U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

                                   (MARK ONE)

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

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999

                                       OR

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

             FOR THE TRANSITION PERIOD FROM __________ TO __________

                         COMMISSION FILE NUMBER 0-21178

                          UNITED TEXTILES & TOYS CORP.
        (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)

<TABLE>
<CAPTION>
<S>                                                                                  <C>
                  DELAWARE                                                           13-3626613
        (STATE OR OTHER JURISDICTION OF                                     (IRS EMPLOYER IDENTIFICATION NO.)
         INCORPORATION OR ORGANIZATION)
</TABLE>

               1385 BROADWAY, SUITE 814, NEW YORK, NEW YORK 10018
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                 (212) 391-1111
                (ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE)

                                       N/A
              (FORMER NAME, FORMER ADDRESS, AND FORMER FISCAL YEAR,
                         IF CHANGED SINCE LAST REPORT)

     CHECK  WHETHER  THE ISSUER (1) FILED ALL  REPORTS  REQUIRED  TO BE FILED BY
SECTION 13 OR 15(D) OF THE  SECURITIES  EXCHANGE  ACT OF 1934 DURING THE PAST 12
MONTHS (OR FOR SUCH  SHORTER  PERIOD THAT  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 CORPORATE ISSUERS

     STATE THE NUMBER OF SHARES OF EACH OF THE ISSUER'S CLASSES OF COMMON EQUITY
OUTSTANDING AS OF THE LATEST PRACTICABLE DATE: COMMON STOCK, PAR VALUE $.001 PER
SHARE: 4,550,236 SHARES OUTSTANDING AS OF DECEMBER 8, 1999.

     TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE): YES [ ] NO [X]
<PAGE>
                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

PART I.              FINANCIAL INFORMATION                                                                        Page Number

Item 1.              FINANCIAL STATEMENTS
<S>                                                                                                                        <C>
                     CONSOLIDATED BALANCE SHEETS AS OF  SEPTEMBER 30, 1999 (UNAUDITED)                                          3
                     and March 31, 1999.

                     CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) for the three and six
                      months ended September 30, 1999 and 1998.                                                                 4

                     CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) for the six
                      months ended September 30, 1999 and 1998.                                                                 5

                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)                                                  6-10

Item 2.              MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS

                                                                                                                            11-16

PART II.             OTHER INFORMATION                                                                                         17
</TABLE>
<PAGE>
                   UNITED TEXTILES & TOYS CORP. AND SUBSIDIARY
            (A SUBSIDIARY OF MULTIMEDIA CONCEPTS INTERNATIONAL, INC.)

                           CONSOLIDATED BALANCE SHEETS
                   As of September 30, 1999 and March 31, 1999
<TABLE>
<CAPTION>
                                                                                         Sept. 30,        March 31,
                                                                                           1999             1999
                                                                                        (UNAUDITED)       (NOTE 1)
                                     ASSETS

CURRENT ASSETS:

<S>                                                                                    <C>             <C>
  Cash and cash equivalents ........................................................   $    363,202    $    126,625
  Accounts receivables-net .........................................................        172,442         118,518
  Inventories ......................................................................     15,127,625      11,506,284
  Stock subscription receivable (Note 5) ...........................................        723,678            --
  Prepaid expenses and other current assets ........................................      2,431,290       1,315,851
  Loans and advances-officer .......................................................        (78,572)        (37,061)
          Total current assets .....................................................     18,739,665      13,030,217
PROPERTY AND EQUIPMENT-NET .........................................................      7,245,790       5,348,175
OTHER ASSETS

  Deposits and other assets ........................................................      3,462,737       2,768,647
          Total other assets .......................................................      3,462,737       2,768,647
          TOTAL ASSETS .............................................................   $ 29,448,192    $ 21,147,039
                                                                                       ============    ============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

  Accounts payable .................................................................     24,246,099      14,498,578
  Accrued expenses and other current liabilities ...................................        305,839         626,815
  Due to affiliates ................................................................        817,155         831,897
  Current portion of notes payable and capital lease obligation ....................        864,429       1,352,197
          Total current liabilities ................................................     26,233,522      17,309,487
LONG-TERM LIABILITIES:
  Borrowings under financing agreement .............................................     10,725,774       7,814,666
  Note payable and capital leases, net of current portion ..........................      1,000,637         585,681
  Deferred rent liability ..........................................................        130,881         126,769
          Total long-term liabilities ..............................................     11,857,292       8,527,116
          Total liabilities ........................................................     38,090,814      25,836,603

MINORITY INTEREST IN SUBSIDIARY ....................................................     (2,326,798)       (165,058)

STOCKHOLDERS' EQUITY:

  Common stock, $.01 par value; 10,000,000 shares authorized, 4,550,236

     shares issued and outstanding .................................................          4,550           4,550
  Additional paid-in capital .......................................................      8,142,281       8,142,281
  Retained earnings (deficit) ......................................................    (14,462,655)    (12,671,337)
          Total stockholders' equity ...............................................     (6,315,824)     (4,524,506)
          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ...............................   $ 29,448,192    $ 21,147,039
                                                                                       ============    ============
</TABLE>
     THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS

                                        3


<PAGE>
                   UNITED TEXTILES & TOYS CORP. AND SUBSIDIARY
            (A SUBSIDIARY OF MULTIMEDIA CONCEPTS INTERNATIONAL, INC.)
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                                 For the Three Months Ended      For the Six Months Ended

                                                                 Sept. 30,        Sept. 30,      Sept. 30,       Sept. 30,
                                                                   1999             1998           1999            1998
                                                                                  Restated                       Restated
                                                                                  (Note 8)                        (Note 8)

<S>                                                            <C>             <C>             <C>             <C>
Net sales ..................................................   $  6,867,119    $  6,098,315    $ 13,375,684    $ 12,460,021

Cost of sales ..............................................      3,645,543       3,414,054       7,364,115       7,120,385

Gross profit ...............................................      3,221,576       2,684,261       6,011,569       5,339,636

Operating expenses:

Operating expenses .........................................      3,684,031       2,620,444       7,464,041       5,219,903
  Depreciation and amortization ............................        228,514         193,794         452,982         382,211

          Total operating expenses .........................      3,912,545       2,814,238       7,917,023       5,602,114

Operating income (loss) ....................................       (690,969)       (129,977)     (1,905,454)       (262,478)

Interest expense:

  Interest and finance charges .............................        300,269         156,860         584,933         295,312
  Amortization of debt issuance costs ......................         47,424          27,202          78,154          54,402
          Total interest expense ...........................        347,693         184,062         663,087         349,714

(LOSS) BEFORE MINORITY INTEREST ............................     (1,038,662)       (314,039)     (2,568,541)       (612,192)

Minority interest in net income (loss)
 of consolidated subsidiary (Note 3) .......................      1,010,110         311,894       2,161,740         495,666

Net income (loss) ..........................................        (28,552)         (2,145)       (406,801)       (116,526)

Effect of non-cash dividends on convertible
 preferred stock ...........................................       (799,402)       (477,973)     (1,384,517)       (751,779)

(LOSS) APPLICABLE TO COMMON SHARES .........................   $   (827,954)   $   (480,118)   $ (1,791,318)   $   (868,305)
                                                                               ============    ============    ============

Basic and diluted loss per common share and share equivalent   $       (.18)   $       (.11)   $       (.39)   $       (.19)
                                                                               ============    ============    ============

Weighted average number of common shares outstanding .......      4,550,236       4,550,236       4,550,236       4,550,236
                                                               ============    ============    ============    ============

</TABLE>
   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
                                   STATEMENTS

                                        4
<PAGE>
                   UNITED TEXTILES & TOYS CORP. AND SUBSIDIARY
            (A SUBSIDIARY OF MULTIMEDIA CONCEPTS INTERNATIONAL, INC.)
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)
                           Increase (Decrease) in Cash
<TABLE>
<CAPTION>
                                                                                           Six Months Ended
                                                                                        Sept. 30,     Sept. 30,
                                                                                          1999          1998
                                                                                                      Restated

CASH FLOWS FROM OPERATING ACTIVITIES:

<S>                                                                                   <C>            <C>
Net income (loss) .................................................................   $  (406,801)   $  (116,526)
Adjustments to reconcile net loss to cash (used) provided for operating activities:
   Depreciation and amortization ..................................................       452,982        382,211
   Deferred rent ..................................................................         4,112          9,102
   Minority interest in net loss of subsidiary ....................................    (2,161,740)      (495,666)
   Compensation options and stock issued by subsidiary ............................          --           21,876
Changes in assets and liabilities:

(Increase) decrease in accounts receivable ........................................       (53,924)        58,654
(Increase) in merchandise inventories .............................................    (3,621,341)    (4,312,326)
(Increase) decrease in prepaid expenses and other current assets ..................    (1,115,439)      (750,243)
(Increase) decrease in deposits and other assets ..................................      (694,090)        83,152
Increase (decrease) in accounts payable ...........................................     8,363,004      3,342,576
Increase (decrease) in accrued expenses and other liabilities .....................      (320,976)      (522,174)
          Total adjustments .......................................................       852,588     (2,182,838)
          Net cash provided (used) by operating activities ........................       445,787     (2,299,364)

CASH FLOWS FROM INVESTING ACTIVITIES:

   Purchases of property and equipment ............................................    (2,350,597)    (1,149,757)
   Advances from affiliates .......................................................       (14,742)        53,484
          Net cash from (used for) investing activities ...........................    (2,365,339)    (1,096,273)

CASH FLOWS FROM FINANCING ACTIVITIES:

   Net borrowings under line of credit ............................................     2,911,108      3,036,798
   Loans and repayment - officer ..................................................        41,511        110,917
   Repayment of notes payable .....................................................       (72,812)        16,469
   Stock subscription .............................................................      (723,678)          --
          Net cash provided by (used for) investing activities ....................     2,156,129      3,164,184

NET INCREASE (DECREASE) IN CASH ...................................................       236,577       (231,453)
Cash, beginning of period .........................................................       126,625        659,378
CASH, END OF PERIOD ...............................................................   $   363,202    $   427,925
                                                                                      ===========    ===========

Supplemental disclosure of cash flow information:

Interest paid .....................................................................   $   584,933    $   295,312
Taxes paid ........................................................................   $      --      $      --


</TABLE>

     THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS

                                        5
<PAGE>
                   UNITED TEXTILES & TOYS CORP. AND SUBSIDIARY
            (A SUBSIDIARY OF MULTIMEDIA CONCEPTS INTERNATIONAL, INC.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 1999
                                   (UNAUDITED)

NOTE 1 -          BASIS OF PRESENTATION:

     The  accompanying  unaudited  consolidated  financial  statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-QSB. Accordingly,  they do
not include all the  information  and footnotes  required by generally  accepted
accounting principles for more complete financial statements.  In the opinion of
management,  the interim financial statements include all adjustments considered
necessary for a fair p resentation of the Company's  financial  position and the
results of its operations for the three months ended  September 30, 1999 and are
not  necessarily  indicative  of the results to be expected  for the full fiscal
year.  For further  information,  refer to the  Company's  annual report on Form
10-KSB for the fiscal year ended March 31,  1999,  as filed with the  Securities
and Exchange Commission.

NOTE 2 -          DESCRIPTION OF COMPANY:

     United  Textiles & Toys Corp.  (the  "Company")  is a Delaware  corporation
which was organized in March 1991 and commenced  operations in October 1991. the
company formerly designed,  manufactured, and marketed a variety of lower priced
women's dresses, gowns, and separates (blouses,  camisoles, jackets, skirts, and
pants) for special  occasions  and formal  events.  in April  1998,  the Company
ceased all operating activities; it now operates solely as a holding company. in
September 1999, the Company sold 55,000 shares of Play Co. Toys & Entertainment
Corp.  ("Play  Co.") common  stock on the open  market,  reducing its  ownership
percentage  to 43.9%.  (see note 6). as a result of this sale,  at September 30,
1999 the  Company  owned  2,434,910  shares of the common  stock of Play Co. the
Company still is considered to have a controlling  influence over Play Co. which
is still consolidated into the Company. (see note 3).

NOTE 3 -          MINORITY INTERESTS:

     The minority  interest in Play Co.  represents  the minority  shareholders'
interest  (56.1%) of Play Co.'s  equity at  September  30,  1999.  The  minority
interest, as reflected in the accompanying  consolidated balance sheet, consists
of Play Co.'s Series E preferred  stock only.  Due to  operating  losses of Play
Co., the minority interest in common stock has been written down to zero.


<PAGE>
NOTE 3 -          MINORITY INTERESTS (CONTINUED):

     On November 24,  1998,  pursuant to a sales  agreement  entered into by and
between Play Co. and Breaking Waves, Inc. ("BWI"), a wholly-owned  subsidiary of
Shopnet.com,  Inc.  ("Shopnet"),  a related  party,  BWI  purchased  1.4 million
unregistered  shares of Play Co.'s  common stock in a private  transaction.  The
President of Breaking Waves and Shopnet is also the Chairman of Play Co.'s Board
of Directors.  Shopnet is a publicly traded company. The shares purchased by BWI
represented approximately 25.4% of the total common stock issued and outstanding
at the time of the transaction.

     The  consideration  for  the  stock  was  $665,000,  which  represented  an
approximate  price of $.475 per share.  This price was  discounted  33% from the
then current  market price  reflecting  a discount  for the  illiquidity  of the
shares,   which  do  not  carry  any  registration   rights.   $300,000  of  the
consideration  remitted was in cash and the  remaining  $365,000 was provided in
BWI  product,  primarily  girls'  swimsuits.  Play Co.  had  previously  carried
swimsuits  from  BWI in its  stores  on a trial  basis.  Pursuant  to the  sales
agreement (which has a term of one year and  automatically  extends for one year
terms unless terminated by either of the parties), Play Co. agreed to purchase a
minimum of 250 pieces of  merchandise  for each of its retail  locations  and to
provide advertising  promotional  materials and ads of the merchandise in all of
its brochures,  advertisements,  catalogs,  and all other promotional materials,
merchandising programs, and sales promotion methods.

     As a result of this  transaction,  the  Company saw its  majority  interest
change  from  60.6%  to  45.2%.  The  Company  still  is  considered  to  have a
controlling  influence  over  Play  Co.,  which is still  consolidated  into the
Company.

     In May  1999,  Play Co.  issued  45,333  shares  of its  common  stock to a
consultant  as  compensation  for site  selections  and  negotiation  of  retail
location leases, thereby diluting the Company's ownership to 44.9%.

     The Company's President is also the President and sole Director of European
Ventures   Corp.   ("EVC")  which  is  the  majority   shareholder  of  Shopnet.
Accordingly,  it is considered that the Company, through commonality of control,
still exercises a controlling influence over Play Co.'s operations.

<PAGE>
NOTE 4 -          INVESTMENT BY MULTIMEDIA CONCEPTS INTERNATIONAL, INC.:

     In January 1998, the Company issued 3,571,429 shares of its common stock to
Multimedia Concepts International,  Inc. ("Multimedia"),  a company of which the
Company's President is also President,  Chief Executive Officer, and a Director.
The issuance of these common shares at a price of $.28 per share ($.01 above the
closing price on December 31, 1997)  represented  a conversion  into equity of a
$1,000,000  loan  owed  by the  Company  to  Multimedia.  As a  result  of  this
transaction, Multimedia ow ns 78.5% of the outstanding shares of common stock of
the Company,  effectively making the Company a subsidiary of Multimedia.  As the
Company  owns  43.9% of the  outstanding  shares  of  common  stock of Play Co.,
Multimedia and its management  have obtained  beneficial  voting control of Play
Co.

     On January 20, 1998, U.S. Stores Corp. ("U.S.  Stores") acquired  1,465,000
shares of Multimedia's  common stock.  U.S. Stores was  incorporated on November
10,  1997.  The  Company's  President is also  President  and a Director of U.S.
Stores.

     After this  transaction,  U.S. Stores held an aggregate of 1,868,000 shares
of  Multimedia's  common stock, or 63% of the  outstanding  shares,  effectively
making Multimedia a subsidiary of U.S. Stores.

     On February 28, 1998,  American Telecom  Corporation  ("American  Telecom")
acquired 100% of the outstanding common shares of U.S. Stores.  American Telecom
was incorporated on July 18, 1997. The Company's President is also President and
a Director  of  American  Telecom.  After  this  transaction,  American  Telecom
effectively   obtained   beneficial  voting  control  of  the  Company  and  its
subsidiary, Play Co.

     In April 1998,  American  Telecom  exchanged all of its outstanding  common
shares with American  Telecom,  PLC, a publicly traded company in Great Britain.
After this  transaction,  American  Telecom  effectively  became a subsidiary of
American  Telecom,  PLC.  Additionally,  as part of this  transaction,  American
Telecom,  PLC acquired 100% of the  outstanding  common  shares of U.S.  Stores,
thereby  effectively making U.S. Stores a direct subsidiary of American Telecom,
PLC and the Company and Play Co. indirect subsidiaries.


<PAGE>
NOTE 5 -          STOCK SUBSCRIPTION RECEIVABLE:

     On July  15,  1999,  an  entity  of  which a  director  of  Play  Co.  is a
shareholder,  exercised  its right to  purchase a 25%  ownership  interest  in a
consolidated subsidiary of Play Co. This entity was the assignee of an option to
acquire 25% of the outstanding shares of the subsidiary at book value as of June
30, 1999.  The book value was determined to be $2,894,711 and 25% was determined
to be $723,678.  This amount was recorded on the  accompanying  balance sheet as
Stock Subscription Receivable. The amount was paid to Play Co. in October 1999.

NOTE 6 -          YEAR 2000:

     The  Company  does not  believe  that the impact of the year 2000  computer
issue will have a significant  impact on its operations and financial  position.
Furthermore,  the Company  does not believe  that it will have to  significantly
modify its  internal  computer  systems.  However,  if  internal  systems do not
correctly  date  information  when the year  changes to 2000,  there could be an
adverse  impact  on the  Company's  operations.  Furthermore,  there can no more
assurances that another  entity's  failure to ens ure year 2000 capability would
not have an adverse effect on the Company and its subsidiary, Play Co.

NOTE 7 -          RESTATEMENT OF FINANCIAL STATEMENTS - SEPTEMBER 30, 1998

     The  consolidated  financial  statements for the three and six months ended
September 30, 1998 have been  restated to reflect a  restatement  by Play Co. of
its dividend  attributable to the beneficial  conversion feature of its Series E
preferred stock.  This  restatement  resulted in an increase of $288,330 for the
three months and $455,743 for the six months ended  September  30, 1998 from its
original reported net loss.

<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

     United  Textiles & Toys Corp.  (the  "Company")  is a Delaware  corporation
which was organized in March 1991 and  commenced  operations in October 1991. In
April 1998, the Company ceased all operating  activities and now operates solely
as a holding  company for its ownership in Play Co. Toys &  Entertainment  Corp.
("Play Co.")  Historically,  the Company's  results of  operations  have related
primarily to its  majority  ownership  of Play Co., as its own  operations  were
substantially  less than those of its subs idiary.  Accordingly,  the  Company's
results of operations  for the three month period ending  September 30, 1999 are
primarily those of Play Co.

     Statements  contained in this report which are not historical  facts may be
considered forward looking  information with respect to plans,  projections,  or
future  performance  of the  Company as  defined  under the  Private  Securities
Litigation  Reform Act of 1995. These forward looking  statements are subject to
risks and  uncertainties  which could cause actual results to differ  materially
from those now projected.

THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1998

     Consolidated  sales for the three  months  ended  September  30,  1999 were
$6,867,119,  as compared to $6,098,315 for the three months ended  September 30,
1998. This increase of $768,804, or 12.6%, is directly attributable to increased
sales  contributions  from Play Co.'s new stores as same store sales declined by
24.8% for the period.

     Consolidated  cost of sales for the three months ended  September  30, 1999
was  $3,645,543,  or 53.1% of sales, as compared to the three month period ended
September 30, 1998 in which cost of sales was $3,414,054,  or 56% of sales. This
increase of $231,489,  or 6.8%,  is primarily due to costs  associated  with the
opening of new retail outlets.

     Consolidated  operating expenses  (excluding  depreciation and amortization
expenses)  were  $3,684,031,  or 53.6%  of  sales  for the  three  months  ended
September 30, 1999, as compared to  $2,620,444,  or 43% of sales,  for the three
months ended September 30, 1998. This increase of $1,063,587,  or 40.6%, was due
to an increase  in payroll  and related  expenses as well as an increase in rent
expense associated with the opening of new retail stores.

     During the three months ended September 30, 1999, non-cash depreciation and
amortization  amounted to $228,514,  as compared to $193,794 in the three months
ended  September  30,  1998.  This  increase  of  $34,720  is due  primarily  to
depreciation on new assets acquired by Play Co. in this quarter.

     Consolidated  interest expense was $347,693, or 5.1% of sales, in the three
months ended  September 30, 1999,  as compared to $184,062,  or 3.0% of sales in
the three months ended  September 30, 1998. The primary reason for the increased
level of interest  expense was a higher level of  borrowings  by Play Co. in the
three month period ended September 30, 1999.


<PAGE>
         For the three months ended  September 30, 1999, the Company  reported a
consolidated  net loss of $827,954  (after  reflecting  the  adjustment  for the
minority  interest in Play Co.), or basic earnings deficit per share of $.18, as
compared to a restated net loss of  $480,118,  or a basic  earnings  deficit per
share of $.11 (after  reflecting  the  minority  interest in Play Co.),  for the
three months ended  September 30, 1998.  The weighted  average  number of common
shares used in the computation of basic earnings per share was 4,550,236 for the
three months ended September 30, 1999 and 1998.

SIX MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO SIX MONTHS ENDED SEPTEMBER
30, 1998

     Consolidated  sales  for the six  months  ended  September  30,  1999  were
$13,375,684, as compared to $12,460,021 for the three months ended September 30,
1998. This increase of $915,663, or 7.34%, is directly attributable to increased
sales  contributions  from Play Co.'s new stores as same store sales declined by
26% for the period.

     Consolidated  cost of sales for the six months ended September 30, 1999 was
$7,364,115,  or 55.1% of  sales,  as  compared  to the six  month  period  ended
September  30,  1998 in which cost of sales was  $7,120,385,  or 57.2% of sales.
This increase of $243,730,  or 3.4%, is primarily due to costs  associated  with
the opening of new retail outlets.

     Consolidated  operating expenses  (excluding  depreciation and amortization
expenses) were $7,464,041,  or 55.8% of sales for the six months ended September
30, 1999, as compared to $5,219,903, or 41.9% of sales, for the six months ended
September 30, 1998. This increase of $2,241,138,  or 43%, was due to an increase
in  payroll  and  related  expenses  as well  as an  increase  in  rent  expense
associated with the opening of new retail stores.

     During the six months ended September 30, 1999,  non-cash  depreciation and
amortization  amounted  to  $452,982,  as compared to $382,211 in the six months
ended  September  30,  1998.  This  increase  of  $70,771  is due  primarily  to
depreciation on new assets acquired by Play Co. in this period.

     Consolidated  interest  expense was $663,087,  or 5.0% of sales, in the six
months ended  September 30, 1999, as compared to $349,714,  or 2.8% of sales, in
the six months ended  September 30, 1998.  The primary  reason for the increased
level of interest  expense was a higher level of  borrowings  by Play Co. in the
six month period ended September 30, 1999.

     For the six  months  ended  September  30,  1999,  the  Company  reported a
consolidated  net loss of $1,791,318  (after  reflecting  the adjustment for the
minority  interest in Play Co.), or basic earnings deficit per share of $.39, as
compared to a restated net loss of  $868,305,  or a basic  earnings  deficit per
share of $.19 (after  reflecting the minority interest in Play Co.), for the six
months ended  September 30, 1998.  The weighted  average number of common shares
used in the  computation  of basic  earnings per share was 4,550,236 for the six
months ended September 30, 1999 and 1998.


<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

     At September 30, 1999,  the Company  reported cash and cash  equivalents of
$363,202,  working capital deficit of $7,493,857,  and  stockholders'  equity of
$(6,315,824),  reflecting  the net loss of  $1,791,318  for the six months ended
September 30, 1999.

     At March 31,  1999,  the  Company  reported  cash and cash  equivalents  of
$126,625,  working capital deficit of $4,279,270,  and  stockholders'  equity of
$(4,524,506).

     During the six month period ending September 30, 1999, the Company provided
$445,787 in cash from its operating  activities,  as compared to $2,299,364 used
by operating activities in the six month period ended September 30, 1998.

     The Company used $2,365,339 of cash in investing  activities during the six
months ended September 30, 1999, compared to an outflow of cash of $1,096,273 in
the six months ended  September 30, 1998. The primary  investing  activities was
the purchase of equipment and fixtures by Play Co. for its new stores.

     The Company generated  $2,156,129 from its financing  activities in the six
month period ended  September 30, 1999,  as compared to providing  $3,164,184 in
the six months  ended  September  30,  1998.  The  primary  contributors  to the
Company's  financing  activities  were  borrowings by Play Co. under a financing
agreement.  These proceeds were used to finance Play Co.'s capital requirements,
capital expenditures, and operating losses during the six months ended September
30, 1999.

     As a result of the above factors, the Company has a net increase in cash of
$236,577 in the six months ended September 30, 1999,  compared to a net decrease
in cash of $231,453 in the six months ended September 30, 1998.

     At September 30, 1999, Play Co. had a working capital deficit of $2,730,031
compared to a working  capital  position of  $5,832,143  at March 31, 1999.  The
primary  factors  in  the  $8.56  million  decrease  in  working  capital  was a
reclassification  of Play Co.'s  credit  line with  FINOVA  Capital  Corporation
("FINOVA")  from  a  long  term  liability  to  a  short  term  liability.  This
reclassification was due to the expiration date of the credit facility of August
3, 2000 falling within one year of the September 30 , 1999 balance sheet date.

     Prior to its most  recent  fiscal  year  ended  March  31,  1999,  Play Co.
generated operating losses in the past several years as well as in the six-month
period ended September 30, 1999. Play Co. has historically financed those losses
and its  working  capital  requirements  through  loans and sales of Play  Co.'s
equity  securities,  primarily through the sale of Play Co.'s Series E preferred
stock.  There  can be no  assurances  that  Play  Co.  will be able to  generate
sufficient revenues or have sufficient cont rols over expenses and other charges
to achieve profitability.

     During the three-month period ended September 30, 1999, Play Co. opened one
new store. This store was located in Pier 39 in San Francisco,  California. Pier
39 is a  tourist-oriented  destination that has a history of heavy foot traffic.
The capital investment for building this store was approximately  $425,000,  net
of landlord contributions.


<PAGE>
     In October 1999, Play Co. opened five new stores located in Concord,  North
Carolina (two stores),  near Houston,  Texas (two stores) and in Mission  Viejo,
California.  These stores are located in high traffic shopping malls. These five
stores  represented  an  aggregate  capital  investment  of  approximately  $1.3
million, net of landlord  contributions.  Play Co. postponed the construction of
its planned new store in Schaumburg, Illinois until the spring of 2000. Play Co.
now has 32 stores located in sev en states.

     Play Co. had  planned to finance the above store  opening  costs  through a
combination of capital lease financing,  use of Play Co.'s working capital,  and
the sale of additional equity. Play Co. has obtained  approximately  $431,500 in
capital lease financing this fiscal year.

     In May 1999,  pursuant  to s 506 of  regulation  D, Play Co.  sold  750,000
shares of series F  preferred  stock,  at a  purchase  price of $1.00 per share,
through Robb Peck McCooey  Clearing  Corporation as placement agent. The Company
received  $657,500  in net  proceeds  from the  sale.  Each  share  of  series F
Preferred Stock is convertible,  at the holder's option, into two fully paid and
non-assessable  shares of common stock,  at any time  commencing on the date the
registration  statement registering the common stock underlying same is declared
effective  by the  securities  and exchange  commission.  Each share of series F
preferred stock shall convert  automatically on the occurrence of the earlier of
either  of the  following  events,  without  action  on the  part of the  holder
thereof:  (i) two years from issuance or (ii) in the event the closing price per
share of Common Stock has been at least $5.00 for a consecutive 30-day period.

     Due to the beneficial  conversion  feature of the Series F preferred stock,
the proceeds have initially been recorded as additional  paid-in capital,  which
is being  authorized over an 8-month period in the form of a non-cash  dividend.
Management  has used an  8-month  period to  correspond  to the  estimated  time
necessary to have a registrations statement declared effective by the Securities
and Exchange Commission.

     In connection with the private  placement of the Series F preferred  stock,
Play Co. granted  options to the placement  agent to purchase  350,000 shares of
Common Stock at an exercise  price of $3.00 per share for a period of four years
from the date of closing of the  private  placement.  Play Co. has valued  these
options at  approximately  $507,000  using the  Black-Scholes  option  valuation
model. As the options were granted in connection with the private placement, the
compensation  effect of these was  effectively  offset against the proceeds into
additional paid-in capital with no net effect on Play Co.'s stockholders' equity
or result of operations.  The placement agent also received a 10% commission, or
$75,000, and a 1% allowance,  or $7,500, to cover administrative  expenses.  The
private placement closed on May 27, 1999.

     On July  15,  1999,  an  entity  of  which a  director  of  Play  Co.  is a
shareholder,  exercised  its right to  purchase a 25%  ownership  interest  in a
consolidated subsidiary of Play Co. This entity was the assignee of an option to
acquire 25% of the outstanding shares of the subsidiary at book value as of June
30, 1999.  The book value was determined to be $2,894,711 and 25% was determined
to be $723,678.  This amount was recorded on the  accompanying  balance sheet as
Stock Subscription Receivable. The amo unt was paid to Play Co. in October 1999.
<PAGE>
     This option arose out of the June 30, 1998  conversion,  by ABC Fund,  Inc.
("ABC",  an affiliate of Play Co.),  of a $1.5 million  debenture  into Series E
preferred stock as of June 30, 1998. Pursuant to the terms of the debenture,  in
September  1998, ABC assigned its right to purchase the Toys common stock to the
entity.

     On July 20, 1999,  Play Co. sold a 6.6% interest in this  subsidiary to two
investors  for $2.8  million in gross  proceeds  in a private  transaction.  The
investors were an unaffiliated  investment-banking  firm,  Concord of Frankfurt,
Germany  and CDMI,  a British  Virgin  Islands  corporation.  One of Play  Co.'s
directors is a  shareholder  of CDMI.  Each party  invested  $1.4 million in the
transaction.

     In early October 1999, Play Co. loaned  $200,000 to  Shopnet.com,  Inc. and
$50,000 to Breaking Waves, Inc., both of which entities are affiliated with Play
Co. The loans carry interest at 9% and are due in March 2000.

     On  October  25,  1999,  an  entity  of which a  director  of Play Co. is a
shareholder,  lent Play Co.  $127,922  under a Demand  Promissory  Note ("Demand
Note"). The Demand Note carries an interest rate of eight percent per annum. The
Demand Note was a bridge loan  designed to be paid off after the  completion  of
the then contemplated initial public offering of the subsidiary.

     On November 19, 1999,  Play Co.'s  subsidiary  completed an initial  public
offering (the "Offering") on the SMAX segment of the Frankfurt Stock Exchange in
Germany. The Offering was underwritten by Concord.

     This subsidiary sold 2 million shares, or a 16.7% interest, in the Offering
for gross proceeds of approximately  $27 million.  The Offering was priced at 13
Euro per share, or approximately  $13.52 per share.  Play Co. retained  majority
ownership of the  subsidiary  holding a 58.4% equity  interest in same and, as a
result,  will  continue to  consolidate  the  subsidiary's  operations  into its
financial statements.

     In addition to the 2 million shares sold by the subsidiary in the Offering,
Concord and CDMI each sold 200,000 shares in the form of a greenshoe  allotment.
Both Concord and CDMI invested in the subsidiary in a private  placement in July
1999.  The total  Offering  size,  including  the greenshoe  allotment,  was 2.4
million shares.

     Play Co.  expects to complete  the  accounting  for the net proceeds of the
Offering during the quarterly period ending December 31, 1999.

     Play Co.  anticipates,  based on currently  proposed plans and  assumptions
relating to its operations, that the proceeds of the Offering will be sufficient
to satisfy its contemplated cash requirements for at least 12 months.


<PAGE>
YEAR 2000

     The Company does not believe that the year 2000 computer  issue will have a
significant impact on its operations and financial  position.  Furthermore,  the
Company does not believe that it will have to significantly  modify its internal
computer systems. However, if internal systems do not correctly date information
when the year changes to 2000, there could be an adverse impact on the Company's
operations. Furthermore, there can no assurance that another entity's failure to
ensure year 2000 capabi lity would not have an adverse effect on the Company and
its subsidiary, Play Co.

TRENDS AFFECTING LIQUIDITY, CAPITAL RESOURCES AND OPERATIONS:

     Play Co. believes that its same store sales showed a decline after a period
of two years of  continuous  increases (in the fiscal years ended March 31, 1998
and March 31, 1999)  because in the six-month  period ended  September 30, 1999,
the flow of allocated "hot" selling merchandise was spread over 25% more stores.
This  shortfall  in  allocated  or "hot"  selling  inventory  is a result of the
current  credit  lines that Play Co. has with some of its  vendors.  Play Co. is
working to  increase  its lines of credit  with its  vendors to more  adequately
address  not only the past growth but its  expected  future  growth as well.  As
noted above, Play Co. has recently significantly  strengthened its balance sheet
by raising  approximately $30 million in additional equity,  which should result
in expanded lines of credit with its trade vendors.

     Play  Co.  believes  that  its  growth  and the  availability  of  "hot" or
allocated  merchandise  within  certain  sectors of its core  business - such as
action  figures,  video  games,  and  collector  plush - could have an impact on
continuing store sales in the future.  Play Co. is working diligently to address
this issue.

     Play Co.'s future  financial  performance will depend upon continued demand
for toys and its  ability  to  choose  locations  for new  stores  and  purchase
products  at  favorable  prices  and on  favorable  terms,  and the  effects  of
increased competition and changes in consumer preferences.

     The toy and hobby retail  industry  faces a number of  potentially  adverse
business  conditions  including  price and gross  margin  pressures  and  market
consolidation.   Play  Co.  competes  with  a  variety  of  mass  merchandisers,
superstores,  and  other  toy  retailers,  including  Toys R Us and  Kay Bee Toy
Stores. Competitors that emphasize specialty and educational toys include Disney
Stores,  Warner Bros.  Stores,  Learning Smith,  Lake Shore,  Zainy Brainy,  and
Noodle  Kidoodle.  Play Co. also competes both through its  electronic  commerce
operations and through its stores against  Internet  oriented toy retailers such
as eToys,  Inc. There can be no assurance that Play Co.'s business strategy will
enable it to compete effectively in the toy industry.

<PAGE>
INFLATION AND SEASONALITY:

     The impact of inflation on Play Co.'s  results of  operations  has not been
significant.  Play Co. attempts to pass on increased costs by increasing product
prices over time. Play Co.'s  operations are highly seasonal with  approximately
30-40% of its net sales  historically  falling  within Play Co.'s third quarter,
which  coincides  with the Christmas  selling  season.  Play Co. intends to open
stores  throughout the year, but generally before the Christmas  selling season,
which will make Play Co.'s third q uarter  sales an even greater  percentage  of
the total year's sales.
<PAGE>
                                     PART II

ITEM 1. LEGAL PROCEEDINGS:

     The Company is not a party to any material  litigation  and is not aware of
any  threatened  litigation  that would have a  material  adverse  effect on its
business. Neither the Company's officers,  directors,  affiliates, nor owners of
record or  beneficially  of more than five percent of any class of the Company's
Common Stock is a party to any material proceeding adverse to the Company or has
a material interest in any such proceeding adverse to the Company.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS: 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) The following  exhibits are filed with this Form 10-QSB for the quarter
ended September 30, 1999:

     27.1       Financial Data Schedule

     During the quarter  ended  September  30, 1999, no reports on Form 8-K were
filed with the Securities and Exchange Commission.

<PAGE>
                                   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 THEREUNTO DULY AUTHORIZED, ON THIS 9TH day of December 1999.

                                    UNITED TEXTILES & TOYS CORP.

                                    BY:     /S/  ILAN ARBEL
                                            Ilan Arbel
                                            President

                                    BY:     /S/ ALLEAN GOODE
                                            Allean Goode
                                            Treasurer