__________________________________________________________________________



                              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, 1996


                    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: [ X ]          NO: 


   Common Stock, $.00001 par value, 1,341,809  issued  and outstanding as of
January 15, 1997.


__________________________________________________________________________

<PAGE>2

                                 INDEX

                                                                 PAGE

PART I - FINANCIAL INFORMATION

     ITEM 1.  Financial Statements (Unaudited)  .....................3


     ITEM 2.  Management's Discussion and Analysis...................8


PART II - OTHER INFORMATION

     ITEM 1.  Legal Proceedings......................................9

     ITEM 2.  Changes in Securities..................................9

     ITEM 3.  Defaults upon Senior Securities........................9

     ITEM 4.  Submission of Matters to a Vote of Security Holders....9

     ITEM 5.  Other Information......................................9

     ITEM 6.  Exhibits and Reports on Form 8-K.......................9




<PAGE>3
                    PART I - FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS


<PAGE>4


                   USA INTERNATIONAL CHEMICAL, INC.
                       BALANCE SHEET (UNAUDITED)
                          DECEMBER 31, 1996

                                ASSETS

CURRENT ASSETS
     Cash                                             $1,165

     Total Assets                                     $1,165



                     LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES                                     $-0-

STOCKHOLDERS' EQUITY (NOTES 1 AND 2)
     Common stock, $.00001 par value, authorized
     50,000,000 shares, issued and outstanding
     1,341,809 shares                                     13
     Additional paid-in capital                      284,167
     Accumulated deficit                            (283,015)

          Total Stockholders' Equity                   1,165

          Total Liabilities and Stockholders' Equity  $1,165











See accompanying notes.

<PAGE>5


                       USA INTERNATIONAL CHEMICAL, INC.
                     STATEMENTS OF OPERATIONS (UNAUDITED)
         THREE MONTHS AND SIX MONTHS ENDED DECEMBER 31, 1996 AND 1995



                               Three Months Ended        Six Months Ended
                                  DECEMBER 31,             DECEMBER 31,
                               1996          1995        1996        1995

SALES                          $    -        $   --      $   --      $   --

GENERAL AND ADMINISTRATIVE 
  EXPENSES                       1,077         5,540       16,007      16,100

LOSS BEFORE INCOME TAX 
  PROVISION                     (1,077)       (5,540)     (16,007)    (16,100)

PROVISION FOR INCOME TAX        _______      ________     ________        800

NET LOSS                        $(1,077)     $(5,540)    $(16,007)   $(16,900)
                                =======      =======     ========    ========

NET LOSS PER SHARE              $   --       $   --      $   (.01)   $   (.01)

WEIGHTED AVERAGE SHARES 
  OUTSTANDING                 1,341,809    1,329,809    1,341,809   1,329,809














See accompanying notes.


<PAGE>6

                   USA INTERNATIONAL CHEMICAL, INC.
                 STATEMENTS OF CASH FLOWS (UNAUDITED)
              SIX MONTHS ENDED DECEMBER 31, 1996 AND 1995



                                                Six Months Ended
                                                   DECEMBER 31,
                                                1996        1995

OPERATING ACTIVITIES:

  Net Cash Used in Operating Activities         $(16,248)   $(18,812)

FINANCING ACTIVITIES:
  Capital contributions                           14,000      18,000

  Net Cash Provided by Financing Activities       14,000      18,000

NET DECREASE IN CASH                              (2,248)       (812)

CASH at beginning of period                        3,413       1,502
CASH at end of period                            $ 1,165    $    690

Supplemental Disclosures of Cash Flow Information:   --          --










See accompanying notes.


<PAGE>7

                   USA INTERNATIONAL CHEMICAL, INC.
                     NOTES TO FINANCIAL STATEMENTS
                  SIX MONTHS ENDED DECEMBER 31, 1996


NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information pursuant to Regulation S-B.  Accordingly, they do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements.  In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included.  Operating results for the three
months and six months ended December 31, 1996 are not necessarily indicative
of the results that may be expected for the year ending June 30, 1997.  For
further information refer to the financial statements and footnotes thereto
included in Form 10-KSB for the year ended June 30, 1996 filed by the Company.

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.

NOTE 2 - SHAREHOLDERS' EQUITY

During the six months ended December 31, 1996 principal shareholders
contributed $14,000 to the Company.




<PAGE>8

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

RESULTS OF OPERATIONS

     OPERATING ACTIVITIES

     There were no sales for the six months ended December 31, 1996 or 1995.
Since the change of control of the Company in September, 1994, the Company has
not pursued any of the Company's former business.  Consequently, until the
Company's current management develops or acquires new business lines, no
operating revenues are expected.

     Operating expenses were $1,077 for the quarter ended December 31, 1996
and $16,007 for the six months ended December 31, 1996 compared to $5,540 and
$16,100, respectively, for the same periods last year.  The decrease for the
second quarter was a direct result of lower legal and accounting fees.

     During the six months ended December 31, 1996, net cash used by
operations was $16,248 compared to $18,812 for the same period last year.

     Net loss totaled $1,077 for the three months and $16,007 for the six
months ended December 31, 1996, compared to a net loss of $5,540 for the three
months ended December 31, 1995 and $16,900 for the six months ended December
31, 1995.  The decrease for the three months ended December 31, 1996 resulted
primarily from the Company's having incurred lower legal and accounting fees
in the current quarter.

     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

     Since September 30, 1994, the Company has generated no revenues from
operations.  During the six months ended December 31, 1996, capital was
provided from $14,000 in contributions from two of the Company's principal
stockholders.

     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.


<PAGE>9

                      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.




<PAGE>10


                               SIGNATURE

     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:  January 20, 1997             YALE FARAR
                                   Yale Farar, President and
                                   Chief Financial Officer
                                   (Principal Accounting Person)