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                              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 SEPTEMBER 30, 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
           incorporation or organization)      Number)

   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, 1,341,809 issued and outstanding as of
November 1, 1996.


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                                 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......................10




<PAGE>
                    PART I - FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

                   USA INTERNATIONAL CHEMICAL, INC.
                       BALANCE SHEET (UNAUDITED)
                          SEPTEMBER 30, 1996

                                ASSETS

     CURRENT ASSETS
          Cash                                                 $398

          Total Assets                                         $398


                 LIABILITIES AND STOCKHOLDERS DEFICIT


     CURRENT LIABILITIES
          Accounts payable and accrued expenses             $8,156

     STOCKHOLDERS' DEFICIT (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                       274,167
          Accumulated deficit                             (281,938)

               Total Stockholders Deficit                   (7,758)

               Total Liabilities and Stockholders' Deficit    $398


See accompanying notes.
<PAGE>
                      USA INTERNATIONAL CHEMICAL, INC.
                    STATEMENTS OF OPERATIONS (UNAUDITED)
               THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995


                                                   Three Months Ended
                                                     SEPTEMBER 30,
                                                   1996         1995

     SALES                                    $     --     $     --

     GENERAL AND ADMINISTRATIVE EXPENSES          14,930       10,560
           Loss from Operations                  (14,930)     (10,560)

           Loss Before Income Tax Provision      (14,930)     (10,560)

     PROVISION FOR INCOME TAX                    _____            800

     NET LOSS                                   $(14,930)     (11,360)

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

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


See accompanying notes.


                      USA INTERNATIONAL CHEMICAL, INC.
                    STATEMENTS OF CASH FLOWS (UNAUDITED)
               THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
 
                                                            Three Months Ended
                                                               SEPTEMBER 30,
                                                             1996       1995

     OPERATING ACTIVITIES:

           Net Cash Used in Operating Activities            $(7,015) $(10,258)

           Financing Activities:
                Capital contributions                         4,000    10,000

                Net Cash Provided by Financing Activities     4,000    10,000

     NET DECREASE IN CASH                                    (3,015)     (258)

     Cash at beginning of period                              3,413     1,502
     Cash at end of period                                  $   398    $1,244

     Supplemental Disclosures of Cash Flow Information:
           Income taxes paid                                             $800


See accompanying notes.



                      USA INTERNATIONAL CHEMICAL, INC.
                        NOTES TO FINANCIAL STATEMENTS
                    THREE MONTHS ENDED SEPTEMBER 30, 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 ended September 30, 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' DEFICIT

During  the  three  months  ended  September  30,  1996  principal shareholders
contributed $4,000 to the Company.


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


RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996
AS COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 1995:

     OPERATING ACTIVITIES

     There were no sales for the quarters ended September  30,  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 totaled $14,930 during the quarter ended September 30,
1996 compared to $10,560 for the same quarter of 1995.  The $4,370 increase was
a direct result of higher legal and accounting fees incurred.

     Accounts payable  increased $7,915 from $241 at June 30, 1996 to $8,156 at
September 30, 1996.  The  increase  resulted  from  professional  fees incurred
during the quarter.

     During  the  three  months  ended  September  30,  1996, net cash used  by
operations was $7,015.  During the three months ended September  30,  1995, net
cash of $10,258 was used by operations.

     Net  loss  totaled  $14,930 for the three months ended September 30,  1996
compared to a net loss of  $11,360  for  the  three  months ended September 30,
1995,  an  increase  of  $3,570.   The  increase  resulted primarily  from  the
Company's having incurred higher administrative expenses (principally 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

     Pursuant to the terms of a Stock Purchase Agreement the Company liquidated
its  assets  and liabilities during the three months ended September 30,  1994.
Since  September   30,  1994,  the  Company  has  generated  no  revenues  from
operations.  During  the  three  months  ended  September 30, 1996, capital was
provided for operations from $4,000 in contributions  from two of the Company's
principal  stockholders.   During the three months ended  September  30,  1995,
capital for operations was provided  from  $10,000  in contributions from these
principal stockholders, or other affiliates of the Company.

     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 SEPTEMBER 30, 1996

     The  following  financial  summary  shows  the equity or  deficit  of  the
Company:
 
                                         September 30, June 30,
                                         1996             1996
                                              (UNAUDITED)

     Total Assets                     $   398          $  3,413
     Total Liabilities                  8,156               241

     Stockholders' Equity (Deficit)   $(7,758)         $  3,172


                          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:  November 5, 1996         YALE FARAR

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