__________________________________________________________________________



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


                                FORM 10-QSB


      QUARTERLY  REPORT  PURSUANT  TO  SECTION  13  OR  15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1995


                    Commission File Number 33-24608-LA

                     USA INTERNATIONAL CHEMICAL, INC.
          (Exact name of Registrant as specified in its charter)

            DELAWARE                                95-4068292
(State  or  other  jurisdiction  of      (I.R.S.Employer Identification Number)
   incorporation or organization)

   20720 Ventura Boulevard, Suite 210, Woodland Hills, California  91364
                 (Address of principal executive offices)

                           (818)       346-9595

           (Registrant's telephone number, including area code)


      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:

                           YES: <checked-box>          NO: <square>


      Common Stock, $.00001 par value, 1,329,809  issued  and outstanding as of
January 31, 1996.


__________________________________________________________________________


                                      INDEX

                                                                          PAGE

PART I - FINANCIAL INFORMATION

      ITEM  1. Financial Statements (Unaudited)                            3
                                                                      F-1 to F-6

      ITEM  2. Management's Discussion and Analysis                        4


PART II - OTHER INFORMATION

      ITEM 1.  Legal Proceedings                                           6

      ITEM 2.  Changes in Securities                                       6

      ITEM 3.  Defaults upon Senior Securities                             6

      ITEM 4.  Submission of Matters to a Vote of Security Holders         6

      ITEM 5.  Other Information                                           6

      ITEM 6.  Exhibits and Reports on Form 8-K                            6






                                  -1-

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

      Set forth herein at pages F-1 to F-6



                                -2-

<PAGE>



[                             Letterhead of                            ]
[                           Block & Handelman                          ]




           REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors
USA International Chemical, Inc.


We have reviewed the accompanying balance sheet of  USA International Chemical,
Inc.  as  of  December 31, 1995 and the related statements  of  operations  and
accumulated deficit  and  cash  flows for the three-month and six-month periods
ended  December  31,  1995  and  1994.   These  financial  statements  are  the
responsibility of the Company's management.

We  conducted  our  review in accordance  with  standards  established  by  the
American Institute of  Certified  Public  Accountants.   A  review  of  interim
financial  information  consists  principally  of   applying  analytical review
procedures  to  financial data and making inquiries of persons responsible  for
financial and accounting  matters.   It  is substantially less in scope than an
audit conducted in accordance with generally  accepted  auditing standards, the
objective  of  which  is the expression of an opinion regarding  the  financial
statements taken as a whole.  Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to the financial  statements  referred  to  above,  for  them  to be in
conformity with generally accepted accounting principles.

As  discussed  in  Note 1, certain conditions indicate that the Company may  be
unable to continue as  a  going concern.  The accompanying financial statements
do not include any adjustments  to  the  financial  statements  that  might  be
necessary should the Company be unable to continue as a going concern.

The  balance  sheet of USA International Chemical, Inc. as of June 30, 1995 and
the related statements of operations, stockholders' deficit and cash flows (not
presented herein)  were  audited  by  Ernst  &  Young  LLP  whose  report dated
September  8,  1995  expressed  an unqualified opinion on those statements  and
included an explanatory paragraph  that described the going concern uncertainty
discussed in Note 1.



BLOCK & HANDELMAN

Los Angeles, California
February 5, 1996

                                F-1

<PAGE>
                    USA INTERNATIONAL CHEMICAL, INC.
                             BALANCE SHEETS
                   DECEMBER 31, 1995 AND JUNE 30, 1995

                                 ASSETS

                                           December 31,   June 30,
                                               1995         1995
                                              (UNAUDITED)   (AUDITED)
CURRENT ASSETS
  Cash                                       $     690    $  1,502

      TOTAL CURRENT ASSETS                         690       1,502

      TOTAL ASSETS                           $     690    $  1,502





             LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
  Accounts payable                           $     567    $  2,479

      TOTAL CURRENT LIABILITIES                    567       2,479

STOCKHOLDERS' EQUITY (DEFICIT)
  Common stock, $.00001 par value, authorized
   50,000,000 shares, issued and outstanding
   1,329,809 shares (Notes 1 and 4)                 13          13
  Additional paid-in capital                   256,967     238,967
  Accumulated deficit                         (256,857)    (239,957)

      TOTAL STOCKHOLDERS' EQUITY (DEFICIT)         123        (977)

      TOTAL LIABILITIES AND
       STOCKHOLDERS' EQUITY (DEFICIT)        $     690    $  1,502

See accompanying notes to financial statements and management's discussion
  and analysis of financial condition and results of operations.
                                F-2

<PAGE>
                      USA INTERNATIONAL CHEMICAL,INC.
       STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT (UNAUDITED)
       THREE MONTHS AND SIX MONTHS ENDED DECEMBER 31, 1995 AND 1994

                             Three Months Ended     Six Months Ended
                                 DECEMBER 31           DECEMBER 31
                             1995        1994        1995       1994


SALES (Note 3)             $     -      $    -     $      -    $ 34,320

COST OF SALES                    -           -            -      17,377

  GROSS PROFIT                   -           -            -      16,943

SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES     5,540       9,107       16,100      10,913

  (LOSS) INCOME FROM
   OPERATIONS               (5,540)      (9,107)    (16,100)      6,030

OTHER INCOME (EXPENSE)
  Interest income (Note 2)       -           -            -         271
  Interest expense (Note 2)      -        (196)           -      (1,234)
                                 -        (196)           -        (963)

  (LOSS) INCOME BEFORE
   INCOME TAX PROVISION     (5,540)     (9,303)     (16,100)      5,067

PROVISION FOR INCOME TAX         -           -          800         800

NET (LOSS) INCOME          $ (5,540)    $ (9,303)   (16,900)      4,267

ACCUMULATED DEFICIT,
 beginning of period                                (239,957)   (232,337)

ACCUMULATED DEFICIT,
 end of period                                     $ (256,857) $ (228,070)

NET (LOSS) INCOME PER SHARE
 (Note 4)                  $     -      $    (.01) $     (.01) $ -

WEIGHTED AVERAGE SHARES
 OUTSTANDING (Note 4)       1,329,809    1,124,809  1,329,809   1,124,809

See accompanying notes to financial statements and management's discussion
  and analysis of financial condition and results of operations.
                                F-3

<PAGE>
                     USA INTERNATIONAL CHEMICAL, INC.
                   STATEMENTS OF CASH FLOWS (UNAUDITED)
                SIX MONTHS ENDED DECEMBER 31, 1995 AND 1994
                                                     Six Months Ended
                                                     DECEMBER 31,
                                               1995         1994

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (Loss) Income                          $ (16,900)   $  4,267

ADJUSTMENTS TO RECONCILE NET (LOSS) INCOME TO
 NET CASH (USED) PROVIDED BY OPERATING ACTIVITIES:
   Changes in:
    Accounts receivable - net                       -          917
    Accounts payable                           (1,912)      (1,880)
    Income taxes payable                            -         (800)
                                               (1,912)      (1,763)

      NET CASH (USED) PROVIDED BY
       OPERATING ACTIVITIES                   (18,812)       2,504

CASH FLOWS FROM FINANCING ACTIVITIES:
  Decrease in related party loans                   -      (69,495)
  Capital contributions                        18,000       67,496

      NET CASH PROVIDED (USED) BY
       FINANCING ACTIVITIES                    18,000       (1,999)

NET (DECREASE) INCREASE IN CASH                  (812)         505

CASH, at beginning of period                    1,502          295

CASH, at end of period                       $    690     $    800



Supplemental Disclosure of Cash Flow Information:
 Income taxes paid                           $      -     $  1,600
 Interest paid                               $      -     $  1,038

See accompanying notes to financial statements and management's discussion
  and analysis of financial condition and results of operations.
                                F-4

<PAGE>
                 USA INTERNATIONAL CHEMICAL, INC.
                   NOTES TO FINANCIAL STATEMENTS
                SIX MONTHS ENDED DECEMBER 31, 1995

NOTE 1 - BASIS OF PRESENTATION

         In the opinion of the Company,  the accompanying unaudited financial
         statements contain all adjustments  necessary  to present fairly its
         financial position and the results of its operations  and cash flows
         for  the  periods shown. Such adjustments consisted only  of  normal
         recurring items.

         The results  of operations for the three-month and six-month periods
         are not necessarily  indicative  of the results to be expected for a
         full year of operations.

         The financial statements and notes  are  presented  as  permitted by
         Form 10-QSB and do not contain certain information included  in  the
         annual financial statements and notes.

         The   accompanying   financial  statements  have  been  prepared  in
         conformity  with generally  accepted  accounting  principles,  which
         contemplate continuation of the Company as a going concern.

         On September  23, 1994, the Company's former President and Secretary
         and an affiliate  of the Company, USA International Defense Systems,
         Inc., (Sellers) and the Company finalized a Stock Purchase Agreement
         whereby, the Sellers  agreed  to  sell  to Shane Investment Company,
         Inc.  (Buyer) 88,200,000 shares of the Company's  common  stock  for
         consideration  of  $69,000  in  cash.  Pursuant to the agreement, to
         complete  the  sale  of stock, the Company's  former  President  was
         required to repay his  loan  to  the  Company  and  the  Company was
         required  to  repay  its  loan to USA International Defense Systems,
         Inc. and liquidate all other  liabilities outstanding at the date of
         the  sale.   The liabilities were  liquidated  through  the  capital
         contribution into  the  Company  by  its former President of $56,996
         prior to the sale.  Upon closing and consummation  of the agreement,
         all  then  current  members  of  the  Company's  Board  of Directors
         tendered  their  resignations  as  Directors,  and  Shane Investment
         Company's  nominees  were  appointed to replace them on  the  Board.
         During the six months ended  December 31, 1995 and 1994, the Company
         did not pay or accrue any amounts for compensation to officers.

         The  Company  has  undergone  a change  in  management.   Management
         recognizes  that  the  Company  has  a  history  of  losses  and  is
         evaluating various alternatives to  recapitalize  the  Company which
         may provide the opportunity for the Company to continue  as  a going
         concern.

         It  is  not possible to predict the success of management's efforts.
         If management  is  unable  to  achieve any of its goals, the Company
         will find it necessary to undertake actions as may be appropriate to
         continue operations.  The financial  statements  do  not reflect any
         adjustments that might result from the outcome of this uncertainty.


                 USA INTERNATIONAL CHEMICAL, INC.
                   NOTES TO FINANCIAL STATEMENTS
                SIX MONTHS ENDED DECEMBER 31, 1995

NOTE 2 - RELATED PARTY TRANSACTIONS

         Loans  made  to  the  former  President of the Company were  due  on
         demand, with interest at 6.5% per  annum.   The loans were repaid in
         full in August, 1994.

         Interest income for the six months ended December  31, 1994 included
         interest of $271 earned from the officer's loans.

         Advances  were due to a former affiliate, USA International  Defense
         Systems, Inc.  (Defense)  at  June  30,  1994.    The  advances were
         payable on demand and bore interest at 6.5% per annum.  The advances
         were repaid in full during September, 1994.

         Interest  expense  for  the  six  months  December 31, 1994 included
         interest incurred on these advances of $1,038.

         The  Company and Defense shared common office  facilities  in  Santa
         Monica,  California  until  September 23, 1994.  Defense charged the
         Company $300 per month for its  share  of occupancy expenses.  After
         the sale of stock in September 1994 (Note 1), the Company maintained
         its executive offices in space provided  by  the Company's President
         at no charge.


NOTE 3 - MAJOR CUSTOMERS

         The Company had no sales for the six-month period ended December 31,
         1995.

         During  the  six months ended December 31, 1994,  89.9%  and  10.1%,
         respectively,  of the Company's sales were made to the Government of
         Taiwan and a single foreign customer in Singapore.


NOTE 4 - NET (LOSS) INCOME PER SHARE

         Net (loss) income  per share has been computed based on the weighted
         average common shares outstanding during each period.

         On April 19, 1995, the Company's stockholders approved a one for 100
         reverse stock split  with  respect to outstanding Common Stock.  All
         references to share and per  share amounts of Common Stock have been
         adjusted to give effect to the reverse stock split.




  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                               AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 1995
AS COMPARED TO THE SIX MONTHS ENDED DECEMBER 31, 1994:

     OPERATING ACTIVITIES

     There were no sales for the six months  ended  December 31, 1995.   Due to
the change of control of the Company in September, 1994,  the  Company  is  not
expected  to  pursue any of the Company's former chemical or skin care products
sales business.   Consequently, until the Company's current management develops
or acquires new business lines, no operating revenues are expected.

     Sales for the  six  months  ended  December 31, 1994 were $34,320 and were
made prior to the change of control of the  Company.   A  sale  of  $30,847  of
chemical  products  to  the  Government  of  Taiwan  accounted  for most of the
Company's sales volume during the six-month period.  Gross profit  for the six-
month  period  totaled  $16,943.   Gross profit, as a percentage of sales,  was
49.4% due to the high margin sale to the Government of Taiwan.

     Interest income for the six months  ended  December  31, 1994 consisted of
interest earned of $271 from officer loans which were repaid in August 1994.

     Operating  expenses totaled $16,100 during the six-months  ended  December
31, 1995 compared  to $10,913 for the same period of 1994.  The $5,187 increase
was a direct result  of higher legal and accounting fees incurred in connection
with the Company's annual audit.

     During the six months ended December 31, 1995, net cash used by operations
was $18,812.  During the six months ended December 31, 1994, net cash of $2,504
was provided by operations.

     Accounts payable  decreased $1,912 from $2,479 at June 30, 1995 to $567 at
December 31, 1995.  The  decrease  resulted  from  the use of available cash to
reduce these accounts payable.

     Net  loss  totaled  $16,900  for the six months ended  December  31,  1995
compared to net income of $4,267 for  the six months ended December 31, 1994, a
decrease of $21,167.  The decrease resulted primarily from the Company's having
no  operating  revenues and incurring higher  administrative  expenses  in  the
current six-month period.

     In light of the foregoing, the Company will attempt to keep administrative
expenses to a minimum.   However,  operating  losses  are anticipated until the
Company establishes new lines of business.

     For the foreseeable future, the Company's sole activity  is expected to be
the  identification  and  evaluation  of suitable business opportunities  which
could result in an acquisition by or combination  with  the Company.  There can
be no assurance, however, that the Company will be successful  in  its efforts,
or that other types of business transactions might not be considered.


     CAPITAL RESOURCES AND LIQUIDITY

     Pursuant to the terms of a Stock Purchase Agreement the Company liquidated
its  assets  and  liabilities  during  the six months ended December 31,  1994.
Since  September  30,  1994,  the  Company  has   generated  no  revenues  from
operations.   During  the  six  months  ended December 31,  1995,  capital  was
provided for operations from contributions  from two of the Company's principal
stockholders.

     Net  cash  of $18,000 was provided by financing  activities  for  the  six
months ended December  31, 1995.  Net cash used by financing activities for the
six months ended December 31, 1994 was $1,999.

     During the six months  ended December 31, 1995 and 1994, respectively, two
principal stockholders contributed  a  total  of  $18,000  and  $10,500  to the
Company to fund its operations.

     During  the  six  months  ended  December  31,  1994,  the  Company's then
President  repaid  his  loan  receivable of $28,969 and contributed capital  of
$56,996 to the Company to pay its liabilities.

     Borrowings of $98,464 from  an  affiliated  corporation were repaid by the
Company during the six months ended December 31, 1994.

     The Company expects to fund its ongoing capital  needs through investments
in or advances to the Company by its principal stockholders or other affiliates
of the Company.

FINANCIAL CONDITION AS OF DECEMBER 31, 1995

     The following financial summary shows the equity (deficit) of the Company:

                               December 31,      June 30,
                                   1995            1995
                                (UNAUDITED)      (AUDITED)

     Total Assets              $    690          $  1,502
     Total Liabilities              567             2,479


     Stockholders' Equity      $    123          $   (977)
      (Deficit)

                                -4-

<PAGE>
                          PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     There  are  no  legal proceedings against the Company,  or  to  which  the
Company or any of its  officers  or directors are a party, and to the knowledge
of the Company's management, no claims have been made against the Company.

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)  No Exhibits

     (b)  No reports on Form 8-K were  filed  during the quarter for which this
report is filed.


                               SIGNATURES

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

                               USA INTERNATIONAL CHEMICAL, INC.

Dated:  February 13, 1996


                                YALE FARAR
                               Yale Farar, President and
                               Chief Financial Officer
                               (Principal Accounting Person)

                                -5-