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 December 31, 1997

                                       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 registrant as specified in its charter)

Delaware                                    13-3626613
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or organization) 

                 448 West 16th Street, New York, New York 10011
                    (Address of principal executive offices)

                                 (212) 675-6666
              (Registrant's telephone number, including area code)


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

     Check whether the Issuer (1) has 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 [ ]

     State the number of shares of each of the issuer's classes of common equity
outstanding as of the latest  practicable date:  Common Stock,  $.001 per share:
978,807 shares outstanding as of December 31, 1997.

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


<PAGE>
                   UNITED TEXTILES & TOYS CORP. AND SUBSIDIARY


                                    CONTENTS

<TABLE>
<CAPTION>

                                                                                                        Page
                                                                                                        Number




PART 1- FINANCIAL INFORMATION

         ITEM 1- FINANCIAL STATEMENTS                                                                    
<S>                                                                                                      <C>
         Consolidated balance Sheets as of  December 31, 1997 (Unaudited)
           and March 31, 1997                                                                            3

         Consolidated statements of Operations  (Unaudited) for the three months
           ended December 31, 1997 and December 31, 1996
           and for the nine months ended December 31, 1997 and December 31, 1996                         4

         Consolidated  statements of Cash Flows (Unaudited) for the three months
           ended December 31, 1997 and December 31, 1996 and for the nine months
           ended December 31, 1997 and December 31, 1996                                                 5

         Notes to Financial Statements (Unaudited)                                                       6


         ITEM 2- MANAGEMENT'S DISCUSSION AND ANALYSIS
                 OF FINANCIAL CONDITION AND RESULTS OF
                 OPERATIONS                                                                              8


PART II- OTHER INFORMATION                                                                               12

         Signatures                                                                                      13
</TABLE>
<PAGE>
                   UNITED TEXTILES & TOYS CORP. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS
                   As of December 31, 1997 and March 31, 1997
<TABLE>
<CAPTION>

                                                                                   December 31,      March 31,
                                                                                        1997          1997
                                                                                   (Unaudited)       (Note 1)

                                                            ASSETS

CURRENT ASSETS:
<S>                                                                                  <C>             <C>         
 Cash and cash equivalents .......................................................   $  2,826,080    $    144,668
 Accounts receivable-net .........................................................        367,314         181,420
 Inventories .....................................................................      7,403,118       7,124,035
 Prepaid expenses and other current assets .......................................        169,012         252,901
 Loans and advances-officer ......................................................        170,798         123,600
                                                                                     ------------   ------------
         Total current assets ....................................................     10,936,322       7,826,624
                                                                                     ------------   ------------
PROPERTY AND EQUIPMENT-NET .......................................................      2,890,606       2,478,706
                                                                                     ------------   ------------
 OTHER ASSETS:
 Deposits and other assets .......................................................        185,882         332,017
                                                                                     ------------   ------------
         Total assets ............................................................   $ 14,012,810    $ 10,637,347
                                                                                     ============   ============

                                              LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Borrowings under financing agreement ............................................   $  4,746,307    $  4,438,875
 Accounts payable ................................................................      6,571,093       3,318,472
 Accrued expenses and other current liabilities ..................................        938,600         510,447
 Due to affiliates ...............................................................      1,698,935         804,000
 Current portion of notes payable ................................................        100,000         141,666
                                                                                     ------------   ------------
         Total current liabilities ...............................................     14,054,935       9,213,460
                                                                                     ------------   ------------
LONG-TERM LIABILITIES:
 Note payable, net of current portion ............................................         25,000         100,000
 Deferred rent liability .........................................................        155,998         126,925
                                                                                     ------------   ------------
         Total long-term liabilities .............................................        180,998         226,925
                                                                                     ------------   ------------
         Total liabilities .......................................................     14,235,933       9,440,385
                                                                                     ------------   ------------

MINORITY INTEREST IN SUBSIDIARY ..................................................      1,668,302       2,007,180
                                                                                     ------------   ------------

STOCKHOLDERS' EQUITY:
   Common stock, $.01 par value; 10,000,000
     shares authorized, 9,788,050 shares issued
  and outstanding ................................................................         97,881          97,881
  Additional paid-in capital .....................................................      7,048,950       7,048,950
 Common stock subscribed .........................................................        150,000         150,000
 Retained earnings (Deficit) .....................................................     (9,188,256)     (8,107,049)
                                                                                     ------------   ------------
         Total stockholders' equity ..............................................     (1,891,425        (810,218)   
Total liabilities and stockholders' equity                                           $ 14,012,810    $ 10,637,347
                                                                                     ------------    -------------
</TABLE>

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

                                       -3-


<PAGE>
                   UNITED TEXTILES & TOYS CORP. AND SUBSIDIARY

                      CONSOLIDATED STATEMENT OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                            For the                       For the
                                                       Nine Months Ended             Three Months Ended
                                                  Dec 31,         Dec 31,        Dec 31,        Dec, 31 
                                                  1997            1996           1997           1996
                                                  ------          -----          -----          -----


<S>                                              <C>             <C>             <C>            <C>         
REVENUES, net sales ..........................   $ 18,189,858    $ 17,014,944    $ 10,473,363   $  9,616,043
                                                 ------------   ------------   ------------   ------------

COSTS AND EXPENSES:
 Cost of sales ...............................     11,422,925      12,405,236       6,596,501      7,001,499
 Operating expenses ..........................      7,501,813       7,169,456       2,948,174      3,113,530
                     Interest and other income           --           (35,502)           --             --      
Interest expense                                      685,205         599,897         254,586        229,215
                                                 ------------   ------------   ------------   ------------
                                                   19,609,943      20,139,087       9,799,261     10,344,244
                                                 ------------   ------------   ------------   ------------
INCOME (LOSS) BEFORE
   MINORITY INTERESTS ........................     (1,420,085)     (3,124,143)        674,102       (728,201)
  Minority interest in net income (loss)
    of consolidated subsidiary (Note 2) ......       (338,878)       (899,297)        343,851       (157,430)
                                                  ------------   ------------   ------------   ------------

INCOME (LOSS) BEFORE PROVISION
  FOR INCOME TAXES ...........................     (1,081,207)     (2,224,846)        330,251       (570,771)
                                                  ------------   ------------   ------------   ------------

Provision for income taxes ...................           --              --              --             --
                                                  ------------   ------------   ------------   ------------

NET INCOME (LOSS) ............................   $ (1,081,207)   $ (2,224,846)   $    330,251   $   (570,771)
                                                  ============   ============   ============   ============

Basic earnings and diluted(loss)
  per common share before minority interest ..     $       (.14)  $       (.65)  $       .069   $       (.13)

Minority interest in net income (loss)
  of consolidated subsidiary .................             (.03)          (.19)          .035           (.03)
                                                    ------------   ------------   ------------   ------------
Basic and diluted earnings (loss)
  per common share ...........................     $       (.11)  $       (.46)  $       .034   $       (.10)
                                                    ============   ============   ============   ============

Weighted average number
  of common shares outstanding ...............      9,788,050       4,833,868       9,788,050      5,588,050
                                                    ============   ============   ============   ============
</TABLE>
     The accompanying notes are an integral part of these consolidated financial
statements

                                       -4-
<PAGE>

                   UNITED TEXTILES & TOYS CORP. AND SUBSIDIARY

                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)
                           Increase (Decrease) in Cash
<TABLE>
<CAPTION>


                                                                     Nine Months Ended
                                                                December 31,   December 31,
                                                                  1997            1996
                                                                  -----          ------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                             <C>            <C>         
Net loss ....................................................   $(1,081,207)   $(2,224,846)
                                                                 -----------    -----------
Adjustments to reconcile net loss to cash (used)
  provided for operating activities:
  Depreciation and amortization .............................       441,172        354,302
  Deferred rent .............................................        29,073        (12,966)
  Minority interest in net loss of subsidiary ...............      (338,878)      (899,297)
  Compensatory options and stock issued by subsidiary .......          --           16,000
Changes in assets and liabilities:
(Increase) in Accounts receivable ...........................      (185,894)        35,524    
(Increase) in Merchandise inventories                              (279,083)     1,028,089
 Decrease in prepaid expenses and other current assets ......        83,889        (60,196)
Decrease in deposits and other assets .......................       146,135           --
Increase in accounts payable ................................     3,252,621        537,549
 Increase in accrued expenses and other liabilities .........       428,153        214,997
                                                                -----------    -----------
         Total adjustments ..................................     3,577,188      1,214,002
                                                                -----------    -----------
         Net cash provided by operating activities ..........     2,495,981     (1,010,844)
                                                                -----------    -----------
                                                                                                                               
CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchases of property and equipment ........................      (853,072)      (447,951)
 Advances from affiliates ...................................       894,935         24,294
                                                                 -----------    -----------
         Net cash (used for) investing activities ...........        41,863       (123,657)
                                                                 -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Net borrowings under financing agreement ...................       307,432           --
 Proceeds from sale of common stock .........................          --           79,451
 Repayment of shareholder loans .............................          --          (87,680)
 Investment by minority shareholders ........................          --        1,234,000
 Repayment of notes payable .................................      (116,666)
 Reduction (increase) in loans receivable-officer ...........       (47,198)          --
                                                                 -----------    -----------
         Net cash provided by( used for) investing activities       143,568      1,225,771
                                                                 -----------    -----------

NET INCREASE (DECREASE) IN CASH .............................     2,681,412         91,270
Cash, beginning of period ...................................       144,668         75,573
                                                                 -----------    -----------
Cash, end of period .........................................   $ 2,826,080    $   166,843
                                                                 ===========    ===========

Supplemental disclosure of cash flow information:
Interest paid ...............................................   $   685,205    $   599,897
Taxes paid ..................................................   $      --      $      --
</TABLE>
     The accompanying notes are an integral part of these consolidated financial
statements




                                       -5-
<PAGE>
                   UNITED TEXTILE & TOYS CORP. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (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 nine months ended December 31, 1997, 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,  1997,  as
         filed with the Securities and Exchange Commission.

Note 2-           DESCRIPTION OF COMPANY:

               Until July 1996,  the Company  was the  majority  shareholder  of
          American  Toys,  Inc.  ("American  Toys")  now known as U.S.  Wireless
          Corporation.  Since American Toys was then the majority shareholder of
          Play  Co.  Toys  &  Entertainment  Corp.  ("Play  Co."),  the  Company
          indirectly  held  the  majority  of  Play  Co.  shares.  By  corporate
          resolution dated June 1, 1996, the Company  authorized its subsidiary,
          American Toys to spin-off ("The spin-off  Distribution")  the Play Co.
          common shares owned by American Toys to American  Toy's  stockholders.
          The spin-off distribution was affected in August 1996.

               The Company owns  2,489,581  shares or 61% of the Play Co. common
          stock  outstanding.  The Company.  The Company  acquired an additional
          70,000  shares of  common  stock in  September  1997 to  increase  its
          ownership percentage to 61% from 59%.

Note 3-           MINORITY INTERESTS:

               The  minority  interest  in Play Co. Toys &  Entertainment  Corp.
          represents  the  minority  shareholders  portion  (39%) of Play  Co.'s
          equity at December 31, 1997. 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.

Note 4-           NEW ACCOUNTING PRONOUNCEMENT:

         For the quarter  ended  December  31,  1997,  the  Company  adopted the
         provisions  of  Statement of Financial  Accounting  Standards  No. 128,
         "Earnings per Share".  Under this Standard,  the Company is required to
         report basic and diluted (loss) per share.  Basic  earnings  (loss) per
         share is  calculated  by dividing the net income (loss) for each period
         by the weighted  average number of common shares  outstanding.  Diluted
         earnings  (loss) per share is similar in  calculation  except  that the
         weighted  average  number of common  shares is increased to reflect the
         effects of  potential  additional  shares  that would  result  from the
         exercise of stock options or other convertible instruments.

                                       -6-
<PAGE>
                   UNITED TEXTILES & TOYS CORP. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


Note 4-           NEW ACCOUNTING PRONOUNCEMENT (continued)


         For the nine  months  ended  December  31,  1997 and 1996,  there is no
difference  between basic and diluted earnings (loss) per share as the inclusion
of additional potential shares is anti-dilutive due to the net loss presented in
each period.

Note 5-           SUBSEQUENT EVENTS:

         On January 2, 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 payment for $1,000,000
loaned to the Company by 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 61% of the  outstanding
shares of common stock of Play Co.,  thus  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 of common stock. U.S. Stores was incorporated on November
10, 1997. The Company's president is also President and 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.




















                                       -7-


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

         Results of Operations

         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 projected.

         Three months ended December 31, 1997 compared to the three months ended
December 31, 1996:

     Consolidated  sales for the  three  months  ended  December  31,  1997 were
$10,474,363  as compared to $9,616,043  for the three months ended  December 31,
1996.  This increase of $857,320 or 8.9% is directly  attributable  to increased
sales contributions from Play Co.'s retail stores.

         Consolidated cost of sales for the three months ended December 31, 1997
were  $6,596,501  or 63% of sales as compared to the three  month  period  ended
December 31, 1996 in which cost of sales were $7,001,499 or 72.8% of sales. This
decrease of $404,998 or 5.8% is primarily due to management's  efforts to better
control costs and product mix.

     Consolidated  operating  expenses  were  $2,948,174  or  28.1%  of sales as
compared to $3,113,530 or 32.4% of sales in the three months ended  December 31,
1996.  This  decrease of $165.356 or 5.3% was due to better  management  control
over operating expenses.

     During the three months ended December 31, 1997, non-cash  depreciation and
amortization  were  $162,482 as compared  to $52,197 in the three  months  ended
December 31, 1996. This increase of $110,285 is due primarily to depreciation on
assets new assets acquired by Play Co. in this quarter.

     Consolidated  interest  expense was  $254,586 or 2.4% of sales in the three
months  ended  December 31, 1997 as compared to $229,215 or 2.4% of sales in the
three months ended December 31, 1996.

     For  the  three  months  ended  December  31,  1997  the  Company  reported
consolidated  net income of $330,251  (after  reflecting  the adjustment for the
minority  interest in Play Co.) or basic earnings per share of $.034as  compared
to a net loss of $570,771 or a basic loss per share of $(.10) (after  reflecting
the minority interest in Play Co.) for the three months ended December 31, 1996.
The weighted  average  number of common shares used in the  computation of basic
earnings per share was  9,788,050  for the three months ended  December 31, 1997
and 5,588,050 for the three months ended December 31, 1996.

     Nine  months  ended  December  31, 1997  compared to the nine months  ended
December 31, 1996:

     Consolidated  sales were $18,189,858 for the nine months ended December 31,
1997 as compared to  $17,014,944  for the nine months  ended  December 31, 1996.
This increase of $1,184,914 or 7% was due to increased sales  contributions from
Pay Co.'s retail stores.



                                       -8-
<PAGE>
     Consolidated  cost of sales were $11,422,925 or 62.8% of sales for the nine
months ended  December 31, 1997 as compared to $12,405,236 or 72.9% of sales for
the nine months ended  December 31, 1996.  This decrease of $982,311 or 7.9% was
due management's efforts to better control costs and product mix.

     Consolidated  operating  expenses were $7,501,813 or 41.2% of sales for the
nine months ended  December 31, 1997 as compared to $7,169,456 or 42.1% of sales
for the nine months  ended  December  31,  1996.  This  increase of 4.6% was due
primarily to increased  operating  expenses of Play Co.,  specifically  rent and
payroll expenses associated with new retail store openings.

     For the nine months  ended  December 31, 1997,  non-cash  depreciation  and
amortization  were  $441,172 as compared to $354,302  for the nine months  ended
December  31,  1996.  This  increase of $86,870 was due to  depreciation  on new
assets acquired by Play Co. in the nine months ended December 31, 1997.

     Consolidated  interest  expense was  $685,205 or 3.8% of sales for the nine
months ended  December 31, 1997 as compared to $599,897 or 3.5% of sales for the
nine months ended December 31, 1996. This increase of $85,308 or14.2% was due to
increased borrowings by Play Co. under its financing agreement.

     For the nine  months  ended  December  31,1 997,  the  Company  reported  a
consolidated  net loss of $1,081,207  (after  reflecting  the adjustment for the
minority interest in Play Co.) or basic loss per share of $(.11), as compared to
a loss of  $2,224,846 or basic loss per share of $(.46)  (after  reflecting  the
minority  interest in Play Co.) for the nine months ended December 31, 1996. The
weighted  average  number  of common  shares  used in the  computation  of basic
earnings  (loss) per share was 9,788,050 for the nine months ended  December 31,
1997 and 4,833,868 for the nine months ended December 31, 1996.

Liquidity and Capital Resources

     At December 31, 1997,  the Company  reported cash and cash  equivalents  of
$2,826,080, negative working capital of $(3,118,613) and stockholders' equity of
$(1,891,425)  reflecting  the net loss of  $1,081,207  for the nine months ended
December 31, 1997..

     At March 31,  1997,  the  Company  reported  cash and cash  equivalents  of
$144,668,  negative working capital of $(1,386,836) and stockholders'  equity of
$(810,218).

     On December  29,  1997,  Play Co.  completed a public  offering of Series E
preferred shares and Series E warrants. The offering was managed by West America
Securities. The offering raised $3,150,000 in gross proceeds. Play Co. estimates
that the net  proceeds of the  offering  were  $2,378,978  after  discounts  and
commissions,  legal expenses, Blue Sky fees, accounting  fees,printing expenses,
other investment banking fees and other miscellaneous  costs and expenses.  Play
Co. will  finalize the net proceeds of the offering  during the audit process on
its March 31, 1998 year end financial statement.






                                       -9-
<PAGE>

     On  January  21,  1997,  Play  Co.  entered  into a $7.1  million  secured,
revolving Loan and Security Agreement with FINOVA Capital Corporation  ("FINOVA"
or "FINOVA  AGREEMENT").  The FINOVA  Agreement  replaces the $7 million  credit
arrangement   Play  Co.  had  with  Congress   Financial   Corporation("Congress
Arrangement").  The FINOVA Agreement is secured by substantially all of the Play
Co.'s  assets and it expires on July 21,  1000.  The  interest  rate of floating
prime plus one and one-half percent is the same in both credit arrangements.

     Under the FINOVA  Agreement,  Play Co. will be able to borrow $2.4  million
against a combination of $3 million in standby  letters of credit and restricted
cash provided by a subordinated loan compared to a $2 million advance against $3
million in additional borrowing support from the standby letters of credit under
the Congress Arrangement. $1.5 million of the $3 million in additional borrowing
support  from the standby  letters of credit was  provided  by an  institutional
investor in the form of a  subordinated  loan,  $1.o million was provided in the
form of a  standby  letter  of credit by the  Company.  The other  $500,000  was
provided by Play Co.. Under both agreements,  Play Co. is able to borrow against
the  cost  value  of  eligible  inventory.  Play Co.  believes  that its  credit
availability  against the cost value of its inventory under the FINOVA Agreement
will be comparable to its availability under the Congress Arrangement.

     The toy industry is seasonal  with  approximately  45% to 49% of Play Co.'s
annual  sales  occurring  during the months of October  through  December.  As a
result,   source  of  funds  to  repay  amounts  due  under  inventory   finance
arrangements  with  financial   institutions  and  manufacturers  are  typically
generated from sales during the peak selling season.

     United  Textiles & Toys  Corp.'s  business  is not  seasonal  with  women's
apparel being sold throughout the year.

     Play Co. plans to open additional  stores and the cost of opening will be a
significant  capital  expenditure.  Play Co.  plans to partially  finance  these
capital  expenditures  through a  combination  of  landlord  tenant  improvement
contributions,  borrowings on its new credit line and from capital  leases.  The
remainder will be paid out of Play Co.'s working capital.

     Trends affecting liquidity, capital resources and operations

     Play Co.'s  sales  efforts are focused  primarily  on a defined  geographic
consisting of the Southern  California area and the Southwestern  United States.
Play co.'s future  financial  performance  will depend upon the continued demand
for  toys and  hobby  items  and on  general  economic  conditions  within  that
geographic  market area, Play co.'s ability to choose  locations for new stores,
its  ability  to  purchase  at  favorable  prices 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.  The  domination of the toy industry by Toys R Us has resulted in
increased  price  competition  among various toy  retailers and declining  gross
margins for such retailers,  Moreover,  the domination by Toys R Us has resulted
in the  liquidation  or bankruptcy  of many toy retailers in the United  States,
including some in the Southern California market. There can be no assurance that
Play Co.'s business strategy will enable it to compete effectively in the retail
toy industry.



                                      -10-
<PAGE>
     Management knows of no other trends reasonably  expected to have a material
impact upon Play Co.'s operations or liquidity in the foreseeable  future.  Play
Co.'s  operating  history has been  characterized  by narrow profit  margins and
accordingly,  Play Co.'s  earnings will depend  significantly  on its ability to
purchase  its product on favorable  terms,  retail a large volume and variety of
products and to provide quality support services. Play Co.'s prices are, in part
based on market surveys of its competitors' prices, primarily of Toys R Us. As a
result,  aggressive  pricing  policies,  such as those  used by Toys R Us,  have
resulted in Play Co. reducing its retail prices on many items,  thereby reducing
the available profit margin. Moreover, increases in expenses or other charges to
income may have a material effect on Play Co.'s results of operations. There can
be no assurance  that Play Co. will be able to generate  sufficient  revenues or
have   sufficient   controls   over  expenses  and  other  charges  to  increase
profitability.

         Other

     The Company believes that its present financial  resources as well as funds
it anticipates  generating from operations and Play Co.'s line of credit will be
adequate to meet its needs for at least the ensuing twelve month period.

         Inflation and seasonality

     During  the  past  few  years,  inflation  in the  United  States  has been
relatively stable in management's  opinion, this is expected to continue for the
foreseeable future. However, should the American economy again experience double
digit inflation  rates,as was the case in the past, the impact upon prices could
adversely affect the Company's operations.


























                                      -11-


<PAGE>
                           PART II - OTHER INFORMATION


ITEM 1 - Legal Proceedings:  None

ITEM 2 - Changes in Securities: None

ITEM 3 - Defaults Upon Senior Securities: None

ITEM 4 - Submission of Matters to a Vote of Security Holders: None

ITEM 5 - Other Information:

     On January 2, 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 payment for $1,000,000
loaned to the Company by 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 61% of the outstanding  shares of
common stock of Play Co.,  thus  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 of common stock. U.S. Stores was incorporated on November
10, 1997. The Company's president is also President and 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.

ITEM 6 - Exhibits and Reports on Form 8-K:

         Exhibits:  None

         Reports on Form 8-K:  None















                                      -12-


<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.

Dated:        February 27, 1998

                                                    United Textiles & Toys Corp.
                                                                    (Registrant)


                                                     /s/Ilan Arbel
                                                     Ilan Arbel
                                                     President


                                                     /s/Allean Goode
                                                     Allean Goode
                                                     Treasurer






























                                      -13-