SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 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
   June 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
requirements 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

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                     MEDIZONE CANADA LIMITED AND SUBSIDIARY

                                      Index

                                 March 31, 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

                                        June 30,              December 31,
                                          1997                   1996
                                        --------              ------------

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
    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)
                                                    ---------        ---------

                                                    $  -             $  -
                                                    =======          =======








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





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<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 Six Months         For the Three Months         1987)
                                      Ended June 30,             Ended June 30,               through
                                      ------------------         -------------------           
                                      1996        1997           1997          1996           June 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-          -0-          -0-            744          191,890
administrative                        ----         ----         ----          ------         -------  
expenses


Total Costs &                          -0-          -0-          -0-            744          221,444
Expenses                              -----        ------       -----         ------         -------

Net Loss                              $-0-         $(744)       $-0-         $ (744)         $(221,444)
========                              =====        ======       =====        =======         ==========                             

Weighted average                      36,493,333   36,493,333   36,493,000   36,493,000      33,198,000
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.






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                     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 June 30, 1997
                                   (unaudited)

                                                                       Deficit
                                                                     Accumulated
                                                 Shares  Additional    During
Medizone Canada Ltd. -          Common Stock     to be   Paid-in     Development
Canadian                     Shares       Amount Issued  Capital        Stage
----------------------       ------       ------ ------  ----------  -----------

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









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






                                                             5 of 11

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                            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 June 30, 1997
                                          (unaudited)

                                                                       Deficit
                                                                     Accumulated
                                                  Shares  Additional   During
Medizone Canada Ltd. -             Common Stock   to be     Paid-in  Development
Utah (con't.)                  Shares      Amount Issued    Capital    Stage
----------------------         ------      ------ ------  --------- ------------
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


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






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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                                                     (3,301)
   months ended, Dec. 31, ----------   -------      -----   --------  ----------
   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)
                                                     =====   =======   ========



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






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<PAGE>





            MEDIZONE CANADA LIMITED AND SUBSIDIARY
                 (A Development Stage Company)
              Consolidated Statement of Cash Flow
                          (unaudited)
        Increase (Decrease) in Cash and Cash Equivalents
                                                                   From the Date
                                                                   of Inception
                                  For the Six Months Ended          (Nov. 18,
                                           June 30,                    1987)
                                  --------------------------------    through
                                  1997                        1996   March 31,
                                  ----                        ----  ----------
                                                                       1997
                                                                       ----
OPERATING ACTIVITIES:
   Net loss                           $ -0-                $ (744)   $(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-                  (2,744)  (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-                   2,744    (89,145)
   Issuance of stock for cash           -0-                    -0-     246,590
                                       -----                  -----    --------

Net cash provided by financing
   activities                           -0-                   2,744    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


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






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                               MEDIZONE CANADA LIMITED AND SUBSIDIARY
                                    (A Development Stage Company)
                        Notes to Unaudited Consolidated Financial Statements

                                               June 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
financial  statements  for the six month  periods  ended June 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.






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Item 2.


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



Results of Operations

General

Six-month periods ended June 30, 1997, and June 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 $744  which  were  shareholder  costs and
professional fees.



Liquidity and Capital Resources

At June 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.





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                           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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