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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                -----------------

                                   FORM 10-QSB

                                -----------------

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
     EXCHANGE ACT OF 1934.

     For the Quarterly Period Ended: March 31, 1997

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

Commission File Number: 033-19992-LA

                        NATIONAL EQUITIES HOLDINGS, INC.
             (Exact name of registrant as specified in its charter)
 
             DELAWARE                                           33-0284600
    (State or other jurisdiction                            (IRS Employer
    of incorporation or organization)                       Identification No.)

                           616 FM 1960 WEST, SUITE 225
                              Houston, Texas 77090
          (Address of principal executive offices, including zip code)

                        (281) 583-1280 fax (281) 583-9363
              (Registrant's telephone number, including area code)

                                                      -----------------


     Check whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 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 [X] No [ ]

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

     Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court. Yes [ ] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     At March 10, 1998 there were 36,993,272 shares of common stock outstanding.

     Transitional Small Business Disclosure Format (check one);  Yes [ ] No [X]



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                        NATIONAL EQUITIES HOLDINGS, INC.



                                    CONTENTS

<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION                                             Page
                                                                           ----
<S>                                                                         <C>
Item 1.  Financial Statements                                                3

             Consolidated Balance Sheets as of March 31, 1996
                  and March 31, 1997 (unaudited)

             Consolidated Statements of Operations for the three months
                  ended March 31, 1996 and March 31, 1997 (both unaudited)

             Consolidated Statements of Cash Flows for the three months
                  ended March 31, 1996 and March 31, 1997 (both unaudited)

             Notes to Consolidated Financial Statements

Item 2.  Management's Discussion and Analysis of Financial Condition and
             Results of Operations                                          12

PART II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K                                   13
</TABLE>



                                       2
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Item 1.  Financial Statements

NATIONAL EQUITIES HOLDINGS, INC.

BALANCE SHEET
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
                                           March 31, 1997    March 31,1996
<S>                                        <C>              <C>
Current Assets:

         Cash                              $    (4,006)     $    (1,398)
         Accounts Receivable                    43,354                0
         Due from Affiliates                   369,879                0
         Inventory                                   0            5,769

         Total Current Assets                  409,227            4,371

Oil & Gas Properties
         Equipment                                   0           18,898
         Proved Oil & Gas Properties         1,070,683                0
         Unproved Oil & Gas Properties       2,876,300                0
         Wells & Related Equipment             373,492                0

         Total Oil & Gas Properties          4,320,475           18,898

Other Assets

         Development Costs                           0           60,746
         Copyright                                   0          360,753
         Patent                                      0          298,358

         Total Other Assets                          0          719,857

Total Assets                               $ 4,729,701      $   743,126
</TABLE>



The accompanying Notes are an Integral part of these Financial Statements.



                                       3
<PAGE>   4
NATIONAL EQUITIES HOLDINGS, INC.

BALANCE SHEET
(Unaudited)

LIABILITIES AND CAPITAL
<TABLE>
<CAPTION>
                                          March 31, 1997    March 31, 1996
<S>                                        <C>              <C>
Current Liabilities:

         Accounts Payable                  $   193,323      $         0
         Accrued Interest                       65,597                0
         Note Payable                                0           38,526
         Loan Payable                                0           34,892
         Convertible Debentures              3,743,733                0

         Total Current Liabilities           4,002,653           69,418

Total Liabilities                            4,002,653           69,418

Stockholders' Equity:

Preferred Stock
         1,000,000 shares authorized
         at $0.001 par value; none
         issued and outstanding                      0                0

Common Stock
         49,000,000 shares authorized
         at $0.001 par value:
         14,873,630 issued and outstanding
         at March 31, 1997;
         1,271,585 issued and outstanding
         at March 31, 1996                      14,873            1,271

Paid In Capital                              3,365,617        1,980,956

Accumulated Deficit                         (2,434,821)      (1,311,075)

Current Earnings                              (218,421)          (1,444)

       Total Stockholders' Equity              727,048          669,708

Total Liabilities and Stockholders'
  Equity                                    $ 4,729,701      $   743,126
</TABLE>



The accompanying Notes are an integral part of these Financial Statements.



                                       4
<PAGE>   5
NATIONAL EQUITIES HOLDINGS, INC.

STATEMENT OF OPERATIONS
(Unaudited)

<TABLE>
<CAPTION>
                                    March 31, 1997    March 31, 1996
<S>                                   <C>            <C> 
INCOME:

         Sales                        $  43,166      $       0
         Other Income                    16,008              0
         Less:
         Lease Operating Expenses       (53,173)             0

Gross Profit                              6,001              0

General & Administrative Expenses      (154,806)        (1,444)
Accrued Interest--Debentures            (69,616)             0

Net Income (Loss) From Operations     $(218,421)     $  (1,444)


Primary Earnings Per Share            $ (0.0146)     $     N/A
Fully Diluted Earnings Per Share      $ (0.0135)     $     N/A
</TABLE>



The accompanying Notes are an Integral part of these Financial Statements.



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<PAGE>   6
NATIONAL EQUITIES HOLDINGS, INC

STATEMENT OF CASH FLOWS
(Unaudited)
For the Three Months Ended March 31, 1997 and 1996
<TABLE>
<CAPTION>

                                               March 31, 1997    March 31, 1996
<S>                                             <C>               <C>  
CASH FLOWS FROM
OPERATING ACTIVITIES:

         Cash Received from operations          $  59,174              0
         Lease operating expenses paid            (53,173)             0
         Debenture Interest Paid                 (135,213)
         General & Administrative
           expenses paid                         (154,806)        (1,444)

Net Cash used in Operating Activities            (284,018)        (1,444)

CASH FLOWS FROM
INVESTING ACTIVITIES
         (Increase) in Capital Expenditures       (25,809)             0
         Net Cash Provided (Used)                 (25,809)             0
         by Investing

CASH FLOWS FROM
FINANCING ACTIVITIES:
         Advances from Affiliate                  302,341              0
Net Increase (Decrease)                          (309,827)        (1,444)
         In Cash
Cash Balance, Beginning                             3,480             46
Cash Balance, Ending                               (4,006)        (1,398)
</TABLE>



The accompanying Notes are an Integral part of these Financial Statements.



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<PAGE>   7
NATIONAL EQUITIES HOLDINGS, INC


RECONCILIATION OF NET INCOME TO NET CASH USED IN OPERATING ACTIVITIES:

<TABLE>
<S>                                       <C>           <C>
         Net Income (Loss)                (218,421)     (1,444)
         Increase in accrued interest      (65,597)          0
Net Cash Used in Operating Activities     (284,018)     (1,444)
</TABLE>

STATEMENT OF STOCKHOLDERS' EQUITY
Three Months Ended March 31, 1997

<TABLE>
<CAPTION>
                        Common        Stock       Paid In      Accumulated    Stockholders'
                        Shares          $         Capital       (Deficit)        Equity
                     ----------------------------------------------------------------------
<S>                  <C>              <C>        <C>           <C>             <C>    
Balance 12/31/96     14,873,630       14,873     3,365,617     (2,434,821)     945,469
Net Loss                                                         (218,421)     727,048
Balance 3/31/97      14,873,630       14,873     3,365,617     (2,653,242)     727,048
</TABLE>



The accompanying Notes are an integral part of these Financial Statements.



                                       7
<PAGE>   8
NATIONAL EQUITIES HOLDINGS, INC.


NOTES TO FINANCIAL STATEMENT

March 31, 1997
And March 31, 1996

NOTE 1:  Summary of Significant Accounting Policies

This summary of significant accounting policies of NATIONAL EQUITIES HOLDINGS,
INC. (the "Company")is presented to assist in understanding the Company's
financial statements. The financial statements and notes are representations of
the Company's management, which is responsible for their integrity and
objectivity. These accounting policies conform to generally accepted accounting
principles and have been consistently applied in the preparation of the
financial statements.

a.  Organization and Business Activities:

Asquith Venture Associates, Inc. was formed on November 24, 1987 with a name
change to Amadeus Holdings, Inc. on October 27, 1988. Corporate stock was issued
for the organization of several business ventures, all of which were
unsuccessful. On January 20, 1993, there was a name change to National Equities
Holdings, Inc. The business purpose was to market a subsurface irrigation system
(Patent number 5,205,487), a family educational game (Copyright Txu 516862) (See
Notes 2, 13, and 14), future real estate construction and development, and oil
and gas production and development.

b. Depreciation, amortization and depletion:

Depreciation will be provided by the straight-line method at rates calculated to
amortize cost over the estimated useful lives of respective assets. Upon sale or
retirement of the respective assets, the related cost and accumulated
depreciation will be eliminated from the accounts, and gains or losses will be
reflected on the income statement. Repair and maintenance expenditures, not
anticipated to extend original asset lives, will be charged to expenses as
incurred. Amortization will be provided by the straight line method when
products are brought to market. Depreciation and depletion (including provisions
for future abandonment and restoration costs) of all capitalized costs of proved
oil and gas producing properties, except mineral interests, will be expensed
using the unit-of-production method by individual fields as the proved developed
reserves are produced. Depletion expenses for capitalized costs of proved
mineral interest are recognized using the unit-of-production method by
individual fields as the related proved reserves are produced. Periodic
valuation provisions for impairment of capitalized costs of unproved mineral
interests will be expensed.



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<PAGE>   9
c.  Fiscal Year:

The Company operates on a December 31 calendar year.

d.  Cash and Cash Equivalents:

The Company considers all cash accounts, which are not subject to withdrawal
restrictions or penalties, and all highly liquid debt instruments purchased with
a maturity of three months or less, to be cash equivalents.

e.  Basis of Accounting:

The Company prepares its financial statements and federal income taxes on the
accrual basis of accounting. The Company's oil and gas ventures will be
accounted for using the Successful Efforts basis of accounting. The Company and
associated entities share office space and use common equipment. It is
management's view, that subsequent to September 30, 1996, the Company benefits
from use of the facilities and is absorbing the majority of these costs. Said
costs are reflected in these financial statements.

Revenue Recognition:

The Company will recognize revenue from oil produced at the point of sale that
is, when the oil is run from the tanks. Gas is not stored on the lease; thus,
revenue will be recognized at the point of production and sale because they are
the same.

Oil & Gas Properties (Successful Efforts):

Costs to acquire mineral interests in oil and gas properties, to drill and equip
exploratory wells that find proved reserves, and to drill and equip development
wells will be capitalized. Costs to drill exploratory wells that do not find
proved reserves, geological and geophysical costs, and costs of carrying and
retaining unproved properties will be expensed.

Unproved oil and gas properties that are individually significant will be
periodically assessed for impairment of value, and a loss will be recognized at
the time of impairment by providing an impairment allowance. Other unproved
properties will be amortized based on the Company's experience of successful
drilling and average holding period. Capitalized costs of producing oil and gas
properties, after considering estimated dis-mantlement and abandonment costs and
estimated salvage values, will be depreciated and depleted by the
unit-of-production method. Support equipment and other property and equipment
will be depreciated over their estimated useful lives.

On the sale or retirement of a complete unit of a proved property, the cost and
related accumulated depreciation, depletion, and amortization will be eliminated
from the property accounts, and the resultant gain or loss will be recognized.
On the retirement or sale of a partial unit of proved property, the cost will be
charged to accumulated depreciation, depletion and amortization with a resulting
gain or loss recognized in income.



                                       9
<PAGE>   10
On the sale of an entire interest in an unproved property for cash or cash
equivalent, gain or loss on the sale will be recognized, taking into
consideration the amount of any recorded impairment if the property had been
assessed individually. If a partial interest in an unproved property is sold,
the amount received will be treated as a reduction of the cost of the interest
retained.

Oil and gas leases held for resale:

The Company will acquire certain oil and gas leases for the purpose of
contributing the leases to affiliated oil and gas partnerships of for the
purpose of selling the leases to industry partners for cash consideration. Such
leases held for resale, or subsequently acquired, will be periodically reviewed
to determine if they have been impaired. If impairment exists, a loss will be
recognized by providing an impairment allowance. Abandonments of oil and gas
leases held for resale will be charged to expense. With respect to leases
transferred to affiliated oil and gas partnerships, the determination of
recovery of total costs will be made on a partnership-by-partnership basis.

Capitalized interest:

The Company will capitalize interest on expenditures for significant exploration
and development projects while activities are in progress to bring the assets to
their intended use.

Management Fees:

In connection with the sponsorship of oil and gas partnerships, the Company will
receive a management fee from partnership subscriptions, which will be credited
to income as earned.

Basis of Presentation:

The financial information presented as of any date other than December 31 has
been prepared from the books and records without audit. The accompanying
financial statements have been prepared in accordance with the instructions to
Form 10-QSB and do not include all of the information and the footnotes required
by generally accepted accounting principles for complete statements. In the
opinion of management, all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of such financial statements,
have been included.

These financial statements should be read in conjunction with the financial
statements and notes thereto for the year ended December 31, 1996.



                                       10
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NOTE 2:  --  Risks and Uncertainties:

Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates. Concentrations:
The Company has acquired Proved Reserves in the oil and gas industry. This will
place the majority of the Company's assets in this industry.

NOTE 3:  --  Income Taxes;

The Company use the accrual method of accounting for tax and financial reporting
purposes. At December 31, 1996, the Company had net operating loss carry
forwards for financial and tax reporting purposes of approximately $2,400,000.
These carry forwards expire through the year 2006, and are further subject to
the provisions of Internal Revenue Code Section 382.

NOTE 4:  --  Stockholder's Equity:

 The total number of shares of all classes of authorized capital stock is
50,000,000 shares of which 1,000,000 shall be Preferred Stock, $.001 par value
per share and 49,000,000 shares of Common Stock, $.001 par value per share. As
of March 31, 1997, there is no Preferred Stock issued and outstanding and
14,873,620 shares of Common Stock are issued and are outstanding.

NOTE 5:  --  Earnings per share:

Primary earnings per share amounts are based upon 14,873,630 weighted average
shares of common stock outstanding. Fully dilutive earnings per share are based
on 16,116,204 weighted average shares outstanding.

In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 128 Earnings Per Share effective
for financial statements ending after December 15, 1997. Earlier application is
not permitted. For pro forma disclosure purposes, there is no difference in the
amounts of net loss per share and weighted average shares of common stock
outstanding computed using FASB 128 and those reflected in the accompanying
financial statements.



                                       11
<PAGE>   12

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

     National Equities Holdings, Inc.'s (the "Company") operations in the first
quarter of 1997 were a continuation of oil and gas operations begun in September
1996. These operations were primarily focused on workover of existing oil wells
in Fisher County, Texas and Coleman County, Texas. There was also oil property
evaluation on existing leases as well as evaluation of new prospects being
considered for acquisition.

First Quarter 1997 Gross Profit and Income & Loss.

     Gross profit of $6,001 was realized from oil and gas operations while a
loss of ($218,421) was realized once General & Administrative and Interest costs
were accounted. This compares to a loss of ($1,444) in the first quarter of
1996.

     Overall earnings (loss) per share were ($0.0146). This was an improvement
from the first quarter of 1996 when earnings (loss) per share were ($0.338).

First Quarter 1997 Assets and Liabilities.

     At the end of the first quarter of 1997, the Company had assets of
$4,729,701, up slightly from the December 31, 1996 and up significantly from the
end of the first quarter 1996. This is primarily related to the valuation of oil
and gas reserves acquired in September 1996.

     At the end of the first quarter of 1997, the liabilities were $4,002,653,
primarily from convertible debenture debt. Management is actively pursuing the
conversion of this debt to equity.

First Quarter 1997 Liquidity and Capital Resources.

     During the first quarter of 1997, cash flow from operations was ($284,018).
During the first quarter of 1996, cash flow from operations was ($1,444). During
the first quarter of 1997, affiliates advanced $302,341 to the Company. No
advances were made during the first quarter of 1996.

Future Trends.

     The Company will continue to focus on oil and gas operations in the future.

Forward-looking Statements

     This statement is being included in connection with the safe harbor
provision of the Private Securities Litigation Reform Act. This Form 10-QSB
includes forward-looking statements. Such statements are based upon management's
current expectations and assumptions and are other than statements of historical
fact. In addition to those factors already discussed, important factors that
could cause actual results to differ materially from those in forward-looking
statements are, among others, commodity pricing for oil and gas, exploration and
operating risks, development and completion risks, market acceptance for the
Company's products, and availability of financing.



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                                     PART II

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits required by Item 601 of Regulation SB

         (1) Exhibit 27. Financial Data Schedule

     (b) Reports on Form 8-K

         None

                                   SIGNATURES

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


                                            NATIONAL EQUITIES HOLDINGS, INC.



Date: March 18, 1998                        By: /s/ George Sutherland
                                               ----------------------
                                                    George Sutherland, 
                                                    Director, President
                                                    and Chief Financial Officer



                                       13
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                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NUMBER            DESCRIPTION
--------------            -----------
<S>                 <C>
 Exhibit 27.        Financial Data Schedule
</TABLE>