U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 
1934 [FEE REQUIRED]
For the fiscal year ended March 31, 1998.

[  ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from            to            .
Commission file number
2-87738

T.H. LEHMAN & CO., INCORPORATED
 (Name of small business issuer in its charter)

Delaware                                                       22-2442356
(state or other jurisdiction                               (I.R.S./Employer
of incorporation or organization                         Identification Number)

4900 Woodway, Suite 650, Houston, Texas                            77056
(Address of principal executive offices)                         (Zip Code)

Issuer's telephone number:  (713) 621-8404

Securities registered under Section 12(b) of the Exchange Act:
Common Stock, $.01 Par.
(Title of Class)

Securities registered under Section 12(g) of the Exchange Act:  None.

          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  .

          Check if there is no disclosure of delinquent filers in response to 
Item 405 of Regulation S-B contained in this form, and no disclosure will be 
contained, to the best of registrant's knowledge in definitive proxy or 
information statements incorporated by reference in Part III of this Form 10-
KSB or any amendment to this Form 10-KSB. [X]

          Issuer's revenues for its most recent fiscal year were $1,057,377.

          The aggregate market value of the voting stock held by nonaffiliates 
of the registrant is approximately $1,418,734 as of June 15, 1998.

                                  4,742,720 
                                  _________
        (Number of shares of common stock outstanding as of June 15, 1998)









PART I

BUSINESSITEM 1.
DESCRIPTION OF BUSINESS

Introduction:

T.H. Lehman & Co., Incorporated (referred to as the "Company or Registrant"), 
was organized in March, 1983 as a Small Business Development Company ("SBDC") 
and was an SBDC until April, 1988.  From April, 1988 to August, 1990 it 
operated through subsidiaries as a broker/dealer and investment advisor.  
Effective October 27, 1989, the Company acquired all of the outstanding stock 
of Self Powered Lighting, Inc. a New York corporation with offices in Elmsford, 
New York ("SPL") from an entity affiliated with two of the Company's directors. 
Effective July 1, 1993 the Company sold all of the outstanding stock of SPL to 
Helionetics, Inc.  See Item 12.  "Certain Relationships and Related 
Transactions" for a description of SPL's business and the acquisition 
transaction.  Although it is no longer an SBDC and has sold its broker/dealer 
and investment advisory business, the Company continues to maintain certain of 
its investments.  During 1992 the Company entered the business of medical 
accounts receivable financing and furnishing medical providers with non-medical 
management services.

Medical Financial Services:

The Company in August 1992 began operations in the area of medical financial 
services, such services being provided through specific subsidiaries.  The 
primary focus of these operations is the financing and collection of accounts 
receivable generated by medical practitioners through their provision of 
diagnostic services and patient treatment.  However, some of these subsidiaries 
offer substantial additional services to medical practitioners.  The services 
are marketed both on an integrated and on an unbundled basis to doctors, 
depending upon their individual needs.  Initially, this is being accomplished 
through the following operating entities:

MedFin Management Corp. was created to provide medical practitioners with non-
medical general and administrative functions such as accounting, marketing, 
management, non-medical staffing, facilities, equipment, and billing and 
collection of receivables.  Revenues are derived from fees charged for these 
services.  Presently, the company has one client, which operates a multi-
specialty clinic in the Los Angeles, California area.  This client has, to 
date, concentrated its practice on workers' compensation medicine and treatment 
for personal injury victims, providing services primarily on a lien basis.  The 
client is currently seeking to diversify its patient mix by focusing more 
toward private pay and HMO/insurance clients.



Page 2

MedFin Management Corporation receives, as a fee for its clinic management 
services, revenues that are indirectly related to the overall collections of 
its client practitioners' receivables.  MedFin Management Corporation also 
provides working capital on an as-needed basis to those clients with 
receivables as collateral for such advances and UCC filings made thereon.  
However, the Company is not engaged in the practice of medicine which, for non-
doctor controlled entities, is not legally allowed in California.

As a further adjunct to the financing/management services provided through 
subsidiaries to medical practitioners, effective February 1, 1993, the Company 
purchased Healthcare Professional Billing Corp. (HPB), in Broomfield, Colorado 
a billing and collection service that is utilized by doctors in the
metropolitan Denver and surrounding areas.  The purchase price was $354,080,
consisting of $140,000 in cash and the balance of $214,080 in notes payable.

In a transaction that was effective October 1, 1996, the Company transferred
50% of the outstanding stock and substantially all of the control of Healthcare
Professional Billing Corp. to certain key employees of that company.  Until
that time, Healthcare Professional Billing Corp. was a wholly-owned subsidiary
of the Company.  As a result of the transfer, the subsidiary's financial
position, results of operations and cash flows are not consolidated with that
of the Company's subsequent to the transfer date.

MedFin Capital Resources, Inc. and HLT Holding Corporation were established to
engage in the purchase of medical accounts receivable as well as the secured 
lending of funds to doctors against their receivables.  This is accomplished 
via bulk purchases of accounts receivable, often in conjunction with 
commitments for purchases of future receivables generated or advances against
such future receivables.

HLT Holding Corporation has, purchased one accounts receivable portfolio
that was derived from medical services provided to plaintiffs, an August
1992 transaction consisting of gross account balances of $2,639,010.  
Consideration given amounted to $250,000 cash and $500,000 in notes payable.
Gross collections through March, 1998 amounted to $822,317 and write-offs
totaled $1,196,848, leaving a balance of $619,845 face value with an expected
nominal realization.





Environmental Matters:

The company is subject to various laws and regulations with respect  to 
employee health and safety and the protection of the environment.  The Company 
believes that it is in substantial compliance with such laws and regulations.  
See Footnote 12: Allowance for Environmental Liability.


Employees: 

The Company employs 11 persons in the medical management field who are
engaged in executive, administrative and clerical positions. 

Page 3


The Company believes that its employee relations are satisfactory.  Employees 
are not subject to any collective bargaining agreement and work stoppages have 
not yet materially affected the Company's business.


ITEM 2.
DESCRIPTION OF PROPERTY

The Company presently has an administrative sharing arrangement which, among 
other things, provides use of other office facilities in Houston, Texas.  
MedFin Management Corporation leases office space in Burbank,California 
under an operating lease that expires on October 31, 2000.  Monthly 
rental payments are $7,220, including all utilities.


ITEM 3.
LEGAL PROCEEDINGS

The company was involved in a lawsuit in respect to the ownership of a note 
payable that originally expired on December 31, 1997.  The note has been 
extended to June 30, 1998 by what the Company considers to be the rightful
Owner of that note. The lawsuit was settled on June 8, 1998 for $10,000. 
The note is still due to the rightful owner.

Medfin Management was involved in a lawsuit in respect to default of a
lease.  The lawsuit was settled on March 24,1998 for $9,500.  Payment was
made on April 14, 1998.

Neither the Company nor its subsidiaries is currently party to any other
material legal proceeding.


ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There has not been an annual meeting held since November 1991.


PART II

ITEM 5.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

a)       Market Information

The Company's Common Stock (symbol THLM) is traded in the Over-The-Counter 
Market, on the Electronic Bulletin Board.  The range of high and low bid 
quotations as reported by the NASDAQ Inter-Dealer Quotation System for the two 
year period ended March 31, 1998 are as follows:




Page 4

         For the Quarter Ended                High                     Low

        June 30, 1996                        1/2                      1/2
        September 30, 1996                   1/2                      1/2
        December 31, 1996                    1/2                      1/2
        March 31, 1997                       1/2                      1/2

        June 30, 1997                        1/2                      1/2
        September 30, 1997                   1/2                      1/2
        December 31, 1997                    1/2                      1/2
        March 31, 1998                       1/2                      1/2

The above quotations do not include commissions, markups, or markdowns and may 
not represent actual transactions.

On August 15, 1994, the Company was delisted from the NASDAQ Small Cap Market 
as a result of failing to timely file the annual report.

b)          Number of Holders of Common Stock

As of June 30, 1997 the Company had approximately 140 shareholders of record.  
Cede & Co. was the registered holder of 665,423 shares.   Because many of the 
shares are registered in street name, the Company believes that there are a 
substantially greater number of beneficial owners.

c)          Dividends on Common Stock

The Company's Board of Directors does not currently intend to pay cash
dividends and has not paid any in the two year period ended March 31, 1998.


ITEM 6.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION 

Statements of Operations:

Fiscal Year Ended March 31, 1998 Compared to
Fiscal Year Ended March 31, 1997

Revenues totaled $1,057,377 during the fiscal year ended March 31, 1998, 3% 
higher than the prior year's revenues of $1,023,101.  The gain on investments
increased to $391,576 from the previous year's $168,250 however the majority
of the gain totaling $325,348 was realized when the Company transferred a
portion of its investment in KTI, Inc. to settle certain notes and accounts
payable in the aggregate amount of $536,547.  Also, income from finance 
receivables increased to $54,073 from the prior year's $28,243 due to
improved collection strategies.  Although total revenue was slightly up due
to the gain on investments and income from finance receivables, other
revenues were down.  Billing fees were $0 compared to $138,050 for the previous
year as a result of the Company's October 1, 1996 transfer of 50% of the stock
of its medical billing company to certain key employees.  Management fees were
also lower, down 12% to $516,034 from the previous year.


Page 5

Lower expenses helped offset the decrease in management and billing fees.
Interest expense decreased to $84,736 from the prior years $102,358 due to
decrease in notes payable.  General and Administrative expenses decreased
25% to $1,036,408.  Lower employee expenses accounted for approximately
one-third of the decline from $558,204 in fiscal 1997 to $447,017 in
fiscal 1998.  Delivery, postage, telephone and management fees experienced
significant reductions.  A portion of these reductions can be attributed
to the transfer of 50% of the medical billing subsidiary's stock to the
employees of that subsidiary.  Although the majority of expenses decreased,
legal fees increased to $39,929 from the prior year's $2,228 due to the
lawsuits mentioned under legal proceedings.  Collection cost increased 48%
to $64,337 in 1998 from $30,879 in 1997 in an effort to boost collections
of the Company's and it's Clients receivables, which results in increased
collections of 54% as compared to last year.  


Fiscal Year Ended March 31, 1997 Compared to
Fiscal Year Ended March 31, 1996


Revenues totaled $1,023,101 during the fiscal year ended March 31, 1997, 15%
lower than the prior year's revenues of $1,203,794. Although gain on investments
increased to $168,250 from the previous year's $28,564, revenues were down in 
other areas.  Billing fees decreased by 39% as a result of the Company's October
1, 1996 transfer of 50% of the stock in its medical billing company to certain 
key employees. Management fees were also lower, down 26% from the previous 
year.

Lower expenses helped offset some of the decrease in revenues, however.  While
interest expense increased slightly to $102,358 from the prior year's $97,371,
general and administrative expenses decreased 15% to $1,387,746. Lower employee
expense accounted for the largest portion of the decline in expenses, from
$811,873 in fiscal 1996 to $558,024 in fiscal 1997.  Rent expense decreased by
$24,172 from last year's $118,833 to $94,661, and telephone, insurance, travel,
postage, delivery and office supply expenses also experienced significant
reductions.  A portion of these reductions can be attributed to the transfer
of 50% of the medical billing subsidiary's stock to the employees of that
subsidiary.



Liquidity, Capital Resources and Income Taxes

At March 31, 1998 cash amounted to $24,123, 28% less than the cash balance of 
$33,422 at March 31, 1997.

The Company's primary source of liquidity has been the cash it has obtained 
from the liquidation of its investment portfolio and collection of medical 
accounts receivable, as well as loans from financial institutions.

The Company anticipates that internally generated cash and its lines of credit 
will be sufficient to finance overall operations.



Page 6


On June 5, 1997, the Company settled certain notes and accounts payable in the
aggregate amount of $536,457 by transferring to the creditors a portion of the 
Company's investment in KTI, Inc.

On February 20, 1998, the Company settled certain notes and accounts payable 
in the aggregate amount of $468,839 by issuing to the creditors 1,512,378
shares of the Company's stock at $0.31 per share.

The Company is continually seeking to acquire businesses and may be in various 
stages of negotiations at any point in time which may or may not result in 
consummation of a transaction.  To provide funding for such acquisitions it may 
take a number of actions including (i) selling of its existing investments (ii) 
use of available working capital (iii) seeking short or long term loans (iv) 
issuing stock.  In addition, the Company may seek additional equity funds if 
needed.  These sources of capital may be both conventional and non-traditional. 
The Company has no existing funding commitments and is presently under no 
contractual obligation to make any investment or acquisition.

At March 31, 1998, the Company had an operating tax loss carryforward of 
approximately $4,747,000.

Impact of Inflation and Other Business Conditions

Generally, increases in the Company's operating costs approximate the rate of 
inflation.  In the opinion of management, inflation has not had a material 
effect on the operation of the Company.  The Company has historically been able 
to react effectively to increases in labor or other operating costs through a 
combination of greater productivity and selective price increases where 
allowable.


ITEM 7.
FINANCIAL STATEMENTS

The financial statements and supplementary data are listed at "ITEM 13: 
EXHIBITS AND REPORTS ON FORM 10-KSB" in this document.

 (See Index Exhibits Part IV Item 13 (a) Financial Statements: F1)


ITEM 8.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not Applicable.


PART III

ITEM 9.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE
EXCHANGE ACT

Page 7

The Directors and Executive Officers of the Company  are as follows:

Name                     Age              Director Since              Position

Dibo Attar               58                1988                       Director
Elliot Gerstenhaber      52                1996   Director/Secretary/Treasurer
Richard Farkas           72                1996                       Director
Edmond Nagel             57                -----        President til 12/05/97
Shannon C. Gries         31                -----  Secretary/Treasurer 02/20/98

On December 5, 1997, Edmond Nagel resigned as President of the Company.  As of
the date of filing this report, the Company is still searching for his re-
placement.

On February 20, 1998, Shannon C. Gries resigned as Secretary/Treasurer of the
Company.  Elliot Gerstenhaber was appointed Secretary/Treasurer.

The term of office of each director is until the next Annual Meeting of 
Shareholders, or until such time as their successors shall have been duly 
elected and qualified.  Officers serve at the pleasure of the board.  There are 
no family relationships between any of the Company's directors or officers.


Background of Officers and Directors:

Dibo Attar's principal business is an investor and a consultant to domestic and 
international companies.  Mr. Attar is a director of Newpark Resources, Inc., 
which is engaged in providing oil field services.  He is also a director of 
KTI, Inc., a public company which is engaged in the sale of electric power from 
incineration of municipal solid waste.

Richard P. Farkas is a graduate of Princeton and Yale Universities and attended 
New Jersey Law School.  He held corporate executive and operating positions 
with major international companies prior to acquiring his own paper products 
company, which was later sold to a major consumer products company.  He then 
founded IMC International Management Consultants, Inc., which operates out of 
several domestic and European offices providing services to multi-national 
corporations ranging in annual revenue size from $5 million to $4 billion.

Elliot Gerstenhaber is a 1968 graduate of the University of Pennsylvania.  He 
received a juris doctorate degree from South Texas College of Law in 1975.  He 
recently left the private practice of law to develop real estate throughout the 
southeastern United States.  He is President of Segue, Inc., a privately-held 
company.



ITEM 10.
EXECUTIVE COMPENSATION

Compensation of Officers and Directors:




Page 8


Set forth below is the aggregate remuneration paid to the Company's officers 
during the fiscal years ended March 31, 1998, 1997, and 1996.

     Name and                                               Restricted
     Principal                                                Stock 
     Position                     Year        Salary         Awards
Edmond C. Nagel, President        1998        $45,833        $     0
                                  1997        $72,917        $     0
                                  1996        $75,000        $     0
Stock Options:

In November 1990 the Board of Directors adopted, and subsequently on November 
8, 1991 shareholders approved, the adoption of the 1990 Stock Option Plan 
("1990 Plan"), under which options will be granted for an aggregate of 500,000 
shares of Common Stock prior to November 20, 2000.  Such Plan resulted in the 
termination of the 1988 Stock Option Plan.  Certain options were granted to 
officers and directors of the Company under the 1990 Stock Option Plan which 
was approved by the shareholders.  All employees of the Company and its 
subsidiaries, as well as directors, officers and third parties providing 
services to the Company or its subsidiaries are eligible to participate in the 
1990 Plan.

All shares available under the 1990 Plan are subject to adjustments that may be 
made for a merger, recapitalization, stock dividend, stock split or other 
similar change affecting the number of outstanding shares of Common Stock.  
Shares subject to an option that lapses, terminates or is forfeited will be 
available for future options or awards.

Options granted may either be Incentive Stock Options ("ISO") pursuant to which 
the recipient receives tax benefits or non-incentive stock options.  The 1990 
Plan provides, among other things, that options may be granted to purchase 
shares of Common Stock at a price per share fixed by the Board of Directors 
and, in the case of an ISO, at not less than the fair market value of the 
applicable class of the Company's Common Stock on the date of option grant 
(110% of such fair market value in the case of optionee's holding 10% or more 
of the combined voting rights of the Company's securities).  The Board of 
Directors or a committee appointed or elected by the Board of one or more Board 
members (the "Committee") may determine the persons to whom options are to be 
granted and the number of shares subject to each option.  Options may be 
exercised by the payment in full in cash or by, with approval of the Board of 
Directors, payment of par value with a note for the balance.

The Board may at any time amend, suspend, or discontinue the Plan, provided 
that certain amendments may not be made by the Board without approval of the 
stockholders.  Amendments may not alter an outstanding option without the 
consent of the optionee.

At the time of adoption of the Plan the Company issued ten-year Stock Options

with an exercise price at $1.50 to purchase 350,000 shares of which 350,000 
shares were issued to officers, a consultant and directors.  At the date of the 
award the high bid price of the Common Stock was $.75.  All outstanding 


Page 9
employee options are exercisable at $1.50 per share and all are non-incentive 
options. 60,000 options were granted during the year ended March 31, 1993
at exercise prices ranging from $1.50 to $2.00 per share expiring through 2000.
105,000 options were granted during the fiscal year ended March 31, 1995   
at exercise prices of both $1.50 per share and $2.00 per share which expires
in five years.  No options were granted during the fiscal year ended March 31, 
1996, 1997 and 1998.

Following is a list of all stock options granted:

                        Number of        When         Exercise     Current
     Name               Options         Issued         Price      Status
Julio Henriquez         100,000          1990          $1.50      Canceled
Edmond Nagel            100,000          1990          $1.50      Outstanding
Charles Olson, Jr.       50,000          1990          $1.50      Canceled
Ivor Braka               25,000          1990          $1.50      Canceled
Vincent Galano, Sr.      50,000          1990          $1.50      Canceled
Rodolfo Oeschslin        25,000          1990          $1.50      Canceled
Lee R. Mathis             5,000          1992          $1.90      Expired
Mark S. Cox              20,000          1992          $2.00      Canceled
Murray Husarsky          20,000          1992          $2.00      Expired
Brenda Heartfield        10,000          1992          $1.50      Expired
Julio Henriquez           5,000          1993          $2.00      Expired
Linda Carroll            10,000          1994          $1.50      Outstanding
Ramanathan Prakash       10,000          1994          $2.00      Outstanding
Russell Molina            5,000          1994          $2.00      Outstanding
Allen Goldstone          15,000          1994          $2.00      Outstanding
Sandy Schwartz           15,000          1994          $2.00      Outstanding
Brenda Heartfield        50,000          1994          $1.50      Outstanding
                       ________
Total Issued            515,000
Less Canceled Shares   (270,000)
Less Expired           ( 40,000)
                       ________
Total Outstanding       205,000
                       =========

ITEM 11.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Principal Shareholders

The following table lists, to the best of the Company's knowledge, the 
beneficial stock ownership of those persons owning beneficially more than 5% of 
the Company's outstanding common stock, as well as the stock ownership of 
executive officers and each director as of June 15, 1998:


Name and Address Of                   Amount and Nature Of   Percent of Class
 Beneficial Owner                       Beneficial Owner 

Title of Class 
(a) Common Stock



Page 10


          Swifton, N.V.               (4)
          Landhuis Joonchi                   301,237                 6.4%
          Kaya Richard J. Beaujon z/n
          P.O. Box 837
          Curacao, Netherlands Antilles

          Burton, N.V.                (4)
          Landhuis Joonchi                   281,383                 5.9%
          Kaya Richard J. Beaujon z/n
          P.O. Box 837
          Curacao, Netherlands Antilles 

          Greenwich Securities, Ltd.  (1)
          Via Canc. Molo II                  985,800                20.8%
          CH-6501 
          Bellinzona, Switzerland 6901

          Millingway, Inc.            (2)
          c/o Capital Holdings, Inc.         598,164                12.6%
          4900 Woodway, Suite 650
          Houston, TX 77056

          The Bridge Fund N.V.        (4)
          Landhuis Joonchi                   519,893                11.0%
          Kaya Richard J. Beaujon z/n
          P.O. Box 837
          Curacao, Netherlands, Antilles
          Signal Hill N.V.
          Landhuis Joonchi                   916,840                19.3%
          Kaya Richard J. Beaujon z/n
          P.O. Box 837
          Curacao, Netherlands, Antilles

(b) Security Ownership of Management

          Dibo Attar              (1) (2)       -0-

          Elliot Gerstenhaber                   -0-

          Richard Farkas                        -0-

          Shannon C. Gries                    10,000                 .2%

          Edmond Nagel                (3)    215,601                4.5%


          Directors and Officers
          as Group 5 persons               3,828,918               80.7%
          (1) (2) (3) (4)


Notes to Table of Beneficial Owners and Management:


Page 11


(1)  The securities of Greenwich Securities, Ltd. are owned by the Ezra and 
Linda Attar Family Foundation, which is a family trust organized under the laws 
of Lichenstein.  Mr. Dibo Attar, a director, has the sole voting and investment 
power with respect to the common stock owned by Greenwich Securities Ltd.

(2)  Dibo Attar is a consultant to Capital Holdings, Inc., parent to 
Millingway, Inc.

(3)  Does not include 100,000 stock options which are fully vested and held by 
Edmond Nagel.

(4)  Swifton, N.V., Burton, N.V., The Bridge Fund, N.V. and Signal Hill, N.V.
are each Netherlands Antilles corporations whose shareholders comprise groups
of European investors, none of which are otherwise affiliated with the Company.
None of the individual shareholders holds an effective ownership of the Company
exceeding 4.9%.

Except as otherwise indicated, the address for each of the above persons is c/o 
T.H. Lehman & Co., Incorporated, 4900 Woodway, Suite 650, Houston, Texas 77056.

ITEM 12.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

During the years ended March 31, 1998 and March 31, 1997, the Company incurred 
management fees for facilities and services provided by GTD Capital Holdings
Management Company in the amount of $79,800 and $86,700 respectively.  Such 
services are believed to have been provided on terms no less favorable than 
available from a third party.

Mr. Dibo Attar, a director and an indirect principal shareholder of the Company 
is a consultant to Capital Holdings, Inc., the parent of Millingway, Inc. and 
GTD Capital Holding Management Company. During the year ended March 31, 1992,
the Company entered into a two year line of credit for $450,000 with Sogevalor
S.A.  In exchange for the funding commitment, the Company issued a Common Stock
Purchase Warrant Certificate for the purchase of 100,000 shares of common stock 
at $1.25 originally expiring February 13, 1994.  The company was involved in a
dispute in respect to ownership of this note payable that originally expired on
December 31, 1997.  The note and the warrant certificate has been extended to 
June 30, 1998 by what the Company considers to be the rightful owner of that
note, however another party has filed a lawsuit demanding immediate payment
on the note.  The lawsuit was settled on June 8, 1998.  The note is still due
the rightful owner and as of March 31, 1998, $328,423 in principal and interest
is outstanding under this line of credit.

On June 5, 1997 the Company settled certain notes and accounts payable in the
aggregate amount of $536,457 by transferring to the creditors a portion of the
Company's investment in KTI, Inc.  Mr. Dibo Attar is a consultant to these
creditor entities.

On February 20, 1998, the Company settled certain note and accounts payable in
the aggregate amount of $468,839 by issuing 1,512,378 shares of its common stock
at $.31 per share.  Mr. Dibo Attar is a consultant to these creditor entities.


Page 12


Stock Transaction Reports by Officers, Directors and 10% Stockholders:

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the 
Company's directors, executive officers and holders of more than 10% of the 
Company's common stock to file with the Commission initial reports of ownership 
and reports of changes in ownership of common stock and other equity securities 
of the Company.  To the Company's knowledge, based solely on copies of reports 
furnished to the Company and information furnished by the reporting persons, 
each officer, director and 10% stockholder of the Company was in compliance 
with all reporting requirements under Section 16(a) for the year ended March 
31, 1998.

PART IV

ITEM 13.
EXHIBITS AND REPORTS ON FORM 10-KSB

The following documents are filed as a part of this report:

Independent Auditor's Report 
Consolidated Balance Sheets
           As of March 31, 1998 and 1997
Consolidated Statements of Operations
          Years Ended March 31, 1998 and 1997
Consolidated Statements of Changes in Stockholders' Equity
          Years Ended March 31, 1998 and 1997
Consolidated Statements of Cash Flows
          Years Ended March 31, 1998 and 1997

Notes to Consolidated Financial Statements

     (a)  Financial Statements - See Index to Financial Statements at Page F-1.

     (b)  Reports on Form 8-K.  No reports on Form 8-K were filed during the
          quarter ended March 31, 1998.

     (c)  Exhibits:


Exhibit No. Exhibit

3.1         Certificate of Incorporation of T.H. Lehman & Co., Incorporated 
            (the Company) as amended.*

3.2         By-laws of the Company.  Incorporated by reference from the 
            Company's Form 8-A dated October 31, 1984 for Registration of 
            Certain Classes of Securities Pursuant to Section 12(b) or (g) of 
            the Securities Exchange Act of 1934.*

4.1         Stock Purchase Agreement, dated February 23, 1988, by and between 
            the Company and Greenwich Securities, Inc. incorporated by 
            reference from the Company's Current Report on Form 8-K dated May 
            10, 1988.*

Page 13


10.1        Acquisition Agreement, dated December 28, 1988, by and between the 
            Company and Greenwich Securities, Inc. incorporated by reference 
            from the Company's Current Report on Form 8-K dated May 10, 1988.*

10.2        Letter Agreement, dated April 30, 1990, between the Company and 
            Millingway, Inc. amending the Acquisition Agreement, dated 
            December 28, 1989.*

10.4        Employment Agreement, dated as of January 2, 1990, between SPL and 
            Julio Henriquez.*

10.6        Agreement, dated March 14, 1991, by Convergent Solutions, Inc., 
            Vincent Galano, Ralph Reda, Thomas Borsanko, The Company, Dibo 
            Attar, and Attar ISERP (Profit Sharing Plan).*

10.7        Sales contract dated October 8, 1993 by and between the Company and 
            Helionetics, Inc. incorporated by reference from the Company's 
            current report on Form 8-K dated July 1, 1993.*

*These items have been previously submitted and are therefore incorporated only 
by reference.

Individual financial statements of the Company are not furnished because 
consolidated financial statements are furnished.






























Page 14




SIGNATURES

In accordance with Section 13 or 15 (d) 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.

T.H. Lehman & Co., Incorporated


Dibo Attar, Acting Principal Executive Officer

Date: June 26, 1998

In accordance with the Exchange Act, this report has been signed below by the 
following persons on behalf of the registrant and in the capacities and on the 
dates indicated.

Signature                     Capacities                Date



Dibo Attar                 (Acting Principal             June 26, 1998
                           Executive Officer)



Elliot Gerstenhaber        Secretary/Treasurer           June 26, 1998
                          (Principal Accounting &
                           Financial Officer)



Dibo Attar                     Director                  June 26, 1998



Elliot Gerstenhaber            Director                  June 26, 1998



Richard P. Farkas              Director                  June 26, 1998











Page 15


T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 1998 AND MARCH 31, 1997

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS:

Report of Independent Auditor                                     F-2

Consolidated Balance Sheets
           As of March 31, 1998 and 1997                          F-3

Consolidated Statements of Operations
          Years Ended March 31, 1998 and 1997                     F-5

Consolidated Statements of Stockholders' Equity
          Years Ended March 31, 1998 and 1997                     F-6

Consolidated Statements of Cash Flows
          Years Ended March 31, 1998 and 1997                     F-7

Notes to Consolidated Financial Statements                        F-9

































Page 16


                                    F-1


REPORT OF INDEPENDENT AUDITOR

To the Board of Directors
T.H. Lehman & Co., Incorporated

I have audited the consolidated balance sheets of T.H. Lehman & Co.,
Incorporated and subsidiaries as of March 31, 1998 and 1997, and the related
consolidated statements of operations, stockholders' equity and cash flows for
the years then ended.  These financial statements are the responsibility of the
Company's management.  My responsibility is to express an opinion on these
financial statements based on my audits.

I conducted my audits in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatements.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  I believe that my audits provide a reasonable basis
for my opinion.

In my opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
T.H. Lehman & Co., Incorporated and subsidiaries as of March 31, 1998 and
1997, and the consolidated results of their operations, stockholders'equity
and cash flows for the years then ended, in conformity with generally
accepted accounting principles.


Jeffrey S. Gilbert, CPA
(Jeffrey S. Gilbert, CPA
is a successor to the
audit firm of Hollander,
Gilbert & Co., which
performed the 1997 audit)


Los Angeles, California
June 11, 1998














                                        F-2
T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND MARCH 31, 1997


ASSETS

                                                     1998               1997
CURRENT ASSETS                                   __________         __________

Cash                                             $   24,123         $   33,422
Trading securities (Note 3)                                             15,000
Accounts receivable                                   9,207             15,532
Prepaid expenses and other current assets             3,623              6,540
Current portion of non-current receivables 
(Note 4)                                            416,659            440,000
                                                 __________         __________

TOTAL CURRENT ASSETS                                453,612            510,494

PROPERTY AND EQUIPMENT AT COST,
  less accumulated depreciation of $164,360 at
  March 31, 1998 and $131,120 at March 31, 1997
  (Note 5)                                           52,384             67,843

OTHER ASSETS
Securities available for sale (Note 3)              523,039            963,767
Investments in non-public companies, at cost            500             30,500
Non-current receivables (Note 4)                  1,235,602          1,479,000
Deposits                                              1,514              4,900
Certificate of Deposit - Restricted                  80,000             80,000
Excess of cost over net assets of acquired companies,
  less accumulated amortization of $28,125 at
  March 31, 1998 and $23,125 at March 31, 1997       21,875             26,875
                                                 __________         __________

TOTAL OTHER ASSETS                                1,862,530          2,585,042
                                                 __________         __________
TOTAL ASSETS                                     $2,368,526         $3,163,379
                                                 ==========         ==========








See accompanying Notes to Consolidated Financial Statements






                                         F-3
T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND MARCH 31, 1997


LIABILITIES AND STOCKHOLDERS' EQUITY

                                                     1998               1997
CURRENT LIABILITIES                              __________         __________

Loans payable - financial
  institution (Note 6)                           $   40,000         $  285,946
Accounts payable                                    402,930            462,463
Accrued liabilities                                  82,778             72,565
Current portion of long-term debt (Note 7)          547,999            316,776
Estimated environmental liability (Notes
  2 and 12)                                          43,235            189,315
                                                 __________         __________

TOTAL CURRENT LIABILITIES                         1,116,942          1,327,065

LONG-TERM LIABILITIES

Long-term debt, less current portion
(Note 7)                                             16,042            821,316
                                                 __________         __________

TOTAL LONG-TERM LIABILITIES                          16,042            821,316

          TOTAL LIABILITIES                       1,132,984          2,148,381

COMMITMENTS AND CONTINGENCIES (Note 10)

STOCKHOLDERS' EQUITY (Note 8)
Common stock-par value $.01; authorized
  5,000,000 shares, issued 4,742,720 shares
  at March 31, 1998 and 3,230,342
  March 31, 1997                                     47,427             32,303
Additional paid-in capital                        7,764,014          7,310,299
Unrealized gain on investments                      376,894            561,422
Accumulated deficit                              (6,904,355)        (6,840,588)
Treasury stock at cost - 25,000 shares              (48,438)           (48,438)
                                                 __________         __________

TOTAL STOCKHOLDERS' EQUITY                        1,235,542          1,014,998 
                                                 __________         __________
                                                 $2,368,526         $3,163,379
                                                 ==========         ==========





See accompanying Notes to Consolidated Financial Statements


                                         F-4
T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 31, 1998 AND MARCH 31, 1997

                                                     1998              1997
                                                 __________         __________

REVENUES
Management and billing fees, net of 
  allowances                                     $  516,034         $ 724,678
Income from finance receivables                      54,073            28,243
Interest and dividends                               75,594            76,930 
Net gain on trading securities                        6,953            24,929
Realized gain from sales of securities
  available for sale                                384,623            63,742
Realized gain from sales of investment in
  non-public companies                                                 79,579
Miscellaneous Income                                    100
Profit participation fee                             20,000            25,000

                                                 __________         __________

TOTAL REVENUES                                    1,057,377         1,023,101
OPERATING EXPENSES
Selling, general and administrative               1,036,408         1,387,746 
Interest expense                                     84,736           102,358 
                                                 __________         __________

TOTAL OPERATING EXPENSES                          1,121,144         1,490,104 
                                                 __________         __________

LOSS BEFORE INCOME TAXES                        (    63,767)       (  467,003)

PROVISION FOR INCOME TAXES (Note 9)                       0                 0
                                                 __________         __________

NET LOSS                                        ($   63,767)       ($ 467,003) 
                                                 ==========         ==========
PER SHARE DATA:

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING                                3,356,374         3,230,342 
                                                 ==========         ==========


BASIC LOSS PER COMMON SHARE                          ($0.02)           ($0.14) 
                                                 ==========         ==========




See accompanying Notes to Consolidated Financial Statements




                                      F-5

T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES 
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY 
YEARS ENDED MARCH 31, 1998 AND MARCH 31, 1997 

BALANCE, March 31, 1996                                
                                          
   Common Stock                           Unreal.     Treasury Stock
 ________________ Additional              Gain on     ______________
  Shares           Paid-in   Accumulated  Sec Avail.  for Shares 
  Issued   Amount  Capital     Deficit    for sale   Held    Amount     Total
_________ _______ __________ ____________ _______ _______ _________ __________

3,230,342 $32,303 $7,293,394 ($6,373,585) 315,738  25,000 ($48,438) $1,219,412

Unrealized gain on securities
  available for sale:                     245,684                      245,684

Paid-in capital from
  distribution of 50% 
  interest in a sub-
  sidiary to certain
  employees           16,905                                            16,905


Net loss                        (467,003)                             (467,003)
_________ _______ __________ ____________ ________ _______ _________ __________


BALANCE, March 31, 1997:

3,230,342  32,303  7,310,299  (6,840,588) 561,422    25,000 (48,438) 1,014,998 
_______________________________________________________________________________

Unrealized gain on securities 
  available for sale                     (184,528)                    (184,528)

Shares issued in settle-
  ment of certain notes
  and accounts payable

1,512,378  15,124   453,715                                            468,839

Net loss                         (63,767)                              (63,767)
_________ _______ __________ ____________ ________ _______ _________ __________


BALANCE, March 31, 1998:

4,742,720  47,427  7,764,014 ($6,904,355) 376,894 25,000 ($48,438)  $1,235,542
========= ======= ========== ============ ======= ======  ========= ===========


See accompanying Notes to Consolidated Financial Statements


                                   F-6
T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 31, 1998 AND MARCH 31, 1997


                                                     1998               1997
                                                 __________          __________

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)                               ($   63,767)     ($  467,003)
Adjustments to reconcile net loss to
  net cash used in operating activities:
Depreciation and amortization                        38,626           61,942 
Provision for bad debts                                              222,643 
Realized gain from sales of securities 
  available for sale partially exchanged
  for debt relief                                  (384,623)         (63,742)
Realized gain from sale of investment in  
  non-public companies                                               (79,579)
Loss on Disposition of Assets                            38
Deposits (paid) received
Changes in operating assets and liabilities:
    (Increase) decrease in:
    Trading Securities                               15,000            2,600 
    Accounts receivable                               6,325          (29,235)
    Prepaid expenses and other current assets         2,917           (6,088)
    Increase (decrease) in:
    Prepaid Income Taxes                                                     
    Accounts payable                                 38,467          143,103
    Accrued liabilities                              91,165           66,192
    Estimated environmental liability              (146,081)         (45,318)
                                                  __________         _________
NET CASH REQUIRED BY
  OPERATING ACTIVITIES                             (401,933)         (194,485)
                                                  __________         _________


CASH FLOWS FROM INVESTING ACTIVITIES

  Investment in 50% owned corporation                                 13,278
  Loans made evidenced by notes receivable         (517,475)        (725,991)
  Collection of notes receivable                    784,215          367,021
  Deposits and certificates of deposits               3,386              615
  Proceeds from sale of securities 
    available for sale                                               208,950
  Proceeds from sales of investments
    in non-public companies                         134,365          113,579 
  Acquisition of property and equipment             (18,205)         (54,036)
                                                  __________        _________
NET CASH USED IN
  INVESTING ACTIVITIES                              386,286         ( 76,584)
                                                  __________        _________

See accompanying Notes to Consolidated Financial Statements

                                   F-7
T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS CONTINUED
YEARS ENDED MARCH 31, 1998 AND MARCH 31, 1997

                                                     1998               1997
                                                   _________         ________

CASH FLOWS FROM FINANCING ACTIVITIES

  Proceeds of loans payable - financial
     institution                                     14,278           63,000
  Proceeds of long-term debt                                         395,067 
  Repayment of long-term debt                      (  7,930)        (201,455) 
                                                  _________         _________
NET CASH PROVIDED BY FINANCING ACTIVITIES             6,348          256,612 
                                                  _________         _________

INCREASE (DECREASE)IN CASH                          ( 9,299)         (14,457)
CASH - BEGINNING                                     33,422           47,879 
                                                  _________         _________

CASH - END                                       $   24,123       $   33,422 
                                                  =========         =========

CASH PAID DURING THE PERIODS FOR:

  Interest                                       $   16,098       $   10,331 
                                                  =========        =========

  Income Taxes                                   $        -       $        - 
                                                  =========        =========


SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING
ACTIVITIES:


Non Cash Transaction:
  Debt relieved in exchange for 
    investments available for sale                $ 536,457        $       -
                                                  =========        =========
  Debt relieved in exchange for
    common stock                                  $ 468,839        $       -
                                                  =========        =========









See accompanying Notes to Consolidated Financial Statements


                                     F-8
T.H. LEHMAN & CO., INCORPORATED AND SUBSIDIARIES 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998 AND 1997


1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of the Business - T.H. Lehman & Co., Incorporated, a Delaware 
corporation, provides medical business management services including billing 
and collection in California through one of its wholly-owned 
subsidiaries.

Principles of Consolidation - The consolidated financial statements include 
the accounts of the Company and its wholly-owned subsidiaries.  All 
intercompany balances and transactions have been eliminated.

Use of Estimates - The preparation of financial statements in conformity with 
generally accepted accounting principles requires management to make estimates 
and assumptions that affect certain reported amounts and disclosures.  
Accordingly, actual results could differ from those estimates.

Securities - Marketable securities that are bought and held principally for 
the purpose of selling them in the near term are classified as trading 
securities and reported at fair value, with unrealized gains and losses 
included in earnings.  Marketable securities not classified as either 
investment securities which are held to maturity or trading securities are 
classified as securities available for sale and reported at fair value, with 
unrealized gains and losses excluded from earnings and reported in a separate 
component of stockholders' equity.  Average cost is used to determine cost 
when calculating realized gains or losses from sales of securities 
available for sale.

Investment in 50% owned Corporation - Investment in 50% owned corporation
is accounted for under the equity method.

Receivables - Assigned medical billings represent the contractual percentage of
medical provider receivables of medical practices to which the Company provides
management services.  Revenues are recognized when the medical services are
provided, according to the contractual percentage after uncollectible 
allowances.

Property and Equipment - Property and equipment is stated at cost.  
Depreciation is computed over the estimated useful lives of the assets using 
both the accelerated and straight-line methods.  Expenditures for repairs and 
maintenance are charged to expense as incurred, while expenditures for 
betterments and renewals are capitalized.
                                   
Property and equipment are reviewed for impairment whenever events or
circumstances indicate that the asset's undiscounted expected cash flows
are not sufficient to recover its carrying amount.  The company measures
an impairment loss by comparing the fair value of the asset to its carrying
amount.  Fair value of an asset is calculated as the present value of
expected future cash flows.

Stock-Based Compensation - The Company elected to account for employee
stock options based on the provisions of APB Opinion No. 25, "Accounting
for Stock Issued to Employees" and adopted only the disclosure require-
ments of SFAS No. 123, "Accounting for Stock-Based Compensation".

Basic Loss Per Share - Basic loss per common share is calculated by
dividing earnings available to common stockholders by the weighted
average number of common shares outstanding during the period.

Excess of Cost Over Net Assets of Acquired Companies - Excess of cost over net 
assets of companies acquired is being amortized on a straight-line basis over 
periods not exceeding ten years.

Recent Accounting Pronouncements - The Company intends to adopt SFAS No. 130,
"Reporting Comprehensive Income", and SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information", in fiscal year ended
March 31, 1999.  Both will require additional disclosure but will not have
a material effect on the Company's financial position and results of
operations.  SFAS No. 130 will first be reflected in the Company's first
quarter ended June 30, 1998 interim financial statements.  Components of
comprehensive income for the Company include items such as net income and
changes in the value of available-for-sale securities.  SFAS No. 131 requires
segments to be determined based on how management measures performance and
makes decisions about allocating resources.  SFAS No. 131 will first be
reflected in the Company's March 31, 1999 annual financial statements.


2.     ACQUISITIONS AND DISPOSITIONS


In a transaction that was effective October 1, 1996,
the Company transferred 50% of the outstanding stock and substantially 
all of the control of Healthcare Professional Billing Corp.("HPB") to 
certain key employees of HPB.  Until that time, HPB was a wholly-owned 
subsidiary the Company.  As a result of the transfer, the subsidiary's
financial position, results of operations and cash flows are not 
consolidated with that of the Company subsequent to the transfer date.
Effective October 1, 1996, the investment in HPB including advances to HPB
will be accounted for under the equity method.  The summarized financial 
information of HPB at March 31, 1998 and March 31, 1997 is as follows:

                                             March 31, 1998     March 31,1997
                                             ______________     _____________
Financial Position:                             
Current Assets                                  $ 31,417           $113,844 
 
Property and equipment                            26,335             31,222
                                                ________           ________
Total assets                                    $ 57,752           $145,066
                                                ========           ========
Current liabilities(including
  due to the Company of $255,067)               $352,138           $315,383
Long-term obligations (a)                         74,573            109,662
Stockholders' deficiency                        (368,959)          (279,979)
                                                ________           ________
Total liabilities and stockholders' 
  deficiency                                    $ 57,752           $145,066
                                               =========          =========

                                             Twelve Months        Six Months
                                                 Ended              Ended
                                             March 31, 1998     March 31, 1997
                                             ______________     ______________
Results of Operation:
Revenues                                        $203,370           $149,792
Operating Expenses                               292,352            157,779
                                                 _______            _______  
Net loss                                        $(88,982)          $( 7,987)
                                                 ========           =======

(a) Certain creditors of HPB are also creditors of the Company.

3.     SECURITIES AVAILABLE FOR SALE

                                                  1998               1997 
                                               __________         __________
KTI, Inc.                                       $496,448           $941,934

Other equity investments in public entities       26,591             21,833
                                               __________         __________
                                                $523,039           $963,767
                                               ==========         ==========





                                      F-9
Unrealized gains and losses for marketable equity securities at March 31, 1998 
and 1997 are as follows:

                                     1998                       1997
                              ______________________     ______________________
                               Current  Non-Current       Current  Non-Current
Aggregate Cost                $      0    $146,145       $  2,923    $402,345

Aggregate Market Value        $      0    $523,039       $ 15,000    $963,767

Gross Unrealized Gains        $      0    $376,894       $ 12,077    $561,422

Gross Unrealized Losses       $      0    $      0       $      0    $      0   





4. NON-CURRENT RECEIVABLES

     Non-current receivables at March 31, 1998 and March 31, 1997 consisted of 
the following:

                                                          1998       1997
                                                       __________  __________


Assigned medical billings net of allowances of
which $416,659 of the unpaid is expected to be
collected during the current fiscal year.               1,412,948   1,718,260

Working capital advances at 12% per annum interest
to a provider of medical services who has contracted
with the Company to provide management services.
None of these advances is expected to be collected
during the current fiscal year.                           852,379     769,593
                                                       __________  __________
                                                        2,265,327   2,487,853   
          Less Allowance for Uncollectible               (613,066)   (568,853)
                                                       __________  __________
                                                        1,652,261   1,919,000 
          Less Current Portion                           (416,659)   (440,000)
                                                       __________  __________
                                                       $1,235,602  $1,479,000  
                                                       ==========  ==========
5. PROPERTY AND EQUIPMENT

Property and equipment at March 31, 1998 and March 31, 1997 consisted of the 
following:
                                Life                   1998           1997 
                              __________           __________      __________

Machinery and Equipment       5-10 Years           $   48,207      $   30,426
Leasehold Improvements        5-10 Years                  500             500
Furniture and Fixtures        5-10 Years              168,037         168,037
                                           F-10



                                                   __________      __________
                                                      216,744         198,963
         Less Accumulated Depreciation              (164,360)       (131,120)
                                                   __________      __________
                                                   $   52,384      $   67,843
                                                   ==========      ==========


6. LOANS PAYABLE - FINANCIAL INSTITUTION

Pursuant to an agreement dated October 4, 1991 and modified March, 1993,
March, 1994 and January 31, 1998 the Company has received loans from a 
Netherlands corporation, consisting of various advances from an available 
line of credit of $400,000.  As of March 31, 1998 and March 31, 1997, the 
outstanding balance against this line of credit totaled $40,000 and 
$285,946, respectively.  The loans bear interest at the prime rate of a 
certain bank in Texas plus 2% per annum.  The weighted average interest 
rate for the years ended March 31, 1998 and 1997 was 10.5% and 10.27% 
respectively, which was computed based on month-end balance.  The approximate
average outstanding monthly balance during the years ended March 31, 1998 and
1997 amounted to $215,686 and $201,806, respectively.  This line of credit 
expires on January 31, 2001.

During the fiscal year ended March 31, 1998 the Company reduced $260,223 of this
indebteness plus $145,000 of long term debt (see Note 7) and $63,615 in payable
and accrued liabilities thru the issuance of 1,513,378 of the Company common 
stock valued at $.31 per share estimated fair value at the date of settlement.

7. LONG-TERM DEBT

Long-term debt including accrued interest at March 31, 1998 and March 31, 1997
consisted of the following:

                                                           1998        1997
                                                        __________  __________

Related Party: 

Advances from an unsecured available line of credit of
$450,000.  The loan bears interest at the prime
rate of a certain bank in Texas.  Interest on
this loan is to be calculated and payable quarterly
as of the first day of each quarter (or at maturity).
The principal is due and payable on or before
June 30, 1998.  The loan is secured by the
market value of publicly-held stock in the Company's
investment portfolio.  As further consideration, 100,000
warrants expiring in June, 1998 to purchase
100,000 shares of the Company's common stock at
an exercise price of $1.25 per share were issued to
this creditor (See Note 8).                              $ 328,423   $ 309,346
Advances from an available line of credit of
$400,000.  The loan bears interest at an annual
rate of 10%.  All principal and interest is due
and payable on or before August 3, 1999.                        0     159,284

Non-related Parties (all unsecured):

Advances from an available line of credit of
$20,000.  The loan bears interest at an annual
rate of 10%.  All principal and interest is due
and payable on or before July 1,1999.                           0       9,673

Advances from three available lines of credit
which total $200,000.  The loans bear interest
at an annual rate of 10%.  All principal and
interest is due and payable on or before
October 26, 1998.                                               0      57,151

Two notes payable totaling $10,000 principal
plus accrued interest at 10%, all due on December 
28, 1998.                                                  11,645      11,258

Note payable of $10,000 principal plus accrued
interest at 10%, all due on February 27, 1999.                  0         679

Advances from an available line of credit of
$250,000.  The loan bears interest at an annual
rate of 10%.  All principal and interest is due
and payable on or before April 18, 2000.                        0     166,023

Advances from an available line of credit of
$200,000.  The loan bears interest at an annual
rate of 10%.  All principal and interest is due
and payable on or before November 16, 1998.                     0      82,578

Note payable of $10,000 principal plus accrued
interest at 10%, all due on November 1, 1998.              11,411      10,411

Equipment purchase contract with a monthly payment
of $886 and an effective interest rate of 11% payable
through November, 2000.                                    24,352      31,784

Advances from an available line of credit of 
$300,000.  The loan bears interest at an annual
rate of 10%.  All principal and interest is due 
and payable on or before November 1, 1998.               188,210     171,716 

Note payable of $60,000 principal plus accrued
interest at 10%, all due on March 12, 2000.                     0	     60,312

Advances from an available line of credit of
$100,000.  the loan bears interest at annual 
of 10%.  All principal and interest is due
and payable on or before February 5, 2000.                      0	     67,877


                                                       __________   __________
                                                          564,041   1,138,092
               Less Current Portion                      (547,999)   (316,776)
                                                       __________   __________
                                                       $   16,042  $  821,316
                                                       ==========   ==========

The amounts of long-term debt maturing in each of the years ending March 31 
are as follows: 1999 - $547,999; 2000 - $9,294; 2001 - $6,748.

During the fiscal year ended March 31, 1998 the Company reached agreements with
certain of the above creditors to accept 42,054 shares of common stock in KTI
and 87,499 warrants in KTI to reduce the outstanding debt of $362,000 plus
an additional $174,457 in accrued liabilities and payables.

8. STOCKHOLDERS' EQUITY

The Company has warrants outstanding for the purchase of 100,000 shares of the
Company's common stock at $1.25 per share exercisable through June, 1998 which
were issued in conjunction with a line of credit made to the Company. 

In November, 1991, the Company adopted a new stock option plan (1990 Plan), 
under which options will be granted for an aggregate of 500,000 shares of 
common stock prior to November 20, 2000.  Options granted may either be 
incentive stock options, pursuant to which the recipient receives tax 
benefits, or non-incentive stock options.  At the time of the adoption of the 
1990 Plan, the Company issued ten-year non-incentive stock options with an 
exercise price of $1.50 to purchase 350,000 shares of which 250,000 shares 
(100,000 shares canceled in 1993; 50,000 shares expired in 1994; 100,000 shares
cancelled in 1997) were issued to the officers of the Company, 50,000 shares
were issued to the directors of the Company, and 50,000 shares were issued
to a consultant who was formerly an officer of the Company.  At March 31, 1998,
100,000 of the options are still outstanding.


In June, 1994, the Company issued 105,000 additional options which are 
exercisable at prices ranging from $1.50 to $2.00 per share for five years.
At March 31, 1997, 105,000 of these options are still outstanding.

9. INCOME TAXES

At March 31, 1998, for income tax reporting purposes, the Company has a 
consolidated net operating loss carryforward of approximately $5,179,000
available to reduce future taxable income, if any, expiring through 2013.  
As a result of a 51% change in ownership in a prior year, certain of the net 
operating loss will be subject to an annual limitation and may not be fully 
utilized in any one year.  Because of histories of losses, the estimate for 
future tax benefits has been offset by an equal asset valuation allowance.

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10. COMMITMENTS AND CONTINGENCIES

Leases - The Company leases medical provider facility and a billing facility 
under noncancelable operating leases expiring October 31, 2000.  Minimum
annual future rentals on each of the years ending March 31 are as follows:
1999 - $86,640; 2000 - $72,200.

Rent expense amounted to $92,150 and $94,661 for the years ended March 31, 
1998 and 1997, respectively.

Medical Management Agreement - The Company has entered into an agreement with 
a medical provider whereby the Company provides management and marketing 
services and the leasing of facilities, furniture, fixtures and equipment for 
a fee equal to 70% of the provider's medical fee revenues (net of allowance for 
uncollectible accounts).  The agreement is effective for one year after the 
effective date of April 15, 1993 and shall automatically renew from year to year
unless either party gives 90 days notice of non-renewal prior to the renewal 
term.


11. RELATED PARTY TRANSACTIONS

The Company has its corporate headquarters in Houston, Texas, where it shares 
office space and personnel with an entity for which a principal stockholder 
and director of the Company serves as a consultant.  The Company has entered 
into agreements with this entity whereby that entity will provide various 
accounting, administrative and managerial services for the Company for 
stipulated monthly fees.  The agreements are for 12 months and they 
automatically renew for an additional 12 month period if not terminated within 
60 days of the end of the current term.  The Company incurred fees 
to this entity under the agreements totaling $79,800and $86,700 for the years 
ended March 31, 1998 and 1997, respectively.

Dibo Attar, a director of the Company, is also a director of KTI, Inc.
(see Note 3)

Certain of the Company's creditors (See Note 7) are related as a result of one 
of the Company's directors and principal stockholders being a consultant to 
these entities.

12. ALLOWANCE FOR ENVIRONMENTAL LIABILITY

The Company, in conjunction with the sale of its manufacturing subsidiary, 
incurred an obligation to assume any and all historic environmental liabilities 
that may have occurred, whether known or unknown.  The Company does not have any
environmental liability insurance coverage.  The Company has initially set up a 
provision of $275,000 to cover possible environmental liabilities (a) arising 
from the contamination of waste delivered to a disposal contractor 
of tritium waste which was generated during the manufacture of luminescent 
signage and (b) pursuant to recently implemented State of New York licensing 
regulations requiring licenses that the former subsidiary establish a 
Decommissioning Funding Plan and attendant Financial Assurance Requirements 
thereto which are acceptable to the State of New York.  Accordingly, the former
subsidiary has had an environmental audit performed which, on a preliminary 
basis, has called for the establishment of an allowance to cover the estimated 
cost of compliance with license renewal requirements of which there is no 
assurance that final acceptance will be made by the regulatory authorities.  
During the fiscal years ended March 31, 1998 and 1997 the Company charged

                                     F-12 
$146,080 and $169,066, respectively, against this provision.  Financial 
responsibility as to the liability relating to (a) has been collateralized by 
an $80,000 certificate of deposit which will be released upon final disposition 
of the tritium waste.  During the year ended March 31, 1997, the Company 
provided for additional estimated environmental liability of $123,748.

On June 26, 1997, the State of New York, Division of Safety and Health, issued
A letter to Self-Powered Lighting, Inc. (the Company's former subsidiary or
"SPL") stating that they concluded that residual radioactive contamination at
the subject facility is below the limits for free release, and that facility may
be released for unrestricted use.  However, in a letter dated July 2, 1997, the
State deleted from SPL's license the authorization to possess and use
radioactive materials at that facility in the future.





































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