SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB
                                   (Mark One)

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 1998

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

             For the transition period from __________ to __________

                         Commission File Number 0-26676

                     MULTIMEDIA CONCEPTS INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S>                                                                         <C>       
        Delaware                                                            13-3835325
        (State or other jurisdiction of Incorporation                       (I.R.S. Employer Identification No.)
        or Organization No.)
</TABLE>

               1410 Broadway, Suite 1602, New York, New York 10018
                    (Address of Principal Executive Offices)

                                 (212) 391-1111
              (Registrant's Telephone Number, Including Area Code)

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



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

     State the number of shares of each of the issuer=s classes of common equity
outstanding as of the latest  practicable date:  Common Stock,  $.001 per share:
3,005,000 shares outstanding as of August 31, 1998.


<PAGE>

            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES


                                    CONTENTS


<TABLE>
<CAPTION>


                                                                                                         Page
                                                                                                        Number
PART 1- FINANCIAL INFORMATION

         ITEM 1- FINANCIAL STATEMENTS
<S>                  <C> <C>                                                                            <C>
         Consolidated balance Sheets as of  June 30, 1998 (Unaudited)
           and March 31, 1998                                                                           3

         Consolidated statements of Operations (Unaudited)  for the three
           months ended June 30, 1998 and June 30, 1997                                                 4

         Consolidated statements of Cash Flows (Unaudited) for the three
          months ended June 30, 1998 and June 30, 1997                                                  5

         Notes to Financial Statements (Unaudited)                                                      6


         ITEM 2- MANAGEMENT'S DISCUSSION AND ANALYSIS
                 OF FINANCIAL CONDITION AND RESULTS OF
                 OPERATIONS                                                                             9


PART II- OTHER INFORMATION                                                                              12

Signatures                                                                                              13

</TABLE>












                                        2


<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                     As of June 30, 1998 and March 31, 1998
<TABLE>
<CAPTION>

                                                                June 30,        March 31,
                                                                  1998            1998
                                                               (Unaudited)      (Note 1)
                                     ASSETS
 CURRENT ASSETS: 
<S>                                                          <C>             <C>         
  Cash and cash equivalents ..............................   $  1,689,040    $  1,635,058
  Restricted certificate of deposit ......................        250,000         250,000
  Accounts receivable ....................................        348,873         404,288
  Inventories ............................................      9,402,294       7,929,061
  Prepaid expenses and other current assets ..............        166,744         189,516
  Loans and advances-affiliate ...........................         89,815          89,815
                                                             ------------    ------------
         Total current assets ............................     11,946,766      10,497,738
                                                             ------------    ------------

PROPERTY AND EQUIPMENT-NET ...............................      3,044,688       2,782,386
                                                             ------------    ------------

OTHER ASSETS:
 Restricted certificate of deposit .......................      2,000,000       2,000,000
 Advances to equity investee .............................        140,000         140,000
 Due from affiliates .....................................         90,000            --   
 Deposits and other assets ...............................        181,869         330,459
                                                             ------------    ------------
                                                                2,411,869       2,470,459
                                                             ------------    ------------
         Total assets ....................................   $ 17,403,323    $ 15,750,583
                                                             ============    ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Accounts payable ........................................   $  5,539,382    $  3,593,811
 Accrued expenses and other liabilities ..................        284,064          53,526
 Current portion of notes payable ........................        262,293         350,000
                                                             ------------    ------------
                  Total current liabilities ..............      6,085,739       3,997,337
                                                             ------------    ------------
LONG-TERM LIABILITIES:
 Borrowings under financing agreement ....................      6,521,695       5,445,198
 Note payable, net of current portion ....................         71,541         500,000
 Deferred rent liability .................................        114,903         110,351
                                                             ------------    ------------
         Total long-term liabilities .....................      6,708,139       7,055,549
         Total liabilities ...............................     12,793,878      11,052,886
 MINORITY INTEREST IN SUBSIDIARIES (Note 3) ..............      2,814,046       2,713,709
                                                             ------------    ------------
STOCKHOLDERS= EQUITY:
   Common stock, $.001 par value; 10,000,000
     shares authorized, 3,005,000 shares issued
   and outstanding .......................................          3,005           3,005
  Additional paid-in capital .............................     13,102,005      13,102,005
 Retained earnings (Deficit) .............................    (11,309,611)    (11,121,022)
                                                             ------------    ------------
                                                                1,795,399       1,983,988
                                                             ------------    ------------
         Total liabilities and stockholders' equity ......   $ 17,403,323    $ 15,750,583
                                                             ============    ============
</TABLE>

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


                                        3


<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                    Three Months Ended 
                                                         June 30,     June 30,
                                                          1998          1997
                                                          -----         -----


<S>                                                    <C>            <C>        
REVENUES, net sales ................................   $ 7,319,749    $ 1,041,435
                                                       -----------       --------

COSTS AND EXPENSES:
 Cost of sales .....................................     4,404,422        757,886
 Operating expenses ................................     2,751,073        126,329
 Depreciation and amortization .....................       188,652           --
                                                       -----------       --------
         Total operating expenses ..................     7,344,147        884,215
                                                       -----------       --------
OPERATING INCOME (LOSS) ............................       (24,398)       157,220
                                                       -----------       --------
OTHER INCOME
 Interest income ...................................        12,500            654
                                                       -----------       --------

INTEREST EXPENSE:
  Interest and finance charges .....................       138,452           --
  Amortization of debt issuance costs ..............        27,200           --     
  Total interest expense                                   165,652           --
                                                       -----------       --------
INCOME (LOSS) BEFORE
  MINORITY INTERESTS ...............................      (177,550)       157,874
   Minority interests (Note 3) .....................       100,337           --
                                                       -----------       --------

NET INCOME (LOSS) ..................................    $ ( 77,213)      $157,874
                                                       ===========       ========

Basic and Diluted income and (loss) per common
  share before minority interests ..................    $     (.06)      $    .05
Minority interests in net income (loss) of
  consolidated subsidiaries ........................           .03             --
                                                       -----------       --------

Basic and Diluted income (loss) per common share ...    $     (.03)      $    .05
                                                       ===========       ========

Weighted average number of common shares outstanding     3,005,000      3,005,000
                                                       ===========       ========
</TABLE>

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

<PAGE>
             MULTIMEDIA CONCEPTS INTERNATIONAL, INC AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)
                           Increase (Decrease) in Cash
<TABLE>
<CAPTION>

                                                                  Three Months Ended
                                                                   June 30,       June 30,
                                                                    1998            1997
                                                                    -----          ------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                             <C>            <C>        
Net income (loss) ...........................................   $  (177,550)   $   157,784
                                                                 -----------    -----------
Adjustments to reconcile net loss to cash (used)
  provided for operating activities:
  Depreciation and amortization .............................       188,652          1,500
  Deferred rent .............................................         4,552           --
  Minority interests in net losses of subsidiaries ..........       100,337           --
Changes in assets and liabilities:
Decrease in Accounts receivable .............................        55,415        145,363   
 (Increase) in Merchandise inventories                           (1,473,323)      (581,272)
 Decrease in prepaid expenses and other current assets ......        22,772           --
Decrease in deposits and other assets .......................       148,680            (50)
Increase in accounts payable ................................     1,945,571        187,570
Increase in accrued expenses and other liabilities ..........       230,538         17,385
                                                                -----------    -----------
         Total adjustments ..................................     1,223,194       (229,504)
                                                                -----------    -----------
         Net cash provided by operating activities ..........     1,045,644        (71,720)
                                                                -----------    -----------
                                                                                          
CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchase of property and equipment .........................      (461,993)          --
                                                                 -----------    -----------
         Net cash provided by( used for) investing activities      (461,993)          --
                                                                 -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Net borrowings under financing agreement of subsidiary .....     1,076,497           --
 Repayment of notes payable of subsidiary ...................    (1,516,166)          --
 Loans receivable-officer ...................................          --          (83,172)
 Loans received from (repaid to) affiliate ..................       (90,000)      (162,000)
                                                                 -----------    -----------
         Net cash provided by (used for) financing activities      (529,669)      (245,172)
                                                                 -----------    -----------

NET INCREASE (DECREASE) IN CASH .............................        53,982       (316,892)
Cash, beginning of period ...................................     1,635,058        591,577
                                                                -----------    -----------
Cash, end of period .........................................   $ 1,689,040    $   274,685
                                                                ===========    ===========

Supplemental disclosure of cash flow information:
Interest paid ...............................................   $   165,652    $      --
Taxes paid ..................................................   $      --      $      --

</TABLE>
     The accompanying notes are an integral part of these consolidated financial
statements

<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


 Note 1-          BASIS OF PRESENTATION:

                  The accompanying  unaudited  consolidated financial statements
have been prepared in accordance with generally accepted  accounting  principles
for  interim  financial   information  and  the  instructions  to  Form  10-QSB.
Accordingly,  they do not include all the information and footnotes  required by
generally accepted accounting principles for more complete financial statements.
In the opinion of  management,  the  interim  financial  statements  include all
adjustments  considered  necessary  for a fair  presentation  of  the  Company's
financial  position and the results of its operations for the three months ended
June 30, 1998, and are not necessarily  indicative of the results to be expected
for the full fiscal year. For further information, refer to the Company's Annual
report on Form 10-KSB for the six months ended March 31, 1998, as filed with the
Securities and Exchange Commission.

                  In December,  1997, the Company's  Board of Directors voted to
change the end of the Company's  fiscal year from  September 30th to March 31st.
The financial  statements for the three months ended June 30, 1997 have not been
restated to reflect the acquisition of United Textiles & Toys Corp.

 Note 2-          DESCRIPTION OF COMPANY:

     Multimedia  Concepts  International,  Inc.  (the  "Company")  is a Delaware
corporation  which  was  organized  in  June  1994  under  the  name  U.S.  Food
Corporation. The Company changed its name to American Eagle Holdings Corporation
in  April  1995 and then to its  present  name in June  1995.  The  Company  was
initially  formed as a holding  company for the purpose of forming an integrated
clothing  design,  manufacturing,  and  distribution  operation.  The Company is
currently,  in principle, a holding company for its two operating  subsidiaries;
(i) its  wholly  owned  subsidiary  U.S.  Apparel  Corp.  ("USAC")  and (ii) its
majority  owned  subsidiary  Play Co. Toys &  Entertainment  Corp.  ("Play Co.")
through its  ownership  of 78.5% of the  outstanding  shares of common  stock of
United  Textiles  and Toys  Corp.  ("UTTC"),  which  owns  59.1% of Play Co. All
references to the "Company" refer to USAC,  UTTC, and Play Co. unless  otherwise
required by the context.

     In February 1997, the Company formed a wholly-owned subsidiary, USAC, a New
York  corporation,  to design and  manufacture  a line of private  label  cotton
"T-shirts" and "polo" type tops predominantly for men.

     In January 1998,  UTTC issued  3,571,429  shares of its common stock to the
Company in full  repayment of certain loans  aggregating  $1,000,000  previously
made by the Company to UTTC.  This conversion of debt to equity was performed at
a price of $.28 per share. As a result of the transaction,  the Company acquired
78.5% ownership of UTTC.



                                        4


<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIAIRIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



Note 3-                    MINORITY INTERESTS:

     The Company owns a majority  interest (78.5%) in United Textiles,  which in
turn  owns a  majority  interest  (59.1%)  in Play  Co.  The  minority  interest
liability  represents  the  minority  shareholders'  portion  (21.5%)  of United
Textiles equity and (40.9%) of Play Co.'s equity at June 30, 1998.

Note 4-                    INVESTMENT BY U.S. STORES CORP.:

     On January 20, 1998, U.S. Stores Corp. (AU.S.  Stores@) acquired  1,465,000
shares of the Company's  Common Stock.  U.S. Stores was incorporated on November
10, 1997. The Company's President is also President and Director of U.S. Stores.
After this transaction, U.S. Stores held an aggregate of 1,868,000 shares of the
Company's Common Stock, or 63% of the outstanding shares, effectively making the
Company a subsidiary of U.S. Stores.

     On February 28, 1998,  American Telecom  Corporation  (AAmerican  Telecom@)
acquired 100% of the outstanding common shares of U.S. Stores.  American Telecom
was incorporated on July 11, 1997. The Company's President is also President and
Director of U.S. Stores.  After this transaction,  American Telecom  effectively
obtained beneficial control of the Company and its subsidiaries.

     In April  1998,  American  Telecom in a  transaction  in which  shares were
exchanged, exchanged all of its outstanding common shares with American Telecom,
PLC,  a  publicly  traded  company in Great  Britain.  After  this  transaction,
American  Telecom  effectively  became a subsidiary  of American  Telecom,  PLC.
Additionally,  as part of this transaction,  American Telecom, PLC acquired 100%
of the outstanding common shares of U.S. Stores, thereby effectively making U.S.
Stores a direct subsidiary of American Telecom, PLC.










                                        5


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

                  Results of Operations

     Statements  contained in this report which are not historical  facts may be
considered forward looking  information with respect to plans,  projections,  or
future  performance  of the  Company as  defined  under the  Private  Securities
Litigation  Reform Act of 1995. These forward looking  statements are subject to
risks and  uncertainties  which could cause actual results to differ  materially
from those projected.

     Three  months  ended June 30, 1998  compared to the three months ended June
30, 1997:

     Consolidated   sales  for  the  three  months  ended  June  30,  1998  were
$7,319,749.  The  consolidated  sales for the three  months  ended June 30, 1998
include  sales of Play Co. in the amount of  $6,357,395,  and sales  reported by
U.S. Apparel amounting to $961,040.

     Consolidated  cost of sales for the three  months  ended June 30, 1998 were
$4,404,422,  or 60.2%, of sales. The component breakdown of this category was as
follows:

                           U.S. Apparel              $  698,090
                           Play Co.                   3,706,331

     Consolidated operating expenses were $2,751,073, or 37.6%, of sales for the
three months ended June 30, 1998.

     Consolidated  depreciation  and  amortization  expense in the three  months
ended June 30, 1998 was $188,652.

     Consolidated  interest  expense  amounted to $165,652  for the three months
ended June 30, 1998.

     For the three months ended June 30, 1998,  subsequent to the adjustment for
the minority interest in the net losses of subsidiaries,  the Company reported a
consolidated net loss of $77,213, or $.03 per common share.

     Liquidity and Capital Resources

     At June 30,  1998,  the  Company  reported  cash and  cash  equivalents  of
$1,689,040,   working  capital  of  $5,861,027  and   stockholders'   equity  of
$1,795,399.

     At March 31,  1998,  the  Company  reported  cash and cash  equivalents  of
$1,635,058,   working  capital  of  $6,500,401  and   stockholders'   equity  of
$1,983,988.

     The Company has generated  operating  losses for the past several years and
has  historically  financed  those losses and its working  capital  requirements
through  loans.  There  can  be no  assurance  that  the  Company  or any of its
subsidiaries  will be able to generate  sufficient  revenues or have  sufficient
controls over expenses and other charges to achieve profitability.

     During the three months ended June 30, 1998,  operating activities provided
funds in the  amount of  $1,045,644.  The  Company's  consolidated  net loss was
$177,550,  before  adjustment  for the  minority  interest  in the net losses of
subsidiaries.

     The Company used $461,993 in investing activities in the three months ended
June 30,  1998,  primarily  as a result  of the  Company's  Play Co.  subsidiary
purchasing property and equipment in relation to new store openings.

     The Company used $529,669 in financing activities.


<PAGE>
     As a result  of these  activities,  the  Company  reported  a  consolidated
increase in cash of $53,982.

     Year 2000

     The  Company  does not  believe  that the impact of the year 2000  computer
issue will have a significant  impact on its  operations or financial  position.
Furthermore,  the  Company  does  not  believe  that  it  will  be  required  to
significantly modify its internal computer computer systems.

     However,  if internal  systems do not correctly  recognize date information
when the year changes to 2000,  there could be adverse  impact on the  Company's
operations. Furthermore, there can be no assurance that another equity's failure
to ensure year 2000 capability would not have an adverse effect on the Company.

     Trends affecting liquidity, capital resources and operations

     As a result of its planned  merchandise  mix change to emphasize  specialty
and educational  toys, Play Co. enjoyed  significant  sales and gross profits in
the three months ended June 30, 1998.

     Play Co.'s current sales  efforts focus  primarily on a defined  geographic
segment consisting of the southern  California area and the southwestern  United
States.  Its future financial  performance will depend upon (i) continued demand
for toys and  hobby  items and  management's  ability  to adapt to  continuously
changing  customer  preferences  and the market for such items,  (ii) on general
economic  conditions within Play Co.'s geographic area, as same may be expanded,
(iii) Play Co.'s  ability to choose  locations  for new stores,  (iv) Play Co.'s
ability to purchase products at favorable prices and on favorable terms, and (v)
the effects of increased competition.

     The toy and hobby retail  industry  faces a number of  potentially  adverse
business  conditions  including  price and gross  margin  pressures  and  market
consolidation.   Play  Co.  competes  with  a  variety  of  mass  merchandisers,
superstores and other toy retailers,  including Toys 'R' Us, Kay Bee Toy Stores,
Wal-Mart and K-Mart.  Competitors that emphasize  specialty and educational toys
include Disney Stores,  Warner Bros.  Stores,  Learning Smith, Lake Shore, Zainy
Brainy and Noodle  Kidoodle.  There can be no assurance that Play Co.'s business
strategy will enable it to compete  effectively in the toy industry or that Play
Co. will be able to generate sufficient revenues or have sufficient control over
expenses and other charges to increase profitability.

     U.S.  Apparel's  sales are generated from  short-term  purchase orders from
customers  who  place  orders  on  as-needed  basis.   U.S.  Apparel   typically
manufactures  its products upon  receipts of orders from  customers and delivers
finished goods within four weeks of receipt of an order.  U.S. Apparel generally
manufactures  10% more goods than is ordered by  customers  in  anticipation  of
reorders from customers.

     U.S.  Apparel has been able to  purchase  raw  materials  from a variety of
suppliers.

     Inflation and seasonality

     The impact of inflation on the Company's results of operations has not been
significant.  Each subsidiary  attempts to pass on increased costs by increasing
product prices over time.

     Play Co.'s operations are highly seasonal with  approximately  3-40% of its
net sales falling  within Play Co.'s third  quarter,  which  coincides  with the
Christmas  selling season.  Play Co. intends to open stores throughout the year,
but generally  before the Christmas  selling  season.  Play Co.  intends to open
stores  throughout the year, but generally before the Christmas  selling season,
which will make Play Co.'s third quarter sales an even greater percentage of the
total year's sales.

     U.S.  Apparel's  operations  are  generally  not seasonal and are generally
spread throughout the year.


                                        6


<PAGE>
PART II - OTHER INFORMATION

ITEM 1 - Legal Proceedings:  None

ITEM 2 - Changes in Securities: None

ITEM 3 - Defaults Upon Senior Securities: None

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

ITEM 5 - Other Information: None

ITEM 6 - Exhibits and Reports on Form 8-K

         Exhibits:  None

         Reports on Form 8-K:  None





                                        7


<PAGE>
                                   SIGNATURES


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

Dated:        September 17, 1998

Multimedia Concepts International, Inc.
(Registrant)


\s\ Ilan Arbel
Ilan Arbel
President


\s\ Allean Goode
Allean Goode
Treasurer