UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Form 10-QSB

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES 
EXCHANGE ACT OF 1934

 FOR THE FISCAL QUARTER ENDED   SEPTEMBER 30, 1998

 Commission File Number          0-8146

MSI HOLDINGS, INC. f/k/a MICRO-MEDIA SOLUTIONS, INC.
 (Exact name of registrant as specified in charter)

 UTAH                                      87-0280886
State or other jurisdiction of     (I.R.S. Employer I.D. No.)
Incorporation or organization

501 Waller St., Austin, Texas 78702
(Address of principal executive offices)

Issuer's telephone number, including area code  (512) 476-6925

Securities registered pursuant to section 12(b) of the Act:
Title of each class   Name of each exchange on which registered
        None                         N/A

Securities registered pursuant to section 12(g) of the Act:
Title of each class   Name of each exchange on which registered
Common Stock,                        None
Par Value  $.10
        
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 report(s), and (2) has been subject to such filing 
requirements for the past 90 days.  
(1)  Yes  (  ) No  (X)    (2)  Yes (X)  No  (  )

Number of shares of common stock outstanding at September 30, 1998: 
12,002,721.














Part I: Financial Information Item 1: 
Consolidated Financial Statements


Index to Consolidated Financial Statements         Page


Consolidated Balance Sheets                         3
        

Consolidated Statements of Operation                4


Consolidated Statements of Cash Flows               5
        

Consolidated Statements of Stockholders' Equity     6


Notes to Consolidated Financial Statements          7





































MSI HOLDINGS, INC. AND SUBSIDIARIES 
Consolidated Balance Sheets  
                          
                                    September 30         March 31
                                        1998               1998
                                    (unaudited)          (audited)

                                                 ASSETS          
Current Assets
 Cash and Cash Equivalents         $     7,748        $    25,786
 Accounts Receivable - Trade           774,834            150,851
 Inventory                             397,832            285,023
 Short-Term Investment               1,350,000          1,350,000
 Other Receivables - Advances          174,530             86,961
                                     ---------          ---------
  Total Current Assets               2,704,944          1,898,621
           
Property, Plant, and Equipment 
 (at cost) net                       1,175,967            800,831
                                     ---------          ---------
TOTAL ASSETS                       $ 3,880,911        $ 2,514,308
                                     =========          =========


































The accompanying notes are an integral part of these financial statements.
MSI HOLDINGS, INC. AND SUBSIDIARIES 
Consolidated Balance Sheets - continued  
                          
                                    September 30         March 31
                                        1998               1998
                                    (unaudited)          (audited)

                              LIABILITIES AND STOCKHOLDERS EQUITY

Current Liabilities
 Accounts Payable - Trade          $   841,414        $   300,035
 Bank Line of Credit                 1,230,000          1,228,966
 Other Accrued Expenses                 96,988            169,336
 Current Maturities of
  Long-term Debt                       112,596            151,267
 Current Portion of Obligations
  Under Capital Leases                  94,005             41,097
 Other Notes Payable                   200,000            200,000
                                     ---------          ---------
  Total Current Liabilities          2,575,003          2,090,701
                                     ---------          ---------
Long Term Notes
 Notes Payable                         206,493            367,522
 Obligations under Capital 
  Leases For Equipment                 302,780            149,560
                                     ---------          ---------
  Total Long Term Notes                509,273            517,082
                                     ---------          ---------

Total Liabilities                    3,084,276          2,607,783
                                     ---------          ---------
Stockholders Equity
 Preferred stock Series B; $5.30
  stated value; 490,000 shares
  authorized, issued & outstanding   2,597,000          2,597,000
Preferred stock Series C; $10.60
  stated value; 99,057 shares
  authorized, issued & outstanding   1,050,004          1,050,004
Preferred stock Series D; $10.60
  stated value; 279,656 shares 
  authorized, issued & outstanding   2,964,364                  -
 Common stock at $.10 par value;     
  50,000,000 authorized; 12,002,721 
  and 11,518,571 shares issued 
  and outstanding, respectively      1,200,272          1,150,685 
 Additional paid-in capital          2,613,637          2,819,646
 Accumulated Deficit                (9,628,642)        (7,525,666)
                                     ---------          ---------
  Total Stockholders Equity            796,635             91,669
                                     ---------          ---------
TOTAL LIABILITIES AND 
 STOCKHOLDERS EQUITY               $ 3,880,911        $ 2,699,452
                                     =========          =========



The accompanying notes are an integral part of these financial statements.
MSI HOLDINGS, INC. AND SUBSIDIARIES 
Consolidated Statements of Operation - (UNAUDITED)
                
                                     For the Six Months    For the Three Months
                                     Ended September 30     Ended September 30 
                                      1998        1997        1998       1997  

Net Revenues:
 Hardware, Software & Peripherals $1,182,196  $1,138,797  $  678,564 $  212,771
 Service, Support & Integration      238,967     514,617     164,868    221,470
 Network Installation                174,746     365,821     150,848    247,818
                                   ---------   ---------   ---------  ---------
Net revenues                       1,595,909   2,019,235     994,280    789,451
                                   ---------   ---------   ---------  ---------
Cost of Goods Sold                
 Hardware, Software & Peripherals  1,137,451     681,063     718,247    278,859
 Service, Support & Integration       91,118     334,502      26,383    143,956
 Network Installation                163,926     254,104     146,719    173,779
                                   ---------   ---------   ---------  ---------
Total cost of goods sold           1,292,495   1,269,669     891,349    596,594
                                   ---------   ---------   ---------  ---------
Gross Margin                         203,414     749,556     102,931    192,857

Selling, General & Administrative           
 Salaries & benefits               1,239,533     728,321     686,326    421,252
 Professional fees and consultants   411,340     164,059     225,398    112,069
 Occupancy                           198,211      88,500     108,532     31,842
 Depreciation                        106,991      99,440      54,000     69,694
 Vehicle expense                      74,432      78,851      39,822     43,481
 Other expense                       307,358     294,216     207,983    230,923
 Interest expense, net                29,393      36,507       8,757     14,377
 Provision for bad debts                   -       1,284           -          -
                                   ---------   ---------   ---------  ---------
Total selling, general and
 Administrative                    2,367,258   1,491,178   1,330,818    929,638
                                   ---------   ---------   ---------  ---------
Operating Income (Loss)           (2,163,844) (  741,622) (1,227,887) ( 736,791)

Plus preferred stock dividends    (  159,422)          -  (   92,679)         -
                                   ---------   ---------   ---------  ---------
Net Loss available to 
 common stockholders              (2,323,266) (  741,622) (1,320,566) ( 736,791)
                                   =========   =========   =========   ========
Earnings (Loss) Per Share          $  (0.200)  $  (0.069)  $  (0.112)  $ (0.069)
                                   =========   =========   =========   ========
Weighted average number of shares 
 Outstanding used in earnings 
 (loss) per share calculation     11,630,458  10,764,733  11,753,571 10,764,733
                                  ==========  ==========  ========== ==========







The accompanying notes are an integral part of these financial statements.
MSI HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity 
For the Year Ended March 31, 1998 (Audited) and
For the Six Months Ended September 30, 1998 (unaudited)
(page 1 of 3)
                                    Preferred Stock 
                      Series B          Series C          Series D
                  Shares    Amount   Shares   Amount   Shares   Amount  
Balance
March 31, 1997         -          -       -          -       -          -
Common stock issued:
 Interest              -          -       -          -       -          -
 Compensation          -          -       -          -       -          -
 Preferred 
  stock dividend       -          -       -          -       -          -
Preferred stock 
 issued:
 Private 
  Placement       420,000  2,226,000 99,057  1,050,004       -          -
 Senior Debt       70,000    371,000      -          -       -          -
Preferred stock 
 dividend discount      -          -      -          -       -          -
Stock option for:
 compensation           -          -      -          -       -          -
 Placement agent        -          -      -          -       -          -
Cash received 
 for uncertificated 
 stock                  -          -      -          -       -          -
Common stock-
 Uncertificated
 Issued for note
 Receivable             -          -      -          -       -          -
Note receivable 
 Offset against
 Common stock
 Subscribed             -          -      -          -       -          -
Net loss                -          -      -          -       -          -
                  -------  --------- ------  --------- -------  ---------
Balance
March 31, 1998    490,000 $2,597,000 99,057 $1,050,004 
Preferred stock 
  issued:
  Private 
   Placement            -          -      -          - 279,657 $2,964,364
Common stock issued for:
 Rulee 144 Stock
 Compensation           -          -      -          -       -          -
 Preferred 
  stock dividend        -          -      -          -       -          -
 Class A Warrants
Stock options for
 Placement agents       -          -      -          -       -          -
Net loss                -          -      -          -       -          -
Balance           -------  --------- ------  --------- -------  ---------
September 30,1998 490,000 $2,597,000 99,057 $1,050,004 279,657  2,964,364
                  =======  ========= ======  ========= =======  =========
The accompanying notes are an integral part of these financial Statements.
MICRO-MEDIA SOLUTIONS, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity - continued
For the Year Ended March 31, 1998 (Audited), and
For the Three Months Ended June 30, 1998 (Unaudited)
(page 2 of 3)
                                                Common Stock
                             Common Stock        Subscribed     
                          Shares     Amount    Shares   Amount   
Balance
March 31, 1997        10,764,733 $1,076,473         -          -  
Common stock issued:
 Interest                 10,286      1,029         -          -  
 Compensation            414,900     41,490         -          -  
 Preferred 
  stock dividend          23,742      2,374         -          -  
Preferred stock 
 issued:
 Private 
  Placement       
 Senior Debt                   -          -         -          -
Preferred stock 
 dividend discount             -          -         -          -  
Stock option for:
 compensation                  -          -         -          -  
 Placement agent               -          -         -          -  
Cash received 
 for uncertificated 
 stock                   293,185    29,319          -          -  
Common stock-
 Uncertificated
 Issued for note
 Receivable                    -          -  543,000    407,250  
Note receivable 
 Offset against
 Common stock
 Subscribed                    -          - (543,000)  (407,250)  
Net loss                       -          -        -          -  
                      ----------  ---------  -------    ------- 
Balance
March 31, 1998        11,506,846  1,150,685        -          -
Preferred stock 
  issued:
  Private 
   Placement                   -          -        -          -
Common stock issued for:
 Rule 144 stock           50,000      5,000        -          -
 Compensation              1,500        150        -          -
 Preferred 
  stock dividend          24,375      2,437        -          -
 Class A Warrants        420,000     42,000        -          -
Stock options for  
 Placement agents              -          -        -          -
Net loss                       -          -        -          - 
Balance               ----------  ---------  -------    ------- 
September 30,1998     12,002,721  1,200,272        -          -
                      ==========  =========  =======    ======= 
The accompanying notes are an integral part of these financial Statements.
MICRO-MEDIA SOLUTIONS, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity - continued
For the Year Ended March 31, 1998 (Audited), and
For the Three Months Ended June 30, 1998 (Unaudited)
(page 3 of 3)
                        Additional     
                      (Discount on)    Accumulated       
                     Paid-in Capital     Deficit         Total
Balance
March 31, 1997       $(1,046,058)     $(  133,999)   $(  103,584)
Common stock issued:
 Interest                  4,114                -          5,143  
 Compensation            250,367                -        291,857  
 Preferred 
  stock dividend          56,294       (   58,668)             -  
Preferred stock 
 issued:
 Private 
  Placement           (  841,547)               -      2,434,457
 Senior Debt                   -                -        371,000
Preferred stock 
 dividend discount     3,412,502       (3,412,502)             -  
Stock option for:
 compensation             93,750                -         93,750  
 Placement agent         253,547                -        253,547  
Cash received 
 for uncertificated 
 stock                   483,130                -        512,449  
Common stock-
 Uncertificated       
 Issued for note
 Receivable                    -                -        407,250  
Note receivable 
 Offset against
 Common stock
 Subscribed                    -                -     (  407,250)  
Net loss                       -       (3,766,950)    (3,766,950)   
                      ----------        ---------      --------- 
Balance
March 31, 1998         2,666,099       (7,372,119)        91,669   
Preferred stock 
  issued:
  Private 
   Placement          (1,022,800)               -      1,941,564 
Common stock issued for:
 Rule 144 stock           48,000                -         53,000
 Compensation              7,853                -          8,003
 Preferred 
  stock dividend          90,242       (   92,679)             -
 Class A Warrants        291,900                         333,900       
Stock options for  
 Placement agents        532,343                         532,343
Net loss                       -       (2,163,844)    (2,163,844)  
Balance                ---------        ---------      ---------   
September 30,1998      2,613,637       (9,628,642)       796,635
                       =========        =========      ========= 
The accompanying notes are an integral part of these financial Statements.
MSI HOLDINGS, INC. AND SUBSIDIARIES 
Consolidated Statements of Stockholders' Equity 
For the Year Ended March 31, 1998 (Audited) and
For the Six Months Ended September 30, 1998 (unaudited)

                                        September 30,       March 31,
                                            1998              1998 
Cash Flows from Operating 
 Activities:
Net (Loss)                            $(2,367,258)      $(3,766,950)
Adjustments to reconcile net income
  to net cash, provided by operating 
  activities:
 Depreciation expense                     106,991           178,892
 Stock issued for compensation              8,002           291,857
 Stock options issued foe compensation          -            93,750
 Stock issued for interest                      -             5,143
 Change in accounts receivable         (  623,983)          832,062
 Change in inventory                   (  112,809)       (   19,569)
 Change in accounts payable               541,397        (  577,325)
 Change in accrued expenses            (   72,348)           57,775
Net Cash Provided by (used by)          ---------         ---------
 Operating Activities                  (2,520,008)       (2,904,365)
                                        ---------         ---------
Cash Flows from Investment Activities:
 Investment in property & equipment    (  482,127)       (  195,685)
 Purchase of short-term investment                       (1,350,000)
 Additional notes receivables                            (  142,265)
 Proceeds from notes receivables                            477,645
 Proceeds from other receivables                            162,793
 Additional other receivables          (   87,569)       (  121,341)
Net Cash provided by (Used by)          ---------         ---------
 Investing Activities                  (  569,696)       (1,168,853)
                                        ---------         ---------
Cash Flows from Financing Activities:
 Proceeds from Line of Credit               1,034           504,076
 Proceeds from other notes payable                          200,000
 Change in long term debt              (  199,700)       (  162,153)
 Proceeds from lease obligations          254,562                 -
 Payments in capital lease obligations (   48,434)       (   32,485)
 Proceeds from Private Placement        2,677,304         2,688,004
 Proceeds from issuance of common stock    53,000           512,450 
 Proceeds from exercise of warrants       333,900                 -
 Proceeds from Senior Convertible Debt          -           371,000
Net Cash Provided by (Used by)          ---------         ---------
 Financing Activities                   3,071,666         4,080,892
                                        ---------         ---------
Net Increase in Cash                   (   18,038)            7,674

Cash at Beginning of Period                25,786            18,112
                                        ---------         ---------
Cash at End of Period                 $     7,748       $    25,786
                                       ==========        ==========



The accompanying notes are an integral part of these financial Statements.
MSI HOLDINGS, INC. AND SUBSIDIARIES 
Consolidated Statements of Stockholders' Equity - continued
For the Year Ended March 31, 1998 (Audited) and
For the Six Months Ended September 30, 1998 (unaudited)

                                        September 30,       March 31,
                                            1998              1998 

Supplemental disclosures:
 Cash paid for interest            $       37,293       $   232,578

Supplemental schedule of non-cash investing and financing activities:
Preferred stock issued for: 
  Placement agent fees             $                    $   156,000
Stock options:
 Compensation                               8,003            93,750
Common stock issued for: 
 Compensation                                               291,857
 Interest on debt                                             5,143
 Preferred stock dividends                 92,679            58,668
Common stock subscribed for
  Note receivable                                           407,250
Debt converted to preferred stock                           371,000
Inventory received for notes                                 84,394
Discount on preferred stock                               3,412,502
              






























The accompanying notes are an integral part of these financial Statements.
MSI HOLDINGS, INC. AND SUBSIDIARIES 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998 (unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation:
The accompanying unaudited interim financial statements have been prepared in 
accordance with generally accepted accounting principals and the rules of the 
Securities and Exchange Commission (the SEC), and should be read in conjunction 
with the audited financial statements and notes thereto contained in the 
Company's latest annual Report filed with the SEC on Form 10-KSB/A on November 
12, 1998 and the latest quarterly report filed with the SEC on form 10QSB/A on 
November 12, 1998.  In the opinion of management, all adjustments consisting of 
normal recurring adjustments, necessary for the fair presentation of financial 
position and the results of operations for the interim periods presented have 
been reflected here in. The results of operation are not necessarily indicative 
of the results to be expected for the full year. Notes to the financial 
statements which would substantially duplicate the disclosure contained in the 
audited financial statements for the year ended March 31, 1998 and the three 
months ended June 30, 1998, as reported in the Form 10-KSB/A and Form 10QSB/A 
have been omitted.

Nature of Business and Organization:
MSI Holdings, Inc., (the Company),(formerly known as Micro-Media Solutions, 
Inc., and Mountain States Resources Corporation, ("MSRC")), was organized under 
the laws of the State of Utah on April 15, 1969.  MSRC began operations April 
15, 1969, as a mining, mineral extraction and oil and gas exploration company.  
MSRC discontinued its operations on 1993 and became a development stage company 
as described in the Statement of Financial Accounting Standards No.7, 
"Accounting and Reporting by Development Stage Enterprises".  On June 23, 1997, 
MSRC entered into an agreement and plan of reorganization with the shareholders 
of Micro-Media Solutions, Inc. (a Texas Corporation), ("MSI-Texas"), in which 
MSRC acquired 100% of the common stock of MSI-Texas.  As part of the 
reorganization, MSRC changed its name to Micro-Media Solutions, Inc.,(a Utah 
Corporation), ("MSI").  On October 14, 1998, MSI changed its name to MSI 
Holdings, Inc.  The transaction was accounted for as a recapitalization.

MSI-Texas is an Austin, Texas, based technology corporation formed to provide 
Computer hardware, software programming, system support, maintenance, media 
duplication, and kitting to the public and private sectors.  In addition, MSI-
Texas is certified by the State of Texas as a Historically Underutilized 
Business (HUB).

MSI-Texas is a business solutions technology integrator with infrastructure 
design and implementation services.  In addition, MSI-Texas' computer 
networking services includes  system integration and local wide-area networks.

Going concern:
As shown in the accompanying consolidated financial statements, the Company has 
incurred net losses of $2,323,266 for six months ended September 30, 1998.  As 
of September 30, 1998, the Company's current assets exceeded its current 
liabilities by $129,941.  These factors create a substantial doubt about the 
Companys ability to continue as a going concern.  The ability of the Company to
continue as a going concern is dependent on the Company's obtaining additional 
financing to fund the expenses related to operations and capital improvements.

MSI HOLDINGS, INC. AND SUBSIDIARIES 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998 (unaudited)

In May through July 1998, the Company received approximately $2.9 million in 
completion of phase III of a private placement agreement, which was used to 
retire debt, decrease past due accounts payable and for operating expenses.  In 
addition, the Company has completed arrangements with a private investment 
groups for a private placement of a newly created series E of preferred stock 
with net proceeds to the Company of approximately $2.6 million to take place in 
November 1998, and plans a public offering in the year ending March 31, 1999.  
Management identified and closed substantial contracts during the year ended
March 31, 1999, and believes it can produce the level of revenue necessary to 
return the Company to a positive earnings trend.  The financial statements do 
not include any adjustments that might be necessary if the Company is unable to 
continue  as a going concern.

Principles of Consolidation:
The consolidated financial statements for the six months ended September 30, 
1998 and 1997 and as of March 31, 1998, include the accounts and transactions 
of the Company and MSI-Texas.  All significant inter-company accounts and 
transactions have been eliminated in the accompanying consolidated financial 
statements.  The Company, however, did not have any material asset or liability 
accounts or account balances. With the exception of the Company's equity 
accounts and a deficit retained earnings, the significant account balances 
belong to MSI-Texas.

Cash and Cash Equivalents:
Cash equivalents consist primarily of funds invested in short-term interest-
bearing accounts.  The Company considers all highly liquid investment purchased
with initial maturities of three months or less to be cash equivalents. 

Accounts Receivable:
The Company follows the allowance method of expensing accounts receivable when 
considered uncollectible.  As of September 30, 1998 and March 31, 1998, 
management believes all accounts are collectible; and therefore, no allowance 
has been recorded. Included in other expenses is a $35,000 recovery of a 
previously written-off bad debt. 

Inventory:
Inventory is valued at lower of cost, using the FIFO method
(first-in/first-out), or market. Inventory consists principally of hardware 
and software needed for maintaining and building network technology for 
customers.














MSI HOLDINGS, INC. AND SUBSIDIARIES 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998 (unaudited)

Property, Plant, and Equipment:
Property and equipment are stated at cost. For financial statement purposes, 
depreciation is computed using the straight-line method over the estimated 
useful lives of the related assets.  Amortization of leasehold improvements is 
computed using the straight-line method over the shorter of the term of the 
related lease or the useful life of the leasehold improvements.  Accelerated 
depreciation methods are used for tax purposes. Depreciation and amortization 
are calculated over the following useful lives stated in years:

                                                         Useful
                                                         Lives
	Vehicles                                                5
	Furniture and fixtures                                  5
	Equipment                                               5
	Leasehold improvements                                 20

Revenue and cost recognition:
Revenue from sales of hardware, software and peripherals is recognized upon 
shipment to the customer.  Most hardware, software and peripherals sales are 
made without the right of return.  Product returns which are minimal are 
recorded as a reduction of sales upon receipts of the product.  Service, 
support and integration sales are recognized upon completion of the service and
is not subject to warranty.

Revenue from fixed priced contracts is recognized on the percentage-of-
completion method of accounting, measured by the cost-to-cost method.  This 
method is used because management considers total costs incurred to be the best 
available measure of progress on contracts.

Contract costs include all direct costs and those indirect costs related to 
contract performance.  Changes in job performance, conditions, and estimated 
profitability and final contract settlements may result in revisions to costs 
and revenue and are recognized in the period in which the revisions are 
determined.

The asset, "Costs and Estimated Earnings in Excess of Billings Uncompleted 
Contracts", represents revenue earned in excess of amounts billed.  The 
liability "Billings in Excess of Costs and Estimated Earnings on Uncompleted 
Contracts" represents billings in excess of amounts earned.

Revenue and contract costs from fixed priced contracts are included in the 
various categories of revenue and cost of goods sold in the accompanying 
financial statements.  

Federal Income Tax:
The Company uses the liability method of accounting for income taxes as 
prescribed by the Financial Accounting Standard Board Statement No. 109.  
Deferred tax liabilities and assets are determined based on differences between 
the financial statement and tax basis of assets and liabilities using enacted 
tax rates expected to be in effect for the year in which the differences are 
expected to reverse.  The net change in deferred tax assets and liabilities is 
reflected in the statement of operations.

MSI HOLDINGS, INC. AND SUBSIDIARIES 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998 (unaudited)

New Accounting Pronouncements:
The Company accounts for stock options and warrants issued to employees in 
accordance with APB 25, "Accounting for Stock Issued to Employees".  The 
Company follows FASB Statement 123, "Accounting for Stock-Based Compensation" 
("SFAS No. 123")  for financial statement disclosure purposes and issuance of 
options and warrants to non-employees for services rendered.

In accordance with SFAS 121, "Accounting for the Impairment of Long-Lived 
Assets and for Long-Lived Assets to be Disposed Of", management reviews 
long-lived assets and intangible assets for impairment whenever events or 
changes in circumstances indicate the carrying amount of an asset may not be 
fully recoverable.  As part of this assessment, management prepares an analysis
of the undiscounted cash flows for each product that has significant long-lived
or intangible asset values associated with it.  This analysis for the asset 
values as of September 30, 1998 and March 31, 1998, indicated there was no 
impairment to the carrying value of these assets.

SFAS No. 130, "Reporting Comprehensive Income", effective for fiscal years 
beginning after December 15, 1997, establishes standards for reporting and 
display of comprehensive income and its components in a full set of general 
purpose financial statements.  This statement requires that all items that are 
required to be recognized under accounting standards as components of 
comprehensive income be reported in a financial statement that is displayed 
with the same prominence as other financial statements.  The Company has 
addressed the requirements of SFAS No. 130 and there is no material impact on 
the financial statements.

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related 
Information", effective for fiscal years beginning after December 15, 1997, 
establishes standards for reporting information about operating segments in 
annual financial statements and interim financial reports issued to 
shareholders.  Generally, certain financial information is required to be 
reported on the basis that is used internally for evaluating performance or an 
allocation of resources to operating segments.  The Company has adopted the 
requirements of SFAS No. 131 and there is no material impact on the financial 
statements.

Use of Estimates and Certain Concentrations:
Management of the Company has made a number of estimates and assumptions 
relating to the valuation and reporting of assets and liabilities and the 
disclosure of contingent assets and liabilities to prepare these consolidated 
financial statements in conformity with generally accepted accounting 
principles.  Although actual results could differ from those estimates, 
management believes its estimates are reasonable.  Certain components, 
subassemblies and software included in the Company's computer systems are 
obtained from sole suppliers or a limited number of suppliers.  The Company 
relies, to a certain extent, upon the ability of its suppliers' to enhance 
existing products in a timely and cost-effective manner, develop new products 
to meet changing customer needs and to respond to emerging standards and other 
technological developments in the computer industry.  The Company's reliance on 
a limited number of suppliers involves several risks, including the possibility 
of shortages and/or increases in costs of components and subassemblies, and the 
risk of reduced control over delivery schedules.
MSI HOLDINGS, INC. AND SUBSIDIARIES 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998 (unaudited)

Financial Instruments:
Cash equivalents include highly liquid short-term investments with original 
maturities of three months or less, readily convertible to known amounts of 
cash.  The amounts reported as cash equivalents, receivables, other assets, 
accounts payable and accrued expenses and debt are considered by the Company to 
be reasonable approximations of their fair values, based on market information 
available to management as of September 30, 1998 and March 31, 998. The use of 
different market assumptions and estimation methodologies could have a material 
effect on the estimated fair value amounts.  The reported fair values do not 
take into consideration potential taxes or expenses that would be incurred 
in an actual settlement.

Financial instruments that potentially subject the Company to concentration of 
credit risk consist principally of cash and cash equivalents and trade accounts 
receivable.  A concentration of credit risk may exist with respect to trade 
receivables, as many of the Company's customers are in the computer and 
telecommunications industries. The Company has a large number of customers on 
which it performs ongoing credit evaluations and generally does not require 
collateral from its customers. Historically, the Company has not experienced 
significant losses related to receivables from individual customers or groups 
of customers in any particular industry or geographic area.

NOTE 2 - STOCKHOLDERS' EQUITY

In October 1997, the Company completed  a  Private  Placement  Agreement,  (the 
"Agreement")  with a  group of accredited investors.  The Agreement provides 
for three "Phases" of financing. 

Phase I of the Agreement was funded in November 1997. The Company received 
$2,120,000 in exchange for 400,000 shares of series B preferred stock (5% 
cumulative, convertible, non-voting, stated value $5.30) ,(the "Series B 
Stock").  Each share of preferred stock is initially convertible into 10 shares 
of the Company's common stock subject to adjustment and six warrants, (the 
"Warrants") for the purchase of six shares of common stock at $1.50 per share.  
The Company paid $302,000 and issued 20,000 shares of series B preferred stock 
for placement agent fees in Phase I.  Also options to purchase 400,000 shares 
of common stock at $1.50 per share were issued as a part of the agreement.  The 
common stock had a fair value of $0.57 per share at the grant date of the 
options resulting in $226,800 in placement agent fees.  The Agreement states 
that conversion of the preferred stock will not occur to the extent that the
HUB status of the Company is compromised. An additional 4,348,738 shares could 
be converted before the HUB status would be lost.

The series B preferred stock can be converted to common stock. Therefore, a 
discount in the amount of $6,151,978 has been realized. The discount is the 
difference in the intrinsic value of the common stock and warrants less the net 
proceeds from the series B preferred stock.  The discount is accreted from the 
date of issuance of the preferred stock to the date the stock can be converted. 
Due to the limitation on the number of shares of stock that can be issued to 
retain the HUB status, $3,412,502 has been recorded as dividends and as an 
increase in additional paid-in capital in the accompanying financial statement. 
The unrecognized portion of the discount in the amount of $2,796,524 will be 
recorded if and when the preferred stock is converted or the HUB status changes.
MSI HOLDINGS, INC. AND SUBSIDIARIES 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998 (unaudited)

Phase II of the Agreement was funded in February 1998. The Company received 
$1,000,004 in exchange for 94,340 shares of series C preferred stock (6% 
cumulative, convertible, non-voting, stated value, $10.60), (the "Series C 
Stock).  Each share of preferred stock is initially convertible into 10 shares 
of the Company's common stock, subject to adjustment. The Company paid $130,000 
and issued 4,717 shares of series C preferred stock for placement agent fees.  
Also options to purchase 47,170 shares of common stock at $4.00 per share were 
issued as a part of the agreement.  The common stock had a fair value of $0.57 
per share at the grant date resulting in $26,745 in placement agent fees.  The 
Agreement states that conversion of the preferred stock will not occur to the 
extent that the HUB status of the Company is compromised.

The series C preferred stock can be converted to common stock. Therefore, a 
discount in the amount of $615,851 has been realized.  The discount is the 
difference in the intrinsic value of the common stock less net proceeds from 
the series C preferred stock. Due to the limitation on the number of shares of 
stock that can be issued to retain the HUB status, the unrecognized discount in 
the amount of $615,851 will be recorded if and when the preferred stock is 
converted or the HUB status changes.

Phase III of the Agreement was funded in May through July 1998.  The Company 
received $2,923,204 in exchange for 266,340 shares of series D preferred stock 
(6% cumulative, convertible, non-voting, stated value, $10.60), (the "Series D 
Stock").  Each share of preferred stock is initially convertible into 10 shares 
of the Company's common stock, subject to adjustment. The Company paid $349,318 
and issued 13,317 shares of series D preferred stock for placement agent fees.  
Also options to purchase 250,850 shares of common stock at $1.59 per share were 
issued as a part of the agreement.  The common stock had a fair value of $1.81 
to $3.05 per share at the grant date resulting in $532,343 in placement agent 
fees.  The Agreement states that conversion of the preferred stock will not 
occur to the extent that the HUB status of the Company is compromised.

The Series D preferred stock can be converted to common stock.  Therefore, a 
discount in the amount of $4,781,739 at September 30, 1998 has been realized.  
The discount is the difference in the intrinsic value of the common stock less 
the net proceeds from the series D preferred stock.  Due to the limitation on 
the number of shares of stock that can be issued to retain the HUB status, the 
unrecognized discount in the amount of $4,781,739 will be recorded if and when 
the preferred stock is converted or the HUB status changes.

Senior convertible debt in the amount of $371,000 was issued for cash in 
November 1997.  This debt was converted to 70,000 shares of series B preferred 
stock(5% cumulative, convertible, non-voting, stated value, $5.30), in February 
1998.  Accrued interest in the amount of $5,143 was paid with the issuance of 
10,286 shares of common stock. The discount on this issue of series B preferred 
stock is included in the total series B discount detailed above.

Preferred stock dividends were paid with the issuance of common stock valued at 
the previous thirty day average closing bid price per share of common stock as 
follows:                SHARES       AMOUNT
                        ------      --------
June 30, 1998           10,224      $ 66,743        
September 30, 1998      14,150      $ 92,679
MSI HOLDINGS, INC. AND SUBSIDIARIES 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998 (unaudited)

NOTE 3 - CONTINGENCY

On December 18, 1997, Argus Management, Inc. filed Plaintiffs Original Petition 
in the 216th District Court of Kerr County, Texas. Argus claims the Company and
Mr. Jose G. Chavez, as joint obligors, defaulted on their obligation to Argus 
pursuant to two promissory notes for $100,000 each, both dated June 2, 1997.  
Argus is seeking a judgment for $200,000, together with interest on the notes 
at the rate of 20% per annum from June 2, 1997, through the date the notes are 
satisfied. As of March 31, 1998, $65,000 had been disbursed to third parties in 
satisfaction of obligations of Argus Management, Inc. The $65,000 has been 
recorded in other receivables in the accompanying financial statements.

On February 6, 1998, the Company filed Plaintiff's Original Petition in the 
above-referenced case.  The Company asserts breach of contract, fraud, 
defamation, usury, and civil conspiracy claims against Argus Management, Inc.  
The Company strongly disagrees with Argus' contentions and denies liability to 
Argus under the notes and plans to oppose vigorously Argus' claims and recover 
the amounts disbursed to third parties.

On January 22, 1998, the Company filed a lawsuit against Bits Technical 
Corporation for damages attributable to a breach of commitment.  This matter is 
still pending.  On August 17, 1998, Bits Technical Corporation ("BTC") filed a 
counterclaim against the Company in connection with the above case.  In the 
counterclaim, BTC asserts the Company fraudulently induced BTC to promise to 
loan money to the Company.  In particular, BTC claims the Company promised 
certain contracts and business opportunities to BTC that the Company was 
unwilling or unable to deliver.

On November 20, 1996, MCA Communications, Inc. ("MCA") filed a lawsuit against 
the Company in County Court at Law No. 2 in Harris County, Texas.  MCA claims 
the Company owes $12,485 for certain goods and services that MCA claims to have 
provided to MSI in connection with various projects for the Texas Department of 
Health.  MCA also seeks interest, costs, and attorneys' fees.  On January 6, 
1997, the Company filed its answer and denied the above-referenced claim in its 
entirety.



















Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS 

THIS MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF 
OPERATIONS SECTION AND OTHER PARTS OF THIS PROSPECTUS CONTAIN FORWARD-LOOKING 
STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES.  THE COMPANY'S ACTUAL RESULTS 
MAY DIFFER SIGNIFICANTLY FROM THE RESULTS DISCUSSED IN THE FORWARD-LOOKING 
STATEMENTS. FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT 
LIMITED TO, THOSE DISCUSSED BELOW AND IN "RISK FACTORS" AND "BUSINESS."

Overview

Micro-Media Solutions, Inc. ("MSI"), the operating subsidiary of MSHI was 
created in 1993 in Austin, Texas, to provide computer hardware, software 
programming, system installation and support, maintenance and media duplication 
to the public and private sectors.  MSI maintains certification as a minority-
owned business enterprise and status as a Historically Underutilized Business 
("HUB").  On June 23, 1997, the then shareholders of MSI entered into an 
agreement and plan of reorganization ("Combination Agreement") with Mountain 
States Resources Corporation (now known as MSI Holdings, Inc.), whereby the 
Company acquired all of the issued and outstanding stock of MSI in exchange for 
9,310,000 shares of the Common Stock of the Company (the "Combination"). The 
Combination was accounted for as a recapitalization.

Among the principal costs to market and sell the Company's products are 
advertising and promotion costs, salaries and commissions, and general and 
administrative expenses.  MSHI's operating results  may be subject to 
fluctuations on a quarterly and an annual basis as a result of various factors, 
including, but not limited to, fluctuating market pricing for computer and 
semiconductor memory products, industry competition, seasonal government 
purchasing cycles, and working capital restrictions on manufacturing and 
production.  Therefore, the operating results for any particular period are not 
necessarily indicative of the results that may occur in any future period. 

The Company's revenues consist of hardware sales, software sales and the 
delivery of technical services, including installing and maintaining networks 
system. The technical service sales of the Company typically yield a higher 
gross margin than the hardware and software sales of the Company.  This is due, 
in part, to  the intense competition in the hardware and software sales sector 
from Original Equipment Manufactures ("OEM's") and distributors.  As a result, 
the Company, is attempting to strategically reposition itself from emphasizing 
hardware sales to intensifying sales of technical services.  See Management's 
Discussion and Analysis of Financial Conditions and Results of Operations -
Results of Operations.













Recent Developments

On July 27, 1998, MSI entered into a renewable 10 year sublease with GTE 
Intelligent Network Services, Inc. ("GTE") under which MSI agreed to lease a 
portion of their east Austin facilities to GTE for installation of GTE's Point 
of Presence ("POP") equipment (the "Sublease").  On May 29, 1998, MSI entered 
into a 3 year subscription to GTE's Internet Advantage version 5.1 Connection 
Service granting MSI access to GTE's POP ("Connection Service")(the Sublease 
and Connection Service are collectively referred to as the "GTE Agreement").  
GTE's establishment, management and monitoring of multiple domains on behalf of 
MSI is included in the Connection Service.  The Connection Service was upgraded 
to GTE's Internet Advantage version 6.0 on September 29, 1998.  MSI will lease 
connections to the POP for access to the GTE Internet network to other 
businesses.  MSI will target companies that need direct, high-speed access to 
the Internet through turn-key collocation services for high volume (known as 
bandwidth) Internet web applications.  Collocation is a service that provides a 
high speed, high bandwidth connection to the Internet backbone using various 
backup systems to increase the connection's fault tolerance.  By connecting 
directly to Internet via the POP, MSI is able to eliminate the local loop, the 
weakest component in localized Internet connections. MSI will have the capacity 
to support over four thousand collocation rack spaces.  These rack spaces will 
be used to host the net servers for MSI clients and provide those clients with 
direct access to the Internet.  When fully implemented, these collocation 
services are expected to significantly increase MSHI's revenues over the term 
of the Connection Service.  The GTE Agreements provide the potential for MSHI 
to increase revenue by selling Internet access to various high Internet demand 
entities for such activities as commerce and academics.  It is anticipated that 
the requisite hardware will be operational in January 1999. 
  
In July 1998, MSI began providing systems integration, warehousing, systems 
configuration and other fulfillment  services for Siemens-Nixdorf Information 
Systems, Inc. ("Siemens-Nixdorf") for  Point of Sale ("POS") systems and 
Automated Teller Machines for Siemens-Nixdorf's customers such as Sears-Roebuck 
,and Bealls department stores (the "Siemens-Nixdorf Agreement"). This agreement 
provides that Siemens-Nixdorf will store its inventory at MSI, and MSI will 
charge Siemens-Nixdorf for various systems integration services.  This 
arrangement provides MSHI with a revenue stream without a significant working 
capital commitment.

MSHI formed TeleVista, Inc., a wholly owned subsidiary ("TVI") in September of 
1998 to run the electronic commerce business for the on-line sale of hardware 
and software over the Internet through the use of a secure server. Secure 
servers allow for the accelerated receipt of funds through credit card payments 
for hardware and software purchases made through their web sites operated by it.













Results of Operations

Three Months Ended September 30, 1998 Compared with the Three Months Ended 
September 30, 1997

Revenues for the quarter ended September 30, 1998 of $994,280 increased 
$204,829 or 25.9% from the $789,451 recorded in the quarter ended September 30,
1997. 

Cost of goods sold for the quarter ended September 30, 1998 increased $294,755 
or 49.4% to $891,349 from the quarter ended September 30, 1997 representing 
89.7% of revenue. The gross margin for the quarter ended September 30, 1997 was 
$596,594 or 75.6% of revenue.

Selling, General and Administrative Expenses the quarter ended September 30, 
1998 of $1,330,818 represents 133.85% of Revenues.  The 1998 figure represents 
an increase over the quarter ended September 30, 1997 of $401,170 or 43.2%.  
Approximately $265,000 of the increase represent the increase in staff salaries 
and benefits.  Staff additions include service technicians, sales staff, 
accounting staff and middle management to enable the Company to work on larger 
service contracts. The majority of the remaining increase in expenses is 
attributable to facility expansion, professional fees, marketing cost 
associated with new service contracts, and other expenses associated with the 
start up of new service contracts.


Six Months Ended September 30, 1998 Compared with the Six Months Ended 
September 30, 1997

Revenues for the six months ended September 30, 1998 of $1,595,909 decreased 
$423,326 or (20.96%) from the $2,019,235 recorded in the six months ended 
September 30, 1997. 

Cost of goods sold for the six months ended September 30, 1998 increased 
$22,826 or 1.8% to $1,292,495 from the six months ended September 30, 1997 
representing 80.99% of revenue. The gross margin for the six months ended 
September 30, 1997 was $1,269,669 or 62.88% of revenue.

Selling, General and Administrative Expenses the six months ended September 30, 
1998 of $2,367,258 represents 148.33% of Revenues.  The 1998 figure represents 
an increase over the six months ended September 30, 1997 of $876,080 or 
58.75%. Approximately $511,000 of the increase represents the increase in staff
salaries and benefits.  Staff additions include service technicians, sales 
staff, accounting staff and middle management to enable the Company to work on 
larger service contracts. The majority of the remaining increase in expenses is 
attributable to facility expansion, professional fees, marketing cost 
associated with new service contracts, and other expenses associated with the 
start up of new service contracts.










Going Concern Issues

The Company's significant historical losses raise a doubt as to the Company's 
ability to continue as a going concern.  The Company plans to address the going 
concern issues described elsewhere in this Prospectus through an additional 
private placement and a possible $20 million debt issue.  However, there can be 
no assurance that the Company will be able to secure such additional capital.  
Subsequent to March 31, 1998, the Company received $2 million dollars in 
proceeds from Private Placement Phase III (as defined) that have been used to 
retire debt, decrease past due accounts payable and for operating expenses.  As 
a result, the Company's current ratio has improved and its cash position has 
increased  The Company is in the process of consummating a private placement of 
a newly created series of preferred stock with net proceeds to the Company of 
approximately $2.6 million (the "Proposed Private Placement"). In the event the 
Proposed Private Placement is not consummated in the near future, the Company 
will experience significant cash flow and working capital restraints sufficient 
to create a likelihood that the Company will not continue as a going concern.

Management believes that its contracts with GTE and Siemens Nixdorf  have the 
possibility of producing revenues of approximately $3 million in 1999.  The 
Company's ability to fulfill its obligations under the Switching Agreement is 
contingent upon the successful consummation of the Proposed Private Placement 
and obtaining the  working capital contemplated by the debt issue described in 
the preceding paragraph.
  
Potential Loss of Hub Status

MSI  is currently qualified in Texas as a "Historically Underutilized Business" 
("HUB").  As long as MSI maintains its status as a HUB, it will continue to 
receive favorable treatment by certain governmental entities in their granting 
of contracts.  The Company generated revenues of approximately $414,000 and 
$919,000 during the years ended March 31,1998 and 1997, respectively, from HUB 
related contracts, or 15% and 20% of its gross revenues, respectively. MSI will 
graduate from its HUB status upon the happening of any of the following events: 
(i) less than 51% of the Company's voting stock is owned by minorities; (ii) 
such minority owners are not active participants in the day-to-day operations 
and management of the business; (iii) the four year average of gross revenue of
MSI exceed certain levels based on the MSI's Standard Industrial Classification 
Code ("SIC Code"); or (iv) the four year average of total employment levels of 
MSI exceeds the Small Business Administration established levels for businesses 
with a similar four-digit SIC Code.  Under the current SIC Code applicable to 
MSI, MSI must not exceed 500 employees, it currently has 79 employees.  The 
current SIC Code class does not impose a revenue ceiling, however, some 
SIC Code classifications under which MSI operated placed a three year or a four 
year average of gross revenue limitation. The potential loss of HUB status may 
also be contingent upon the  SIC Code under which MSI operates in the future.  
Future changes in operations may require the MSI to change its SIC Code, which 
could alter the employee ceiling and impose revenue restrictions as low as $5 
million per year, averaged over periods as short as three years.  There can be  
no assurance that MSI will continue to qualify for HUB status. Further, there 
is no assurance that HUB-type programs will not be eliminated by the state or 
federal governments.  If MSI's HUB status is lost, the Company anticipates a 
significant loss of revenues.




Liquidity and Capital Resources

On November 18, 1997, the Company received $2,120,000 upon completion of a 
private placement whereby 400,000 of Series B Preferred were sold to 
Entrepreneurial Investors, Ltd. ("EIL") for $5.30 per share ("Private Placement
Phase I").  The Company also issued 20,000 shares of Series B Preferred to 
Equity Services, Ltd. ("ESL") as a commission for the completion of Private 
Placement Phase I. The Company received $371,000 in October 1997 from two 
individuals pursuant to two senior convertible notes (the "Notes"), which are 
secured by an aggregate of 1,050,000 shares of Common Stock of the Company. The 
Notes were subsequently converted into an aggregate of 70,000 shares of Series 
B Preferred.  On February 4, 1998, the Company received $1,000,000 completing a
second private placement whereby 94,340 shares of Series C Preferred were sold 
to EIL for a purchase price of $10.60 per share ("Private Placement Phase II"). 
As commission for the completion of Private Placement Phase II, the Company 
issued 4,717 shares of Series C Preferred to ESL.  By July, 1998, the Company 
received $2,964,364 completing a third private placement, whereby 279,657 
shares of Series D Preferred were sold to fourteen investors for a purchase 
price of $10.60 per share ("Private Placement Phase III").  The expenses for 
Private Placement Phase I, Private Placement Phase II, and Private Placement 
Phase III, including broker fees, commissions and legal and accounting expenses
totaled $408,000, $180,000, and $490,478, respectively.

For the six months ended September 30, 1998 and the year ended March 31,1998, 
the Company's total assets were $3,880,911 and $2,514,308 respectively, with 
liabilities of $3,084,276 and $2,607,783, respectively. Current assets of 
$2,704,944 and $1,898,621 represent 105.0% and 79.9% of current liabilities of 
$2,575,003 and $2,090,701.  Improvements in the Company's cash position are a 
result of the collection of accounts receivable and funds from increases in 
shareholder equity resulting from the previously consummated private placements 
more particularly described above. Reductions in accounts receivable between 
1998 and 1997 are a direct reflection of the reduced level of sales experienced 
in 1998.  The Company's liabilities of $3,084,276 at September 30,1998 consist 
of $1,230,000 of a fully secured credit line, $1,345,003 of current liabilities 
and $509,273 of long-term liabilities.

The Company, subsequent to the end of March 31, 1998, paid its Bank One Texas, 
NA loans in full and substantially reduced the borrowings under its fully 
secured line of credit. Net shareholders equity as of September 30, 1998 and 
March 31, 1998 was $796,635 and $91,669, respectively.  During the year ended 
March 31, 1998, and the six months ended September 30, 1998, the Company 
completed Private Placement Phase I, Private Placement Phase II and Private 
Placement Phase III.  Receipt of these funds enabled the Company to reduce its 
outstanding debt and pay off the past due accounts payable.

Subsequent to September 30, 1998, the Company made arrangements for an 
additional private placement of $3,000,000. The Company will issue 100,000 
shares of Series E preferred stock, at a stated value of $30 per share. 

During the six months ended September 30, 1998, working capital increased 
$322,021 from March 31, 1998. The balances of its accounts payables, accrued 
expenses and accounts receivable were increased as a result increased sales and 
the resulting increase in related accounts.  At September 30, 1998, the Company 
had a working capital of $129,941 compared to a working capital deficit of 
($192,080) at March 31, 1998.    

The Company has a critical need for additional working capital to meet 
contractual obligations under the GTE Agreements. Management believes that the 
GTE Agreements  with Siemens Nixdorf Agreements have the potential to increase 
revenue levels, provided that sufficient working capital is obtained.  See 
Management's Discussion and Analysis of Financial Conditions and Results of 
Operations and Going Concern Issues.

Year 2000 Issues.

As with other companies, the Company has started a program to study the impact 
on its computer system in order to be Year 2000 compliant.  This study involved 
identifying any modifications or replacements of certain hardware and software 
maintained by the Company.  The study has been completed.  The company has 
identified the computer systems that will require either modification, upgrade 
or replacement.  Implementation of the Company's Year 2000 plan should be 
completed by March 31, 1999.  The Company anticipates that in-house personnel 
will be primarily responsible for completing the tasks and that the costs will 
be insignificant. As such, the Company believes that the planned modifications, 
upgrades and replacements of existing systems will be completed in a timely 
fashion to assure Year 2000 compliance, and any related cost will not have a 
material impact on the Companys results of operations, cash flows, or financial 
conditions in future periods.  The Company has budgeted for $25,000 to address 
these expenses.  In addition, the Company is also taking actions to assure that 
its customers and vendors are taking steps to remedy their Year 2000 issues.
The Company is not incurring any unique risks in connection with Year 2000 
issues.  It is however subject to the risk that information and financial 
resources may be temporarily unavailable.  This societal risk may temporarily 
disrupt cash flows worldwide.  The Company believes that by becoming, and 
assisting its clients and vendors to become, Year 2000 compliant its likely to 
circumvent that threat. The Company expects to be Year 2000 compliant March 31, 
1999.  If compliance is not achieved by that date, the Company will reallocate 
resources, as necessary, to ensure compliance within six months, thereafter.

Inflation.

Management does not believe that inflation will have a material impact on the 
Company's pricing of goods or services since the Company, generally, has the 
ability to adjust prices to meet the current market conditions. 






















                          PART II: Other Information


ITEM 1: LEGAL PROCEEDINGS

For a discussion of Legal Proceedings, refer to Note 3, Contingencies, in the  
Notes to Consolidated Financial Statements in Part I 


ITEM 2: CHANGES IN SECURITIES AND USE OF PROCEEDS

For a discussion of Changes in Securities and Use of Proceeds, refer to Note 2, 
Stockholders' Equity, in the Notes to Consolidated Financial Statements in Part 
I 



ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K


(B) REPORTS ON FORM 8-K

16.1  FORM 8-K/A, FILED SEPTEMBER 25, 1998 

16.2  FORM 8-K, FILED SEPTEMBER 17, 1998

16.3  FORM 8-K, FILED SEPTEMBER 17, 199
































SIGNATURES

Pursuant to the requirements of 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.





Date  11/16/1998           By:  /s/  Jose G Chavez
                                     Jose G. Chavez, President


Pursuant to the requirements of the Securities Exchange Act of 1934, this 
report has been signed below by the following persons on behalf of this 
Registrant and in the capacities and on the dates indicated.

Signature                          Capacity                  Date

/s/ Jose G Chavez                                         11/16/1998
    Jose G. Chavez           Chairman of the Board of        
                              Directors and President

/s/ Mitchell Kettrick                                     11/16/1998
    Mitchell Kettrick        Vice-President and Director     


/s/ David Hill                                            11/16/1998
    David Hill               Chief Financial Officer


/s/ Ernesto Chavarria                                     11/16/1998
    Ernesto Chavarria        Director