U.S. SECURITIES AND EXCHANGE COMMISSION 
 
                         Washington, D.C. 20549 
 
 
 
 
                              FORM  10-KSB 
 
 
 
 
            ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF 
 
                 THE SECURITIES EXCHANGE ACT OF 1934 
 
 
 
 
For fiscal year ended March 31, 1997	           Commission File No. 0-25810 
 
 
 
 
 
                        ISO BLOCK PRODUCTS USA, INC. 
 
            (Exact name of registrant as specified in its charter) 
 
 
          	COLORADO                                84-1026503 
 
(State or other jurisdiction of	          (I.R.S. Employer Identification No.)
incorporation or organization) 
 
 
 	8037 South Datura Street 
	 Littleton, Colorado 80120                      (303) 795-9729 
 
(Address of Principal's Executive        (Registrant's Telephone No. 
         Offices)                               incl. area code) 
 
 
 
 Securities registered pursuant to Section 12(b) of the Act:   NONE 
 
 
 Securities registered pursuant to Section 12(g) of the Act:   Common 
Stock, $.0001 par value. 
 
 
 Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act 
of 1934 during the preceding 12 months (or such shorter period that the 
registrant was required to file such reports), and (2) has been subject 
to such filing requirements for at least the past 90 days. 
 
 Yes        No   X   
 
 
 Indicate by check mark if no disclosure of delinquent filers in response 
to Item 405 of Regulation S-B will be contained in this form, and no 
disclosure will be contained, to the best of registrant's knowledge, in 
definitive proxy or information statements incorporated by reference in 
Part III of this Form 10-KSB or any amendment to this Form 10-KSB. 
 
 Yes         No   X   
 
 
 The registrant's revenues for its most recent fiscal year were 
$46,228. 
 
 
 The aggregate market value of the 1,219,321 shares of common stock of 
the registrant held by non-affiliates on June 6, 1997 was not 
determinable. 
 
 
 At June 6, 1997, a total of 2,070,821 shares of common stock were 
outstanding. 
 
 
 
 
                                  PART I 
 
 
 
Item 1.	Prior Business 
 
          On March 28, 1994, the Company entered into an Agreement and Plan 
        of Reorganization ("Reorganization Agreement") with R-S Iso-Block 
        Produktions GmbH, a German limited liability company ("Iso-Block 
        GmbH"), Josef Ratey, an individual ("Ratey"), Helge Seidel, an 
        individual ("Seidel"), and R-S Plus Investment Corp., a Florida 
        corporation ("R-S PLUS").  Pursuant to the Reorganization Agreement, 
        on March 31, 1995 the Company purchased from Ratey and Seidel all 
        of the equity interest in Iso-Block GmbH, and purchased from 
        R-S Plus all of its right, title and interest in and to Iso-Block 
        GmbH, including all R-S Plus property heretofore contributed to 
        Iso-Block GmbH and all R-S Plus's rights to Iso-Block profits, in 
        exchange for the issuance of an aggregate of 2,000,000 shares of  
        the Company's authorized but heretofore unissued common stock, no 
        par value (the "Exchange Shares").  In addition, Mr. Ratey, Mr. 
        Seidel and R-S Plus were entitled to receive options for a two-year 
        period to purchase an aggregate of not more than 1,000,000 shares 
        of the Company at a nominal price in order too prevent their 
        aggregate equity interest in the Company from being diluted below 
        57%.   In 1995, Iso-Block GmbH changed its name to R-S ISO-Block 
        Produktions und Bautrager GmbH, which permitted it to engage in 
        the business of constructing buildings as well as manufacture and 
        production of building materials. 
 
 
 
          In fiscal years ended 1995 and 1996, Iso-Block GmbH had certain 
        operations in Germany.  The Company wound down such operations in 
        the closing months of 1996. See Part II, Item 6 below. 
 
 
 
        Current Business of the Company 
 
          The Company now functions entirely as an US company engaged in 
        the business of residential home construction as general contractor 
        as well as the holding company of Franchise Connection, Inc., 
        ("Franchise Connection") a strategic conglomerate of new and 
        emerging franchise companies and a team of franchise experts that 
        work together to match the aspirations of entrepreneurs with viable 
        analogous franchise concepts. 
 
 
 
        Residential Home Building. 
 
          The demand for housing in Colorado has exploded during the 1990s 
        because of the  migration to Colorado of numerous large corporations 
        as well as the expansion of Colorado domiciled businesses due to 
        the current excellent economic climate. February, 1997 home sales 
        in the Denver Metro area was the second best on record in which 
        5,297 homes were placed under contract in contrast with February, 
        1992 in which there were 3,436 homes  placed under contract. It is 
        estimated that the only factor which could slow home sales in the 
        Denver area would be rising  mortgage interest rates.  The 
        Company believes the strong housing market will allow it to build 
        custom homes very profitably. 
 
  
 
        Franchising Operations 
 
          Franchise Connection, Inc. was incorporated in Colorado in 1996 
        with headquarters in Denver, Colorado.  The Company plans to 
        form strategic partnerships with prospective or existing 
        franchise operations ("Franchisors") under which it will provide 
        them with marketing and sales services plus business and legal 
        services in return for an equity interest in, and/or a portion 
        of their royalties.  It is targeting private companies which are 
        seeking to franchise expertise or financial capacity to 
        successfully engage in franchising.  The Company will offer 
        comprehensive franchise marketing and consulting services to its 
        Franchisors companies including operations, personnel, 
        management, training, legal and financial advice.  In addition, 
        Franchise Connection will assume total responsibility for the 
        recruitment of franchisees.  
 
          This will include national media advertising, trade show attendance, 
        and other forms of promotion supported by a commissioned sales staff. 
 
 
 
          In the evaluation of a prospective Franchisor, the Company will 
        generally be guided by a number of factors, including analysis 
        of a prospect's financial position, the experience of its 
        management, the product, service and/or concept offered and the 
        identification of its competitors, as well as its ability to  
        show a profit at the franchisee level.  To date, Franchise 
        Connection has established a strategic partnership with several 
        companies which will be the initial base franchises.  Franchise 
        Connection receives a franchise sales commission plus has 
        varying interests in each company ranging from full ownership to 
        a royalty agreement.  The initial base franchises include 
        Brilliant Marketing! Inc., a small business marketing and 
        training firm wholly owned by Franchise Connection which offers 
        a step-by-step, comprehensive, consistent marketing system that 
        is custom designed for each client; ENCORE NAILS, a nail salon 
        which offers women a nail covering which is attractive and 
        durable using a revolutionary, proprietary process; 
        HYDRO-PHYSICS, a pipe inspection service using video technology 
        to inspect or locate underground water or sewer pipe breakages; 
        and, FOOT LAB, a full service, compact, self contained, insole 
        "foot bed" manufacturing station which can produce a foot 
        platform that is custom shaped to a person's foot. 
 
 
 
          There are many firms engaged in the business of franchising small 
        companies, and competition is fierce. Franchise Connection believes 
        that its particular marketing orientation (the marketing of less 
        expensive franchises of low-entry cost businesses) combined with 
        Johnny Wilson's experience and background will enable it to be 
        successful. 
 
 
 
          Franchise Connection and its subsidiaries currently employ 4 
        people in full-time positions and employ others as needed. Staff 
        will be added only as needed, and there is a labor pool or 
        persons with experience in the business of Franchise Connection 
        available at a reasonable cost. 
 
 
 
        Employees 
 
          The Company 's only employees are its executive officers, who 
        devote most of their time to Company affairs, and the four employees 
        of Franchise Connection, Inc.  
 
 
 
Item 2.	Description of Property. 
 
 
          The Company occupies facilities provided at no charge by its 
        President, Mr. Egin Bresnig in his residence; these facilities are 
        expected to be adequate in the near term, through fiscal 1998.  
        Franchise connection leases from unaffiliated parties approximately 
        1,383 square feet of space at 4155 East Jewell Avenue, Suite 1000, 
        Denver, Colorado 80222. Management of 
        Franchise Connection believes that these facilities will be 
        sufficient for their needs for at least the next twelve months. 
 
 
 
Item 3.	Legal Proceedings. 
 
 
 
          The Company and its President, Egin Bresnig, have been named as 
        defendants in Texas Finance Incorporated v. Iso Block Products 
        USA, Inc., et al., filed in the United States District Court for 
        the District of Colorado, Civil Action No. 96-WM-1961. The suit 
        alleges among other things that the plaintiff purchased 
        securities of the Company in reliance upon misleading statements 
        knowingly made by the Company, Mr. Bresnig and others, and seeks 
        return of the price paid for the securities plus damages under 
        various federal and state securities laws. The Company has not 
        answered the lawsuit but has instead filed a motion to dismiss 
        the complaint upon various grounds, including among others that 
        plaintiff has sustained no damages and lacks standing to bring 
        the action. The Company intends to vigorously defend the action 
        if it does not prevail on its motion to dismiss. Management 
        believes that, should the action go to trial, the Company will 
        prevail on the merits.  Otherwise, the Company is not subject to 
        any pending or threatened legal proceedings. 
 
 
 
Item 4.	Submission of Matters to a Vote of Security Holders. 
 
 
          No matters were submitted to the Company's security holders 
        during the fiscal year ended March 31, 1997. 
 
 
 
PART  II 
 
 
 
Item 5.	Market for Common Equity and Related Stockholder Matters. 
 
        Market Information 
 
          The Company's outstanding Common Shares are not publicly quoted 
        or traded, nor were they traded during the two fiscal years 
        ended March 31, 1997. The Company intends to arrange in the 
        second fiscal quarter of 1997 for the quotation and trading of 
        its shares in the over-the-counter markets.  There is no 
        assurance that an active market will arise in the Company's 
        shares. 
 
 
 
        Holders 
 
          The Company had 326 shareholders of record as of June 6, 
        1997, which does not include shareholders whose shares are held 
        in street or nominee names. 
 
 
 
        Dividends 
 
          The Company does not expect to pay a cash dividend upon its 
        capital stock in the foreseeable future. Payment of dividends in 
        the future will depend on the Company's earnings (if any) and 
        its cash requirements at that time. 
 
 
 
Item 6.	Management's Discussion and Analysis or Plan of Operation. 
 
 
        Business Operations 
 
          The Company's principal business operations through March 31, 
        1992 consisted of leasing out computers, peripheral products and 
        software.  The Company realized only nominal revenues through 
        March 31, 1992.  Due to lack of significant revenues or 
        operations, the Company remained in the developmental stage, as 
        defined in Financial Accounting Standards Board Statement No. 7 
        until fiscal year ended March 31, 1994. 
 
 
 
          The first half of the business year of 1994 was occupied in 
        establishing the infra structure to gear up for the planned 
        operational activities of the German subsidiary, ISO-Block GmbH. 
        Securing authorization to construct homes as a general contractor 
        and obtaining  the necessary financing in Germany became a 
        bureaucratic nightmare. The Company had a very difficult time 
        trying to raise capital to start single-family and multi-family 
        developmental projects as a general contractor. The Company decided 
        to begin building single family custom homes at first, using the 
        Company's proprietary building system, before attempting larger 
        and more aggressive projects. Not until the first quarter of 1995 
        was the Company able to raise sufficient additional capital to 
        begin operations.  
 
 
 
          The Company had a difficult but promising start, and the wholly 
        owned subsidiary Iso-Block GmbH began custom home construction 
        in Germany in the second quarter of 1995. A proof-of-concept 
        home was built to demonstrate the Company's proprietary building 
        system, several homes were completed for customers and others 
        were initiated. Bigger projects were planned, some with partial 
        financing from local governments. The weather in Germany in the 
        fall and winter of 1995 (third and fourth quarter 1995) did turn 
        so bad that it was practically impossible, under those circumstances, 
        to build anything for several months. Also a very negative 
        business climate developed in Germany with an abnormally high 
        unemployment rate, the highest since Word War II. We were, 
        however, successful in raising additional capital and hoped for 
        better weather and a better economy in Germany. The weather 
        improved but the business climate in Germany has not. The 
        construction industry, in general, in Germany hit bottom in 1995. 
 
 
 
          The financial statement section  below discloses operating 
        losses the past two years of approximately  $1,031,000 of which 
        the major amount was due to the very adverse business climate in 
        Germany as outlined above.  However, in addition the previous 
        Chairman of the Board and CEO, Mr. Josef Ratey, resident of 
        Germany,  and the Company's major shareholder did not provide 
        the required direction and guidance.  Mr. Helge Seidel, manager 
        of Iso-Block GmbH  continued fighting an uphill battle trying 
        to build houses in an ever more eroding construction business 
        environment.  The US side of the Company, represented by Mr. 
        Egin Bresnig,  was challenged with taking over the offices of 
        CEO and the presidency of the Company from Mr. Josef Ratey.  
        After this change of leadership, the Company and its new 
        management initiated drastic action to stop the financial 
        bleeding.  The process of extraditing the Company from its 
        overseas operations was very costly because of the archaic 
        business practices still in place in Germany.  Hourly wages for 
        an unskilled laborer in Germany with all the mandatory  
        financial benefits required by the government are so high that 
        the Company attempted importing labor from France.  However, it 
        is expected in Europe that construction employees must be paid 
        even if the weather prohibits work.  The Company faced poor 
        weather for weeks at time and the labor costs continued.  We 
        found out the hard way that Germany is one of the most expensive 
        places in the world in which to do business.  We could not leave 
        projects unfinished but rather completed them knowing that these 
        projects would lose money. 
 
          The Company explored other business opportunities in the United 
        States. Negotiations with one potential venture partner came 
        close to being completed but the Company withdrew from the 
        negotiations due to repeated delays. Management of the Company 
        decided to cease all operational activities in Germany.  The 
        better part of 1996 was spent winding down and closing the 
        German operation.  
 
 
 
          During the 1996 fiscal year, the Company decided to 
        discontinue its European  operations because of the continuing 
        recession in Germany and the difficulty in managing its European 
        subsidiaries from Denver, Colorado.  Iso-Block GmbH ceased 
        operations in July, 1996. The Company incurred dissolution 
        expenses in ceasing operations of its two European  subsidiaries 
        of $166,000.  The Company retained assets of $126,000 consisting 
        of undeveloped property in Kehl, Germany and an account 
        receivable for completed construction of one residential 
        property in Germany.  On December 9, 1996 the Company sold its 
        Iso-Block GmbH subsidiary, including all liabilities and assets, 
        to Big B Tex A.G. (CH), a Swiss company  domiciled in Zurich, 
        and the Company paid $40,000 to the buyer in addition to 
        transferring its Iso-Block GmbH assets.  Big B Tex A.G. assumed 
        all Iso-Block GmbH  liabilities and future contingent 
        liabilities, if any. 
 
 
 
        Results of Operations  - Fiscal Year 1997
 
          The Company realized a loss of  $348,921 on total revenue of 
        $46,228 for the fiscal year ended March 31, 1997. As of March 31,
        1997, the Company had accumulated a deficit since inception of 
        $1,357,440. The loss realized was primarily due to beginning 
        operations in the U.S.,the closing of operations in Germany and 
        general and administrative expenses incurred to date.

        Results of Operations - Fiscal Year 1996

          The Company realized a loss of $682,136 on total revenue of 
        $618,421 for the fiscal year ended March 31, 1996. As of March 
        31, 1996, the Company had accumulated a deficit since inception 
        of $831,889. The loss incurred was diverse and  was primarily due
        to adverse whether and economic conditions in Germany. These 
        activities included construction material, various services, poor 
        wether conditions and increased labor costs.        
 
 
        Liquidity and Capital Resources 
 
          Cash on-hand on March 31,1997 was nominal in light of the  
        Company's home building and franchise plans. During the fiscal 
        year the Company issued 652,000 preferred shares in exchange for 
        cash of $521,600. The Company also issued 245,353 common shares. Of 
        which 200,000 shares, valued at $130,000, were issued for services 
        rendered, 35,000 shares were issued for employment incentive in 
        Germany and 10,353 common shares were issued as an incentive to the 
        issuance of preferred stock. 
 
 
          Cash totaled $302,931 at March 31, 1997 compared with $10,296 
        at March 31, 1996. The $292,635 increase in cash was primarily 
        from operating activities. As of March 31, 1996 , the Company 
        had raised $31,136 from the sale of its common shares and 
        $527,470 in net proceeds from the sale of its Series A, Non-Voting 
        Convertible Preferred Stock, stated value $1.25 per share and 
        from the sale of its Series B and C, Non-Voting Convertible 
        Preferred Stock, stated value $1.50 per share, to a small number 
        of persons who are residents of Germany. 
 
 
 
        Income Taxes and Net Operating Losses 
 
          At March 31, 1997, the Company had net operating loss 
        carryforwards for United States and German income tax purposes 
        totaling $1,357,440, which are available to offset future taxable 
        income.  These NOL's expire through 2004. 
 
 
 
        Plan of Operation 
 
          The Company intends to continue as general contractor in the 
        United States and has purchased two residential building sites 
        in the Outlook subdivision in Broomfield, Colorado, located 
        approximately five miles northwest of Denver, Colorado, The 
        Company has the capacity to build at least one speculative house 
        at a constructed retail price of $250,000 and a constructed cost 
        price of approximately $149,000. Construction was started June
        1997. Once the first residential house is constructed and has
        passed all building inspections and sold,  the Company will
        immediately begin construction on its second building site. The
        Company expects to continue its construction program as long as the 
        residential real estate business climate continues its intensity 
        in Colorado.  According to the March 7, 1997 issue of The Rocky 
        Mountain News "SunMicrosystems' $200 million planned research 
        and development campus in Broomfield, Colorado already  has 
        helped jump-start the metro area's home building activity."  In 
        January, there were 75 permits pulled for single-family homes in 
        Broomfield, compared with only 13 in January 1996.   The 
        relatively healthy month for permit activity is a sign of the 
        "Goldilocks" economy according the Home Builders Association of 
        Metropolitan Denver. One of the strongest areas is expected to 
        be Broomfield, Colorado, thanks to SunMicrosystems, which will 
        create 4,000 jobs at an average salary of $70,000.  The Company 
        is positioned correctly to take advantage of this growth by  
        establishing itself as general contractor in Broomfield.  If the 
        Company realizes its profit goals by completing the first two 
        speculative homes then it intends to become a developer of 
        housing projects.  Even though the current management of the 
        Company has limited building experience the availability of 
        professional construction consultants should provide the 
        necessary guidance to the Company.   Management believes it will 
        be successful in raising additional capital required to become a 
        significant player in the Broomfield and Metro Denver housing  
        construction market. 
 
 
 
          The Company is very excited about its completion of ownership 
        of The Franchise Connection, Inc. because of the importance of 
        franchising in today's economy.  Franchising has been 
        responsible for over 35% of the United State's total retail 
        sales in the 1990s and is projected too grow to over 50% of all 
        retail sales in the twenty-first century.  Franchising has 
        proved to be an outstanding method of distribution and market 
        penetration.  Established franchise organizations are growing by 
        11% annually and service related and business format franchises 
        are  growing by 39% annually.  Franchising has  added two 
        million jobs to the US economy the past ten years.  The 
        Franchise Connection, Inc. intends to  capitalize  on this 
        predominate and enormous growth trend by exploiting its 
        franchise expertise in conjunction with viable, talented  
        entrepreneurs who know and understand their business.  These 
        business owners work diligently to insure that their business 
        will be successful and that it  maintains its strong niche that 
        can be duplicated on a national and/or international scale 
        through franchising. By working in a "partnership" relationship 
        with The Franchise Connection, Inc., these entrepreneurs can 
        continue to make their business ever better  while using  The 
        Franchise Connection, Inc. to recruit franchises and expand 
        their concept globally.  Using this strategic alliance, 
        marketing costs, administration costs, and legal expenses can be 
        controlled and, thus, general overhead  can be reduced.  The 
        Franchise Connection's corporate objective is to acquire 
        successful business concepts and via franchise sales to multiply 
        its revenues over the next three years.  The Franchise 
        Connection, Inc. has formed alliances with the following 
        companies; each representing a successful prototype and 
        possessing an unique position in their industry.  They all have 
        a proprietary product with the ability to dominate their market 
        if expanded rapidly.  The concepts are very teachable, have a 
        universal consumer base and have very affordable entry 
        investment.  Each one has management in place with the technical 
        expertise to operate the business.  With the franchising 
        knowledge and marketing  know-how of the Franchise Connection 
        they all have the ability to exceed five hundred units in a very 
        short time.  The demand has never been higher to get into 
        business.  The opportunity seeker is more knowledgeable and 
        seeking more than just buying a job. 
 
 
 
          Brilliant Marketing offers marketing and training services to 
        small businesses that is custom designed to fit the client and 
        his budget.  Brilliant Marketing offers a proprietary product," 
        The Living Marketing Manual" featuring an annualized marketing 
        blueprint that gets guaranteed results.  With more than 22.5 
        million businesses  currently operating the US and an additional 
        800,000 new businesses starting up every year the marketing 
        niche for this business  is unlimited. Brilliant Marketing has a 
        letter of intent to provide marketing product to be made  
        available for distribution by a network of over 500 
        representatives.  Encore Nails is an upscale nail studio in the 
        fast growing nail beautification industry.  It uses a 
        revolutionary, proprietary process to offer clients attractive, 
        durable, environmentally safe, and technologically advanced nail 
        coverings.  The product was tested for four years in a very 
        successful studio prior to being offered outside the control 
        market.  A new unit will open in March, 1997 to serve  as a 
        prototype unit.  With the growth in the nail industry exploding, 
        Encore Nails is on the leading edge. Franchise Connection has 
        acquired the franchise rights which includes a 40% ownership of  
        Encore Nails and 50% of all franchise fees and has a letter of 
        intent to joint venture the franchising with financial partners 
        who will have day to day operation responsibility. Franchise 
        Connection projects opening 12 units in the next 12  months. 
        Hydro-Physics is the first of its kind, national video pipe 
        inspection service franchise that saves commercial and 
        residential customers thousands of dollars in unnecessary repair 
        cost.  The company utilizes a self-contained portable state-of 
        -the-art video technology to identify, locate, and verify 
        underground pipeline problems.  The market is wide-open with 
        limited competition.  Hydro-Physics has a five year history of 
        profitability.  By using technology in insure portability with 
        the ability to inspect 3 inch pipes by a one man crew the 
        concept has wide appeal.  The company has contracted for two 
        franchises (Idaho and Missouri). Franchise Connection has the 
        exclusive marketing rights and receives 25% of royalty over five 
        years with a  conversion factor to own 30% of the parent 
        company.   It is expected that 10 units will be opened over the 
        next 12 months. Footlab is a full service, compact, 
        self-contained foot insole manufacturing station that produces 
        hand-make custom shaped foot support inserts from a variety of 
        materials depending on the intended use in less that five 
        minutes.  Re-designed from a 25 year old invention from 
        Switzerland and in use in the winter ski industry for many years 
        this concept can be located in athletic footwear stores, 
        sporting good stores, golf pro shops, and department stores.  
        With approximately 90 % of the 275 million US and Canadian 
        population needing foot inserts the market is very large.  The 
        operating units require less than 20 sq. feet which opens up 
        many avenues of opportunity. Franchise Connection is the 
        franchisor and owns 100% of Footlab with a contract to pay 10% 
        royalty fees to the founder  who also has the responsibility to 
        provide all research and development of product. 
 
 
 
Item 7.	Financial Statements. 
 
 
          See index to financial statements at page F-1. The financial 
        statements included as part of this report immediately follow 
        that index. No supplementary financial data is required or 
        included. 
 
 
 
Item 8.	Changes in and Disagreements with Accountants or 
        Accounting and Financial Disclosure. 
 
 
          On April 29, 1996, the Company engaged R. Scott Hall, CPA, as 
        its independent auditor, replacing BDO Seidman LLP, who were 
        dismissed as the Company's auditors effective May 8, 1996, as 
        reported on Form 8-K dated such date.  
 
 
 
          Mr. Hall has reported on the Company's financial statements for 
        the fiscal years ended March 31, 1997 and 1996. Such reports did 
        not contain either an adverse opinion or a disclaimer of 
        opinion, and were not qualified or modified as to uncertainty, 
        audit scope or accounting principles. There were no 
        disagreements on any matters of accounting principle or 
        practices, financial statement disclosures, or auditing scope or 
        procedure in connection with Mr. Hall's audits of the Company's 
        financial statements for such fiscal years which, if not 
        resolved to his satisfaction, would have caused him to make 
        reference in his reports on the subject matter of the 
        disagreement. 
 
 
 
          BDO Seidman LLP reported on the Company's financial statements 
        for the fiscal year ended March 31, 1994. Such report did not 
        contain either an adverse opinion or a disclaimer of opinion, 
        and was not qualified or modified as to uncertainty, audit scope 
        or accounting principles. However, such report contained an 
        explanatory paragraph related to the Company's ability to 
        continue as a going concern. There were no disagreements on any 
        matters of accounting principle or practices, financial 
        statement disclosures, or auditing scope or procedure in 
        connection with such firm's audit of the Company's financial 
        statements for such fiscal year which, if not resolved to the 
        auditors' satisfaction, would have caused them to make reference 
        in their report on the subject matter of the disagreement. 
 
 
 
PART III 
 
 
 
Item 9.	Directors, Executive Officers, Promoters and Control 
        Persons; Compliance with Section 16(a) of the Exchange Act. 
 
 
        Identification of Directors and Executive Officers 
 
          The present directors and executive officers of the Company, 
        their ages, positions held in and tenure with the Company, are 
        listed below. Each director will serve until the next annual 
        meeting of shareholders, or until his respective successor has 
        been elected and duly qualified. Directors serve one-year terms. 
        Officers hold office at the pleasure of the Board of Directors, 
        absent any employment agreement, of which none currently exist 
        or are contemplated. There are no family relationships between 
        any director or executive officer. 
 
 
 
            Name           Age           Position                   Since 
            ----           ---           --------                   ----- 
        Egin Bresnig       61       Director (since Dec. 1993),    June 1995  
                                    President  June, 1995 
                                    Chief Executive Officer 
 
        Dean Wicker        57       Director and Secretary         June 1995 
                                    (since Dec. 1993),	 
                                    Chief Financial and 
                                    Accounting Officer 
 
        Johnny M. Wilson   54       Director                       Jan. 1997 
  
 
 
          The following is a brief account of the business experience 
        during at least the past five years of each director and 
        executive officer, indicating the principal occupation and 
        employment during that period, and the name and principal 
        business of the organization in which such occupation and 
        employment were carried out.  
 
 
 
          Egin Bresnig.  Mr. Egin Bresnig was raised and educated in 
        Austria.  He has a doctor degree in Physical Education and  
        Modern Languages from the Karl Franzens University in Graz, 
        Austria.  He has been a  resident in the USA for over 35 years.  
        Mr. Bresnig spent many years in the winter ski industry as a ski 
        school owner, business owner, importer of equipment and 
        clothing.  He has been a real estate developer in Colorado ski 
        resort areas and  has had 18 years experience in the financial 
        securities industry.  He was a licensed securities broker, 
        branch manager, director of European  operations, national sales 
        manager and the president of various investment banking firms.  
        For several years he owned his own branch office with up to 25 
        brokers.  Mr. Bresnig was the successful owner and president of 
        a NASD member firm.  He is fluent in several European languages. 
        He is an officer and director of East Slope Funding Corp., a 
        Colorado financial consulting firm, Eurous Funding, Inc., a 
        Colorado public relations company, Arista Corporation, a non-active 
        Colorado company and REWIPAC Worldwide Corporation, a non-active 
        Nevada company. 
 
													
							 
 
          Dean Wicker.  Dean Wicker has lived in the Denver, Colorado 
        area for 43 years.  He graduated from the University of 
        Colorado, Boulder, CO in 1961 with a BA degree in American 
        History. He has done advanced degree work in financial 
        accounting and merger and acquisition negotiations. Mr. Wicker 
        began his career in investment banking in 1962 in which he was 
        the youngest Public Finance negotiator in the Rocky Mountain 
        region.  He changed careers in 1967 by developing retail winter 
        sports and apparel operations until 1981.  Mr. Wicker reentered 
        the security industry with the position of Senior Institutional 
        Sales with George K. Baum and Co., Member of the New York Stock 
        Exchange.  In 1984 he became a vice-president and Partner of 
        Boettcher and Co., Inc., Member of the New York Stock Exchange 
        and then, the largest investment banking firm in the western 
        United States. In  1991 he became an independent financial 
        consultant specializing in merger and acquisitions.   He is an 
        officer and director of East Slope Funding Corp., a Colorado 
        financial consulting firm, Eurous Funding, Inc., a Colorado 
        public relations company, Arista Corporation, a  non-active 
        Colorado company, and REWIPAC Worldwide Corporation, a non-active 
        Nevada company. 
 
 
 
          Johnny Wilson.  Johnny M. Wilson has 25 years experience in the 
        franchise industry.  Mr. Wilson received a BA degree from the 
        University of Missouri, Columbia, Mo and a J.D. degree from the 
        Missouri School of Law in Columbia, MO.   He served as Assistant 
        Prosecuting Attorney of Scott County, MO for two years and 
        became President of Missouri Health and Medical Organization, a 
        non-profit  corporation to organize and structure a prepaid 
        health delivery  system for rural areas in Missouri.  From 1972 
        to 1976 he managed forty people and administrated a six million 
        dollar grant from the US Department of Health and Welfare.  In 
        1976 Mr. Wilson started Savings Plus Systems combining Savings 
        and Loan associations, retail merchants and consumers into 
        automatic discount/savings programs.  In four years the Company 
        grew to over 150 financial institutions,  thousands of merchants 
        and hundred of thousands of consumers.  Mr. Wilson initiated and 
        completed a private placement offering with investors   
        representing Massy  Investment Group, ITT International, and 
        Citicorp Bank among others. Mr. Wilson sold his interest in the 
        company in 1979 to the investment partners.  From 1980 until 
        1983 Mr. Wilson was in private law practice specializing in 
        franchise development.  In 1983 he joined with investors in 
        Denver, CO to develop franchises in the packaging and shipping 
        industry.  He formed Pack Mail Centers of America, Inc.  He 
        served as President, Chairman of the Board until 1990. Under his 
        direction  the company grew to over 250 franchises and 25 
        million dollars in gross sales.  He guided the company through a 
        public offering in 1986 and completed a friendly buy-out by the 
        executives of Beatrice Foods in 1989.  Mr. Wilson returned to 
        franchise consulting through his own company, The International 
        Franchise Company from 1990 to 1996.  In 1996 Mr. Wilson formed 
        The Franchise Connection, Inc. in which he serves as President. 
 
 
 
        Compliance with Section 16(a). 
 
          Section 16(a) of the Securities Exchange Act of 1934, as 
        amended ("Exchange Act"), requires the Company's executive  
        officers, directors and persons who beneficially own more than 
        10% of a class of the Company's equity securities registered 
        under the Exchange Act to file reports of ownership and changes 
        in ownership with the Securities and Exchange Commission.  
        Because the Company was not subject to the reporting 
        requirements of the Exchange Act during the fiscal year ended 
        March 31, 1995, no filings under Section 16(a) were required. 
 
 
 
Item 10. Executive Compensation. 
 
 
        Cash Compensation and Compensation Pursuant to Plans 
 
          For the fiscal year ended March 31, 1997, Mr. Egin Bresnig, CEO 
        and Mr. Dean Wicker, Secretary received cash compensation 
        of $47,500 each annually, and reimbursement of out-of-pocket 
        expenses incurred on behalf of the Company.  The Company does 
        not have in effect any pension, profit-sharing, stock 
        appreciation or bonus plans.  The Board of Directors authorized 
        a Medical Insurance Plan for its President, Mr. Egin Bresnig, 
        effective January 3, 1997.  Other benefit plans are described 
        below. 
 
 
 
          Employee Stock Compensation Plan.  The Company has adopted the 
        1993 Employee Stock Compensation Plan for employees, officers, 
        directors of the Company and advisors to the Company (the "ESC 
        Plan"). The Company has reserved a maximum of 500,000 Common 
        Shares to be issued upon the grant of awards under the ESC Plan. 
        Employees will recognize taxable income upon the grant of Common 
        Stock equal to the fair market value of the Common Stock on the 
        date of the grant and the Company will recognize a compensating 
        deduction at such time. The ESC Plan will be administered by the 
        Board of Directors or Compensation Committee. No Common Stock 
        has been awarded under the ESC Plan. 
 
 
 
          Compensatory Stock Option Plan.  The Company has adopted the 
        1993 Compensatory Stock Option Plan for officers, employees, 
        potential key employees, non-employee directors and advisors 
        (the "CSO Plan"). The Company has reserved a maximum of 
        1,000,000 Common Shares to be issued upon the exercise of 
        options granted under the CSO Plan. The CSO Plan is intended to 
        qualify as an "incentive stock option" plan under Section 422 of 
        the Internal Revenue Code of 1986, as amended.  Options will be 
        granted under the CSO Plan at exercise prices to be determined 
        by the Board of Directors or other CSO Plan administrator.  With 
        respect to options granted pursuant to the CSO Plan, optionees 
        will not recognize taxable income upon the grant of options, but 
        will realize income (or capital loss) at the time the options 
        are exercised to purchase Common Stock. The amount of income 
        will be equal to the difference between the exercise price and 
        the fair market value of the Common Stock on the date of the 
        exercise. The CSO Plan will be administered by the Board of 
        Directors or a Compensation Committee of directors. Subsequent 
        to year-end, an aggregate of 600,000 common shares subject to 
        purchase under options have been granted under the CSO Plan. See 
        Item 11 below. 
 
 
 
        COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS 
 
 
          The following table sets forth information regarding compensation 
        paid to the Company's Chief Executive Officer and Secretary during 
        the last two fiscal years. The CEO's total annual salary and bonus 
        did not exceed $100,000, nor did that of any other executive officer. 
 
 
 
                          SUMMARY COMPENSATION TABLE 
 
                            Long-Term Compensation         
                            ---------------------- 
 
 
           Annual Comp.              Awards       Payouts 
          --------------------  ----------------  -------   
  (a)       (b)    (c)    (d)    (e)      (f)       (g)      (h)      (i) 
 
 
Name and                               Rstrctd     No. of    ($)      All 
Principal          ($)    ($)    ($)    Stock     Options   LTIP    Other($) 
Position   Year  Salary  Bonus  Other  Awards($)   & SARs  Payouts   Comp. 
---------  ----  ------  -----  -----  ---------  -------  -------  -------- 
Egin 
Bresnig, 
CEO        1997	$47,500	  N/A    -0- 
           1996 $47,000   N/A    -0- 
 
Dean 
Wicker, 
Sec.       1997 $47,500   N/A    -0- 
           1996 $47,000   N/A    -0- 
 
 
 
 
 
               OPTIONS GRANTED DURING THE 1997 FISCAL YEAR 
                           Individual Grant 
                                                     
           ---------------------------------------------------------------- 
 
 (a)          (b)             (c)                (d)              (e) 
 
           Number of       % of Total    
          Securities        Options		 
          Underlying      Granted to   			 
           Options         Employees      Exercise or Base 
Name   	   Granted      in Fiscal Year     Price ($/Share)   Expiration Date 
----      ----------    --------------    ----------------   --------------- 
Egin 
Bresnig          -            -                   -                 - 
 
Dean 
Wicker           -            -                   -                 - 
 
 
 
 
 
                    OPTION EXERCISES IN LAST FISCAL YEAR 
                      and FISCAL YEAR-END OPTION VALUES                 
 
            ----------------------------------------------------------------- 
(a)              (b)               (c)             (d)               (e) 
 
                                                Number of     
                                                Securities      ($) Value of 
                                                Underlying      Unexercised 
                                                Unexercised     In-the-Money 
                                                Options           Options 
              Number of                         at FY End         at FY End 
           Shares Acquired          ($)        Exercisable/     Exercisable/ 
Name         on Exercise     Value Realized   Unexercisable    Unexercisable 
----       ---------------   --------------   -------------    ------------- 
Egin 
Bresnig         None              None         200,000/None      None / None 
 
Dean 
Wicker          None              None         200,000/None      None / None 
 
	 
 
 
 
          The Company has no stock appreciation rights (SAR) plan in 
        place and has not awarded SAR's to any person. The Company has 
        no long-term incentive plans, as that term is defined in the 
        rules and regulations of the Securities and Exchange Commission. 
        During the fiscal year ended March 31, 1997, the Company did not 
        amend or reprice the exercise price of any stock options granted 
        to any executive officer. 
 
 
 
        Other Compensation. 
 
          Mr. Helge Seidel, the former General Manager of Iso-Block GmbH, 
        was issued 200,000 shares of common stock for services rendered 
        and other consideration valued at $130,000. 
 
 
 
        Compensation of Directors 
 
          No person was compensated by the Company for serving as a 
        director during the fiscal year ended March 31, 1996. While no 
        such compensation is currently anticipated, the Company believes 
        that directors in the future will be paid for serving on the 
        Board of Directors and on committees of directors. 
 
 
 
Item 11. Security Ownership of Certain Beneficial Owners and 
         Management. 
 
 
 
        (a)(b) Security Ownership.  The following table sets forth as 
        of February 28, 1997, the names of persons who own of record, or 
        were known by the Company to own beneficially, more than five 
        percent of its total issued and outstanding common stock and the 
        beneficial ownership of all such stock as of that date by 
        officers and directors of the Company and all such officers and 
        directors as a group. Except as otherwise noted, each person 
        listed below is the sole beneficial owner of the shares and has 
        sole investment and voting power as to such shares. No person 
        listed below has any option, warrant or other right to acquire 
        additional securities of the Company, except as may be otherwise 
        noted. 
 
 
 
 
                              Name and Address              Amount & Nature 
                                of Beneficial                of Beneficial  
        Title of Class             Owner                       Ownership 
        ----------------      --------------------------    ---------------- 
 
        Common Stock          * Egin Bresnig                   356,500 
        no par value          8037 So. Datura Street 
                              Littleton, Colorado  80120 
 
 
 
        SAME                  * Dean Wicker                    367,500 
                              5176 East Davis Drive 
                              Littleton, Colorado 80122 
 
 
 
        SAME                  * Johnny M. Wilson               462,500 
                              1885 S. Evanston 
                              Aurora, Colorado 80012 
 
 
 
        SAME                  Josef Ratey                      490,000 
                              Albert-Kohler-Str. 23 
                              77883 Ottenhoffen, Germany 
 
 
 
 
        SAME                  John D. Brasher Jr.              365,000 
                              90 Madison Street, Suite 707 
                              Denver, Colorado  80206 
 
	 
                                                             --------- 
        * All officers and directors                         1,186,500	 
          as a group (3 persons) 
 
 
 
          Includes options to purchase 200,000 shares of common stock 
        pursuant to the Company's 1993 Compensatory Stock Option Plan. 
 
          Includes options to purchase 100,000 common shares pursuant to 
        an employment agreement. 
 
          Mr. Ratey retained 250,000 shares of common stock pursuant to a 
        Settlement Agreement dated November 22, 1996 and was granted 
        options to purchase 240,000 shares of the common stock of the 
        Company. 
 
 
 
Item 12. Certain Relationships and Related Transactions. 
 
 
        Settlement Agreement 
 
          Effective November 22, 1996, the Company entered into a 
        Settlement Agreement (the "Settlement Agreement") with Ratey, 
        Seidel and R-S Plus.  The Settlement Agreement provided for the 
        cancellation of certain shares issued pursuant to the 
        Reorganization Agreement dated March 28, 1994. 
 
 
 
          Pursuant to the Reorganization Agreement, the Exchange Shares 
        were issued in the following proportions: 1,000,000 shares to 
        R-S PLUS, 900,000 shares to Ratey, and 100,000 shares to Seidel, 
        and a total of 300,000 of the shares issued to R-S PLUS 
        subsequently were transferred to two individuals. In addition, 
        Ratey, Seidel and R-S PLUS received options pursuant to the 
        Exchange Agreement for a two-year period to purchase an 
        aggregate of not more than 1,000,000 shares of the Company. 
        Pursuant to the Settlement Agreement, such options were 
        cancelled and voided as if never issued. 
 
 
 
          Of the 2,000,000 Exchange Shares originally issued, an 
        aggregate of 1,737,500 shares were cancelled and voided, as 
        follows: 
 
 
 
        (i) all 100,000 of the Exchange Shares issued to Seidel 
        pursuant to the Exchange Agreement; 
 
 
 
        (ii) 650,000 shares (that is, all but 250,000) of the Exchange 
        Shares issued to Ratey pursuant to the Exchange Agreement; and 
 
 
 
        (iii) 987,500 shares (that is, all but 12,500) of the 1,000,000 
        Exchange Shares issued to R-S PLUS pursuant to the Exchange 
        Agreement. 
 
 
 
          A total of 787,500 of the 1,737,500 cancelable shares have been 
        physically cancelled. The 650,000 shares of Ratey to be 
        cancelled and the 300,000 shares transferred to two individuals 
        have by action of the Company's board of directors been 
        cancelled and are reflected as such on the Company's records of 
        stock transfer and registry, but have not yet been physically 
        cancelled. The certificates evidencing these shares will be 
        physically cancelled when received by the Company. 
 
 
 
          The Settlement Agreement provided for the full settlement and 
        release of all existing claims, if any, and all potential claims 
        of R-S PLUS, Ratey and Seidel against the Company and against 
        all persons now or formerly serving or acting as officers, 
        directors or employees of the Company or legal counsel, 
        accountants or other advisers or consultants to the Company. 
        Upon the effective date of the Agreement and the issuance of the 
        options, neither R-S PLUS, Ratey nor Seidel retained any further 
        claim of any kind against the Company or the enumerated persons. 
 
 
 
          The Settlement Agreement also provided for the issuance and 
        delivery to Ratey of options to purchase an aggregate of 240,000 
        shares of the common stock of the Company at the price of Eighty 
        Cents (US$0.80) per share, subject to customary adjustments, for 
        a period of two years from the effective date of the Agreement 
        (the "Settlement Options"). 
 
 
 
        Exchange Agreement 
 
          In January, 1997 the Company completed an Exchange Agreement 
        and Plan of Reorganization for the purchase of  100% ownership 
        of Franchise Connection, Inc., a Colorado corporation and its 
        wholly owned subsidiary Brilliant Marketing, Inc. In full 
        payment for the control shares of Franchise Connection, Inc., 
        and Brilliant Marketing, Inc. the Company issued and delivered 
        to the shareholders an aggregate of Five Hundred Thousand 
        (500,000) shares of the authorized but unissued shares of Iso 
        Block Products USA, Inc.'s common stock and One Million Five 
        Hundred Thousand (1,500,000) shares of the Series 1996 
        Non-Voting Convertible Preferred Stock subject to adjustment as 
        outlined below.  The preferred Exchange Shares shall be 
        convertible into shares of the no-par value common stock of the 
        Company three (3) years from the date of issuance at the 
        following conversion rate: 
 
 
 
        (1)  if Franchise Connection has by then sold an aggregate 
        of 150 franchises, consisting of all or any franchises marketed 
        by Franchise Connection, each preferred Exchange Share will be 
        convertible into one (1) Conversion share; or 
 
 
 
        (2)  if Franchise Connection has by then sold an aggregate 
        of less than 150 franchises, the number of Conversion Shares 
        into which the preferred Exchange Shares are convertible will be 
        proportionally reduced. 
 
 
 
        (3)  if Franchise Connection has sold an aggregate of less 
        than 100  franchises by the third anniversary of the closing 
        under the definitive agreement, then in addition to the 
        adjustment set forth above, the Company may at its election 
        demand the surrender and cancellation of and may unilaterally 
        cancel a percentage of the 500,000 common Exchange Shares. 
 
 
 
          Pursuant to the Letter of Intent,  ISO BLOCK advanced to 
        Franchise Connection an aggregate of $50,000 to be used as 
        working capital.  Additionally, under the terms of the Exchange 
        Agreement and Plan of Reorganization ISO BLOCK will over the  
        twelve months (12) following the Closing make available to 
        Franchise Connection an aggregate of an additional $300,000, 
        subject to adjustment, to be advanced monthly.  Such funds will 
        be advanced within five (5) days prior to the month in which 
        needed upon  written request of Franchise Connection, which 
        shall specify the  amount needed and general use intended.  Such 
        amounts shall be loaned to Franchise Connection on customary 
        commercial terms.  As of June 27, 1997 a total of $211,000 
        had been advanced to Franchise Connection. 
 
 
 
        Employment Agreement 
 
          The Company entered into an Employment Agreement by and among 
        Franchise Connection, Brilliant Marketing Inc. ("BMI") and 
        Johnny M. Wilson for a three year period.  Under the terms of 
        the Employment Agreement, Mr. Wilson will be employed by both 
        BMI and the Franchise Connection as Chief Executive Officer and 
        President and will serve as Chairman of the board of directors 
        of both companies.  He also will serve in any other capacity as 
        designated by either company' board of directors.  He will not 
        compete with Franchise Connection or BMI or any franchise 
        project now or later undertaken by Franchise Connection or BMI 
        or engage in any franchise-related business whatsoever, as 
        consultant, employee or otherwise, except those operated by 
        Franchise Connection and BMI. 
 
 
 
          Otherwise, there were no transactions, or series of 
        transactions, for the fiscal year ended March 31, 1997, nor are 
        there any currently proposed transactions, or series of 
        transactions, to which the Company is a party, in which the 
        amount exceeds $60,000, and in which to the knowledge of the 
        Company any director, executive officer, nominee, five percent 
        or greater shareholder, or any member of the immediate family of 
        any of the foregoing persons, have or will have any direct or 
        indirect material interest other than as described above or 
        elsewhere in this report. 
 
 
 
                       ISO BLOCK PRODUCTS USA, INC. 
                        CONSOLIDATED COMPARATIVE 
                          FINANCIAL STATEMENTS 
 
                              Years Ended 
                         March 31, 1997 and 1996 
 
 
 
        TABLE OF CONTENTS                                        PAGE 
        -----------------                                        ---- 
 
          INDEPENDENT AUDITORIS REPORT............................F-1 
 
 
        CONSOLIDATED COMPARATIVE FINANCIAL STATEMENTS 
        --------------------------------------------- 
 
          Balance Sheet...........................................F-2 
 
          Statement of Operations.................................F-3 
 
          Statement of Shareholder's Equity.......................F-4 
 
          Statement of Cash Flows.................................F-5 
 
          Notes to Financial Statements...........................F-6 
 
 
 
 
 
 
 
        R. SCOTT HALL 
        407 LORIN LANE 
        CASTLE ROCK, COLORADO 80104 
        (303) 688-1622 
 
 
 
                      INDEPENDENT AUDITOR'S REPORT 
 
        Board of Directors 
 
        ISO BLOCK PRODUCTS USA, INC. 
 
 
 
        I have audited the accompanying consolidated comparative balance 
        sheet of ISO Block Products USA, Inc., as of March 31, 1997 and 
        1996 and the related consolidated comparative - statements of 
        operations, shareholder's equity and cash flows for the years 
        then ended.  These consolidated comparative financial statements 
        are the responsibility of the Company's management.  My 
        responsibility is to express an opinion on these consolidated 
        comparative f inancial statements based on my audit. 
 
 
 
        I conducted my audit in accordance with generally accepted 
        auditing standards.  These standards require that I plan and 
        perform the audit to obtain reasonable assurance about whether 
        the financial statements are ree of material misstatement.  An 
        audit includes examining, on a test basis, evidence supporting 
        the amounts and disclosures in the financial statements.  An 
        audit also includes assessing the accounting principles used and 
        the significant estimates made by management, as well as 
        evaluating the overall financial statement presentation.  I 
        believe that my audit provides a reasonable basis for my opinion. 
 
 
 
        In my opinion, the consolidated comparative financial statements 
        referred to above, present fairly, in all material respects, the 
        financial position of ISO Block Products USA, Inc., at March 31, 
        1997 and 1996 and the results of its operations and cash flows 
        for the years then ended in conformity with generally accepted 
        accounting principles. 
 
 
 
 
 
        R. Scott Hall, CPA 
 
        July 7, 1997 
        Castle Rock, Colorado 
 
                                   Page F-1 
 
 
 
                      ISO BLOCK PRODUCTS USA, INC. 
                 CONSOLIDATED COMPARATIVE BALANCE SHEET 
 
 
                                                      March 31, 
                                              1997               1996 
                                           ----------         ---------- 
         ASSETS 
         ------ 
 
    Current Assets 
    -------------- 
      Cash                                  302,931              10,296 
      Note Receivable - Officer               2,000               2,000 
      Mortgages Receivable                1,176,590           1,335,624   
      Prepaid Expenses                       72,033                   - 
                                          ----------          ---------- 
 
        Total Current Assets              1,553,554           1,347,920 
 
 
    Property & Equipment 
    -------------------- 
      Office Equipment                        2,860               2,660 
      Less: Accumulated Depreciation           (179)               (532) 
                                          ----------          ---------- 
        Net Property & Equipment              2,681               2,128 
                                          ----------          ---------- 
          TOTAL ASSETS                    1,556,235           1,350,048 
                                          ==========          ========== 
 
 
         LIABILITIES & STOCKHOLDERS' EQUITY 
         ---------------------------------- 
 
    Current Liabilities 
    ------------------- 
      Accounts Payable                        8,780               6,682
      Payroll  Taxes Payable                  4,639                   -
                                          ----------          ---------- 
                                             13,419               6,682
 
    Stockholders' Equity 
    -------------------- 
      Preferred Stock, No Par Value, 
       10,000,000 Shares Authorized, 
       1,448,610 and 924,000 Shares 
       Outstanding, Respectively.         1,427,700             739,200 
 
      Common Stock, 50,000,000 Shares 
       Authorized, 2,070,821 and 
       3,185,821 Shares Outstanding, 
       Respectively.                      1,472,556           1,436,055 
 
      Accumulated Deficit                (1,357,440)           (831,889) 
                                         ----------          ---------- 
                                          1,542,816           1,343,366 
                                         ----------          ---------- 
       TOTAL LIABILITIES & 
        STOCKHOLDERS EQUITY               1,556,235           1,350,048 
                                         ==========          ========== 
 
 
 
               The accompanying notes are an integral 
                 part of these financial statements. 
 
                               Page F-2 
 
 
 
 
 
                        ISO BLOCK PRODUCTS USA, INC. 
               CONSOLIDATED COMPARATIVE STATEMENT OF OPERATIONS 
               ------------------------------------------------ 
                 For the Years Ended March 31, 1997 and 1996 
 
 
                                                        March 31, 
                                                  1997              1996 
                                              ----------         ----------- 
    INCOME 
    ------ 
      Construction Sales                         15,289             618,421 
      Interest Income                            30,939               2,318 
                                              ----------         ----------- 
        Total Income                             46,228             620,739 
 
 
    COST OF SALES 
    ------------- 
      Cost of Materials and Services                  -             949,925 
      Labor                                           -              94,313 
                                              ----------         ----------- 
        Total Cost of Sales                           -           1,044,238 
 
 
 
    GROSS PROFIT (LOSS)                          46,228            (423,499) 
 
 
    OPERATING EXPENSES 
    ------------------ 
      General and Administrative                304,812             258,637 
                                              ----------         ----------- 
 
    INCOME (LOSS) FROM OPERATIONS              (258,584)           (682,136)

    OTHER INCOME (LOSS)
    --------------------------------
      Loss From Dispatch of Subsidiary          (90,337)                  -
         NET LOSS                              (348,921)           (682,136) 
                                              ==========         =========== 
 
 
    LOSS PER COMMON SHARE                      (    .17)           (    .21) 
 
 
    Weighted Average Shares Outstanding       2,070,821           3,185,827 
 
 
 
 
                   The accompanying notes are an integral 
                     part of these financial statement. 
 
                                   Page F-3 
 
 
 
 
        CONSOLIDATED COMPARATIVE STATEMENTS OF STOCKHOLDERS' EQUITY 
               For the Year Ended March 31, 1997 and 1996 
 
        
               Preferred               Common   
                 Stock                  Stock             Accum. 
                 -----                  -----             ------ 
            Shares    Amounts     Shares     Amounts      Deficit      Total 
            ------    -------     ------     -------      -------      ----- 
Balance 
at April 1 
1995       272,000    217,600  2,940,468  1,436,055    (155,623)    1,498,032 
-------- 
 
Issue of 
Preferred 
Shares     652,000    521,600                                         521,600 
 
Issue of 
Common 
Shares                           245,353        -                        - 
 
Foreign 
Exchange 
Gain                                                      5,870         5,870 
 
Net (Loss) 
for Year      -           -         -           -      (682,136)     (682,136) 
          --------  ---------  -----------  ----------  ---------  ------------ 
Balance 
at March  
31, 1996  924,000    739,200    3,185,821   1,436,055   (831,889)   1,343,366 
--------

Issue of
Preferred
Shares    524,610    688,500                                          688,500

Issue of
Common
Shares                           622,500       36,000                  36,000

Foreign
Echange
Gain 
(Loss)                                                   (158,692)   (158,692)

Retirement
of Common
Stock                         (1,737,500)          -                        -

Acquisitions
of
Subsidiaries                                     501      (17,938)    (17,437)

Net (Loss)
for Year           -           -          -          -   (348,921)   (348,921)
           ----------  ---------  ---------  --------- -----------  ---------
Balance 
at March
31, 1997   1,448,610   1,427,700  2,070,821  1,472,556 (1,357,440)  1,542,816
---------  ==========  =========  =========  ========= ===========  ========= 
 
 
 
                  The accompanying notes are an integral 
                    part of these financial statements. 
 
                                 Page F-4 
 
 
 
                    ISO BLOCK PRODUCTS USA, INC. 
 
             CONSOLIDATED COMPARATIVE STATEMENT OF CASH FLOWS 
             ------------------------------------------------ 
 
               For the Years Ended March 31, 1997 and 1996 
 
 
                                                        March 31, 
 
                                                  1997             1996 
                                                  ----             ---- 
 
    CASH FLOWS FROM OPERATING ACTIVITIES 
    ------------------------------------ 
      Net Income (Loss)                        (348,921)        (682,136) 
        Depreciation                                 36              532 
        Loss on Disposition of Equip.             2,128                -
        Note Receivable - Officer                     -                - 
        Mortgages Receivable                    159,034           64,907 
        Prepaid Expenses                              -            5,011 
        Inventory - Work in Process             (72,033)               -
        Accounts Payable                          6,737          113,954 
                                             -----------       ---------- 
    Net Cash Used in Operating Activities       253,019         (725,640) 
 
 
 
    CASH FLOWS FROM INVESTING ACTIVITIES 
    ------------------------------------ 
      Purchase of Property & Equipment           (2,717)            (796) 
 
 
 
    CASH FLOWS FROM FINANCING ACTIVITIES 
    ------------------------------------ 
      Proceeds From Preferred Stock             688,500          521,600 
      Proceeds From Common Stock                 36,501                - 
      Acquisition - Retained Earnings           (17,938)               - 
      Foreign Exchange Gains (Losses)          (158,692)           5,870 
                                             -----------       ---------- 
      Net Cash Provided by (Used In)    
        Financing Activities                    548,371          527,470   
 
 
 
    NET INCREASE (DECREASE) IN CASH             292,635         (198,966) 
 
 
    CASH - Beginning of Year                     10,296          209,262 
                                             -----------       ---------- 
 
    CASH - End of Year                          302,931           10,296 
                                             ===========       ========== 
 
 
 
               The accompanying notes are an integral 
                 part of these financial statements. 
 
                              Page F-5 
 
 
 
 
                   	ISO BLOCK PRODUCTS USA, INC. 
 
        NOTES TO CONSOLIDATED COMPARATVIE FINANCIAL STATEMENTS 
        ------------------------------------------------------ 
 
            For the Years Ended March 31, 1997 and 1996 
 
 
NOTE 1.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
        ------------------------------------------ 
 
        Company Description 
        ------------------- 
 
        The Company was incorporated on April 28, 1986 under the laws 
        of the State of Colorado under the name of Champion Computer 
        Rentals, Inc.  The Company's Articles of Incorporation were 
        amended to change the name of the corporation to ISO Block 
        Products USA, Inc. from Champion Computer Rentals, Inc. 
        effective on September 21, 1994. 
 
 
 
        Effective March 28, 1994, USA acquired 100% stock of R-S ISO 
        Block Produktions GmbH (ISO-Block GmbH), The acquisition was 
        accounted for as a purchase by ISO-Block GmbH of USA and the 
        accompanying financial statements present historical results of 
        ISO-Block GmbH since its formation and include USA's activities 
        from the effective date of the acquisition. 
 
 
 
        ISO-Block GmbH obtained from an affiliate the worldwide 
        ownership of a technology to develop, manufacture and sell a new 
        potential construction component for buildings. 
 
        During July 1996, the Company decided to discontinue its 
        European Operations because of the continuing recession in
        Germany and the difficulty in managing its European subsidiary
        from Denver, Colorado. On December 9, 1996, the Company sold
        its ISO-Block GmBH subsidiary, including all assets and liabilities
        to Big B Tex A.G. (ch), a Swiss company domiciled in Zurich, and
        the Company paid $40,000 to the buyer in addition to transfering its
        ISO-Block GmBH assets. Big B Tex A.G. assumes all Iso-Block 
        GmBH liabilities and future contingent liabilities, if any.

 
        Settlement Agreement
        ---------------------------

        Effective November 22, 1996, ISO Block Products USA, Inc.
        entered into a Settlement Agreement with Josef Ratey, Helge
        Seidel, and R-S Plus Investment Corp., a Florida corporation.
        The Settlement Agreement provides for the cancellation of
        certain shares issued pursuit to an Agreement and Plan of
        Reorganization dated March 28, 1994 among the Company, R-S
        ISO-Block Produktions GmBH, a Germany limited liability
        company, Ratey, Seidel and R-S Plus, in which the Company
        purchased from Ratey and Seidel all of the equity interest 
        in ISO-Block GmBH, and purchased from R-S Plus all of its
        rights, title and interest in and to ISO-Block GmBH, 
        including all R-S Plus property theretofore contributed to
        ISO-Block GmBH and all R-S Plus rights to ISO-Block GmBH
        profits, in exchange for the issuance of an aggregate of
        2,000,000 shares of the Company's authorized but heretofore
        unissued common stock, no par value. 



                     ISO BLOCK PRODUCTS USA, INC.

           NOTES TO CONSOLIDATED COMPARATIVE FINANCIAL STATEMENTS
           ------------------------------------------------------
               For the Years Ended March 31, 1997 and 1996


        The Exchange shares were issued in the following proportions:
        1,000,000 shares to R-S Plus, 900,000 shares to Ratey, and
        100,000 shares to Seidel, and a total of 300,000 of the
        shares issued to R-S Plus subsequently were transfered to
        two individuals. In addition, Ratey, Seidel and R-S Plus
        received options pursuant to the Exchange Agreement for a
        two year period to purchase an aggregate of not more than
        1,000,000 shares of the Company. Pursuant to the Settlement
        Agreement, such options were cancelled and voided.

        Of the 2,000,000 Exchange Shares originally issued, an
        aggregate of 1,737,500 shares were cancelled and voided as
        follows:

            1.    All 100,000 of the Exchange Shares issued to Seidel.
            2.    650,000 shares of the Exchange Shares issued Ratey.
            3.    987,500 shares of Exchange Shares issued to R-S Plus.

        The Settlement Agreement also provided for the issuance and
        delivery to Ratey of options to purchase an aggregate of
        240,000 shares of the common stock of the Company at the
        price of Eighty Cents (U.S. $.80) per share for a period of
        two years from the effective date of the Agreement.
        
        Effective January 24, 1997, ISO acquired 100% stock of
        Franchise Connection, Inc. and its wholly owned subsidiary
        Brilliant Marketing, Inc. The Acquisition was accounted for
        as a purchase by ISO and the accompanying financial statements
        present historical results of ISO and include Franchise 
        Connection, Inc. and Brilliant Marketing, Inc. activities
        from the effective date of the acquisition.

 

        Consolidation 
        ------------- 
 
        The financial statements include the accounts of ISO and its 
        wholly-owned subsidiary Franchise Connection, Inc. All
        significant intercompany balances and transactions have been
        eliminated in consolidation. 
 
 
 
 
        Concentrations of Credit Risk 
        ----------------------------- 
 
        The Company's financial instruments that are exposed to 
        concentrations of credit risk consist primarily of mortgages 
        receivable. 
 
 
 
        The Company's mortgages receivable are concentrated in German 
        real estate but are not concentrated in a limited number of 
        borrowers.  The mortgages are from high quality entities and 
        secured by high value real estate to limit the Company's 
        exposure to concentrations of credit risk. 
 
 
 
        The Company's mortgages receivable are classified as available 
        for sale as the Company does not have the positive intent to 
        hold to maturity or does not intend to trade actively.  These 
        securities are reported at fair value with unrealized gains and 
        losses reported as a net amount as a separate component of 
        stockholders' equity.  
 
                               Page F-6 
 
 
 
                  	ISO BLOCK PRODUCTS USA, INC. 
 
        NOTES TO CONSOLIDATED COMPARATIVE FINANCIAL STATEMENTS 
        ------------------------------------------------------ 
 
             For the Years Ended March 31, 1997 and 1996 
 
 
 
        Cash 
        ---- 
 
        All amounts are stated in U.S. dollars. 
 
 
 
        Property & Equipment 
        -------------------- 
 
        Property & equipment are recorded at cost.  Depreciation is 
        provided over the estimated useful lives of the assets. 
 
 
 
        Income Taxes 
        ------------ 
  
        The Company has no current or deferred income tax liability due 
        to accumulated losses during the development stage.  The Company 
        has net operating losses totaling $1,357,440 and $831,889, 
        respectively, which are available to offset future taxable 
        income.  These NOL's expire through 2004. 
 
 
 
 
        Foreign Currency Translation 
        ---------------------------- 
 
        The functional currency for the Company's foreign operations is 
        the applicable local currency.  The translation of the 
        applicable foreign currency into U.S. Dollars is performed for 
        the balance sheet accounts using current exchange rates in 
        effect at the balance sheet date and for revenue and expense 
        accounts using a weighted average exchange rate during the 
        period.  The gains or losses resulting from such translation are 
        included in stockholders' equity. 
 
 
 
        Income (Loss) Per Common Share 
        ------------------------------ 
 
        Income (loss) per common share is based upon the weighted 
        average number of common shares outstanding during each period. 
 
 
 
 
NOTE 2.	STOCKHOLDERS' EQUITY 
        -------------------- 
 
        Effective December 31, 1993, the Company adopted a 1993 
        Compensatory Stock Option Plan with 500,000 common shares 
        reserved for issuance and a 1993 Employee Stock Compensation 
        Plan with 1,000,000 common shares reserved for issuance.  No 
        options or shares have been granted under either plan. 
 
 
 
 
NOTE 3. NOTE RECEIVABLE - OFFICER 
        ------------------------- 
 
        The Company loaned the President of the company, Egin Bresnig, 
        $2,000.00. The note bears interest at 6% per annum and is due on 
        March 1, 1998. 
 
 
 
NOTE 4. CONTINGENT LIABILITY
        --------------------

        The Company and its oresident, Egin Bresnig, have been named
        as defendant in Texas Finance Incorporated vs ISO Block
        Products USA, Inc. et al, filed in the United States 
        District Court for the District of Colorado, Civil Action
        No. 96WM-1961. The suit alleges among other things that the
        plaintiff purchased securities of the Company in reliance
        upon misleading statements knowingly made by the Company,
        Mr. Bresnig and others and seeks return of the proce paid
        for the securities plus damages under various federal and
        state securities laws. The Company and Mr. Bresnig are
        vigerously contesting the action. No provision for any loss
        contingency has been provided in the financial statements.

  

 
PART IV 
 
 
 
Item 13. Exhibits and Reports on Form 8-K. 
 
 
 
         (a)  Exhibits.  The following exhibits are filed with this 
         report, except those indicated as having previously been filed 
         with the Securities and Exchange Commission and which are 
         incorporated by reference to another report, registration 
         statement or form. As to any shareholder of record requesting a 
         copy of this report, the Company will furnish any exhibit 
         indicated in the list below as filed with this report (not 
         incorporated by reference) upon payment to the Company of its 
         expenses in furnishing the information. References to the 
         "Company" mean ISO-BLOCK PRODUCTS USA, INC. (formerly named 
         Champion Computer Rentals, Inc.). 
 
 
 
 
 
 
 
 2.0   	Plan of Acquisition, Reorganization, Arrangement, 
        ------------------------------------------------- 
        Liquidation or Succession 
        ------------------------- 
 
 2.1   	Agreement and Plan of Reorganization dated March 28, 1994 
        (incorporated by reference to Exhibit 2.1 to Form 8-K dated 
        March 28, 1994)...............................................   * 
 
 
 
 3.0   	Articles and Bylaws 
        ------------------- 
  
 
 3.1   	Articles of Incorporation of the Company (incorporated 
        by reference to Exhibit 3.1 to registration statement on 
        Form S-18 of Champion Computer Rentals, Inc., file no. 
        33-23257-D)...................................................   * 
 
 3.3   	Bylaws of the Company (incorporated by reference to Exhibit 
        on Form 10-KSB for fiscal year ended 1993)....................   * 
 
 3.4   	Certificate of Amendment and Restatement to Articles of 
        Incorporation (incorporated by reference to Exhibit 3.4 to 
        Form 8-K dated February 10, 1994). ...........................   * 
 
 3.5   	Certificate of Amendment to Articles of Incorporation, 
        changing the Company's name to Iso-Block Products USA, Inc. 
        (incorporated by reference to Exhibit 2(c) to registration 
        statement on Form 8-A, file no. 0-25810)......................   * 
 
 3.6    Certificate of Designation Establishing Series A, 
        Non-Voting Convertible Preferred Stock, as filed with the 
        Colorado Secretary of State on May 19, 1995 ..................   1 
 
 3.7   	Certificate of Designation Establishing Series B, 
        Non-Voting Convertible Preferred Stock, as filed with the 
        Colorado Secretary of State on May 26, 1995 ..................   1 
 
 3.8   	Certificate of Amendment to Certificate of Designation 
       	Establishing Series C, Non-Voting Convertible Preferred 
        Stock, as filed with the Colorado Secretary of State on 
        June 26, 1995.................................................   1 
 
 3.9   	Certificate of Designation Establishing Series 1996,  
       	Non-Voting Convertible Preferred Stock (incorporated by 
        reference to Exhibit 3.1 to Form 8-K dated January 24, 
        1997).........................................................   * 
 
 
 
 4.0   	Instruments Establishing Rights of Security Holders 
        --------------------------------------------------- 
 
 
 4.1   	Specimen common stock certificate of the Company 
        (incorporated by reference to Exhibit 4.1 to registration 
        statement on Form S-18 of Champion Computer Rentals, Inc., 
        file no. 33-23257-D)...........................................  * 
 
 4.2   	Specimen Series A, Non-Voting Convertible Preferred Stock 
        certificate ...................................................	 1 
 
 4.3   	Specimen Series B, Non-Voting Convertible Preferred Stock 
        certificate ...................................................  1 
 
 4.4   	Specimen Series C, Non-Voting Convertible Preferred Stock 
        certificate ...................................................  1 
 
 4.5   	Specimen Series 1996, Non-Voting Convertible Preferred 
        Stock certificate .............................................  1 
 
 
 
10.0   	Material Exhibits 
        ----------------- 
 
 
10.1    1993 Compensatory Stock Option Plan (incorporated by 
        reference to	Exhibit 10.1 to Form 8-K dated February 10, 
        1994)..........................................................  * 
 
10.2   	1993 Employee Stock Compensation Plan (incorporated by 
        reference	to Exhibit 10.2 to Form 8-K dated February 10, 
        1994)..........................................................  * 
 
10.3   	Settlement Agreement dated November 19, 1996 (incorporated 
        by reference to Exhibit 10 to Form 8-K dated November 22, 
        1996)..........................................................  *  
 
10.4   	Stock Option dated November 19, 1996 (incorporated by 
        reference to Exhibit 4 to Form 8-K dated November 22, 
        1996)..........................................................  * 
 
10.5   	Exchange Agreement and Plan of Reorganization dated 
        December 27, 1996 (incorporated by reference to Exhibit 
        2.1 to Form 8-K dated January 24, 1997)........................  *   
 
10.6   	Employment Agreement dated December 27, 1996 (incorporated 
        by reference to Exhibit 10.1 to Form 8-K dated January 24, 
        1997)..........................................................  * 

 
EX-27   FINANCIAL DATA SCHEDULE 
 
 
       	* - Incorporated by reference to another registration 
            statement, report or document. 
 
       	1 - Includes Exhibits filed as part of this Report. 
 
 
 
	(b)    Reports on Form 8-K.   
 
      		None. 
 
	 
 
	(c)    Financial Statements. 
 
      		The index to the financial statements appears at page F-1. 
 
 
 
 
                              SIGNATURES 
 
 
          In accordance with section 13 or 15(d) of the Securities 
        Exchange Act of 1934, the Registrant caused this Annual Report 
        on Form 10-KSB to be signed on its behalf by the undersigned, 
        thereto duly authorized individual. 
 
 
 
        Date: July 14, 1997 
 
                                  ISO BLOCK PRODUCTS USA, INC. 
 
 
 
                           /s/  Egin Bresnig 
 
                            By......................................... 
                                Egin Bresnig, Chief Executive Officer 
 
 
 
          In accordance with the Securities Exchange Act of 1934, this 
        report has been signed below by the following persons on behalf 
        of the Registrant and in the capacities and on the dates 
        indicated. 
 
 
 
     Name                 Title                              Date 
     ----                 -----                              ---- 
 
/s/  Egin Bresnig.........Director, President,           July 14, 1997 
     Egin Bresnig         Chief Executive Officer 
 
									  
 
/s/  Dean Wicker..........Director, Secretary            July 14, 1997 
     Dean Wicker 
 
 
 
/s/  Johnny M. Wilson.....Director                       July 14, 1997 
     Johnny M. Wilson