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 March 31, 1998

[   ] Transition report under Section 13 or 15(d) of the Exchange Act of 1934

      For the transition period from  to 

      Commission file number 1-9224


                              HELMSTAR GROUP, INC.
        (Exact Name of Small Business Issuer as Specified in Its Charter)

                DELAWARE                               13-2689850          
-----------------------------------------    ------------------------------
      (State or Other Jurisdiction of               (I.R.S. Employer
       Incorporation or Organization)              Identification No.)

             2 World Trade Center, Suite 2112, New York, N.Y. 10048
  ---------------------------------------------------------------------------
                    (Address of Principal Executive Offices)

                                  212-775-0400
                (Issuer's Telephone Number, Including Area Code)

         Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.

Yes  [ X ]   No  [   ]

         The number of shares  outstanding  of each of the  issuer's  classes of
common equity, as of the latest practicable date.

           Class                             Outstanding at April 30, 1998
           -----                             -----------------------------
                                                                         
Common stock - par value $.10                       5,516,373 shares     
-----------------------------                       ----------------     
<PAGE>
                                     PART I

                              FINANCIAL INFORMATION


Item l.  Financial Statements.

         The following consolidated financial statements of Helmstar Group, Inc.
and subsidiaries  (collectively referred to as the "Company," unless the context
requires otherwise) are prepared in accordance with the rules and regulations of
the  Securities  and  Exchange  Commission  for  Form  10-QSB  and  reflect  all
adjustments  (consisting of normal recurring accruals) and disclosures which, in
the opinion of management, are necessary for a fair statement of results for the
interim periods  presented.  It is suggested that these financial  statements be
read in conjunction with the financial  statements and notes thereto included in
the Company's Form 10-KSB for the year ended December 31, 1997,  which was filed
with the Securities and Exchange Commission.

         The results of operations for the three months ended March 31, 1998 are
not  necessarily  indicative of the results to be expected for the entire fiscal
year.
<PAGE>
<TABLE>
<CAPTION>
                      HELMSTAR GROUP, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS


                                                 March 31,            December 31,
                                                   1998                  1997
                                               ------------           ------------
                                               (Unaudited)
<S>                                            <C>                    <C>         
               ASSETS
Cash and cash equivalents ...........          $    720,373           $    802,352
Short term investments - restricted .            70,430,232             71,174,934
Marketable securities ...............             7,023,591              7,234,862
Joint ventures ......................               191,546                185,864
Furniture, equipment and
    leasehold improvements - at cost,
    less accumulated depreciation and
    amortization of $248,822 in
    1998 and $242,565 in 1997 .......                99,871                106,128
Deferred financing costs, less
    accumulated amortization of
    $35,415 in 1998 and
    $11,000 in 1997 .................             1,721,125              1,663,209
Other assets ........................               798,240                651,403
                                               ------------           ------------

         TOTAL ......................          $ 80,984,978           $ 81,818,752
                                               ============           ============

         LIABILITIES

Bonds payable .......................          $ 72,750,000           $ 72,750,000
Accrued expenses and other
    liabilities .....................             1,069,614              1,509,201
Income taxes payable ................               108,450                 59,737
                                               ------------           ------------

         Total liabilities ..........            73,928,064             74,318,938
                                               ------------           ------------

Due to Preferred Member .............               750,000                750,000
                                               ============           ============
<PAGE>
<CAPTION>
                      HELMSTAR GROUP, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS


                                                 March 31,            December 31,
                                                   1998                  1997
                                               ------------           ------------
                                               (Unaudited)
<S>                                            <C>                    <C>         
             STOCKHOLDERS' EQUITY

Common stock - authorized
    10,000,000 shares, par value
    $.10; issued 6,749,600 shares
    in 1998 and 1997 ................               674,960                674,960
Paid-in surplus .....................            14,984,510             14,984,510
(Deficit) ...........................            (6,423,958)            (5,981,058)
                                               ------------           ------------

         Total ......................             9,235,512              9,678,412

Less treasury stock, at cost -
    1,233,227 shares in 1998 and 1997            (2,928,598)            (2,928,598)
                                               ------------           ------------

         Total stockholders' equity .             6,306,914              6,749,814
                                               ------------           ------------

         TOTAL ......................          $ 80,984,978           $ 81,818,752
                                               ============           ============
</TABLE>

     See Notes to Condensed Consolidated Financial Statements (Unaudited).
<PAGE>
<TABLE>
<CAPTION>
                      HELMSTAR GROUP, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                       Three Months Ended
                                                             March 31,    
                                                 ------------------------------
                                                    1998                1997
                                                 -----------        -----------
                                                                     (Restated)
<S>                                              <C>                <C>        
Revenues:
    Profit from joint ventures ...........       $    68,682        $   186,918
    Financial consulting fees ............                               90,000
    Interest income ......................         1,061,684             28,560
    Investment income ....................           117,228            544,564
                                                 -----------        -----------
         Total revenues ..................         1,247,594            850,042
                                                 -----------        -----------
Expenses:
    Compensation and related costs .......           284,269            329,620
    Occupancy cost .......................            40,175             41,601
    General and administrative ...........            96,745             97,818
    Professional fees ....................            38,027             15,020
    Interest .............................         1,185,333
                                                 -----------        -----------
         Total expenses ..................         1,644,549            484,059
                                                 -----------        -----------
(Loss) income from continuing
    operations before taxes ..............          (396,955)           365,983
Provision for income taxes ...............            45,945              9,780
                                                 -----------        -----------
(Loss) income from
    continuing operations ................       $  (442,900)       $   356,203
Loss from operations of
    discontinued subsidiary ..............                             (315,929)
                                                 -----------        -----------
NET (LOSS) INCOME ........................       $  (442,900)       $    40,274
                                                 -----------        -----------
Per common share - basic and diluted:
(Loss) income from
    continuing operations ................       $      (.08)       $       .06
(Loss) from discontinued operations ......                                 (.06)
                                                 -----------        -----------
Net (loss) ...............................       $      (.08)       $       .00
                                                 ===========        ===========
Weighted average number of
    common shares outstanding -
    basic and diluted ....................         5,516,373          5,559,707
</TABLE>

      See Notes to Condensed Consolidated Financial Statements (Unaudited).

  The three month period for 1997 has been restated to reflect the results of
              a Company's subsidiary as a discontinued operation.
<PAGE>
<TABLE>
<CAPTION>
                      HELMSTAR GROUP, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                                  Three Months Ended
                                                                        March 31,     
                                                              ----------------------------
                                                                  1998            1997
                                                              -----------      -----------
                                                                                (Restated)
<S>                                                           <C>              <C>        
Cash flows from operating activities:
  Net (loss) income .....................................     $  (442,900)     $    40,274
  Adjustments to reconcile net income (loss) to net
     cash provided by (used in) operating activities:
    Depreciation and amortization .......................           6,257            6,257
    Unrealized (gain) from marketable securities ........         (68,682)        (186,918)
    Changes in operating assets and liabilities:
     Proceeds from the sale of short term
      investments - net .................................         744,702             --
     Proceeds from the sale of marketable
      securities - net ..................................         211,271             --   
     (Increase) decrease in other assets ................        (122,423)         208,448
     (Decrease) increase in accrued expenses ............        (390,875)         196,741
     Decrease in assets & liabilities of
      disposed subsidiary ...............................            --          1,420,929
                                                              -----------      -----------
Net cash (used in) provided by operating activities .....         (62,650)       1,685,731
                                                              -----------      -----------
Cash flows from investing activities:
  Purchase of investment securities .....................            --         (3,364,621)
  Distributions from joint ventures and other investments          63,000             --   
  Increase in deferred financing costs ..................         (82,329)
  Purchase of fixed assets ..............................                          (28,669)
                                                              -----------      -----------
Net cash (used in) investing activities .................         (19,329)      (3,393,290)
                                                              -----------      -----------
Cash flows from financing activities:
  Proceeds of short-term borrowings - net: ..............            --          1,956,449
  Purchase of treasury stock ............................            --             (3,943)
                                                              -----------      -----------
Net cash provided by financing activities ...............            --          1,952,506
                                                              -----------      -----------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ....         (81,979)         244,947
Cash and cash equivalents at beginning of period ........         802,352          165,858
                                                              -----------      -----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD ..............     $   720,373      $   410,805
                                                              ===========      ===========
Supplemental disclosures of cash flow information:
  Cash paid during the period for:
    Interest ............................................     $   791,255             --
    Taxes ...............................................          31,318      $       688
</TABLE>
      See Notes to Condensed Consolidated Financial Statements (Unaudited).
<PAGE>
                      HELMSTAR GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

l.       SIGNIFICANT ACCOUNTING POLICIES

         The  accounting  policies  followed by the Company are set forth in the
notes to the Company's financial statements included in its Form 10-KSB, for the
year ended  December 3l, 1997,  which was filed with the Securities and Exchange
Commission.

2.       INCOME (LOSS) PER SHARE

         Basic income (loss) per share is based on the weighted  average  number
of  common  shares  outstanding.  Stock  options  did not have an  effect on the
computation of diluted earnings per share since they were anti-dilutive.

3.       LITIGATION

         The Company is a defendant in various lawsuits. The ultimate outcome of
the lawsuits cannot presently be determined,  and no provision for any liability
that may result has been made in the financial statements, since the amounts, if
any, cannot be determined.

         There were no  significant  changes in the status of litigation  during
the three months ended March 31, 1998.
<PAGE>
Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations

         The  Statements of Operations for the prior period has been restated to
         reflect  the  results of the  Company's  subsidary,  Citizens  Mortgage
         Service Company, as a discontinued operation.

      A. Three Months Ended March 31, 1998 Compared
         with Three Months Ended March 31, 1997

         Total revenues increased to $1,247,594 for the three months ended March
         31, 1998 from $850,042 for the three months ended March 31, 1997.

         Profit from joint  ventures  decreased  to $68,682 for the three months
         ended March 31, 1998 from $186,918 for the three months ended March 31,
         1997,  primarily as a result of the sale of the outlet  shopping  malls
         during the  fourth  quarter  of 1997 by two  partnerships  in which the
         Company has a majority financial  interest.  The income for the current
         quarter  represents  percentage rents collected during the period,  but
         attributable to a prior period per the terms of the sales contract.

         Financial consulting fees were nil for the three months ended March 31,
         1998  compared to $90,000 for the three  months  ended March 31,  1997.
         Although  providing  financial  structuring  advice to clients on a fee
         basis remains an integral  component of the Company's  merchant banking
         business,  significant variations in revenues are likely because of the
         transactional nature of this business. The Company currently is engaged
         in advising  clients with respect to the  structuring  of  transactions
         which are expected to generate fees later in 1998.

         Interest  income  increased  to  $1,061,684  for the three months ended
         March 31, 1998 from  $28,560 for the three months ended March 31, 1997,
         primarily due to interest earned during the  development  period on the
         net proceeds from the $72,750,000 bond offering made by the Company for
         the purpose of obtaining  land and  constructing  Theaters,  and on the
         securities held in the cash management and investing  activities of the
         Company.

         Investment  income  decreased  to $117,228  for the three  months ended
         March 31, 1998  compared to $544,564  for the three  months ended March
         31, 1997. This category principally consists of net income or loss from
         cash  management  and  investing  in futures,  puts,  calls,  equities,
         municipal securities, and other securities activities.

         Total expenses increased to $1,644,549 for the three months ended March
         31, 1998 from  $484,059  for the three  months  ended  March 31,  1997,
         primarily due to interest paid on the $72,750,000 bond offering made by
         the Company.

         Compensation  and related  costs  decreased  to $284,269  for the three
         months  ended March 31, 1998 from  $329,620  for the three months ended
         March 31,  1997,  primarily  due to  discretionary  bonuses paid in the
         first quarter of 1997.

         Occupancy  costs  decreased to $40,175 for the three months ended March
         31, 1998 from $41,601 for the three months ended March 31, 1997.
<PAGE>
         General and administrative  expenses decreased to $96,745 for the three
         months  ended March 31, 1998 from  $97,818 for the three  months  ended
         March 31, 1997.

         Professional fees increased to $38,027 for the three months ended March
         31, 1998 from $15,020 for the three  months  ended March 31, 1997.  The
         increase is due in large part to increased legal expenses  incurred for
         the quarter ended March 31, 1998.

         Interest  expense  increased to  $1,185,333  for the three months ended
         March 31, 1998 from nil for the three months ended March 31, 1997,  due
         to interest paid on the  $72,750,000  bond offering made by the Company
         for the purpose of obtaining land and constructing Theaters.

         On a pre-tax basis,  from continuing  operations the Company had a loss
         of $396,955 for the three months ended March 31, 1998  compared  with a
         profit of $365,983 for the three months ended March 31, 1997. Provision
         for income taxes for the three months ended March 31, 1998 increased to
         $45,945  compared to $9,780 for the three  months ended March 31, 1997.
         The current provision  consists solely of state and local taxes for the
         current  period and an  adjustment  for the prior  period.  For Federal
         income tax  purposes,  as of  December  31,  1997,  the Company had net
         operating loss carryforwards of approximately  $7,300,000  available to
         reduce future taxable income.  These carryforwards  expire in the years
         2005 through 2011. The Company has a net capital loss  carryforward  of
         approximately $3,400,000 which will expire in 2002.

         The first quarter 1997  operating loss for Citizens was $315,929 and is
         recorded as "Loss from Discontinued Operations."

         The  Company's  net loss for the three  months ended March 31, 1998 was
         $442,900  compared  with a net profit of $40,274  for the three  months
         ended March 31, 1997.  For the three  months ended March 31, 1998,  net
         loss  from  continuing  operations  was $.08 per  share.  For the three
         months ended March 31, 1997, net income from continuing  operations was
         $.06 per share decreased by a net loss from discontinued  operations of
         $.06 per share,  resulting in no income or loss per share.  The Company
         adopted  Statements of Financial  Accounting  Standards No. 128 in 1997
         and has retroactively  applied the effects thereof to the quarter ended
         March 31, 1997.  Statement No. 128 replaces the  calculation of primary
         and fully  diluted  earnings per share with basic and diluted  earnings
         per share.  Unlike primary earnings per share, basic earnings per share
         excludes any  dilutive  effects of options,  warrants  and  convertible
         securities.   Diluted  earnings  per  share  is  very  similar  to  the
         previously  reported  fully diluted  earnings per share.  The number of
         shares used in the  computations  were  5,516,373  for the three months
         ended March 31, 1998 and 5,559,707 for the three months ended March 31,
         1997.

     B.  Liquidity and Capital Resources

         Management  of  the  Company   believes  that  funds   generated   from
         operations,  supplemented by its available assets, will provide it with
         sufficient  resources  to meet all present and  reasonably  foreseeable
         future capital needs. Currently, the Company's assets consist primarily
         of cash and investments which are readily convertible into cash.
<PAGE>
         The  Company  invests  excess  funds in  liquid,  short-term  financial
         instruments  in order to maximize  its current cash return with minimum
         interest  rate risk,  while  preserving  the ability to move quickly in
         funding attractive merchant banking ventures.  Such investments include
         U.S. Government and municipal obligations,  futures contracts and money
         market funds.

         Additionally,  on November 20, 1997, the Company issued  $72,750,000 of
         adjustable  rate tender  securities due November 1, 2015 (the "Bonds").
         The Bonds were issued to finance 97% of the cost of the Company's  Real
         Estate  Development  Program.  The 3%  balance,  $2,250,000,  is  being
         provided   as   a   capital   contribution   from   Preferred   Members
         (shareholders)  of the Company's  Lessor  subsidiary,  Movieplex Realty
         Leasing,  L.L.C.  $772,500 of this capital was  contributed  during the
         fourth quarter of 1997.

         The Bonds pay interest from the date of delivery on the first Monday of
         each  month  for the  preceding  four or five  week  period  commencing
         January 5, 1998 and principal  annually on the first Monday of November
         commencing in the year 2000.  Various  commercial  banks which provided
         letters  of credit  securing  payment  on the  Bonds are due  letter of
         credit  ("LOC")  fees  which are  payable on the same dates as the Bond
         interest and also commence in 1998. In addition,  a preferred return on
         capital  contributed  is due to the Preferred  Members,  payable on the
         same due  dates as is the  interest  on the  Bonds  but  commencing  in
         January of the year 2000.

         All debt  service  on the  Bonds,  while  bank  letters  of credit  are
         effectively  in force,  is paid directly from draws on those LOCs.  The
         banks are then reimbursed by the Lessor.  Fees and the Preferred return
         are due from the Lessor directly.  During the period from November 1997
         through  November 1999, all  reimbursements  to the banks and bank fees
         will be paid from Bond proceeds.  Thereafter, all reimbursements to the
         banks for debt  service on the Bonds as well as fees and the  preferred
         return to Preferred  Members will be paid from the Rents which commence
         on December 1, 1999. In addition,  the Rents will cover all other costs
         of owning and operating  the real estate other than  Federal,  state or
         local income taxes due on a net income basis.  Prior to the utilization
         of  these  proceeds  to pay  for  the  costs  in  connection  with  the
         construction  of  the  Theaters,   they  will  be  invested  in  liquid
         short-term instruments.

         While the Company believes that currently  available funds will provide
         it  with  sufficient  resources  to meet  all  present  and  reasonably
         foreseeable future capital needs, the Company may seek various forms of
         credit in order to finance its merchant  banking or other activities in
         the future.  The Company  does not have any  material  commitments  for
         capital  expenditures as of March 31, 1998,  except for the development
         of the Theaters with funds provided by the issuance of the Bonds.

         The Company is a defendant in various lawsuits.  An unfavorable  result
         in certain of these lawsuits could have a significant adverse effect
         upon the Company's liquidity and capital resources.

         Year 2000 Issue

         The Company does not  anticipate  that the cost of addressing the "Year
         2000"  issue  will be  material  to its  future  operating  results  or
         financial condition.
<PAGE>
                                     PART II

                                OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K.

         (a)  Exhibits:  -- A statement  regarding the  computation of per share
              earnings is omitted because the computation is described in Note 2
              of the Notes to Consolidated  Financial Statements  (Unaudited) in
              this Form 10-QSB.

              Exhibit 27 -- Financial Data Schedule - see below

         (b)  Reports on Form 8-K:

              -- The  Company  did not file any  reports  on Form 8-K during the
                 three months ended March 31, 1998.
<PAGE>
                                                SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                              HELMSTAR GROUP, INC.



                                        s/ George W. Benoit
                                        ----------------------------------------
Date: May 15, 1998                      George W. Benoit, Chairman of the
                                        Board of Directors, President,
                                        Chief Executive Officer




                                        s/ Roger J. Burns    
                                        ----------------------------------------
Date: May 15, 1998                      Roger J. Burns, First Vice President,
                                        Chief Financial Officer