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 Quarter Ended                               Commission File
September 30, 1996                             Number  001-12245


                        METROGOLF INCORPORATED
-----------------------------------------------------------------
       (Exact name of registrant as specified in its charter)



COLORADO                                       84-1288480
-----------------------------------------------------------------
(State or other jurisdiction   I.R.S. Employer Identification No.
of incorporation or organization)

1999 Broadway, Suite 2435, Denver, Colorado 80202
-----------------------------------------------------------------
(Address of principal executive offices) (Zip code)

Registran's telephone number, including area code (303) 294-9300
-----------------------------------------------------------------

(Former name, former address and former fiscal year, if changed 
since last report.)

Indicate by check whether the registrant (1) has filed  1)  Yes X
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    2)  Yes X
the past 90 days.

Indicate the number of share outstanding of each of the issue's 
classes
of stock, as of the latest practicable date.

                                                 Number of Shares
Class                            Outstanding at November 22, 1996
Common stock, no par value                     2,211,957   shares


METROGOLF INCORPORATED
FORM 10-Q QUARTERLY REPORT
TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION
     ITEM 1. Consolidated Financial Statements

     Consolidated Balance Sheets as of September 30, 1996
     (Unaudited) and December 31, 1995


     Consolidated Statements of Operations (Unaudited)
     for the three months and the nine months ended September 
30,1996 and 1995


     Consolidated Statements of Cash Flows (Unaudited)
     for the nine months ended September 30, 1996 and 1995


     Notes to Consolidated Financial Statements (Unaudited)

     ITEM 2. Managemen's Discussion and Analysis of
     Financial Condition and Results of Operations

PART II - OTHER INFORMATION

     Items 1 through 6

     SIGNATURE

<TABLE>
<CAPTION>
                         MetroGolf Incorporated
                       Consolidated Balance Sheets



                               September 30,        December 31,
                                   1996                 1995
                               (Unaudited)
 ASSETS
<S>                          <C>                <C>
Current Assets
    Cash and cash equivalent $     51,000       $           324 
    Restricted cash                     -               222,700 
    Inventories                    96,024                     - 
    Management fee 
    receivable, related party      66,091                83,256 
    Other current assets           70,470                15,452 
                             ----------------------------------
                                  283,585               321,732 
Property and equipment, 
net of accumulated
     depreciation of 
     $64,774 and $24,025        1,548,515                63,952 

Other Assets

    Deposits and other assets      40,535                19,800 
    Deferred offering costs       462,431                     - 
    Debt issue costs, 
    net of accumulated 
    amortization of $89,292 as 
    of September 30, 1996         178,586                     - 
    Deferred acquisition costs    108,856                59,467 
    Notes receivable, 
    related parties               766,626               514,728 
    Note receivable, other         83,172                     - 
                                -------------------------------
                                1,640,206               593,995 
                                -------------------------------
TOTAL ASSETS                $   3,472,306          $    979,679 
                             ==================================


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

<S>                         <C>                    <C>
Current Liabilities
    Accounts payable        $   963,410            $   380,217 
    Accrued salaries            332,708                145,784 
    Accrued expenses and
    other current 
    liabilities                 120,345                 11,446 
    Note payable, officer         4,075                 26,827 
    Line of credit                    -                246,937 
    Convertible 
    subordinated notes 
    payable, net of issue 
    discount of $182,700 as
    of September 30, 19961,     842,300                      - 
    Current portion of 
    long-term debt              716,489                 16,489 
                             ----------------------------------
                              3,979,327                827,700 
                             ----------------------------------
Long term debt, 
less current portion             10,357                 23,151 
                             ---------------------------------
Investments in affiliates         5,967                  3,689 
                             ---------------------------------
Minority interest in
consolidated subsidiaries        24,992                 24,178 
                             ---------------------------------
Stockholders' Equity (Deficit)
Preferred stock -- 
$1 par value; 1,000,000 
shares authorized;
45,500 shares issued 
and outstanding;
liquidation value of $25 
per share plus dividends
in arrears of $333,698 
and $205,729 (in the
aggregate $1,471,198 
and $1,343,229)                  45,500                 45,500 
    Additional paid-in
    capital                     940,609                940,609 
    Common stock -- 
    No par value: 9,000,000 
    shares authorized; 
    680,782 shares issued 
    and outstanding             146,830                (96,770)
    Notes receivable, 
    stockholder                (166,716)              (120,300)
    Accumulated deficit      (1,514,560)              (668,078)
                            -----------------------------------
                               (548,337)               100,961 
                            -----------------------------------
TOTAL LIABILITIES AND 
STOCKHOLDERS' EQUITY 
(DEFICIT)                 $   3,472,306            $   979,679 
                           ===================================
</TABLE>

<TABLE>
<CAPTION>
                         MetroGolf Incorporated
                   Consolidated Statements of Operations
                             (Unaudited)

                                    For the Three Months Ended
                                  September 30,     September 30,
                                      1996              1995
<S>                             <C>                 <C>
Revenues
     Operating revenues          $      265,034      $         -   
     Merchandise                         42,701                -   
     Management fees, 
     related parties                     44,737           28,773 
     Acquisition and 
     consulting fees                     10,000          145,000
                                 -------------------------------- 
Total revenues                          362,472          173,773 
     Operating expenses                 346,541                -   
     Cost of merchandise sold            23,362                -   
     Selling, general and 
     administrative expenses            323,320          153,715 
                                 --------------------------------
Income (loss) from operations          (330,751)          20,058
                                 -------------------------------- 
Interest expense                       (181,450)          (5,821)
Other                                    19,925            2,693 
                                 --------------------------------
Total other income (expense)           (161,525)          (3,128)
                                 --------------------------------
Equity in income of affiliates              351               77
                                 -------------------------------- 
Minority interest in income
of subsidiaries                          (3,219)          (1,732)
                                 --------------------------------
Net income (loss)                      (495,144)          15,275 
Dividend requirements on 
preferred stock                          42,656           39,875 
                                 --------------------------------
Loss applicable to common stock $      (537,800) $       (24,600)
                                 ================================
Net (loss) per common share     $         (0.61)  $        (0.03)
                                 ================================
Weighted average number 
of common shares outstanding            877,142          877,142 
</TABLE>

See accompanying notes to consolidated financial statements 
<TABLE>
<CAPTION>
                       MetroGolf Incorporated
                 Consolidated Statements of Operations
                           (Unaudited)

                                  For the Nine Months Ended
                                September 30,       September 30,
                                    1996                1995
<S>                             <C>                 <C>
Revenues
     Operating revenues         $      265,034      $          - 
     Merchandise                        42,701                 - 
     Management fees,
     related parties                   144,011           113,786 
     Acquisition and 
     consulting fees                    10,000           145,000 
                                ---------------------------------
Total revenues                         461,746           258,786 
                                ---------------------------------

     Operating expenses                346,541                 - 
     Cost of merchandise sold           23,362                 - 
     Selling, general and 
     administrative expenses           745,615           524,726 
                                ---------------------------------
Income (loss) from operations         (653,772)         (265,940)
                                ---------------------------------

Interest expense                      (243,940)          (16,191)
Other                                   54,325            22,733 
                                ---------------------------------
Total other income (expense)          (189,615)            6,542 
                                ---------------------------------
Equity in loss of affiliates            (2,278)             (800)
                                ---------------------------------
Minority interest in 
income of subsidiaries                  (9,459)           (6,394)
                                ---------------------------------
Net income (loss)                     (855,124)         (266,592)
Dividend requirements on 
preferred stock                        127,969           112,396 
                                ---------------------------------
Loss applicable to common 
stock                           $     (983,093)   $     (378,988)
                                =================================
Net (loss) per common share     $        (1.12)    $       (0.43) 
                                =================================
Weighted average number of
common shares outstanding              877,142           877,142 
                                =================================
</TABLE>
See accompanying notes to consolidated financial statements 
<TABLE>
<CAPTION>
MetroGolf Incorporated
Consolidated Statements of Cash Flows
(Unaudited)

Increase (Decrease) in Cash and Cash Equivalents
                                    For the Nine Months Ended
                                September 30,       September 30,
                                    1996                1995
<S>                             <C>                 <C>
OPERATING ACTIVITIES
Net loss                        $     (855,124)     $   (266,592)
    Adjustments to reconcile
    net loss to net cash
    provided by (used in)
    operating activities
         Depreciation                   40,749             9,093 
         Interest expense              150,192                 - 
         Equity in loss of 
         affiliates                      2,278               778 
         Minority interest in
         income of consolidated 
         subsidiaries                    9,459             6,394 
         Changes in operating 
         assets and liabilities
           Management fee 
           receivable, related 
           party                        17,165            (4,341)
           Account receivable,
           related party               (11,000)                - 
           Account receivable          (23,489)          (50,310)
           Inventories                 (96,024)                - 
           Other current assets        (20,532)           18,368 
           Accounts payable            573,193           139,083 
           Accrued salaries            186,924           (11,216)
           Accrued expenses 
           and other current 
           liabilities                 118,899           (45,307)
                                ---------------------------------
Net Cash Provided by (Used in)
Operating Activities                    92,690          (204,050) 
                                ---------------------------------
INVESTING ACTIVITIES
    Restricted cash                    222,700                 - 
    Payments for notes 
    receivable, related 
    parties                           (251,898)          (96,718)
    Payments for notes 
    receivable, stockholder            (46,416)          (99,763)
    Acquisition of fixed assets       (825,312)          (38,807)
    Payments for deferred 
    acquisition costs                  (49,389)                - 
    Receivable in connection 
    with asset acquisition             (83,172)                - 
    Deposits and other assets          (20,735)           17,000 
                                ---------------------------------
Net Cash Used in Investing 
Activities                          (1,054,222)         (218,288)
                                ---------------------------------
FINANCING ACTIVITIES
    Proceeds from convertible 
    subordinated notes payable       2,025,000                 - 
    Proceeds from (payments on)
    line of credit                    (246,937)           97,559 
    Payments on long term debt         (12,794)           12,315 
    Payments on note payable,
    officer                            (22,752)                - 
    Payments for debt issue costs     (267,878)                - 
    Payments for deferred 
    offering costs                    (462,431)          (25,283)
    Proceeds from issuance of
    preferred stock, net of 
    offering costs                           -           199,504 
                                ---------------------------------
Net Cash Provided by Financing
Activities                           1,012,208           284,095 
                                ---------------------------------
Increase (Decrease) in Cash 
and Cash Equivalents                    50,676          (138,243)
Cash and Cash Equivalents,
Beginning of Period                        324           195,777 
                                    ----------------------------
Cash and Cash Equivalents,
End of Period                  $        51,000       $    57,534 
                                =================================
</TABLE>

See accompanying notes to consolidated financial statements


MetroGolf Incorporated
Notes to Consolidated Financial Statements
(Unaudited)

1. General:

The accompanying financial statements have been prepare in 
accordance with generally accepted accounting principles for 
interim financial information and in accordance with 
instructions to Form 10-Q and Regulation S-X.  Accordingly, 
they do not include all of the information and footnotes 
required by generally accepted accounting principles for 
complete financial statements.  The accompanying financial 
information is unaudited but includes all adjustments 
(consisting of normal recurring accruals) which, in the 
opinion of management, are necessary to present fairly the 
information set forth herein.  The consolidated financial 
statements should be read in conjunction with the notes to 
the consolidated financial statements which are included in 
the Registration Statement on Form S-1 of the Company for 
the fiscal year ended December 31, 1995.

The results for the interim periods are not necessarily 
indicative of results to be expected for the fiscal year of 
the Company ending December 31, 1996.  The Company believes 
that the nine month report filed on Form 10-Q is 
representative of its financial position and its results of 
operations and changes in cash flow for the periods ended 
September 30, 1996 and 1995.

2.     Convertible Subordinated Notes Payable:

On May 30, 1996, the Company completed its offer for sale in 
a private placement of $2,025,000 in convertible 
subordinated notes.  Net proceeds from the offering, after 
paying commissions and offering costs, were approximately 
$1,757,000.  The notes bear interest at 12%, with interest 
payable June 1 and December 1 of each year commencing 
December 1, 1996.  The market interest rate on the 
convertible subordinated notes has been determined to be 
greater than the stated interest rate which results in an 
original issue discount on the face amount of the 
convertible subordinated notes in the amount of $243,600 
based on an effective interest rate of 24%.  This original 
issue discount is being charged to interest expense over the 
life of the convertible subordinated notes under the 
effective interest method.

Simultaneously with the completion of the Company's Initial 
Public Offering (IPO) on October 21, 1996, subordinated 
notes and accrued but unpaid interest totaling $1,068,525 
were converted into 356,175 shares of common stock in 
accordance with the provisions of the convertible 
subordinated notes.  The remaining $1,012,500 in notes are 
due on June 1, 1997.



3.     Stockholders Equity

In September, 1996 the Company declared a 1.535 to 1 reverse 
stock split.  All share information herein reflects such 
stock adjustment.

On October 21, 1996, the Company completed the sale of 
1,175,000 shares of common stock in an IPO registered on 
Form S-1.  Net proceeds to the Company upon completion of 
the IPO was approximately $5,781,000 after paying offering 
costs and commissions of approximately $1,269,000.

On November 21, 1996, the Company completed the redemption 
of 45,500 shares of preferred stock at an aggregate cost of 
$1,544,432, including dividends in arrears of $357,870.

4.     Acquisitions

On July 1, 1996, the Company purchased the leasehold 
interest on an existing driving range and learning center 
facility in Fremont, California for $1,350,000 plus 
acquisition costs of approximately $81,000.  The purchase 
agreement provided for payment of $650,000 in cash and 
$700,000 payable by a promissory note accruing interest at a 
rate of 9% per annum, with all principal and interest due 
November 15, 1996.  The note is secured by a first deed of 
trust encumbering the leasehold.  The Company is currently 
in negotiations with the note holder to extend the due date 
past November 15, 1996.  The ability of the Company to 
extend the due date is uncertain at this time.

On July 1, 1996 the Company entered into a sublease, with an 
option to purchase, for the Harborside Golf Center located 
in downtown San Diego, California.  The sublease provides 
for a term of one year for both sublease and purchase 
option, with an option to extend for three months.  If the 
Company elects to exercise its option to purchase the 
facility for approximately $1.2 million, it intends to fund 
the acquisition and subsequent development expenses through 
a combination of working capital provided from the proceeds 
of its IPO and debt which it expects to obtain from a 
commercial bank, specialized golf lending institution or 
private lender.

On September 1, 1996, the Company entered into a short term 
sublease on the Palms Golf Center located south of San 
Diego, California.  The sublease provides for a four month 
term.  The Company is in the process of negotiating a 
purchase agreement to acquire this facility for 
approximately $790,000.  The Company intends to fund the 
acquisition through assumption of existing debt, proceeds 
from the IPO and issuance of securities.

On October 21, 1996 the Company purchased 93.6% of the 
limited partnership interests in Illinois Center Golf 
Partners L.P. (Illinois Center) for $1,587,500 cash and 
$1,687,500 in convertible notes.  The convertible notes will 
be convertible at the holders option into common stock at 
any time after November 21, 1997 at a conversion price equal 
to $6 per share of common stock.  In addition, each 
convertible note issued to the limited partners of Illinois 
Center will convert into warrants to purchase 2,500 shares 
of common stock at an exercise price equal to $7.20 per 
share.

On October 21, 1996 the Company purchased 89.7% of the 
limited partnership interests in Goose Creek Limited 
Partnership (Goose Creek) for $620,500 cash and $744,500 
in convertible notes.  The convertible notes will be 
convertible at the holders option into common stock at any 
time after November 21, 1997 at a conversion price equal to 
$6 per share of common stock.


5.     Supplemental Data to Statements of Cash Flows

Excluded from the consolidated statements of cash flows were 
the effects of certain noncash investing and financing 
activities.

In July 1996, the Company acquired certain leasehold 
interests for $700,000 by issuing a note payable, as 
discussed more fully in Note 4 above.

<TABLE>
         For the Three Months Ended    For the Nine Months Ended
        September 30,  September 30,  September 30, September 30,
            1996            1995          1996          1995
<S>       <C>           <C>             <C>            <C>
Cash
payments
for
interest  $2,070        $5,821          $44,310        $16,192
</TABLE>
6.     Income Taxes

At September 30, 1996 and December 31, 1995, the Company has 
available net operating loss carry forwards of approximately 
$1,437,000 and $584,000 for tax reporting purposes which 
expire through 2012.  These operating loss carry forwards 
are subject to various limitation imposed by the rules and 
regulations of the Internal Revenue Service.

The Company has deferred tax assets fully reserved as of 
September 30, 1996 and December 31, 1995.  The tax effect on 
the components is as follows:
<TABLE>
                                  September 30,     December,31
                                     1996              1995
<S>                               <C>               <C>
Net operating loss carry forward .$  286,000        $  117,000
Salary accrual ...................         -            29,000
Basis difference in property
and equipment             ....         1,000             1,000
                                  -----------------------------
                                     287,000           147,000
Valuation allowance                 (287,000)         (147,000)
                                  -----------------------------
                                  $       --         $      --
                                  =============================
</TABLE>
A 100 percent valuation allowance has been established to 
reflect management's evaluation that it is more likely than 
not that all of the deferred tax assets will not be 
realized.  For the nine months ended September 30, 1996 and 
for the year ended December 31, 1995, the valuation 
allowance increased by $140,000 and $98,000.


ITEM 2.  MANAGEMENT DISCUSSION AND PLAN OF OPERATION.

     The following discussion and analysis should be read in 
conjunction with the Company's Financial Statements and the notes 
thereto appearing elsewhere in this Report.  This report contains 
forward-looking statements that involve risks and uncertainties.  
The Company's actual results could differ materially form the 
results discussed in the forward-looking statements.  Factors 
that could cause or contribute to such differences include, but 
are not limited to, those discussed in "Risk Factors" in the 
Company's Registration Statement on Form S-1, as amended, dated 
October 16, 1996, filed with the Securities and Exchange 
Commission.

General

     The Company's strategy is to increase revenues and net 
income by increasing the number of golf centers it owns, leases 
or manages by (i) identifying and acquiring existing golf 
facilities that have the potential for revenue enhancement 
through better management and improved or expanded facilities, 
including the addition of enclosed hitting areas, full-line pro 
shops and other amenities, (ii) developing new golf centers in 
locations where suitable acquisition opportunities are not 
available, and (iii) seeking to realize economies of scale 
through centralized purchasing, accounting, management 
information and cash management systems. Consistent with this 
strategy, during October 1996 the Company has acquired 93.6% of 
the limited partnership interests in Illinois Center Golf 
Partners, L.P. ("Illinois Center") and 89.7% of the limited 
partnership interests in Goose Creek Golf Partners Limited 
Partnership ("Goose Creek"). In addition, the Company is actively 
pursuing acquisition or development projects in major cities, 
including Atlanta, Denver, Los Angeles, St. Louis, San Diego, 
San Francisco, Seattle and Toronto. The Company currently has 
18 properties under active review as candidates for acquisition 
and has either entered into or is currently negotiating 
non-binding letters of intent with respect to six of these 
properties. Consummation of any acquisition or development of 
these or any other future sites is subject to the satisfaction of 
various conditions, including the satisfactory completion of due 
diligence by the Company and the negotiation of definitive 
agreements. As consideration for any future acquisition or 
development, the Company may pay cash, incur indebtedness or 
issue debt or equity securities. Such acquisitions or 
developments could result in material changes in the Company's 
financial condition and operating results; however, there can be 
no assurance as to the occurrence of any of these acquisitions or 
developments or, if they occur, as to the timing of the 
consummation of any acquisitions or developments. 

Results of Operations

     The Company derives its revenue from three major sources: 
consulting or acquisition fees, management fees and golf center 
operations.  The Company acquired the leasehold interest in the 
Fremont Park Golf Center on July 1, 1996.  The Company entered 
into a sublease agreement for the Harborside Golf Center on July 
1, 1996.  The Company entered into a short term lease agreement 
for the Palms Golf Center on September 1, 1996.  Prior to these 
dates, the Company had no direct revenue or expenses from the 
operation of Golf Centers.

Nine Months Ended September 30, 1996, as Compared to Nine Months 
Ended September 30, 1995

     Total revenues increased 78.4% to approximately $461,700 for 
the nine months ended September 30, 1996, from approximately 
$258,800 for the nine months ended September 30, 1995.  Golf 
center operations and merchandise sales were approximately 
$307,700, up from $0 in 1995, resulting from the leases and 
subleases acquired in the third quarter of 1996 discussed above.  
Management fees increased to approximately $144,000 in 1996 from 
approximately $113,800 in 1995.  Acquisition and consulting fees 
decreased to $10,000 in 1996 from $145,000 in 1995.  Of the 
$145,000 in acquisition and consulting fees, $120,000 was 
attributabe to a fee for the negotiation of certain Goose Creek 
notes payable.  The remaining $25,000 was a fee for the sale of 
the contract to acquire a golf course.  Both fees are non-
recurring in nature.

     Operating expenses were approximately $346,500 for the nine 
months ended September 30, 1996, up from $0 for the nine months 
ended September 30, 1995 resulting from the leases and subleases 
acquired in the third quarter of 1996 discussed above.  Cost of 
merchandise sold was $23,362 for the nine months ended September 
30, 1996.

     Selling, general and administrative expenses increased to 
approximately $745,600 for the nine months ended September 30, 
1996 from approximately $525,000 for the nine months ended 
September 30, 1995.  These increases are primarily attributable 
to the addition of key personnel associated with management of 
the golf center operations and selling, general and 
administrative costs associated with the golf center operations.

     Interest expenses increased to $243,940 in 1996 from $16,191 
in 1995 primarily due to placement of the $2,025,000 convertible 
subordinated notes in the second quarter of 1996 and a note 
payable of $700,000 in connection with the acquisition of 
Fremont.  Approximately $56,025 of interest was paid by the 
issuance of common stock subsequent to September 30, 1996.  See 
Note 2 to the consolidated financial statements.


     Other income increased to $54,325 in the nine months ended 
September 30, 1996 from $227,338 in the nine months ended 
September 30, 1995 as a result of an increase in interest-bearing 
receivables of approximately $252,000. 

Three months Ended September 30, 1996, as Compared to Three 
Months Ended September 30, 1995

     Total revenues increased 108.6% to approximately $362,500 
for the three months ended September 30, 1996, from approximately 
$173,800 for the three months ended September 30, 1995.  Golf 
center operations began July 1, 1996 at Harborside and Fremont 
and September 1, 1996 at Palms.  Golf center operations and 
merchandise sales were approximately $307,700 in 1996, up from $0 
in 1995, resulting from the leases and subleases acquired in the 
third quarter of 1996 discussed above.  Management fees increased 
to approximately $44,800 from approximately $28,800.  Acquisition 
and consulting fees decreased to $10,000 in 1996 from $145,000 in 
1995.  Of the $145,000 of acquisition and consulting fees in 
1995, $120,000 was attributable to a fee for the negotiation of 
certain Goose Creek notes payable.  The remaining $25,000 was a 
fee for the sale of the contract to acquire a golf course.  Both 
fees are non-recurring in nature.

     Operating expenses were $346,500 for the three months ended 
September 30, 1996, up from $0 for the three months ended 
September 30, 1995.  Cost of merchandise sold was $23,362 for the 
three months ended September 30, 1996.

Selling, general and administrative expenses increased to 
approximately $323,300 for the three months ended September 30, 
1996 from approximately $154,000 for the three months ended 
September 30, 1995.  These increases are primarily attributable 
to the addition of key personnel associated with management of 
the golf center operations and selling, general and 
administrative costs associated with the golf center operations.

     Interest expenses increased to $181,450 in 1996 from $5,821 
in 1995 primarily due to placement of the $2,025,000 convertible 
subordinated notes in the second quarter of 1996 and a note 
payable of $700,000 issued in connection with the acquisition of 
Fremont.  Approximately $56,025 of interest was paid by the 
issuance of common stock subsequent to September 30, 1996.  See 
Note 2 to the consolidated financial statements.

     Other income increased to $19,925 in 1996 from $2,693  in 
1995 as a result of an increase in interest-bearing receivables 
of approximately $252,000. 


 Liquidity and Capital Resources

     At September 30, 1996, the Company had a working capital 
deficit of approximately $3,695,700, as compared to a working 
capital deficit of $506,000 at December 31, 1995. The increase in 
working capital deficit is primarily due to issuance of the 
convertible subordinated notes, issuance of the purchase mortgage 
indebtedness in conjunction with the Fremont acquisition, and 
costs associated with the private placement of the convertible 
subordinated notes (including issue discount on such convertible 
subordinated notes deemed short term for accounting purposes).

     The nine months ended September 30, 1996 had cash provided 
by operating activities of $92,700 compared to cash used in 
operating activities of $204,000 in the nine months ended 
September 30,1995. Cash raised in debt and equity financing in 
1995 and 1996 was primarily used to acquire the Fremont leasehold 
interest, the Harborside sublease interest and to fund operating 
losses and advances to related parties.  In addition, the Company 
used accounts payable as a source of financing.  Trade accounts 
payable increased $139,100 in 1995 and $573,200 in 1996. Because 
of reduced cash flows, officers of the Company were not paid all 
of their salaries due them in 1996. 

     For the nine months ended September 30, 1996, the Company 
had net cash provided by operations, despite a net loss of 
$855,100. The net cash provided by operations was the result of 
an increase in accounts payable, accrued salaries and accrued 
expenses and other current liabilities of $879,000 from 
December 31, 1995 to September 30, 1996. In addition, the Company 
received $17,000 in management fees during the nine months ended 
September 30, 1996 which had been accrued for in prior periods.

     Since its inception, the Company has been funded primarily 
through loans, capital contributions and the sale of preferred 
stock. In May 1996, the Company successfully completed the sale 
of $2,025,000 of convertible subordinated notes, resulting in net 
proceeds of approximately $1,757,100. Some of the proceeds from 
the convertible subordinated notes were used to pay off the 
Company's line of credit.  With the recent and expected future 
increased activities of the Company, the Company expects certain 
operating expenses, such as office rent and salaries, to 
increase. Depending on the number of acquisitions that the 
Company undertakes during 1997, the working capital provided from 
the IPO, together with cash flow from operations, in the opinion 
of management, is sufficient to fund the Company's day-to-day 
operations through the end of 1997. 

     The Company's expected capital requirements for project 
acquisition, development and expansion are estimated at 
approximately $8,500,000. The Company has been granted the 
exclusive right to negotiate an agreement to develop an adjacent 
35-acre tract of land owned by the City of Fremont into a 9-hole 
executive-length golf course with expanded practice facilities 
and significantly improved clubhouse amenities. This grant 
expires on December 31, 1996 unless mutually extended. The 
Company expects to commence construction of the 9-hole 
executive-length golf course and begin modifications to the 
existing facility in the spring of 1997, with the completion of 
the golf center scheduled for the fall of 1997. The total 
acquisition and proposed development budget is approximately 
$3,200,000. Of such amount, $650,000 was paid utilizing the 
proceeds from the sale of the convertible subordinated notes, and 
a $700,000 note was given to the seller of the leasehold 
interest. The Company expects to utilize approximately $500,000 
of the proceeds from the IPO, together with debt from a 
prospective lender from whom the Company has received a 
non-binding lending proposal for $2,000,000 or another bank or 
private lender, to fund such development. The total expected cost 
of the New York Golf Center is expected to be approximately 
$6,000,000. The Company expects to utilize approximately $500,000 
of the proceeds from the IPO, together with other undetermined 
debt or equity financing from banks and institutional or private 
lenders to fund such amount. 

     Illinois Center and Goose Creek have had net losses from 
operations in 1996.  Upon their acquisition on October 21, 1996 
the Company expects to fund losses from operations for the 
remainder of 1996.  The funding of these losses, expected to be 
approximately $103,000, will be financed from net proceeds from 
the IPO.

     In the case of Illinois Center, the Company believes future 
earnings will improve as a result of the maturity of this new 
operation. In the case of Goose Creek and Fremont, the Company 
believes it will enhance revenues at these facilities by 
completing capital improvements, enhancing the facilities and 
increasing and refocusing marketing efforts for these projects. 
In addition, the Company believes it can improve cash flows and 
reduce expenses by economies of scale achieved through 
centralized purchasing, accounting, management information 
systems and cash management. There can be no assurance, however, 
that the Company will be able to improve the performance of newly 
acquired facilities. 

     The Company took over management of both Goose Creek and 
Illinois Center on October 1, 1995 and April 1, 1996, 
respectively. Prior to this time, an independent golf management 
company managed each facility. In addition to generating revenues 
from these management activities, the Company believes it will be 
able to better evaluate daily changes in operation and react in a 
more timely basis if needed. 

     At September 30, 1996, the Company had a deferred tax asset 
of $287,000 that was fully reserved to reflect management's 
evaluation that it is more likely than not that all of the 
deferred tax asset will not be realized. 

     The Financial Standards Board has recently issued Statement 
of Financial Accounting Standards ("SFAS") No. 121, "Accounting 
for the Impairment of Long-Lived Assets" and SFAS No. 123, 
"Accounting for Stock Based Compensation."  SFAS No. 121 requires 
that long-lived assets and certain identifiable intangibles be 
reported at the lower of the carrying amounts or their estimated 
recoverable amounts, and the adoption of this statement by the 
Company is not expected to have an impact on the financial 
statements. SFAS No. 123 encourages the accounting for 
stock-based employee compensation programs to be reported within 
the financial statements on a fair value based method. If the 
fair value based method is not adopted, then the statement 
requires pro forma disclosure of net income and earnings per 
share as if the fair value based method has been adopted. The 
Company has not yet determined in what form SFAS No. 123 will be 
adopted or its impact on the financial statements. Both 
statements are effective for fiscal years beginning after 
December 15, 1995. 


Seasonality

     Historically, the second and third quarters have accounted 
for a greater portion of the Company's revenue and operating 
income than have the first and fourth quarters of the year. This 
is primarily due to an outdoor playing season limited by 
inclement weather. Although most of the Company's facilities are 
designed to be all-weather, portions of the facilities tend to be 
vulnerable to weather conditions. Also, golfers are less inclined 
to practice when weather conditions limit their ability to play 
golf on outdoor courses. This seasonal pattern, as well as the 
timing of new golf facility acquisitions, developments and 
openings, may cause the Company's results of operations to vary 
significantly from quarter to quarter. Accordingly, 
period-to-period comparisons are not necessarily meaningful and 
should not be relied upon as indications of future results. 

Trends

     The Company plans to acquire or develop additional golf 
centers. As such additional golf centers are acquired or 
developed, total revenue should continue to increase. The Company 
is making capital improvements at the Fremont Golf Center and 
Goose Creek and has recently strengthened the on-site management 
teams at these golf centers with an increased emphasis on sales 
and marketing. The Company believes that, as its current golf 
centers mature, revenues and operating income from such centers 
should increase due to customer awareness, programs marketing the 
golf centers to various special interest groups, expanded ties to 
local businesses and golfing communities and marketing programs 
developed by the Company. Such increases may be partially offset 
by initial losses from pre-opening costs (and initial operating 
losses) associated with new golf centers. The Company's interest 
expense will decrease in the short term with the conversion of 
the part of convertible subordinated notes, but will likely 
increase over time as a result of increased borrowings to fund 
new golf center development. 


     PART II - OTHER INFORMATION
-------------------------------------------------------
Item 1:          Legal Proceedings
In July 1996, the Company entered into a sublease 
agreement to operate the Harborside Golf Center in San 
Diego, California.  Management believes that the 
sublessor breached its sublease agreement, and the 
Company is withholding a portion of the rental payments 
seeking resolution of these matters.  The sublessor has 
sued the Company seeking payment of approximately 
$18,700 of rental payments.  The Company is preparing a 
counter-suit alleging the sublessor's breaches of 
contract.

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)     Exhibits
          Exhibit No. 11          Statement Regarding Computation
                                  of Earnings per Share

         (B)     Reports on Form 8-K
          None during the quarter ended September 30, 1996

MetroGolf Incorporated
Exhibit 11
Statement Re: Computation of Earnings Per Share
<TABLE>
<CAPTION>
Historical weighted average number of shares outstanding is 
summarized as follows:
<S>                          <C>      <C>
Common stock outstanding              680,782 
Warrants outstanding         288,160 
Less treasury stock that 
could be repurchased with 
proceeds of exercised 
warrants
                             (91,800)
                            ---------
Assumed exercise of 
warrants                              196,360 
                                      -------
Historical weighted average
number of common shares
outstanding                           877,142 
                                      =======
</TABLE>
<TABLE>
<CAPTION>
Primary and Fully Diluted Earnings Per Share

               For the Three Months      For the Nine Months
                     Ended                      Ended 
          September 30, September 30, September 30, September 30,
              1996          1995          1996          1995
<S>         <C>           <C>           <C>            <C>
Loss
applicable
to common
stock       $(537,800)    $  (24,600)   $(983,093)     $(378,988)
            =====================================================
Weighted
average
number
of common
shares
outstanding   877,142        877,142      877,142        877,142 
            =====================================================

Primary
and Fully
Diluted
Earnings
Per Share   $   (0.61)    $   (0.03)    $   (1.12)      $  (0.43) 
            =====================================================
</TABLE>


SIGNATURES



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


                                    MetroGolf Incorporated



DATE: December 2, 1996           /S/ Charles D. Tourtellotte
                                     Charles D. Tourtellotte
                                     President

DATE: December 2, 1996           /S/J.D. Finley
                                    J.D. Finley
                                    Chief Financial Officer