------  ------------  ------------

   Total Stockholders Equity                431,644      (115,931)      197,336 
                                        ------------  ------------  ------------
   TOTAL LIABILITIES & 
   STOCKHOLDERS' EQUITY                 $ 2,040,545   $ 1,580,545   $ 1,754,951 
                                         ===========  ============  ============

</TABLE>
</Page>
<PAGE>
                              THE QUANTUM GROUP, INC.                    (F-3)
                              STATEMENT OF OPERATIONS
                                    (UNAUDITED)
<TABLE>
<CAPTION>
                             Three       Nine      Three       Nine      Twelve 
                            Months     Months     Months     Months      Months 
                             Ended      Ended      Ended      Ended       Ended 
                         September  September  September  September    December 
                          30, 1996   30, 1996   30, 1995   30, 1995    31, 1995 
                         ---------- ---------- ---------- ----------  ----------
<S>                     <C>        <C>        <C>        <C>         <C>        
REVENUE
 Equipment Sales        $1,662,149 $2,443,698 $   19,401 $   57,201  $2,679,790 
 License Sales              35,000     35,000          0          0           0 
                         ---------- ---------- ---------- ----------  ----------
 Total Revenues          1,697,149  2,478,698     19,401     57,201   2,679,790 

COST OF SALES            1,046,223  1,504,036     21,239     21,239   1,688,947 
                         ---------- ---------- ---------- ----------  ----------
 Gross Profit              650,926    974,662     (1,838)    35,962     990,843 

EXPENSES
 Commission                 47,936    117,936          0          0     329,960 
 Depreciation                3,159      8,367      3,384     10,152      14,342 
 Amortization               12,439     20,731          0          0           0 
 Taxes                           0          0          0          0           0 
 Travel                     26,122     66,778      7,730     19,232      45,468 
 Professional Fees               0     10,000      5,000     11,000      46,925 
 Office                     19,312     56,095        986      3,351      23,846 
 Rent & Utilities           28,689     59,144      6,827     31,868      57,221 
 Administration Expenses    23,247    112,258      9,488     50,707      69,301 
 Consulting Fees            62,377    224,698     51,803    146,295     164,178 
 Interest                   10,205     31,692      5,667     17,655      69,617 
 Accounts Receivable 
  Write Off                      0          0          0    882,498     953,634 
 Foreign Currency
  Translations                   0          0          0          0         532 
                         ---------- ---------- ---------- ----------  ----------
 Total Expenses            233,486    707,699     90,885  1,172,758   1,775,024 
                         ---------- ---------- ---------- ----------  ----------
 Net Profit of (Loss)
 From Operations           417,440    266,963    (92,723)(1,136,796)   (784,181)


</TABLE>
</Page>
                               THE QUANTUM GROUP, INC.          (F-4)
                              STATEMENT OF OPERATIONS
                                    (UNAUDITED)
<TABLE>
<CAPTION>

                             Three       Nine      Three       Nine      Twelve 
                            Months     Months     Months     Months      Months 
                             Ended      Ended      Ended      Ended       Ended 
                         September  September  September  September    December 
                          30, 1996   30, 1996   30, 1995   30, 1995    31, 1995 
                         ---------- ---------- ---------- ----------  ----------
<S>                     <C>        <C>        <C>        <C>         <C>        
OTHER INCOME & (EXPENSES)
 Sale of Securities 
  Previously Written 
  Off                            0          0          0     12,500      12,500 
 Asset Abandonment               0          0          0    (10,500)    (10,500)
 Gain on Sale of Asset           0     24,850          0          0           0 
                         ---------- ---------- ---------- ----------  ----------
 Total Other Income 
 & Expenses                      0     24,850          0      2,000       2,000 

 Profit or (Loss)          417,440    291,813    (92,723)(1,134,796)   (782,181)

 Minority Interest          52,493     35,760    (13,241)   162,049     122,621 
 Provisions for Taxes
  - Current                 23,345     23,345          0     34,785      34,785 
 Provisions for Taxes
  - Deferred                     0          0          0          0          80 
 Provision for Taxes &   ---------- ---------- ---------- ----------  ----------
  Minority Interest         75,838     59,105    (13,241)   196,834     157,486 
 Net Profit or (Loss) 
 After                   ---------- ---------- ---------- ----------  ----------
 Tax and Minority 
 Interest                 $341,602   $232,708   ($79,482) ($937,962)  ($624,695)
                         ========== ========== ========== ==========  ==========
 Net Profit or (Loss)
  Per Share                  $0.04      $0.02     ($0.01)    ($0.10)     ($0.07)

 Weighted Average
  Shares Outstanding     9,456,696  9,456,696  9,456,696  9,456,696   9,456,696 

 Diluted Net Profit 
 Per Share                     N/A        N/A        N/A        N/A          N/A

 Weighted Average 
 Shares and Options 
 Outstanding                   N/A        N/A        N/A        N/A         N/A 



</TABLE>
</Page>
<PAGE>
                            THE QUANTUM GROUP, INC.                    (F-5)
                         STATEMENT OF SHAREHOLDERS' EQUITY
                       January 1, 1993 to September 30, 1996
<TABLE>
<CAPTION>

                                  COMMON STOCK          PAID IN    ACCUMULATED 
                              SHARES     AMOUNT         CAPITAL        DEFICIT 
                        -------------------------------------------------------
<S>                         <C>            <C>      <C>          <C>         
Balance,
January 1, 1993                 8,506,090   $ 8,506  $ 958,637     $ (960,162)


Shares Issued for
Cash                              938,606       939    227,817 

Sale of Shares by
Subsidiary 
(Eurectec, Inc.)                                       478,321 

Profit for the 
Year Ended 
December 31, 1993                                                     266,392 
                        ------------------------------------------------------
Balance, 
December 31, 1993               9,444,696     9,445  1,664,775       (693,770)

Shares Issued for
Commission in Lieu 
of Cash                            12,000        12     11,988 

Loss for the 
Year Ended
December 31, 1994                                                    (170,419)
                         ------------------------------------------------------
Balance, 
December 31, 1994               9,456,696     9,457  1,676,763       (864,189)

Loss for the 
Year Ended 
December 31, 1995                                                    (624,695)
                         ------------------------------------------------------
Balance,
December 31, 1995               9,456,696     9,457  1,676,763     (1,488,884)

Contributed Capital                                      1,600 

Profit for the Nine 
Months Ended
September 30, 1996                                                    232,708 
                          -----------------------------------------------------

Balance,
September 30, 1996              9,456,696    $9,457 $1,678,363    $(1,256,176)
                          =====================================================

</TABLE>
</Page>
<PAGE>
                          THE QUANTUM GROUP, INC.                        (F-6)
                          STATEMENT OF CASH FLOWS
                                (UNAUDITED)
<TABLE>
<CAPTION>
                                                Nine         Nine        Year 
                                               Ended        Ended       Ended 
                                           September    September    December 
                                            30, 1996     30, 1995    31, 1995 
                                          -----------  ----------- -----------
<S>                                       <C>          <C>         <C>        
CASH FLOWS FROM OPERATING ACTIVITIES
 Net Profit (Loss)                          $232,708    ($937,962)  ($624,695)
 Adjustments to reconcile net profit 
 or (loss) to net cash:
  Amortization & Depreciation                 29,098       11,574      14,342 
  Non Cash Expenses                                0            0           0 
  Gain on Sale of TSI Stock                        0            0     (12,500)
  Loss On Abandonment of Asset                     0       10,500      10,500 
  Minority Interest                           35,760     (132,049)   (122,621)
Changes in Operating Asset & 
Liabilities
 (Increase) Decrease in Accounts 
  Receivable                                (400,421)     556,249     453,182 
 (Increase) Decrease in Inventory                  0            0      12,900 
 (Increase) in Deposit on Inventory          424,820            0           0 
 Decrease (Increase) in Long Term
  Accounts Receivable                              0      326,249     (11,932)
 (Increase) Decrease in Loan
  Receivable                                       0        7,816       7,816 
 (Increase) Decrease in Prepaid
  Insurance                                        0          984         984 
 (Increase) in Prepaid Commissions           (67,415)           0     273,500 
 (Increase) Decrease in Deposits                   0        8,336       8,335 
 Increase (Decrease) in Accrued
  Expenses                                   (45,759)           0     136,579 
 Increase (Decrease) in Accounts
  Payable                                   (176,500)     178,096     (49,217)
 Increase (Decrease) in Tax Payable           23,345      (34,785)    (34,785)
 Increase in Customer Deposits                  (488)           0    (244,464)
 (Increase) in Taxes Payable -
  Deferred                                         0            0         (80)
                                          -----------  ----------- -----------
    Net Cash Generated (Used) by
    Operating Activities                      55,148       (4,992)   (182,156)
                                          -----------  ----------- -----------

</TABLE>
</Page> 
<PAGE>

                          THE QUANTUM GROUP, INC.                        (F-7)
                          STATEMENT OF CASH FLOWS
                                (UNAUDITED)
                                 Continued
<TABLE>
<CAPTION>
                                                Nine         Nine             
                                              Months       Months        Year 
                                               Ended        Ended       Ended 
                                           September    September    December 
                                            30, 1996     30, 1995    31, 1995 
                                          -----------  ----------- -----------
<S>                                       <C>          <C>         <C>        

CASH FLOWS FROM INVESTING ACTIVITIES
 Gross Proceeds from Sale of TSI 
  Stock                                            0            0      12,500 
 Sale of Residential Property                236,586            0           0 
 Purchase of Furniture                       (11,089)           0           0 
 Purchase of License Rights                 (497,547)           0           0 
                                          -----------  ----------- -----------
  Net Cash Provided (Used) by 
  Investing Activities                      (272,050)           0      12,500 

CASH FLOWS FROM FINANCING ACTIVITIES 
 Payment of Long Term Debt                         0       (1,300)     (1,997)
 Increase (Decrease) in Notes Payable        353,547            0     266,871 
 Increase (Decrease) in Mortgage 
  Payable                                   (165,000)           0           0 
 Increase (Decrease) in Vehicle Note
   Payable                                    (4,781)           0           0 
 Increase (Decrease) in Amounts Due
  Officers                                    31,163        9,365     (69,900)
 Contributed Capital                           1,600            0           0 
                                          -----------  ----------- -----------
  Net Cash Provided by 
  Financing Activities                       216,529        8,065     194,974 
                                          -----------  ----------- -----------
  Increase (Decrease) in Cash                   (373)       3,073      25,318 

  Cash at Beginning of Period                 26,140          822         822 
                                          -----------  ----------- -----------
  Cash at End of Period                      $25,767       $3,895     $26,140 
                                          ===========  =========== ===========

</TABLE>
<PAGE>
                       THE QUANTUM GROUP, INC.(F-8)
                       Notes to Financial Statements


NOTE #1 - STATEMENT PREPARATION

     The Company has prepared the accompanying financial statements with
interim financial reporting requirement promulgated by the Securities and
Exchange Commission.   The information furnished reflects all adjustments
which are, in the opinion of management, necessary for a fair presentation of
financial position and results of operations.

     The consolidated financial statements should be read in conjunction with
the consolidated financial statements and notes thereto included in the
Company's December 31, 1996 10-K report.
<PAGE>
PART II - OTHER INFORMATION                       



ITEM 1.  LEGAL PROCEEDINGS

          None


ITEM 2.  CHANGES IN SECURITIES

          None


ITEM 3.   DEFAULTS UPON SENIOR SECURITIES
        
           None


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF THE SHAREHOLDERS

           None


ITEM 5.   OTHER INFORMATION

           None


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K
     
            (A)    Exhibits

                     27  Financial Data Schedule

           (B)     
                   Reports on Form 8-K

                 No reports on Form 8-K were filed, or required to be filed,
during the quarter ended September 30, 1996.

</Page>
<PAGE>

                             SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this to be signed on its behalf by the undersigned
thereunto duly authorized.


                          The Quantum Group, Inc.


                                        /s/ Ehrenfried Liecich
          November 15, 1996             _________________________
          (Revised May 22, 1997)        Ehrenfried Liebich      
                                        Chairman of the Board,  
                                        President, and          
                                        Chief Executive Officer 



                                        /s/ John F. Pope
          November 15, 1996             _________________________
          (Revised May 22, 1997         John F. Pope            
                                        Vice President, Finance 
                                        Chief Accounting Officer<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this to be signed on its behalf by the
undersigned thereunto duly authorized.


                          The Quantum Group, Inc.



          November 15, 1996             /S/ Ehrenfried Liebich
          (Revised May 22, 1997)        ----------------------------
                                        Ehrenfried Liebich      
                                        Chairman of the Board,  
                                        resident, and          
                                        Chief Executive Officer 




          November 15, 1996             /S/  John F. Pope
          (Revised May 22, 1997)        ----------------------------
                                        John F. Pope            
                                        Vice President, Finance 
                                        Chief Accounting Officer



















</Page>