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 June 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: 4,550,235 shares outstanding as of August 18, 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> <C>                                                   <C>
                              Consolidated Balance Sheets as of  June 30, 1999 (unaudited)                                      3
                     and March 31, 1999.

                     Consolidated Statement of Operations (unaudited) for the Three
                      Months Ended June 30, 1999 and 1998.                                                                      4

                     Consolidated Statement of Cash Flows (unaudited) for the Three
                      Months Ended June 30, 1999 and 1998.                                                                      5

                     Notes to Consolidated Financial Statements (unaudited)                                                  6-11

Item 2.              MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS
                                                                                                                            12-17
PART II.                      OTHER INFORMATION

                                                                                                                               18
Item 1.              LEGAL PROCEEDINGS

Item 2.              CHANGES IN SECURITIES AND USE OF PROCEEDS                                                                 18

Item 3.              DEFAULTS UPON SENIOR SECURITIES                                                                           18

Item 4.              SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                       18

Item 5.              OTHER INFORMATION                                                                                         18

Item 6.              EXHIBITS AND REPORTS ON FORM 8-K                                                                          18

                     Signatures                                                                                                19


</TABLE>



<PAGE>
                   UNITED TEXTILES & TOYS CORP. AND SUBSIDIARY
            (A Subsidiary of Multimedia Concepts International, Inc.)



                           CONSOLIDATED BALANCE SHEETS
                     As of June 30, 1999 and March 31, 1999
<TABLE>
<CAPTION>
                                                                                          June 30,        March 31,
                                                                                           1999             1999
                                                                                        (Unaudited)       (Note 1)

                                     ASSETS


CURRENT ASSETS:
<S>                                                                                    <C>             <C>
  Cash and cash equivalents ........................................................   $    392,968    $    126,625
  Accounts receivables-net .........................................................        152,078         118,518
  Inventories ......................................................................     12,247,019      11,506,284
  Prepaid expenses and other current assets ........................................      1,393,311       1,315,851
  Loans and advances-officer .......................................................        (52,469)        (37,061)
          Total current assets .....................................................     14,132,907      13,030,217
PROPERTY AND EQUIPMENT-NET .........................................................      5,583,035       5,348,175
OTHER ASSETS
  Deposits and other assets ........................................................      2,930,058       2,768,647
          Total other assets .......................................................      2,930,058       2,768,647
          Total assets .............................................................   $ 22,646,000    $ 21,147,039
                                                                                       ============    ============


                      LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES:
  Accounts payable .................................................................   $ 18,060,045    $ 14,498,578
  Accrued expenses and other current liabilities ...................................        368,084         626,815
  Due to affiliates ................................................................        844,258         831,897
  Current portion of notes payable and capital lease obligation ....................      1,260,530       1,352,197
          Total current liabilities ................................................     20,532,917      17,309,487
LONG-TERM LIABILITIES:
  Borrowings under financing agreement .............................................      8,263,713       7,814,666
  Note payable and capital leases, net of current portion ..........................        524,396         585,681
  Deferred rent liability ..........................................................        129,533         126,769
          Total long-term liabilities ..............................................      8,917,642       8,527,116
          Total liabilities ........................................................     29,450,559      25,836,603

MINORITY INTEREST IN SUBSIDIARY ....................................................     (1,316,689)       (165,058)

STOCKHOLDERS' EQUITY:
  Common stock, $.01 par value; 10,000,000 shares authorized, 4,550,234
     shares issued and outstanding .................................................          4,550           4,550
  Additional paid-in capital .......................................................      8,142,281       8,142,281
  Retained earnings (deficit) ......................................................    (13,634,701)    (12,671,337)
          Total stockholders' equity ...............................................     (5,487,870)     (4,524,506)
          Total liabilities and stockholders' equity ...............................   $ 22,646,000    $ 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

                                                                      June 30,       June 30,
                                                                       1999            1998
                                                                                     Restated
                                                                                     (Note 8)

<S>                                                                <C>            <C>
Net sales ......................................................   $ 6,508,565    $ 6,358,709

Cost of sales ..................................................     3,763,214      3,706,331

Gross profit ...................................................     2,745,351      2,652,378

Operating expenses:
Operating expenses .............................................     3,780,011      2,596,461
  Depreciation and amortization ................................       224,468        188,417

               Total operating expenses ........................     4,004,479      2,784,878

Operating income (loss) ........................................    (1,259,128)      (132,500)

Interest expense:
  Interest and finance charges .................................       284,664        138,452
  Amortization of debt issuance costs ..........................        30,730         27,200
               Total interest expense ..........................       315,394        165,652

(LOSS) BEFORE MINORITY INTERESTS ...............................    (1,574,522)      (298,152)

Effect of non-cash dividends on convertible preferred stock ....      (540,473)      (273,806)
                                                                    (2,114,995)      (571,958)
Minority interest in net income (loss) of  consolidated
  Subsidiary (Note 12) .........................................     1,151,631        183,772

Net income (loss) ..............................................   $  (963,364)   $  (388,186)
                                                                     ==========     ==========

(Loss) per basic and diluted common share and share equivalents:
  Net loss before minority .....................................   $      (.47)   $      (.13)
  Minority interest in net loss ................................           .26            .04

Net  income (loss) .............................................   $      (.21)   $      (.09)
                                                                     ==========     ==========

Weighted average number of common shares outstanding ...........     4,550,234      4,550,234
                                                                    ==========      ==========

</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>
                                                                                        Three Months Ended

                                                                                        June 30,         June 30,
                                                                                          1999            1998
                                                                                                        Restated
                                                                                                        (Note 8)

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                   <C>            <C>
Net income (loss) .................................................................   $  (963,364)   $  (388,186)
Adjustments to reconcile net loss to cash (used) provided for operating activities:
   Depreciation and amortization ..................................................       224,468        188,417
   Deferred rent ..................................................................         2,764          4,552
   Minority interest in net loss of subsidiary ....................................    (1,151,631)      (183,772)
   Compensation options and stock issued by subsidiary ............................          --           10,938
Changes in assets and liabilities:
(Increase) decrease in accounts receivable ........................................       (33,560)        64,195
(Increase) in merchandise inventories .............................................      (740,735)    (1,503,323)
(Increase) decrease in prepaid expenses and other current assets ..................       (77,460)        22,772
Decrease in deposits and other assets .............................................      (161,411)       163,323
Increase (decrease) in accounts payable ...........................................     3,586,189      2,649,618
Increase (decrease) in accrued expenses and other liabilities .....................      (258,731)      (554,329)
          Total adjustments .......................................................     1,389,893        862,391
          Net cash provided (used) by operating activities ........................       426,529        474,205

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment ............................................      (196,653)      (461,745)
   Advances from affiliates .......................................................       (12,361)       (43,239)
          Net cash from (used for) investing activities ...........................      (209,014)      (504,984)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Net borrowings under line of credit ............................................       449,047      1,076,497
   Loans and repayment - officer ..................................................        15,408        299,200
   Repayment of notes payable .....................................................      (415,627)    (1,516,166)
          Net cash provided by (used for) investing activities ....................        48,828       (140,469)

NET INCREASE (DECREASE) IN CASH ...................................................       266,343       (171,248)
Cash, beginning of period .........................................................       126,625        659,378
Cash, end of period ...............................................................   $   392,968    $   488,130
                                                                                      ===========    ===========

Supplemental disclosure of cash flow information:
Interest paid .....................................................................   $   315,394    $   165,652
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
                                  June 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 presentation of the Company's
                  financial  position and the results of its  operations for the
                  three  months  ended  June 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.  The Company owns 2,489,910
               shares  or  44.9%  of  the  common  stock  of  Play  Co.  Toys  &
               Entertainment Corp. ("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  (55.1%) of Play Co.'s equity at June 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.

                    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


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

                  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 represent  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.  This issuance diluted 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  owns  78.5% of the  outstanding  shares  of common
                  stock  of  the  Company,  effectively  making  the  Company  a
                  subsidiary  of  Multimedia.  As the Company  owns 44.9% 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 -          FINANCING AGREEMENTS:

                    On February 7, 1996, Play Co.  borrowed,  under an agreement
               with Congress  Financing  Corporation  (Western)  (the  "Congress
               Financing"), approximately $2,243,000, the proceeds of which were
               used to repay the then  outstanding  borrowings under a bank line
               of credit agreement.  The Congress Financing provided for maximum
               borrowings up to  $7,000,000  based upon a percentage of the cost
               value of eligible inventory,  as defined.  Outstanding borrowings
               bore interest at 1.5% above the prime rate, as defined.

                    In connection with the Congress Financing,  and the previous
               bank line of credit  agreement,  European  American Capital Corp.
               ("EACC"),  an affiliate,  provided a $2,000,000  letter of credit
               for  collateral.  As  compensation to EACC, Play Co. granted EACC
               options to acquire  shares of Common Stock and  Preferred  Stock,
               the aggregate value of which was $458,000. The aggregate $458,000
               was initially  included in other assets,  as debt issuance costs,
               and additional paid-in capital.  The option values were amortized
               into  interest  expense  through the February 1, 1998 maturity of
               the Congress  Financing,  resulting in aggregate interest charges
               of $196,849 for the year ended March 31, 1998.

                    In March 1997, the Congress Financing was amended to provide
               for,  among  other  things,  increased  borrowing  ratios  and an
               additional  $1,000,000 letter of credit for collateral from EACC.
               Thereafter,  the  Congress  Financing  was  collateralized  by an
               aggregate $3,000,000 in letters of credit through its maturity on
               February 1, 1998.

                    On February 3, 1998, Play Co. borrowed  $4,886,324 under the
               FINOVA  Financing,  the proceeds of which were used  primarily to
               repay  the  then   outstanding   borrowings  under  the  Congress
               Financing and to pay fees related to the FINOVA Financing.

                    The FINOVA  Financing,  as amended  through  June 30,  1999,
               provided  for  maximum  borrowings  up to  $8,300,000  based on a
               percentage of the cost value of eligible  inventory,  as defined.
               Outstanding borrowings bear interest at 1.5% above prime rate, as
               defined  (the prime rate at March 31, 1999 and 1998 was 7.75% and
               8.5%, respectively).  The agreement matures on August 3, 2000 and
               can be renewed for one  additional  year at the lender's  option.
               See Note 6 for further amendments.

<PAGE>
NOTE 6 -          SUBSEQUENT EVENTS:

                    On July 15, 1999, Tudor Technologies,  Inc.  ("Tudor"),  the
               assignee of an option to acquire 25% of the outstanding shares of
               Play Co.'s subsidiary,  Toys International.COM,  Inc. ("Toys") at
               Toys' book value,  elected to exercise  its right to purchase the
               Toys  common  stock  and  requested  that the  exercise  price be
               amended  to  reflect  the book  value of Toys at the most  recent
               fiscal  quarter,  June 30,  1999.  Play  Co.  agreed  to  Tudor's
               request. As the book value of Toys as of June 30, 1999 is not yet
               determined,  Play Co. has not yet  provided  Tudor with the basis
               for the  option  exercise  and,  as a  result,  Tudor has not yet
               provided Play Co. with the  appropriate  consideration.  Play Co.
               anticipates  that it will  provide  Tudor the June 30,  1999 book
               value determination later in August 1999.

                    This option  arose out of the June 30, 1998  conversion,  by
               ABC Fund, Inc. ("ABC," an affiliate of Play Co. and the Company),
               of a  $1.5  million  debenture  into  Series  E  Preferred  Stock
               ("Series E 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 Tudor.

                    On July 20, 1999,  Play Co. sold a 6.6% interest in its Toys
               subsidiary to two investors for $2.8 million in gross proceeds in
               a  private  transaction.   The  investors  were  an  unaffiliated
               investment banking firm and CDMI Capital Corporation  ("CDMI"), a
               British Virgin Islands corporation.  Mr. Mika is a shareholder of
               CDMI. Each party invested $1.4 million in the transaction.

                    On August 4, 1999, Play Co. entered into Amendment  Number 6
               to  its  Financing  Agreement  with  FINOVA  Capital  Corporation
               ("FINOVA").  As a result of this amendment,  Play Co.'s aggregate
               credit facility with FINOVA  increased from $8.3 million to $11.3
               million.

                    The  amendment  also (1)  increased  the  minimum  net worth
               financial  covenant  from $750,000 to $2.9 million as of June 30,
               1999 with the $2.9  million  threshold  increasing  by 60% of any
               equity  raised  by  Play  Co.  and by 60% of any  annual  profits
               generated  by Play Co.;  (2)  allows  Play Co. to sell a minority
               equity  interest  (up to 49%)  in its  Toys  subsidiary;  and (3)
               increased  the maximum  levels of capital  expenditures,  capital
               leases and unsecured debt allowed under the Financing Agreement.


<PAGE>
NOTE 7 - 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 ensure year 2000 capability  would not have an adverse
               effect on the Company and its subsidiary, Play Co.

NOTE 8 - RESTATEMENT OF FINANCIAL STATEMENTS - JUNE 30, 1998:

                    The consolidated  financial  statements for the three months
               ended June 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 $166,425 in its  original
               reported net loss.



                                        6


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


Results of Operations:

     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.  Historically,  the Company's  results of operations  have
related  primarily  to the  Company's  majority  ownership  of Play Co.,  as its
operations were  substantially  less than those of its subsidiary.  Accordingly,
the Company's  results of operations  for the three month period ending June 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 June 30, 1999  compared to the three months
ended June 30, 1998:

     Consolidated   sales  for  the  three  months  ended  June  30,  1999  were
$6,508,565,  as compared to $6,358,709 for the three months ended June 30, 1998.
This increase of $149,856,  or 2.4%, is directly attributable to increased sales
contributions from Play Co.'s new stores as same store sales declined by 27% for
the period.

     Consolidated  cost of sales for the three  months  ended June 30,  1999 was
$3,763,214,  or 58% of sales,  as compared to the three month  period ended June
30, 1998 in which cost of sales was $3,706,331,  or 58% of sales.  This increase
of $56,883,  or 1.5%, is primarily due to costs  associated  with the opening of
new retail outlets.

     Consolidated  operating  expenses were $4,004,479,  or 62% of sales for the
three months ended June 30, 1999,  as compared to  $2,784,878,  or 44% of sales,
for the three months ended June 30, 1998.  This increase of $1,219,601,  or 44%,
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 June 30, 1999,  non-cash  depreciation  and
amortization  amounted to $224,468,  as compared to $188,417 in the three months
ended June 30, 1998.  This increase of $36,051 is due primarily to  depreciation
on new assets acquired by Play Co. in this quarter.

     Consolidated  interest expense was $315,394, or 4.8% of sales, in the three
months ended June 30, 1999,  as compared to $165,652,  or 2.6% of sales,  in the
three months ended June 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 June 30, 1999.
<PAGE>
     For  the  three  months  ended  June  30,  1999,  the  Company  reported  a
consolidated  net loss of $963,364  (after  reflecting  the  adjustment  for the
minority  interest in Play Co.), or basic earnings deficit per share of $.21, as
compared to a restated net loss of  $388,186,  or a basic  earnings  deficit per
share of $.09 (after  reflecting  the  minority  interest in Play Co.),  for the
three months ended June 30, 1998.  The weighted  average number of common shares
used in the  computation of basic earnings per share was 4,550,234 for the three
months ended June 30, 1999 and 1998.

Liquidity and Capital Resources:

     At June 30,  1999,  the  Company  reported  cash and  cash  equivalents  of
$392,968,  working capital deficit of $6,400,010,  and  stockholders'  equity of
$(5,487,870),  reflecting  the net loss of $963,364  for the three  months ended
June 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 three month period  ending June 30, 1999,  the Company  provided
$426,529 in cash from its operating activities, as compared to $474,205 provided
by operating  activities  in the three month  period  ended June 30,  1998.  The
consolidated net loss was $963,346 and $388,186, respectively, in those periods.

     The Company used $209,014 of cash in investing  activities during the three
months  ended June 30,  1999,  compared to an outflow of cash of $504,984 in the
three months  ended June 30,  1998.  The primary  investing  activities  was the
purchase of equipment and fixtures by Play Co. for its new stores.

     The Company  generated  $48,828 from its financing  activities in the three
month  period  ended June 30,  1999,  as  compared to the use of $140,469 in the
three months  ended June 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 three months ended June 30, 1999.

     As a result of the above factors, the Company has a net increase in cash of
$266,343 in the three months ended June 30, 1999,  compared to a net decrease in
cash of $171,248 in the three months ended June 30, 1998.

     In November 1998, Play Co. entered into an agreement with ZD Group,  L.L.C.
("ZD"), a related party, to secure additional financing. ZD is a New York trust,
the  beneficiary  of which is a member  of the  family of Play  Co.'s  chairman.
Pursuant to the ZD agreement,  ZD issued a $700,000  irrevocable  standby L/C in
favor of FINOVA. FINOVA then lent a matching $700,000 to Play Co. in the form of
a term loan. The term loan expires on August 3, 2000 and bears interest at prime
plus one percent.  As consideration for its issuance of the L/C, ZD will receive
a one-third profit percentage after application of corporate  overhead beginning
April 1, 1999 from three of Play Co.'s  stores  (Woodfield  Mall in  Schaumburg,
Illinois now scheduled to open in fall 1999; Auburn Hills, Michigan; and Gurnee,
Illinois).  As those  stores did not  generate  a profit  after  application  of
corporate  overhead in the  three-month  period ended June 30, 1999, no payments
accrued or were made to ZD during the June period.
<PAGE>
     Planned new store openings remain a significant  capital commitment of Play
Co.  Play Co.  has  entered  into  leases to open eight new stores by the end of
calendar  year  1999.  Play Co.  expects  that the costs of  building  those new
stores,  net of  landlord  tenant  improvement  contributions  and of  inventory
requirements, will be approximately $2.8 million.

     Play Co. plans to finance the costs of opening  those new stores  through a
combination of capital lease financing,  use of Play Co.'s working capital,  and
the sale of additional equity.

     The first of those stores opened in June in the Venetian  Resort and Casino
in Las Vegas, Nevada. The costs of opening that store (excluding inventory) were
approximately  $825,000.  This  store  was  projected  to be  the  most  capital
intensive of all the stores scheduled to be opened this fiscal year.

     The following transactions entered into after April 1, 1999 were equity and
debt  transactions  structured  to help  Play Co.  with the cost of the  capital
expenditures associated with opening the total of eight new stores in 1999.

     Play Co.  received  approximately  $240,000 in lease financing in the three
month period ended June 30, 1999 and continues to seek additional  capital lease
financing.

     In May 1999,  pursuant to ss.506 of  Regulation  D, Play Co.  sold  750,000
shares of Series F Stock,  at a purchase price of $1.00 per share,  through Robb
Peck McCooey Clearing Corporation as placement agent. Play Co. received $657,000
in net proceeds from the sale. Each share of Series F 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  of  the  registration  statement
registering  the Common  Stock  underlying  same is  declared  effective  by the
Securities and Exchange  Commission.  Each share of Series F Stock shall convert
automatically on the occurrence of the earlier of either of the following event,
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 lest
$5.00 for a  consecutive  30 day  period.  Play Co.  received  net  proceeds  of
$657,500 after deduction of all investment  banking and legal and administrative
fees.

     Due to the  beneficial  conversion  feature  of the  Series  F  Stock,  the
proceeds have initially  have been recorded as additional  paid in capital which
will amortize over a 12-month period in the form of a non-cash dividend.

     On July 15, 1999, Tudor  Technologies,  Inc. ("Tudor") - an entity of which
Mr.  Moses Mika (a director of the Company and Play Co.) is a  shareholder  - as
the assignee of an option to acquire 25% of the outstanding shares of the common
stock of the Play Co. subsidiary,  Toys International.COM,  Inc. ("Toys"), which
shares were then owned by Play Co. and which  option price was set at Toys' book
value on the date of election to exercise  the option,  elected to exercise  its
right to purchase the stock and requested  that the exercise price be amended to
reflect the book value of Toys at the most recent fiscal quarter, June 30, 1999.
Play Co.  agreed to  Tudor's  request.  As the book value of Toys as of June 30,
1999 is not yet  determined,  Play Co. has not yet provided Tudor with the basis
for the option  exercise  and, as a result,  Tudor has not yet provided Play Co.
with the appropriate  consideration.  Play Co.  anticipates that it will provide
Tudor the June 30, 1999 book value determination by the end of August 1999.
<PAGE>
     This option arose out of the June 30, 1998  conversion,  by ABC Fund,  Inc.
("ABC",  an affiliate of Play Co. and the Company),  of a $1.5 million debenture
into Series E Preferred  Stock ("Series E Stock") as of June 30, 1998.  Pursuant
to the terms of the  debenture,  in September  1998,  ABC assigned its rights to
purchase the Toys common stock to Tudor.

     On July 20, 1999,  Play Co. sold a 6.6% interest in its Toys  subsidiary to
two investors for $2.8 million in  consideration in a private  transaction.  The
investors  were  an  unaffiliated  investment  banking  firm  and  CDMI  Capital
Corporation  ("CDMI"), a British Virgin Islands  corporation.  Mr. Moses Mika, a
director  of Play Co. and the  Company,  is a  shareholder  of CDMI.  Each party
invested $1.4 million in the transaction.

     On  August  4,  1999,  Play  Co.  entered  into  Amendment  Number 6 to its
Financing Agreement with FINOVA Capital Corporation  ("FINOVA").  As a result of
this amendment,  Play Co.'s aggregate credit facility with FINOVA increased from
$8.3 million to $11.3 million.  The amendment also (1) increased the minimum net
worth financial  covenant from $750,000 to $2.9 million as of June 30, 1999 with
the $2.9 million  threshold  increasing  by 60% of any equity raised by Play Co.
and by 60% of any annual  profits  generated by Play Co.; (2) allows Play Co. to
sell a minority  equity  interest  (up to 49%) in its Toys  subsidiary;  and (3)
increased  the  maximum  levels of  capital  expenditures,  capital  leases  and
unsecured debt allowed under the Financing Agreement.

     Electronic  commerce represents another area that may result in significant
capital  expenditures  for Play Co. in fiscal 2000. It is also a major focus for
management.  In  April  1999,  Play Co.  debuted  the  first of three  dedicated
electronic commerce web sites. This site, www.ToysWhyPayRetail.com, represents a
new trade name for Play Co. and allows consumers to purchase,  at near wholesale
prices,  overstocks,  special  buys,  and  overruns  on mostly  name-brand  toys
purchased by Play Co. out of season.  Play Co. plans to offer approximately 1000
items for sale on the web site.

     The second and third  electronic  commerce  web sites are  currently  being
developed  to a  state-of-the-art  standard  in  conjunction  with two  Internet
consulting  firms.  These sites will offer  collectible  and imported  specialty
merchandise such as die-cast cars, dolls,  plush toys,  trains,  and collectible
action figures and are expected to open in the late fall of 1999. In conjunction
with the web site launch,  the Company plans to place computer kiosks in several
of its retail  locations in order to permit customers to place orders on the web
site for goods otherwise not sold in such store.

     Play Co. has  entered  into a letter of intent with an  investment  banking
firm to raise  additional  equity in the  approximate  amount of $20-25  million
through  the public sale of a minority  interest in Play Co.'s Toys  subsidiary.
This public  offering  currently is expected to close in 1999.  This  investment
banking firm also  participated  in the $2.8 million  private  placement in July
1999.


<PAGE>
     Play Co. is pursuing this  opportunity and is continuing to seek additional
lease financing.  There can be no assurance that Play Co. will be able to obtain
sufficient financing to successfully open the planned new stores.  Additionally,
Play Co. has  incurred  significant  capital  expenditures  over the past twelve
months.  To  date,  Play  Co.  has  deployed  its  working  capital  to  cover a
significant portion of these capital expenditures. As a result, Play Co. is also
seeking  additional  working capital from the above mentioned equity  offerings.
Should Play Co. be unable to raise sufficient working capital,  it may be unable
to purchase  product  directly from factories at advantageous  pricing,  thereby
resulting in a negative impact on gross margins and results of operations.

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 can could be an
adverse  impact  on the  Company's  operations.  Furthermore,  there can no more
assurances that another  entities  failure to ensure year 2000 capability  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  because the flow of  allocated  or "hot"
selling  merchandise  is being  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 notes  above,  Play Co. has
significantly  strengthened  its  balance  sheet by raising  approximately  $3.5
million in additional equity over the past three months,  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 Play Co.'s ability to choose  locations for new stores,  Play Co.'s
ability to purchase  product as 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 the Company's  business  strategy
will enable it to compete effectively in the toy industry.

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 quarter sales an even greater percentage of the
total year's sales.



<PAGE>
                           PART II - OTHER INFORMATION


Item 1. Legal Proceedings: None

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
June 30, 1999:

27.1 Financial Data Schedule


(b) During the quarter  ended June 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 20th day of August 1999.


                                    UNITED TEXTILES & TOYS CORP.



                                    By:     /s/  Ilan Arbel
                                            Ilan Arbel
                                            President


                                    By:     /s/ Allean Goode
                                            Allean Goode
                                            Treasurer