SECURITIES AND EXCHANGE COMMISSION
                          Washington, DC 20549

                              Form 1O-QSB/A
         [X]   Quarterly Report Pursuant to Section 13 or 15(d) of the
                      Securities Exchange Act of 1934
               For the Quarterly Period Ended March 31, 1999

        [ ]   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 333-18967
                   AMERICAN CHAMPION ENTERTAINMENT, INC.
             (Exact Name of Registrant as Specified in its Charter)

            Delaware                                     94-3261987
  (State or Other Jurisdiction or          (IRS Employer Identification Number)
   Incorporation or Organization)

          1694 The Alameda, Suite 100, San Jose, California 95126-2219
                              (408) 288-8199
   (Registrant's Address of Principal Executive Offices and Telephone Number)

                               (No Change)
    Former Name, Former Address and Former Fiscal Year, if Changed Since Last
                                  Report

Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
        Yes ..X..                       No .....

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15 (d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
         Yes .....                       No .....

APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.

           Class                          Outstanding at March 31, 1999
------------------------------              -----------------------------
Common Stock, $.0001 par value                     7,269,050 shares

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

  The Registrant hereby amends and restates in their entirety the following
items, financial statements, exhibits or other portions of its Quarterly Report
on Form 10-QSB for the quarter ended March 31, 1999 as set forth in the pages
attached hereto:

      Part I, Item 1 and 2
      Exhibit 27.1

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

  American Champion Entertainment, Inc. (the "Company"), by this Form 10-QSB/A,
Amendment No. 1 to Form 10-QSB, hereby: (1) amends and restates in its entirety
Item 1 of Part I of the March 31, 1999 Quarterly Report; (2) amends and
restates in its entirety Item 2 of Part I of the March 31, 1999 Quarterly
Report; and (3) amends and restates in its entirety Exhibit 27.1.  Each such
amended Item of, and Exhibit to, the March 31, 1999 Quarterly Report is
attached to this Amendment No. 1.

EXPLANATORY NOTE TO AMENDMENT NO.1 TO MARCH 31, 1999 QUARTERLY REPORT ON FORM
10-QSB

This Form 10-QSB/A, Amendment No.1 to Form 10-QSB (the "Amendment"), which
amends the March 31, 1999 Quarterly Report, includes the following changes: (i)
Item 1, "Financial Statements", of Part I has been restated to reflect the
non-cash charge to interest expense and corresponding increase to paid in
capital to account for the beneficial conversion feature of the convertible
debentures, (ii) Item 2, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" of Part I has been amended with respect to
the analysis of interest expense and results of operations to discuss the
effects of the non-cash charge to interest expense and corresponding increase to
paid in capital related to the beneficial conversion feature of the convertible
debentures, and (iii) a new Exhibit 27.1, "Financial Data Schedule".

Transitional Small Business Disclosure Format (check one)
                              Yes .....               No ..X..

                          Exhibit Index on Page

<PAGE>

                     AMERICAN CHAMPION ENTERTAINMENT, INC.
                                Form 10-QSB
                               March 31, 1999




                              TABLE OF CONTENTS




PART I -        Financial Information                                   Page

    Item 1. Financial Statements

            Consolidated Balance Sheet as of March 31, 1999

            Consolidated Statements of Operations for
            the three month periods ended March 31, 1999 and 1998

            Consolidated Statements of Cash Flows for
            the three month periods ended March 31, 1999 and 1998

            Notes to Consolidated Financial Statements

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


PART II -       Other Information

    Item 1. Legal Proceedings

    Item 6. Exhibits and Reports on Form 8-K


Signatures


Exhibit Index


Exhibits

<PAGE>

PART I -        FINANCIAL INFORMATION

ITEM 1- Financial Statements - (unaudited)

                      AMERICAN CHAMPION ENTERTAINMENT, INC.
                     Condensed Consolidated Balance Sheets
                               (unaudited)
<TABLE>
<CAPTION>
                                                 March 31,     December 31,
                                                 1999          1998
                                                 ------------  ------------
<S>                                              <C>           <C>
                       Assets

       Cash......................................    ($9,748)       $2,763
       Account receivable........................    225,937        37,675
       Loans receivable, related parties.........    114,937       114,937
       Prepaid expenses .........................     48,019        56,267
       Property and equipment,...................    379,981       395,330
       Film costs, net...........................  6,119,221     5,381,329
       Note receivable...........................     80,424        80,424
       Other assets..............................     11,360        11,673
                                                 ------------  ------------
                                                  $6,970,131    $6,080,398
                                                 ============  ============
                     Liabilities

       Accounts payable and accrued expenses.....    954,775    $1,122,307
       Note payable, related parties.............    129,069       137,037
       Other.....................................      --             --
       Deferred revenues.........................     36,336        78,020
       Notes payable.............................    349,978       831,266
       Obligations under capital leases..........      6,565         6,565
                                                 ------------  ------------
       Total long-term liabilities...............  1,476,723     2,175,195
                                                 ------------  ------------


                   Stockholders' Equity

  Preferred stock, $.0001 per share,
   3,000,000 shares authorized, none
   issued or outstanding.....................          --            --
  Common stock, $.0001 par value;
   20,000,000 shares authorized;
   paid in capital...........................      9,227,888     7,122,414
  Common stock warrants......................        352,026       290,901
  Accumulated deficit........................     (4,086,506)   (3,508,112)
                                                 ------------  ------------
  Total stockholders' equity ................      5,493,408     3,905,203

                                                  $6,970,131    $6,080,398
                                                 ============  ============
</TABLE>
                      See accompanying notes.
<PAGE>


                      AMERICAN CHAMPION ENTERTAINMENT, INC.
                   Condensed Consolidated Statements of Operations
                                  (unaudited)
<TABLE>
<CAPTION>
                                     Three Months Ended
                                           March 31,
                                    ---------------------
                                    1999       1998
                                    ---------- ----------
<S>                                 <C>        <C>
REVENUE:
  Tuition and related fees.........   $61,353   $126,905
  Accessories and video sales......         0     13,401
  Film income......................   225,637    215,000
  Interest income..................         0     26,692
                                    ---------- ----------
  Total revenue....................   286,990    381,998
                                    ---------- ----------
COSTS AND EXPENSES:
  Cost of sales....................         0      8,711
  Amortization of film costs.......   138,252     73,332
  Salaries and payroll taxes.......    10,019    215,634
  Rent.............................    42,328     84,616
  Selling, general and
    administrative.................   315,831    236,117
  Interest.........................   358,914      8,901
                                    ---------- ----------
  Total costs and expenses.........   865,344    627,311
                                    ---------- ----------
Net Loss From Operations............($578,354) ($245,313)

Gain On Sale Of Studio                      0    115,473

Net Loss Before Income Tax           (578,354)  (129,840)

Income Tax                                 40      5,050

Net Loss                             (578,394)  (134,890)

Accumulated Deficit                (4,086,506) (1,719,486)

Weighted average number of shares
  outstanding...................... 6,097,269  3,832,345
                                    ========== ==========

Net loss per share.................    ($0.09)    ($0.04)
                                    ========== ==========
</TABLE>
                      See accompanying notes.
<PAGE>


                      AMERICAN CHAMPION ENTERTAINMENT, INC.
                 Condensed Consolidated Statements of Cash Flows
                                  (unaudited)
<TABLE>
<CAPTION>
                                                          Three Months Ended
                                                               March 31,
                                                      -----------------------
                                                      1999        1998
                                                      ----------- -----------
<S>                                                   <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss........................................       ($578,394)  ($134,890)
Adjustments to reconcile net loss to
  net cash used for operating activities:
    Non-cash charge related to beneficial
      conversion feature of debentures                   316,198       --
    Gain on sale of studio......................              $0   ($115,473)
    Depreciation and amortization...............         168,132      88,805
    Amortization of original issue discounts
      on long-term debt.........................           5,432           0
    Rent concession amortization................               0      (2,108)
    Stock warrants issued to consultants                 150,000           0
Decrease (Increase) in:
  Accounts receivable...........................        (188,262)      --
  Prepaid expenses and other....................           8,561      20,087
Increase (Decrease) in:
  Accounts payable and accrued expenses.........        (172,071)    181,703
  Deferred revenues.............................         (41,684)    (72,779)
  Other liabilities.............................               0       --
                                                      ----------- -----------
     Net cash used for operating activities.....        (332,090)    (34,655)
                                                      ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment..............          (7,133)    (13,226)
Payments for film costs.........................        (883,542) (1,187,489)
                                                      ----------- -----------
     Net cash used for investing activities.....        (890,675) (1,200,715)
                                                      ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of warrants..............         540,000           0
Proceeds (payments) of loans from related
  parties.......................................          (7,968)     (1,752)
Proceeds on long-term debt......................         914,096           0
Payments on long-term debt......................        (235,874)     (1,938)
Principal payments on capital leases............               0      (2,428)
                                                      ----------- -----------
     Net cash provided by financing activities..       1,210,254      (6,118)
                                                      ----------- -----------
NET INCREASE IN CASH............................         (12,511) (1,241,488)
CASH, beginning of period.......................           2,763   1,795,657
                                                      ----------- -----------
CASH, end of period.............................         ($9,748)   $554,169
                                                      =========== ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid during the year for:
    Interest....................................         $42,718      $8,901
    State income taxes..........................             $40      $5,050

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND
FINANCIAL ACTIVITIES:
    Warrants isssued in connection with debt              61,125           0
    Long-term debt converted to equity                 1,103,818           0
    Non-cash charge related to beneficial
      conversion feature of debentures                   316,198       --

</TABLE>
                      See accompanying notes.
<PAGE>


PART I -        FINANCIAL INFORMATION

Notes to Consolidated Financial Statements


Note 1 - Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations and Consolidation - The consolidated  financial statements
include the accounts of American Champion  Entertainment, Inc. (the "Company")
and its wholly owned  subsidiary, America's Best Karate ("ABK") which owns 100%
of  American Champion Media, Inc. ("AC Media"). The Company and AC  Media were
formed during 1997. Pursuant to an Agreement and Plan  of Merger, dated as of
July 14, 1997, the Company entered into a  reorganization transaction pursuant
to which the Company acquired  all of the issued and outstanding shares of ABK
(the  "Reorganization"). The financial statements included herein give  effect
to the Reorganization in which the Company became the  successor to ABK. All
significant intercompany accounts and  transactions have been eliminated in
consolidation.

AC Media focuses on operating and managing all media-related  programs for the
Company. These programs consist of fitness  information video tapes, books and
audio tapes and production of  educational television programs for children
which emphasize  martial arts values and fun. ABK focuses solely on operating
and  managing the Company's karate studios, which are located in the  San
Francisco Bay Area.

Revenue Recognition - AC Media - Revenue from films is recognized  on the
accrual method. Film costs are amortized using the
individual-film-forecast-computation method, which amortizes costs  in the
ratio that current gross revenues bear to anticipated total  gross revenues
from all sources. The management of AC Media  periodically reviews its
estimates of future revenues for each  master and if necessary a revision is
made to amortization rates  and a write down to net realizable value may occur.

ABK - Substantially all ABK's students are required to sign a  student
enrollment agreement (the "Enrollment Agreement") covering  a period from 36 to
48 months to complete a black belt course or a  2nd degree black belt course,
respectively. The students have the  option to (a) make an initial fee payment
equal to 2-5 months of  instruction with the remaining amount payable monthly
over the  remaining term of the agreement, (starting with the month  following
enrollment), or (b) make one or more lump sum payments  for the entire course
at a significant discount. Revenues are  recognized over the term of the
Enrollment Agreement.

A student may cancel an Enrollment Agreement at any time. A  refund, if any, is
made if the student's advanced payments exceed  the elapsed portion of the
course, prorated at $75 per month  (additional family members prorated at $45
per person per month).  The elapsed portion of the course is the number of
months between  the course starting date and the cancellation date. Fee
payments  subject to refund are shown in the financial statements as  deferred
revenue, which will be recognized as revenue in the  future years if there is
no cancellation by the student. See Note  18 related to sales of studios.

Concentration of Credit Risk - Financial instruments which  potentially subject
the Company to concentrations of credit risk  are cash and accounts receivable
arising from its normal business  activities. The Company places its cash with
high credit quality  financial institutions. The amount on deposit in any one
institution that exceeds federally insured limits is subject to  credit risk.
To reduce credit risk, the Company requires advanced  payments from students
and thus, no student fees receivable is  recorded.

Cash and Cash Equivalents - The Company considers certain highly  liquid
instruments purchased with original maturities of year or  less to be cash
equivalents. The Company had cash equivalents of $  -0- and $1,496,000 at
December 31, 1998 and 1997, respectively.

Property and Equipment - Property and equipment is stated at cost.
Depreciation for furniture and fixtures and certain equipment is  computed
using the straight-line method over an estimated useful  life of five years.
Leasehold improvements are amortized using the  straight-line method over the
term of the respective leases.  Leased assets under capital lease agreements
are amortized using  the straight-line method over the shorter of the estimated
useful  lives or the length of the lease terms, ranging from two to five  years.

Film Costs - Film costs consist of the capitalized costs related  to the
production of original film masters for videos and  television programs. The
net film costs are presented on the  balance sheet at the net realizable value
for each master.

Fair Values of Financial Instruments - The carrying value of cash,
receivables, accounts payable and short-term borrowings  approximate fair value
due to the short maturity of these  instruments. The carrying value of
long-term obligations  approximate fair value since the interest rates either
fluctuate  with the lending banks' prime rates or approximate market rate.
None of the financial instruments are held for trading purposes.

Basic Loss Per Share - Statement of Financial Accounting Standards  (SFAS) No.
128 was adopted by the Company during the year ended  December 31, 1997. Basic
loss per share is based on the weighted  average outstanding shares issued.
Because the Company has a net  loss, the common stock equivalents would have an
anti-dilutive  effect on earnings per share. Accordingly, basic earnings per
share and diluted earnings per share are the same.

Income Taxes - Deferred tax assets and liabilities are recognized  for the
expected tax consequences of temporary differences between  the tax bases of
assets and liabilities and their reported  amounts. The Company and its
Subsidiaries file a consolidated tax  return.

Presentation - Because of the Company's reduced activity in its  karate
instruction segment, management believes utilizing a  classified balance sheet
presentation is no longer appropriate, as  the operating cycle of the
media-related segment of the Company is  expected exceed 12 months.
Accordingly, an unclassified  presentation is utilized for the accompanying
balance sheet, which  is an acceptable method under SFAS No. 53, "Financial
Reporting by  Producers and Distributors of Motion Picture Films".

Reclassifications - Certain reclassifications have been made to  the 1997
amounts to conform to the current presentation.

Note 2 - Basis of Reporting

The accompanying unaudited financial statements have been  prepared in
accordance with generally accepted accounting  principles for interim financial
information and with the  instructions to Form 10-QSB.  Accordingly, they do
not include  all of the information and disclosures required by generally
accepted accounting principles for completed financial  statements.  In the
opinion of management, such statements  include all adjustments (consisting
only of normal recurring  items) which are considered necessary for a fair
presentation of  the financial position of the Company at March 31, 1999
and  the results of its operations and its cash flows for the three months
periods ended March 31, 1999 and 1998.  The  accompanying unaudited
financial statements should be read in  conjunction with the financial
statements and notes for the year  ended December 31, 1998 included in the
Company's Form 10-KSB as  filed with the SEC on March 31, 1999.

<PAGE>

Note 3 - Uses of Estimates, Risks and Uncertainties

The preparation of financial statements in conformity with  generally accepted
accounting principles requires management to  make estimates and assumptions
that affect amounts reported in the  financial statements and accompanying
notes. Actual results could  differ from those estimates. Significant estimates
used in these  financial statements include the recovery of film costs, which
has  a direct relationship to the net realizable value of the related  asset.
It is at least reasonably possible that management's  estimate of revenue from
films could change in the near term,  which could have a material adverse
effect on the Company's  financial condition and results of operations.

Note 4 - Film Costs

Film costs consist of the capitalized costs related to the
production of videos and programs for television as follows:

                                                  March 31,    December 31,
                                                    1999          1998
                                                 -----------   -----------
Television program
  The Adventures of Kanga Roddy...............   $6,331,909    $5,455,764

Videos
  Montana Exercise Video......................      148,253       148,253
  Strong Mind Fit Body........................       18,042        18,042
                                                 -----------   -----------
                                                  6,498,204     5,622,059
  Less accumulated amortization...............      378,984       240,730
                                                 -----------   -----------
                                                  6,119,220     5,381,329
                                                 ===========   ===========

Production of the first seven episodes of The Adventures of Kanga  Roddy was
completed during 1997. Thirteen additional episodes were  completed during the
year ended December 31, 1998. Seven additional episodes were completed during
the quarter ended March 31, 1999.  Both videos  were completed in 1996, but
only the Strong Mind Fit Body video  has been released. During 1997, management
wrote down the  capitalized costs for this video by $105,000.

Note 5 - Related Party Transactions

Loans to stockholders were $114,937 and $114,773 at December 31,  1998 and
1997, respectively.

In November 1996, the Company agreed to pay to two participants of  the Montana
Exercise Video the sum of $50,000 from the proceeds of  the initial public
offering and another $50,000, which is included  in accounts payable at
December 31, 1998, will be paid 30 days  prior to the release date. These two
participants are stockholders  of the Company.

During 1998 and 1997, the Company paid $67,500 and $60,000,  respectively, to
two shareholders for story lines and scripts for  the production of the
television series "The Adventures with Kanga  Roddy".

<PAGE>

Note 6 - Sale of Karate Studios

During the year ended December 31, 1998, the Company sold four  karate studios
to the locations' general managers. The Company  received notes receivable
totaling $86,500 due in monthly payments  of $333 to $1,000 including interest
imputed at 10%. The Company has  guaranteed payments of a studio lease, which
are $4,673 per month  through March 2000. The Company retained all advance
payments of  enrollment fees, which were approximately $310,000 as of the
closing  dates; however, the Company is liable for any future refunds to
students enrolled prior to the closing dates. The Company reduced  the
liability for advance payments of enrollment fees related to  these studios to
$35,000, which is included in deferred revenue.  Management will evaluate this
liability quarterly in light of  cancellations to date and expected future
cancellations.

Note 7 - Financing through the sale of convertible debentures

During the quarter ended March 31, 1999, the Company sold $950,000 in
convertible debentures to four investors. The terms  of this transaction were
filed by the Company on Form S-3 with  the SEC on February 12, 1999. The
proceeds from which will be used for production expenses.  As of March 31, 1999
the outstanding principle amount of the debentures was $220,000; while $730,000
of debentures and accrued interests were converted into 871,719 shares of
common stock.

Note 8 - Common Stock Purchase Warrants

During the quarter ended March 31, 1999, the  Company issued 600,000 warrants
to purchase the Company's common stock. These warrants were issued to
consultants for services provided to the Company. The Company received no
proceeds upon issuance of the warrants. All holders exercised their rights to
convert the warrants to common stock on March 5, 1999. The Company received
total proceeds of $540,000 and issued one share of common stock for each
warrant exercised.

Note 9 - Subsequent Events

Financing - Subsequent to quarter ended March 31, 1999, the Company issued
convertible debentures totaling $1,250,000. The interest rate on the Debentures
is 7% per annum, payable in cash or in shares of the Company's Common Stock.
The Debentures mature May 1, 2002 and may be converted to shares of Common
Stock. The Company also issued 125,000 warrants in connection with these
debentures. The Company received no proceeds from these warrants.

Note 10 - Year 2000

In the opinion of management, no material adverse effect on either  results of
operations, cash flows or financial position is  anticipated due to the
modifications or replacement of existing  information systems in order to
accommodate year 2000  implications.

Note 11 -Beneficial Conversion Feature of Debentures

The Company has restated its financial statements for the quarter ended March
31, 1999  to account for the beneficial conversion feature of its 7%
convertible debentures issued during the quarter in accordance with EITF D-60,
"Accounting for Convertible Securities with Beneficial Conversion Features or
Contingently Adjustable Conversion."  The application of EITF D-60 resulted in
the recognition of a non-cash charge to interest expense of $316,196 for the
quarter ended March 31, 1999 with a corresponding increase to additional paid
in capital.  There was no effect on the balance sheet except for the
reclassification of the interest expense from additional paid in capital to
retained earnings.


<PAGE>

PART I -        FINANCIAL INFORMATION

ITEM 2 -        Management's Discussion And Analysis Of
                Financial Condition And Results Of Operations


Forward Looking Information
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" from liability for forward-looking statements. Certain
information included in this Form 10-QSB and other materials filed or
to be filed by the Company with the Securities and Exchange Commission
(as well as information included in oral statements or other written
statements made or to be made by or on behalf of the Company) are
forward-looking, such as statements relating to operational and
financing plans, capital uses and resources, competition, and demands
for the Company's products and services. Such forward-looking
statements involve important risks and uncertainties, many of which
will be beyond the control of the Company. These risks and
uncertainties could significantly affect anticipated results in the
future, both short-term and long-term, and accordingly, such results
may differ from those expressed in forward-looking statements made by
or on behalf of the Company. These risks and uncertainties include, but
are not limited to, the acceptance by the television viewer and public
television stations of the television series - ADVENTURES WITH KANGA
RODDY, production delays and/or cost overruns with respect to such
series, changes in external competitive market factors or in the
Company's internal budgeting process which might impact trends in the
Company's results of operations, unanticipated working capital or other
cash requirements, changes in the Company's business strategy or an
inability to execute its strategy due to unanticipated change in the
industries in which it operates; and various competitive factors that
may prevent the Company from competing successfully in the marketplace.

The following section discusses the significant operating changes,
business trends, financial condition, earnings and liquidity that have
occurred in the three-month period ended September 30, 1998. This
discussion should be read in conjunction with the Company's
consolidated financial statements and notes appearing elsewhere in this
report.

Results of Operations

        Revenues.  For the three months ended March 31, 1999, the  Company's
total revenue decreased to $286,990, a decrease of $95,008 or 25% as compared
to total revenue for the three months ended  March 31, 1998 of $381,998.  This
decrease is mainly due to the closure of the Company's karate studios,
which have been reduced to only one studio for the quarter.

        The Company's revenues from the operation of its karate studios for the
three months ended March 31, 1999 was $61,353, an decrease of 52% from revenues
of $126,905, for the three months ended  March 31, 1998.  The decrease is
attributable to closure of the Company's karate studios.

        For the three months ended March 31, 1999,  film income was $225,637.
Film income was derived from the delivery of seven episodes of the company's
television show "Adventures With Kanga Roddy" to the San Jose Public TV station
KTEH, which was invoiced for $30,000 for each episode for distribution fees,
and also the Company received $5,000 in advanced royalty payment from Timeless
Toys.


<PAGE>

        Costs and Expenses.  Revenue from the Company's karate
studios and film business was offset by the amortization of film costs of
$138,252, calculated in proportion to the revenue generated by the
television show in this first quarter to total expected revenues from
the television show.

        The Company's expenses for salaries and payroll taxes was only $10,019
for the three months ended March 31, 1999, a reduction of 95% from
$215,634 for the comparable period in 1998.  The decrease was due to payroll of
the Company's management included in capitalized film costs.


        Rent expense decreased by $42,288, or 50%, to $42,328 for the three
months ended  March 31, 1999, from $84,616 for the comparable period in 1998.
The decrease is due to the closure of karate studios, but is partially offset
by the increased expense of the Company's new corporate office which the
Company has occupied since the end of July 1998. The Company currently
operates only one studio in California.

        Total selling, general and administrative expenses increased by
$79,714, or 34%, to $315,831 for the three months ended March 31, 1999, from
$236,117 for the comparable period in 1998.  This increase is primarily  due to
increased promotional expenses related to the television show, depreciation of
production equipment and legal and accounting fees.

        Interest expense increased by $350,013 to $358,914 for the three months
ended March 31, 1999, from $8,901 for the comparable period in 1998.  Included
in interest expense for the quarter ended March 31, 1999 is a non-cash charge of
$316,196 related to the beneficial conversion feature of the convertible
debentures issued within the quarter.  The debentures are convertible to common
stock of the Company with the shares to be issued upon conversion based on 75%
of the fair value of the stock at the time of conversion.  Since the debt can
be converted at any time, the value of the discount as of the issuance date has
been charged to interest expense with a corresponding increase to additional
paid in capital.  The balance of the increase is attributable to accrued
interests on debentures the Company sold during this quarter.

        As a result of the foregoing factors, the Company's net loss for the
three months ended March 31, 1999 was $578,394 which represented an increase of
$443,504 from $134,890 for the comparable period in 1998.  Net loss per share
increased to $0.09 for the three months ended March 31, 1999 as compared to
$0.04 for the comparable period in 1998.  Weighted average number of shares
outstanding increased to 6,097,269 for the three months ended March 31, 1999
from 3,832,345 for the comparable period in 1998, due to shares issued upon the
conversion of convertible debentures sold by the Company during 1998 and also
during this quarter.


Liquidity And Capital Resources

        Cash decreased for the three months ended March 31, 1999 by
$12,511 to ($9,748).  The decrease in cash is attributable to $890,675 of
investments in the production of Adventures With Kanga Roddy, and $332,090 in
net cash used for operating activities, offset by $1,210,254 which was raised
by the Company through financing activities.

        As of March 31, 1999, total long-term debt was $1,476,723 and  loans
payable to related parties was $129,069.  In addition, deferred  revenues were
$36,336 at March 31, 1999.  Deferred revenues represent pre-paid  tuition for
the karate studios and booked revenue from sponsorship  activities and cannot
be immediately recognized.


<PAGE>

Recent Developments

         In May 1999 the Company sold $1,250,000. The interest rate on the
Debentures is 7% per annum, payable in cash or in shares of the Company's
Common Stock. The Debentures mature May 1, 2002 and may be converted to shares
of Common Stock. The Company also issued 125,000 warrants in connection with
these debentures. The Company received no proceeds from these warrants.
Proceeds will be used for the  production of Adventures With Kanga Roddy.


PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

        On April 24, 1998, the Company filed a Complaint for Declaratory Relief
in the U.S. District Court, Northern District of California, against William
Charles Jeffreys, requesting a judicial determination of the Company's rights
in certain intellectual property associated with the Adventures with Kanga
Roddy show, and that Mr. Jeffreys has no such rights.  Mr. Jeffreys filed an
answer to the Company's complaint on June 15, 1998 along with a counterclaim.
The Company disputes all claims of Mr. Jeffreys to an interest in certain of
the Company's intellectual property.  In February 1999, Mr. Jeffreys and the
Company have agreed to settle the lawsuit and counterclaim for $36,000 which
the Company will pay Mr. Jeffreys in twelve monthly payments of $3,000 each
beginning in March of 1999.

         With exception of the foregoing, no lawsuits or proceedings are
currently pending against the Company.


Item 6.  Exhibits and Reports on Form 8-K.
        (a)     Exhibits.  See the Exhibit Index beginning on page 24.

        (b)     Reports on Form 8-K.  No reports on Form 8-K were filed
                during the quarter for which this report is filed.


SIGNATURES

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

                               AMERICAN CHAMPION ENTERTAINMENT, INC.
                               (Registrant)

Dated:  March 17, 1999         By:         /s/ Anthony K. Chan
                                   Anthony K. Chan, Chief Executive Officer

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                           INDEX TO EXHIBITS

Exhibit No.                 Exhibit

 1.1(1)   Form of Underwriting Agreement
 3.1(1)   Amended and Restated Certificate of Incorporation dated April 24, 1997
 3.11(5)  Amended and Restated Certificate of Incorporation dated June 4, 1998
 3.2(1)   Bylaws
 4.1(1)   Specimen stock certificate
 4.2(1)   Warrant Agreement with form of Warrant
 4.3(1)   Form of Underwriters' Warrant
 4.41(4)  Securities Purchase Agreement dated July 2, 1998
 4.42(4)  Form of Debenture dated July 2, 1998
 4.43(4)  Joint Escrow Instructions
 4.44(4)  Registration Rights Agreement dated July 2, 1998
 4.45(4)  Form of Warrant dated July 2, 1998
 4.461(7) Securities Purchase Agreement dated January 19, 1999
 4.462(7) Form of Debenture dated January 19, 1999
 4.463(7) Joint Escrow Instructions dated January 19, 1999
 4.464(7) Registration Rights Agreement dated January 19, 1999
 4.465(7) Form of Warrant dated January 19, 1999
 5(1)     Opinion of Sheppard, Mullin, Richter & Hampton LLP
 10.1(1)  1997 Stock Plan
 10.2(1)  Form of Stock Option Agreement for 1997 Stock Plan
 10.3(1)  1997 Non-Employee Directors Stock Option Plan
 10.4(1)  Form of Non-Employee Directors Stock Option Agreement
 10.8(1)  Promissory Note dated December 15, 1994 made payable by Messrs.
          Chung and Chan and their wives in favor of Michael Triantos M.D.
          Inc. Money Purchase and Profit Sharing Pension Plans Trust
 10.9(1)  Employment Agreement between the Company and George Chung dated
          March 4, 1997, effective upon the closing date of the Offering
 10.10(1) Employment Agreement between the Company and Anthony Chan dated
          March 4, 1997, effective upon the closing date of the Offering
 10.11(1) Employment Agreement between the Company and Don Berryessa dated
          March 4, 1997, effective upon the closing date of the Offering
 10.12(1) Employment Agreement between the Company, AC Media and Jan
          Hutchins dated March 4, 1997, effective upon the closing date of
          the Offering
 10.13(1) Convertible Loan Agreement dated as of May 5, 1995, between ABK
          and David Y. Lei
 10.15(1) Amended Deal Memo between ABK and Rick Fichter dated February
          23, 1997, with respect to payments related to the Kanga Roddy
          Series
 10.17(1) Form of Indemnification Agreement
 10.19(1) Letter dated October 29, 1996 from the Company to Tim Pettitt
          regarding certain payments to the Montanas
 10.20(1) Distribution Agreement dated June 18, 1996 by and between
          America's Best Karate and InteliQuest
 10.21(1) Distribution Agreement, dated May 6, 1997, by and between KTEH,
          San Jose Public Television and American Champion Media, Inc.
 10.22(1) Letter Agreement, dated June 1997, between AC Media, Inc. and
          Sega of America, Inc.
 10.23(1) Business Loan Agreement between America's Best Karate and Karen
          Shen
 10.24(1) Business Loan Agreement between America's Best Karate and Thomas
          J. Woo
 10.25(2) Licensing Agent Agreement, dated July 25, 1997, between American
          Champion Media, Inc. and Sega of America, Inc.
 10.26(3) Continuous Distribution Agreement dated April 20, 1998 between
          KTEH, San Jose and American Champion Media, Inc.
 10.27(3) Sponsorship Agreement dated April 29, 1998 between Sara Lee
          Corporation and American Champion Media, Inc.
 10.28(3) Engagement Agreement dated April 24, 1998 between JW Charles
          and American Champion Entertainment, Inc.
 10.29(5) Amendment to Employment Agreement with George Chung, dated July 1,
          1998
 10.30(5) Amendment to Employment Agreement with Anthony Chan, dated July 1,
          1998
 10.31(5) Amendment to Employment Agreement with Don Berryessa, dated July 1,
          1998
 10.32(5) Amendment to Employment Agreement with Jan Hutchins, dated July 1,
          1998
 10.33(5) Amendment to Employment Agreement with Mae Lyn Woo, dated July 1,
          1998
 10.34(5) Amendment to Employment Agreement with Kristen Simpson, dated July 1,
          1998
 10.35(6) International Distribution Agreement with Portfolio Entertainment
          dated August 19, 1998
 10.36(6) Video Distribution Agreement for the Kanga Roddy Series with Kreative
          Video Products dated August 19, 1998
 10.37(6) Video Distribution Agreement for the Montana Exercise Video with
          Kreative Video Products dated August 21, 1998
 10.38(8) Consultant Agreement between Olympia Partners, LLC, Dalton Kent
          Securities Group, Inc. and American Champion Entertainment, Inc.
 10.39(8) Merchant Licensing Agreement between Timeless Toys and American
          Champion Media, Inc.
 10.40(8) Loan Agreement between Olympia Partners and American Champion
          Entertainment, Inc.
 10.41(8) SEGA Agreement termination letter.
 10.42(8) Consultant Agreement between American Champion Entertainment, Inc.
          and Trademark Management

 21.1(1)  Subsidiaries of the Registrant
 23.1(8)  Consent of Moss Adams, LLP
 27.1     Financial Data Schedule


(1)     Filed as an exhibit with the registrant's Form SB-2 filed with the
        SEC on March 21, 1997 or Form SB-2/A filed March 3 and June 20, 1997
        and incorporated by  reference herein.

(2)     Filed as an exhibit with the registrant's Form 10-KSB filed with the
        SEC on March 30, 1998 and incorporated by reference herein.

(3)     Filed as an exhibit with the registrant's Form 10-QSB filed with the
        SEC on May 15, 1998 and incorporated by reference herein.

(4)     Filed as an exhibit with the registrant's Form S-3 filed with the SEC
        on August 3, 1998 and incorporated by reference herein.

(5)     Filed as an exhibit with the registrant's Form 10-QSB filed with the
        SEC on August 7, 1998 and incorporated by reference herein.

(6)     Filed as an exhibit with the registrant's Form 10-QSB filed with the
        SEC on November 16, 1998 and incorporated by reference herein.

(7)     Filed as an exhibit with the registrant's Form S-3 filed with the SEC
        on Feburary 12, 1999 and incorporated by reference herein.

(8)     Filed as an exhibit with the registrant's Form 10-KSB filed with the
        SEC on March 31, 1999 and incorporated by reference herein.


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