__________________________________________________________________________



                                 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 MARCH 31, 1997


                    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
      April 30, 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)
                            MARCH 31, 1997

                                ASSETS

     CURRENT ASSETS

          Cash                                                         $ 8,598
                                                                       -------
          Total Assets                                                 $ 8,598
                                                                       =======
          
                 LIABILITIES AND STOCKHOLDERS DEFICIT


     CURRENT LIABILITIES
          Accounts payable and accrued expenses                        $ 1,500
                                                                       -------
     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                                   311,167
          Accumulated deficit                                         (304,082)
                                                                      ---------
               Total Stockholders Deficit                                7,098
                                                                      ---------
               Total Liabilities and Stockholders' Deficit            $  8,598
                                                                      =========


See accompanying notes.

<PAGE>5

                      USA INTERNATIONAL CHEMICAL, INC.
                    STATEMENTS OF OPERATIONS (UNAUDITED)
         THREE MONTHS AND NINE MONTHS ENDED MARCH 31, 1997 AND 1996

<TABLE>
<CAPTION>
                                          Three Months Ended             Nine Months Ended
<S>                                  <C>           <C>          <C>                <C>   

                                               MARCH 31,                    MARCH 31,
                                         1997           1996         1997              1996

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

GENERAL AND ADMINISTRATIVE EXPENSES     21,067          5,219        37,074           21,319
                                     ----------     ----------   -----------       ----------
LOSS BEFORE INCOME TAX PROVISION       (21,067)        (5,219)      (37,074)         (21,319)

PROVISION FOR INCOME TAX                    --             --            --              800
                                     ----------     ----------    ----------       ----------
NET LOSS                             $ (21,067)     $  (5,219)    $ (37,074)       $ (22,119)
                                     ==========     ==========    ==========       ==========
NET LOSS PER SHARE                   $    (.02)     $      --     $    (.03)       $    (.02)

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


</TABLE>
See accompanying notes.

<PAGE>6

                         USA INTERNATIONAL CHEMICAL, INC.
                       STATEMENTS OF CASH FLOWS (UNAUDITED)
                     NINE MONTHS ENDED MARCH 31, 1997 AND 1996


   
                                                             Nine Months Ended
                                                                  MARCH 31,
                                                           1997           1996

     OPERATING ACTIVITIES:

           Net Cash Used in Operating Activities        $(35,815)     $(24,428)
                                                        ---------     ---------
     FINANCING ACTIVITIES:
           Capital contributions                          41,000        23,000
                                                        ---------     ---------
           Net Cash Provided by Financing Activities      41,000         3,000
                                                        ---------     ---------
     NET INCREASE (DECREASE) IN CASH                       5,185        (1,428)

     CASH at beginning of period                           3,413         1,502
                                                        ---------     ---------
     CASH at end of period                              $  8,598      $     74
                                                        =========     =========
     Supplemental Disclosures of Cash Flow Information:       --            --



     See accompanying notes.


<PAGE>7

                         USA INTERNATIONAL CHEMICAL, INC.
                           NOTES TO FINANCIAL STATEMENTS
                         NINE MONTHS ENDED MARCH 31, 1997


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 nine months ended March 31, 1997 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 nine months ended March 31, 1997 principal shareholders contributed
$41,000 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 nine months ended March 31, 1997 or 1996.
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.

     General  and  administrative expenses were $21,067 for the  quarter  ended
March 31, 1997 and $37,074 for the nine months ended March 31, 1997 compared to
$5,219 and $21,319, respectively, for the same periods last year.  The increase
in expenses in the current  quarter  and nine months was the result of expenses
in connection with the identification  and review of potential mergers, none of
which were consummated.

     During the nine months ended March  31,  1997, net cash used by operations
was $35,815 compared to $24,428 for the same period  last  year  as a result of
higher expenditures during the most recent quarter.

     Net  loss  totaled $21,067 for the three months and $37,074 for  the  nine
months ended March  31,  1997,  compared  to a net loss of $5,219 for the three
months ended March 31, 1996 and $22,119 for  the  nine  months  ended March 31,
1996.  The increase for the three months and nine months ended March  31,  1997
was the result of increased expenses discussed in the second paragraph above.

     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 nine months ended  March 31, 1997, capital was provided
from $41,000 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
                                    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.


DATED:  May 1, 1997                         USA INTERNATIONAL CHEMICAL, INC.


                                            YALE FARAR

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