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                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549      
                                                        
                                   FORM 10-Q                           
                                                                       
                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934
                                                                            
   For the Quarter Ended                     Commission File Number
      September 30, 1997                           33-16757-D   
                                            
                             MEDIZONE CANADA LIMITED
           (Exact name of registrant as specified in its charter)

          Utah                                              87-0431771         
(State or other jurisdiction                              (I.R.S. Employer
   of incorporation or                                  Identification No.)  
      organization)                                  
              


                          4505 South Wasatch Boulevard
                                   Suite 210
                           Salt Lake City, Utah 84124
                                 (801) 274-8400
               (Address, including zip code, and telephone number,
        including area code, of registrant's principal executive offices)



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 require-
ments for the past 90 days.


      YES                                         NO  X
         -----                                      -----           


At February 3, 1998, there were outstanding 36,493,333 shares of the
registrant's common stock.




                                     1 of 11

<PAGE>

                    MEDIZONE CANADA LIMITED AND SUBSIDIARY
                   

                                      Index

                               September 30, 1997




                                                                            Page
                                                                          Number
                                                                          ======
                         PART I - FINANCIAL INFORMATION


Item 1.  -    Financial Statements

              Unaudited Interim Consolidated Balance Sheets                   3

              Unaudited Interim Consolidated Statements of Operations         4

              Unaudited Interim Consolidated Statement of Changes in
                Stockholders' Equity                                        5-8

              Unaudited Interim Consolidated Statements of Cash Flow          9

              Notes to Unaudited Interim Consolidated Financial
                Statements                                                   10

Item 2.  -    Management's Discussion and Analysis of Financial
                Condition and Results of Operations                          11


                           PART II - OTHER INFORMATION

Item 6.  -    Exhibits and Reports on Form 8-K Signatures                    12

Signatures                                                                   12


                                     2 of 11
<PAGE>
                     
                         PART I - FINANCIAL INFORMATION


Item 1.  -  Financial Statements



                     MEDIZONE CANADA LIMITED AND SUBSIDIARY
                          (A Development Stage Company)
                       Interim Consolidated Balance Sheets
                                   (unaudited)



                                     ASSETS

<TABLE>
<CAPTION>
                                                       September 30,        December 31,
                                                           1997                 1996
                                                       -------------        ------------
<S>                                                    <C>                 <C>
Current Assets:
    Cash                                                $   -                 $   -
                                                        ---------             ---------  
    Total Current Assets                                    -                     -


Other Assets:
    License agreement                                                          
    Organization costs (net of accumulated amortization
       of $5,520 and $5,520, respectively)                  -                     -
                                                        ---------             ---------  
Total Assets                                            $   -                 $   -
                                                        =========             =========  




                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY


Current Liabilities:
    Accounts payable                                    $   9,498             $   9,498
    Accrued expenses                                        2,000                 2,000
                                                        ---------             ---------  
    Total Current Liabilities                              11,498                11,498
                                                        =========             =========  
Commitments and Contingencies (Note 1)

Stockholders' Deficiency
   Common stock, authorized 100,000,000 shares, par
      value $.001 per share; issued and outstanding
         36, 493,333                                       36,493                36,493
   Additional paid-in capital                             173,453               173,453
   Deficit accumulated during development stage          (221,444)             (221,444)

   Total Stockholders' Deficiency                        ( 11,498)             ( 11,498)

                                                        $   -                   $  -

</TABLE>

                  The accompanying notes are an integral part
                  of these consolidated financial statements.

                                     3 of 11
<PAGE>

                     MEDIZONE CANADA LIMITED AND SUBSIDIARY
                          (A Development Stage Company)
                  Interim Consolidated Statements of Operations
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                   From the
                                                                                   Date of
                                                                                   Inception
                                                                                   Nov. 18,
                       For the Nine Months            For the Three Months         1987)
                       Ended September 30,            Ended September 30,          through
                       -------------------            --------------------
                       1997           1996            1997            1996        September
                       ----           ----            ----            ----        30, 1997
                                                                                  ---------
<S>                   <C>             <C>             <C>           <C>          <C>    
Sales                  $-0-            $-0-            $-0-          $-0-         $-0-
                       ----            ----            ----          ----         ----

Costs and Expenses:     -0-             -0-             -0-           -0-         29,554


General &               -0-             1,301           -0-           557         191,890
administrative
expenses

Total Costs &          -0-              1,301           -0-           557         221,444
Expenses

Net Loss               $-0-             $1,30          $-0-          $(557)       $(221,444)
                       ====             =======        ====          ======       ==========           
Weighted average       36,493,333       36,493,333     36,493,000    36,493,000   33,367,000
number of shares       ==========       ==========     ==========    ==========   =============    
outstanding

Loss per Share         $-0-             $-0-           $-0-           $-0-        $-0-
                       ====             ====           ====           ====        ====   
</TABLE>




                  The accompanying notes are an integral part
                  of these consolidated financial statements.




                                     4 of 11
<PAGE>


                     MEDIZONE CANADA LIMITED AND SUBSIDIARY
                          (A Development Stage Company)
            Consolidated Statement of Changes in Stockholders' Equity
    From the Date of Inception (November 18, 1987) through September 30, 1997
                                   (unaudited)

                                              
                                              
<TABLE>
<CAPTION>
                                                                                       Deficit
                                                                                     Accumulated     
                                                          Shares      Additional        During
Medizone Canada Ltd. -              Common Stock          to be       Paid-in        Development
Canadian                         Shares         Amount    Issued      Capital           Stage
----------------------           ------         ------    ------      ----------     -----------
<S>                              <C>            <C>       <C>         <C>            <C>

Initial issuance of shares
   exchanged for license
   agreement, November 1987                                                               
   ($.0000003 per share)         3,000,000      $     1                                        
Share issued for cash,
   November 1987 ($1/share)              1            1                        
Net loss for the year
   ended December 31, 1987       ---------      -------                               $ (1,000)
                                                                                      ---------   
Balance, Dec. 31, 1987           3,000,000            2                                 (1,000)

Sale of shares for cash
   ($.7692 per share, no par
   value)                          130,000      100,000
                                 ---------     --------                               ---------    
                                 3,130,000     $100,002                               $ (1,000)
                                 =========     ========                               =========       
KPC Investments
---------------
Initial capitalization of
   KPC investments ($.001 par
   value) July 1984 ($.003
   per share)                      590,000    $     590                   910
Shares issued for cash
   April 1985 ($.003/share)      3,000,000        3,000                 6,819
Shares & warrants issued
   for cash June 1988            2,000,000        2,000                82,089
                                 ---------     --------               -------  
                                 5,590,000     $  5,590               $89,818
                                 =========     ========               =======  
Medizone Canada Ltd. -
Utah
----------------------
Existing shares of MCL
   Utah (formerly KPC
Investments ..............       5,590,000     $  5,590             $  89,818
Exchange of 3,130,001
   shares of Medizone Canada
   Ltd.-Canadian for shares
   of MCL-Utah resulting in a
   reverse merger December
   1988                         27,132,000       27,132                66,551

</TABLE>


                  The accompanying notes are an integral part
                  of these consolidated financial statements.




                                     5 of 11

<PAGE>

                     MEDIZONE CANADA LIMITED AND SUBSIDIARY
                          (A Development Stage Company)
            Consolidated Statement of Changes in Stockholders' Equity
    From the Date of Inception (November 18, 1987) through September 30, 1997
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                         Deficit
                                                                                       Accumulated
                                                           Shares       Additional       During
Medizone Canada Ltd. -                Common Stock         to be         Paid-in       Development
Utah (con't.)                    Shares        Amount      Issued        Capital         Stage
----------------------           ------        -----       ------       ----------     -----------
<S>                          <C>           <C>         <C>          <C>            <C> 
Shares reserves for
   issuance to minority
   shareholder                (1,126,888)     (1,127)     $1,127
Share issued for servi-
   ces ($.005/share)           1,938,000       1,938                     $   8,062
Return of capital to
   majority shareholder                                                    (50,851)

Net loss for the year
   ended December 31, 1988                                                              $(106,392)
                              ----------      ------       -----           -------      ----------   
Balance, Dec. 31, 1988        33,533,112      33,533       1,127           113,580       (107,392)

Return of Capital to
   majority shareholder                                                    (58,056)

Net loss for the year
   ended Dec. 31, 1989                                                                    (26,179)
                              ----------      ------       -----            ------       --------- 
Balance, Dec. 31, 1989        33,533,112      33,533       1,127            55,524       (133,571)

Sale of shares for cash
   (from $.05 to $.075/sh)       983,333         983
Shares issued for services
   ($.05 per share)              850,000         850
Shares issued to minority
   shareholder which had
   been previously reserved    1,126,888       1,127      (1,127)
Return of capital to
   majority shareholder                                                    (42,480)

Net loss for the year
   ended Dec. 31, 1990                                                                    (28,561)
                             -----------     -------    -------           ---------      ---------
Balance, Dec. 31, 1990        36,493,333      36,493       -0-              111,211      (162,132)

Capital received from
   majority shareholder                                                       9,100

Net loss for the year
   ended Dec. 31, 1991                                                                                        (8,150)
                              ----------      ------    ------            ---------      --------- 
Balance, Dec. 31, 1991        36,493,333      36,493       -0-              120,311      (170,282)

Capital received from
   majority shareholder                                                       6,314

Net loss for the year
   ended Dec. 31, 1992                                                                   (8,334)
                              ----------      ------    ------           ---------       --------   
Balance, Dec. 31, 1992        36,493,333      36,493       -0-             126,625       (178,616)

Capital received from
   majority shareholder                                                     25,936
</TABLE>


                  The accompanying notes are an integral part
                  of these consolidated financial statements.




                                     6 of 11
<PAGE>



<TABLE>
<CAPTION>
<S>                            <C>              <C>      <C>        <C>            <C>
Net loss for the year
   ended Dec. 31, 1993                                                                (32,357)

Balance, Dec. 31, 1993         36,493,333         36,493   -0-          152,561      (210,973)

Capital received from
   majority shareholder                                                  12,038

Net loss for the year
   ended Dec. 31, 1994                                                                 (3,617)

Balance, Dec. 31, 1994         36,493,333         36,493   -0-          164,599      (214,590)

Capital received from
   majority shareholder                                                   5,553

Net loss for the year
   ended Dec. 31, 1995             (3,553)

Balance, Dec. 31, 1995         36,493,333         36,493   -0-          170,152      (218,143)

Capital received from
   majority shareholder                                                   3,301

Net loss for the six
   months ended, Dec. 31,                                                              (3,301)
   1996

Balance, Dec. 31, 1996         36,493,333    $    36,493   $ -0-    $   173,453   $  (221,444)

Net loss for the six
   months ended
   June 30, 1997                                             -0-

Balance, June 30, 1997         36,493,333    $    36,493   $ -0-   $   173,453    $  (221,444)
</TABLE>


                  The accompanying notes are an integral part
                  of these consolidated financial statements.

                                     7 of 11
<PAGE>
                     MEDIZONE CANADA LIMITED AND SUBSIDIARY
                          (A Development Stage Company)
                       Consolidated Statement of Cash Flow
                                   (unaudited)
                Increase (Decrease) in Cash and Cash Equivalents

<TABLE>
<CAPTION>
                                                                               From the Date
                                                                               of Inception
                                               For the Nine Months Ended         (Nov. 18,
                                                      September 30,                1987)
                                                                                  through
                                               1997           1996          September 30, 1997
                                               ----           ----          ------------------

<S>                                        <C>            <C>               <C> 
OPERATING ACTIVITIES:
   Net loss                                  $ -0-         $ (1,301)            $(221,444)
   Adjustments to reconcile net
     loss to net cash used in
     operating activities:                                     -0-
     Issuance of stock for services            -0-             -0-                  52,500
     Write-off of prior year payables          -0-             -0-                 (25,261)
     Amortization                              -0-             -0-                   5,520
     Write-off of license agreement            -0-                                       1
   Changes in assets and liabilities:
     Accounts payable and accrued                            (2,000)
       expenses                                -0-                                  36,759

Net cash used in operating activities          -0-           (3,301)              (151,925)

INVESTMENT ACTIVITIES:
   Additions to other assets:
     Organization costs                        -0-             -0-                  (5,520)

Net cash used in investing activities          -0-             -0-                  (5,520)

FINANCING ACTIVITIES:
   Cash received from (advanced to)
     majority shareholder                      -0-            3,301                (89,145)
   Issuance of stock for cash                  -0-             -0-                 246,590

Net cash provided by financing
   activities                                  -0-            3,301                157,445

INCREASE (DECREASE) IN CASH                    -0-             -0-                    -0-

CASH
   Beginning of period                         -0-             -0-                    -0-

   End of period                             $ -0-           $ -0-                   $ -0-

NONCASH ACTIVITIES:
   Issuance of stock for license
     agreements                                -               -                        1
</TABLE>
                  The accompanying notes are an integral part
                  of these consolidated financial statements.

                                     8 of 11
<PAGE>
                     MEDIZONE CANADA LIMITED AND SUBSIDIARY
                          (A Development Stage Company)
              Notes to Unaudited Consolidated Financial Statements

                               September 30, 1997

Continuation  of the Company as a going concern is dependent  upon the Company's
obtaining  additional  capital and the  requisite  approvals  from the  Canadian
Health and Welfare  authorities for the marketing of ozone-related  products and
equipment and, ultimately,  upon the Company's attaining profitable  operations.
The Company may require a substantial amount of additional funds to complete the
development of its products, to establish manufacturing  facilities,  to build a
sales and marketing organization and to fund additional losses which the Company
expects to incur over the next several years.

The Company expects that its parent, Medizone International,  Inc., ("MII") will
provide funds or undertake such actions as are necessary to continue operations.
The Company has no continuing  financial  commitments  and it has estimated that
expenditures  for the next  twelve  months  will  consist  only of the  costs of
continuing its bare legal existence.

In the opinion of management of the Company,  the unaudited  consolidated finan-
cial  statements  for the nine month periods ended  September 30, 1997 and 1996,
respectively,  include all  adjustments,  which  comprise only normal  recurring
accruals,  necessary for a fair presentation of the results for such periods. It
is suggested that these unaudited  consolidated  financial statements be read in
conjunction  with the financial  statements  and notes  thereto  included in the
Company's  1996  Annual  Report  on Form  10-K  which  has been  filed  with the
Securities and Exchange Commission.

                                     9 of 11
<PAGE>
Item 2.


           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

Results of Operations

General

Nine-month periods ended September 30, 1997, and September 30, 1996

No research and  development  expenses were incurred in 1997 or 1996. No general
and  administrative  expenses  were  incurred  in 1997 or 1996  period.  General
administrative  expenses in 1996 were $1,301  which were  shareholder  costs and
professional fees.


Liquidity and Capital Resources

At September 30, 1997, the Company had a working  capital  deficiency of $11,498
and a shareholders' deficiency of $11,498. At December 31, 1996, the Company had
a working  capital  deficiency  of $11,498  and a  shareholders'  deficiency  of
$11,498.

The Company  and its parent  company,  Medizone  International,  Inc.,  have had
discussions with a number of potential lenders,  investors and underwriters with
a view  towards  raising  additional  funds  to  fund  research  and  continuing
operations.

The Company  expects that Medizone will provide funds or undertake  such actions
as are necessary to continue  operations  of the Company.  In the event that the
outstanding  warrants of the  Company are  exercised,  fully or  partially,  the
Company  will  expend any net  proceeds  for the  continuation  of its  business
including continuation of its research endeavors.

                                    10 of 11
<PAGE>
                           PART II - OTHER INFORMATION

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

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

                                   SIGNATURES

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


                                            MEDIZONE CANADA LIMITED
                                                  (Registrant)



                                            s/Arthur P. Bergeron
                                            Arthur P. Bergeron
                                            Vice President


February 10, 1998

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