UNITED STATES SECURITIES AND EXCHANGE 
COMMISSION 
             Washington, D.C. 20549 
                             FORM 10-QSB 
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13
OR 15(D) OF THE SECURITIES  EXCHANGE
ACT OF 1934

For the quarterly period ended  March 31, 1998.

[   ] TRANSACTION REPORT UNDER SECTION 
13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the transaction period from                  To    
Commission File Number       0-14213      

    U.S. MICROBICS
(Formally Global Venture Funding, Inc.) 
(Name of small business issuer in its charter)
Colorado                                      84-0990371
(State or other jurisdiction of       (IRS Employer
 incorporation or organization)   Identification No.)

6965 El Camino Real, Ste 105-279
Carlsbad CA 92009
(Address of principal executive offices) 
Issuer's telephone number   (760) 436-5485
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 issuer was required to file such report), and 
(2) has been subject to such filing requirements for the 
past 90 days.     Yes  x      No   

State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest 
practicable date.

Class                               Outstanding at May 8, 1998 
Common Stock 
$.0001 par value                            3,228,048 
=================================
 U.S. Microbics and Subsidiaries
(formerly Global Venture Funding, Inc.) 
  Consolidated Balance Sheets 
As of March 31, 1998 and September 30, 1997
<TABLE>
<CAPTION>
<C>                              <C>               <C>
                                     March 31,      September 30,
                                        1998                1997
                                    (Unaudited)       (Audited)
ASSETS                    
 Current Assets
 Cash                          $     15,232          $    1,700   
Accounts receivable 
 - trade                             253,534                     -
  Inventory                           2,475                      -  
Prepaid expenses and 
  other assets                          500                 28,000  

  Total current assets       271,741                  29,700  
Plant and equipment  
  (Note 2)                         37,792                   36,200  
  Total assets                $ 309,533             $    65,900 

 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Notes payable (Note 3) $  25,000            $    75,400  
Accounts payable and 
 accrued liabilities               50,772                  88,300   
Net liabilities of 
 discontinued operation 
  (Note 4)                                 -                     76,900  
  Total current liabilities      75,772                240,600  
Stockholders' equity 
(deficit)  (Note 5):
 Convertible preferred stock, 
$.10 par value;  authorized 
20,000,000 shares: 

Series II; authorized 500,000 
shares; issued and outstanding 
21,857 and 22,519 shares 
(aggregate liquidation preference 
of $21,857 and $22,519)           2,186                   2,300    

Series B; authorized 500,000 
shares; issued and outstanding 
17,955 and 18,655 (aggregate 
liquidation preference of $17,955 
and $18,655)                             1,796                    1,900   

Series C, authorized 50,000 
shares; issued and outstanding 
13,470 and 3,240 shares 
(aggregate liquidation preference 
of $1,347,000 and $324,000)      1,347                      300

Series D; authorized 50,000 shares:
issued and outstanding 32,450 and 
17,138 shares (no liquidation 
preference)                                 3,245                    1,700

Common stock $.0001 par value; 
authorized 150,000,000 shares; issued 
and outstanding 1,628,048 and 
1,447,929                                      162                       200

Additional paid-in capital      2,305,910             1,928,000 
Stock options                          204,357                187,700 
Treasury stock                                -                      (1,000)
Accumulated deficit            (2,285,242)           (2,295,800)

Total stockholders' equity 
(deficit)                                    233,761             (174,700)

Total liabilities and stockholders' 
equity (deficit)                   $    309,533        $      65,900 
</TABLE>
==============================
   U.S. Microbics and Subsidiaries 
  (formerly Global Venture Funding, Inc.)
   Consolidated Statement of Cash Flow   
  For the six months  and quarters ended
          March 31, 1998 and 1997 

<TABLE>
<CAPTION>
<C>                                                 <C>                     <C>           <C>                  <C>
                                                              For The Six                               For the Three
                                                     Months Ended March 31,          Months Ended March 31,
                                                     1998                       1997          1998                  1997
Cash flows from operation activities:
 Net income (loss)                         $ 10,521        $ (255,791)       $ 96,421          $ (150,376)
 Depreciation                                        -                        -                      -                        -
Adjustments to reconcile net income
  (loss) to net cash (used) by operating
  activities:
  (Increase) decrease in:
   Accounts receivable - trade        (253,534)                                   (253,534)    
Inventory                                           2,475)                                       (2,475)    
Stock options exercised                          -                 30,000     
Prepaids, deposits and other assets   27,500                5,169               47,600             11,573 

Increase (decrease) in:
  Notes payable                               (50,400)                                        6,500    
Accounts payable and accrued 
   expenses                                      (37,491)             35,506              11,824             11,357 
Net liabilities of discontinued 
    operations                                   (76,900)                                           -                  8,059 
Common stock subscriptions 
     payable                                                                81,000                                     81,000 

Net cash (used) by operating 
     activities                                 (382,779)           (104,116)             (93,664)        (38,387)

Cash flows from financing activities
Issuance of common stock and 
 preferred stock in exchange for 
  services                                      229,403                27,191               14,968             25,690 
Proceeds from issuance of 
  common and preferred stock net 
  of placement fees                        167,500               79,620                91,520            79,620 
 Proceeds from issuance of 
 long-term debt to related parties                              98,500   
Cancellation of treasury stock         1,000                                               1,000   
Repayments of long-term debt                                (118,889)                                   (87,100)
 Repayments of notes payable                                     (6,156)                     -               (3,087)

Net cash flow from financing 
  activities                                    397,903                  80,266               107,488          15,123 

Cash flows from investing activities:
 Purchase of leasehold improvements 
  and equipment                              (1,592)                (16,620)              (1,592)        (10,395)


INCREASE (DECREASE) IN 
  CASH                                          13,532                 (40,470)              12,232          (33,659)
CASH AT BEGINNING OF 
  PERIOD                                        1,700                   49,836                3,000            43,025 
CASH AT END OF PERIOD      $ 15,232                 $ 9,366           $ 15,232        $    9,366 

</TABLE>
===================================
        U.S. Microbics and Subsidiaries  
 (formerly Global Venture Funding, Inc.)
     Consolidated Statement of Income  
For the six months quarters ended
 March 31, 1998 and 1997 

<TABLE>
<CAPTION>
<C>                                                 <C>                     <C>           <C>                  <C>
                                                                 For the Six                            For the Three
                                                       Months Ended March 31,       Months Ended March 31,
                                                        1998                      1997         1998                1997
Revenues                                       $ 259,124             $    -            $ 259,124         $     -

Cost of revenues                                      193                   -                     193                 -

Gross profit                                       258,931                   -              258,931                 -

Selling, general , and
 administrative expenses                     198,601             239,214         145,841          140,940

Income (loss) from operations             60,330             (239,214)       113,090          (140,940)

Other expenses:
 Interest related parties                                                  16,577                                    9,436 
 Interest expense                                  49,809                     -             16,669                   -

Net Income (loss) from continuing
 operations before taxes                         10,521          (255,791)          96,421         (150,376)

Provision for income taxes                         -                       -                        -                     -

Net profit (loss) from continuing 
  operations                                           10,521           (255,791)          96,421         (150,376)

Discontinued operations                             -                        -                     -                    -

Net income (loss)                               $ 10,521          $(255,791)       $ 96,421       $(150,376)

BASIC Earnings Per Share                 $      Nil           $     (0.07)        $    0.03       $       (0.04)
Net income (loss) per common share

Weighted average common shares 
and common equivalents outstanding   3,674,965       3,853,932       3,674,965         3,853,932 

Diluted Earnings Per Share                  $      Nil            $    (0.07)         $   0.02      $      (0.04)
Net income(loss) per common share &
outstanding options

Weighted average common shares, 
 common equivalents and options         3,894,965          3,853,932      3,894,965      3,853,932 
 outstanding
</TABLE>
==============================
  NOTES TO FINANCIAL STATEMENTS 
1.   Basis of presentation and accounting policies:

Organization and basis of presentation:

Global Venture Funding, Inc. (the "Company" or "GVF") 
was incorporated in Colorado on December 7,  1984 under 
the name of Venture Funding Corporation.  The Company 
was formed for the purpose of   acquiring or merging with 
a privately held business.  The Company completed
its registered offering on Form S-18 on October 17, 1985.  
The stock was traded in the OTC market.
          
On May 8, 1992, a "Certificate of Assumed or Trade Name" 
was filed with the Colorado Secretary of State  to record the 
trade name of "Global Venture Funding, Inc." On June 18,
1993, the Articles of  Incorporation were amended and the 
name of the Company was changed to Global Venture 
Funding, Inc.  In April of 1998, the Articles of Incorporation 
were amended and the name of the company was changed  
to U.S. Microbics (USMX), the name under which the 
company now transacts business. 

From May 1996 to October 1997, USMX was pursuing 
opportunities in the prepaid cellular communications business 
via an acquired subsidiary in Atlanta, a national support 
center in Las Vegas, and a retail store operation in 
Houston, TX.  The Atlanta operation was closed in 1996
and the national support center in 1997.  The Houston 
operation was sold to its existing management in December 
1997 with an effective date of October 31, 1997.           

On July 17, 1997, Robert Brehm became CEO and changed 
the direction of the company.  The Board of Directors 
authorized a one for twenty reverse split of all classes of 
the stock effective on August 20, 1997. 

USMX has a fiscal year ending in September and is 
currently building an environmental conglomerate based upon 
the microbial technology acquired from XyclonyX.         

On August 30, 1997, USMX acquired XyclonyX, a 
microbial technology company with headquarters in 
La Jolla, CA. XyclonyX was acquired to capitalize on 
the prior commercial success of the existing management 
with microbial technology applications in oil recovery,
environmental cleanup, hazardous waste management and 
agricultural applications.  USMX operates XyclonyX as a 
separate profit center with its own management 
and technology.

During fiscal 1998, USMX created another subsidiary, 
West Coast Fermentation Center, to cultivate
microbial cultures that are sold to third party licensees 
and other subsidiaries of USMX. In November 1997, 
USMX formed Sub-Surface Waste Management, a 
wholly owned subsidiary whose purpose is to 
manufacture and sell the patented Bio-RaptorTM 
technology licensed from XyclonyX.  During the 
second quarter, USMX also formed Sol Tech 
Corporation and Bio-Con Microbes as wholly 
owned subsidiaries to reach the sewage treatment 
and agriculture markets.

The Company is in the process of arranging and 
obtaining private and public financing for additional 
equity to provide working capital for current overhead 
costs as well as to finance start-up costs of its West Coast 
Fermentation Center, XyclonyX, Bio-Con Microbes, and
Sub-Surface Waste Management operating  subsidiaries. 
  
Consolidated Subsidiaries:
The consolidated financial statements include the accounts 
U.S. Microbics, the parent company, and the wholly owned 
subsidiaries of XyclonyX, Sub-Surface Waste 
Management, Inc., West Coast Fermentation center, and 
Bio-Con Microbes.  All material intercompany transactions
have been eliminated in consolidation.

Income taxes:
The Company has implemented the provisions on 
SFAS No. 109, "Accounting for Income Taxes."  SFAS 
No. 109 requires that income tax accounts be computed 
using the liability method.

Deferred taxes are determined based upon the estimated 
future tax effects of differences between the financial 
reporting and tax reporting bases of assets and liabilities 
given the provisions of currently enacted tax laws.  
The adoption of this provision by the Company has not 
required any adjustment to the financial statements 
presented.

Net earnings per common share:
Net earnings per common share is computed by dividing 
net earnings by the weighted average number of shares of 
common stock and dilutive common stock equivalents 
outstanding during the year.  Dilutive common stock 
equivalents consist of shares issuable upon conversion of
convertible preferred shares and the exercise of the 
Company's stock options (calculated using the treasury 
stock method).  

In February 1997, the Financial Accounting Standards 
Board issued Financial Accounting Standards No. 128 
("SFAS 128"), Earnings Per Share, which is effective for 
periods ending after December 15, 1997.  At that time, 
the Company will be required to change the method
currently used to compute earnings per share and to 
restate all prior periods.  Under the new requirements
for calculating primary earnings per share, which will be 
referred to as basic earnings per share, the dilutive effect 
of stock options and warrants will be excluded. Diluted 
earning per share as defined in SFAS 128 is similar to 
fully diluted earnings per share as defined in APBO 
No. 15  "Earnings Per Share".  The impact of SFAS 
128 on the calculation of basic and diluted earnings
per share for 1997 and 1996 is not expected to be material.

Pervasiveness of estimates:
The preparation of financial statements in conformity with 
generally accepted accounting principles requires management 
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of 
contingent assets and liabilities at the date of the
financial statements and the reported amounts of 
revenues and expenses during the reporting period.  
Actual results could differ from those estimates. 

Fair value of financial instruments:
Based on the borrowing rates currently available to the 
Company, the carrying value of any long-term debt, to 
related parties approximates fair value. 

Property and Equipment
Property and equipment consists principally of a 
fermentor and related accessories that were acquired as 
part of the Company's acquisition of XyclonyX.  As of 
March 31, 1998,  the assets had not been placed in service. 

Notes Payable
Notes payable consists of one unsecured note, to a 
related party, that was converted to equity in May 1998.

Business acquisition and discontinued operations:
On August 30, 1997, the Company completed the 
acquisition of XyclonyX in a transaction accounted for 
in a manner similar to a purchase.  In accordance with 
accounting principles associated with a transaction where 
the acquired company is considered a promoter in the 
founding and organizing of the business, the acquired 
business assets were recorded at the historical cost basis 
of the predecessor.  XyclonyX became a wholly owned 
subsidiary of the Company through the exchange of 
250,000 shares of common stock for all of the outstanding 
stock of XyclonyX.  XyclonyX was formed on August 
14, 1997 and had no significant operations prior to its 
acquisition by the Company.  

On October 31, 1997, the Company adopted a formal 
plan to sell its Houston, Texas cellular phone products store.
The sale was effective as of October 31, 1997 with the 
buyer assuming all liabilities for products or services 
entered into from November 1, 1997 forward.  The assets 
of this operation consisted of inventories, deposits and 
leasehold improvements.   

5.  Stockholders' Surplus:
 
Common Stock
As of March 31, 1998, there were 1,628,048 shares of 
Common Stock outstanding.  Holders of Common Stock 
are entitled to one vote for each share held of record on 
all matters submitted to a vote of the stockholders.  
Holders of Common Stock are entitled to receive 
ratably such dividends as may be declared by the 
Board of Directors out of funds legally available 
therefrom.  In the event of a liquidation, dissolution 
or winding up of the Company, holders of Common Stock
are entitled to share ratably in all assets remaining after 
payment of liabilities and the liquidation preference of 
any then outstanding.

Preferred stock, if any.  Holders of Common Stock have 
no right to convert their Common Stock into any other 
securities.  The Common Stock has no preemptive or 
other subscription rights.  There are no redemption or 
sinking fund provisions applicable to the Common Stock.

Preferred Stock
The Board of Directors has the authority, without further 
action of the stockholders, to issue up to 20,000,000 shares 
of non-voting Preferred Stock, $.10 par value, as follows:

500,000 shares have been designated as Series II, of which 
21,857 shares of Series II are currently issued and remain 
outstanding.  Each share of Series II preferred stock is 
entitled to preference upon liquidation of $1.00 per share 
for any unconverted shares.  Each Series II preferred share
may be converted to Common stock after a specified 
holding period as follows: after one year, two shares of 
Common stock; after two years, five shares of Common 
stock; after three years, ten shares of Common stock.  
In November 1996, the Board of Directors changed the 
conversion schedule as follows : Commencing January 
1, 1997, each shareholder shall be entitled to convert 250 
shares (or 5%) of each 5,000 share unit to 2,500 shares of 
common stock.  The shareholder shall be entitled to 
convert the balance of each unit of Series II Preferred shares 
at the conversion rate of 475 shares of each unit during 
each six-month period thereafter beginning July 1, 1997.
          
500,000 shares have been designated as Series B, of which 
17,955 shares of Series B are currently issued and remain 
outstanding. Each share of Series B preferred stock is 
entitled to preference upon liquidation of $1.00 per share 
for any unconverted shares.  Each Series B preferred 
share may be converted to Common stock after a specified 
holding period as follows: after one year, two shares of 
Common; after two years, five shares of Common stock.  
In November 1996, the Board of Directors changed the 
conversion schedule as follows: Commencing January 
1, 1997,  each shareholder shall be entitled to convert 
250 shares (or 5%) of each 5,000 share unit to 1,250
shares of common stock.  The shareholder shall be 
entitled to convert the balance of each unit of Series B 
Preferred shares at the conversion rate of 475 shares 
of each unit during each six-month period thereafter 
beginning July 1, 1997.
          
50,000 shares have been designated as Series C, of 
which 13,740 shares of  Series C are currently issued.  
Each share of Series C preferred stock is entitled to 
preference upon liquidation of $100 per share for any 
unconverted shares, and the liquidation preference is 
junior only to that of all previously issued preferred 
shares.  Each Series C preferred share may be converted 
to 100 shares of Common stock after a specified holding 
period of one year. 

50,000 shares have been designated as Series D, of which 
32,450 shares of Series D are currently issued and remain 
outstanding. The Series D preferred stock carries no 
liquidation preferences and is subject to forfeiture prior 
to conversion.  Each Series D preferred share may be 
converted to 100 shares of Common stock after a 
specified holding period of one year.

The Company has reserved 17,500,000 shares of its 
$.0001 par value Common stock for conversion of Preferred stock.  
 
The Board of Directors of the Company has authority to 
issue all or a portion of the authorized but unissued 
preferred stock in one or more series and to fix the 
rights, preferences, privileges and restrictions thereof, 
including dividend rights, conversion rights, voting 
rights, terms of redemption, liquidation preferences 
and the number of shares constituting any series or the
designation of such series.  The issuance of Preferred 
Stock could adversely affect the voting power of 
holders of Common Stock and could have the effect 
of delaying, deferring or preventing a change in 
control of the Company. 

Stock Options:

For the period beginning March 31, 1996 and 
ending March 31, 1997: 
On July 26, 1996, the Company issued options to 
purchase 15,000 common shares to an individual in exchange 
for a management consulting agreement scheduled to 
terminate on May 26, 1997.  The option agreement 
provides for an exercise price of $2 per share commencing 
July 26, 1996 until July 26, 1998 or 24 months after the 
filing and acceptance of this issuance with the Securities 
and Exchange Commission, whichever date is later.  
The number of shares issuable under the agreement are 
subject to adjustment to take into account 
reorganizations, recapitalization, mergers or other 
similar corporate events.  In addition, the Company 
agreed to reserve 15,000 shares of its $.0001 par 
value common stock for the exercise of this option. 
This agreement was valued at $30,000 and was 
amortized over the life of the consulting agreement. 
These options were exercised during December 1996.

An additional 5,000 shares were issued to a consultant 
per a services contract and are exercisable at $20.00 
per share.  A prior employee of the company was also 
granted an employee stock option for 5,000 shares at 
$.50 per share.

For the period beginning March 31, 1997 and ending 
March 31, 1998: The Company issued options during the 
year for consulting services, fees in connection with
obtaining financing and various other services to 
employees and non-employees.  

Stock options and warrants summary information:
Activity of options and warrants granted is as follows:
[CAPTION]
<TABLE>
<C>                                                     <C>                              <C>
                                                            Options and warrants outstanding     
                                                                                                    Weighted
                                                            Shares                             average
                                                                                                   exercise
                                                                                                       price
Balance, December 31, 1995                     0                                        0
Granted                                               25,000                                 $6.20

Balance December 31, 1996                25,000                                 $6.20
Granted                                          1,480,400                                 $2.59
Exercised                                           (15,000)                                $2.00
 
Balance December 31, 1997            1,490,400                                 $2.77
Granted                                                26,700                                 $0.75

Expired                                             (247,900)                                $0.72

Balance March 31, 1998                  1,269,200                                 $3.15
Exercisable, March 31, 1998            1,224,200                                 $3.16
</TABLE>

The following is a summary of options and warrants 
outstanding at March 31, 1998: 
[CAPTION]
<TABLE>
<C>                        <C>                   <C>               <C>                 <C>                 <C>
Options and warrants outstanding                                     Options and warrants exercisable
=======================================
                                                       Weighted Range of                  Number           Average       
 Weighted          Number           Weighted
exercise prices       Outstanding      remaining          average        exercisable           average
                                                   contractual life   exercise price                        exercise price
                                                         (years)
=======================================
$ .10 - .75              121,700               2.06              $     0.42          81,700              $0.58
              1              325,000               4.47                     1.00        325,000                1.00
              2              200,000               4.61                     2.00        200,000                2.00
              3              200,000               4.61                     3.00        200,000                3.00
              4              200,000               4.61                     4.00        200,000                4.00
              5              200,000               4.61                     5.00        200,000                5.00
            10                  3,150               3.85                   10.00            3,150              10.00
            20                10,000               2.79                   20.00            5,000              20.00
            60                  9,350               1.48                   60.00            9,350              60.00
                            ------------         ----------             -----------       -----------             -------
                           1,269,200               4.29               $    3.13     1,224,200             $ 3.16
</TABLE>
=======================================
The Company accounts for stock compensation to 
non-employees under the provisions of FAS 123, 
"Accounting for Stock-Based Compensation."  As 
allowed by FAS 123, the company has elected to 
continue to follow Accounting Principals Board 
Opinion No. 25, "Accounting For Stock Issued To 
Employees" (APB 25) in accounting for its employee 
stock option plans.  Under APB 25, the company does 
not recognize compensation expense on the issuance of 
its stock options because the option terms are fixed and 
the exercise price equals the market price, or greater, 
of the underlying stock on the grant date. 

As required by FAS 123, the company has determined 
the pro-forma information as if the company had 
accounted for stock options under the fair value method 
of FAS 123. Had the fair value method of accounting 
been applied to the company's stock option plan, the 
tax-effected impact would be as follows:

Quarter ending 03/31/98 
Net Income as reported                              $     (10,521) 
Estimated fair value of the option grants, 
   net of tax                                                 $   (112,345) 
Net Income Adjusted                                  $   (101,824) 
Adjusted net income per share                     $          (.10) 

The fair value of each option and warrant is estimated as 
of the date of the grant using the Black-Sholes option 
pricing  model with the following assumptions : 
Expected stock price volatility                            340.45%  
Expected option/warrant lives                               1-5 years 
Expected dividend yields                                            --
Risk-free interest rates                                       5.65 - 6.59% 

The weighted average fair value of options/warrants 
granted was $.16. 

6.   Related party transactions:

Office space and administrative support:
Since July, 1997, the Company is provided office space 
and other administrative support services at a cost of 
$750 per month by various corporations under the 
control of the president of the Company, a principal 
stockholder.

Notes payable to related party:
For 3/31/97, Notes payable to a related party consisted 
of various notes payable to a Director of the Company, 
and a corporation under the control of Director.  
For period ending 03/31/98, The notes were unsecured, 
and due to related party shareholders.  They were 
converted to equity in May 1998.

Legal fees:
Certain stockholders of the Company are affiliated with 
firms who currently provide or have provided legal services 
to the Company in prior years.  During the quarters 
ended March 31, 1998 and 1997, the outstanding 
balances due these firms totaled approximately $ 627 
and $31,433, respectively.  
       
PART I - Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 

Overview
During the quarter ended March 31, 1998, the Company 
efforts were directed to fund raising, building 
organizational infrastructure, adding new sales 
subsidiaries, searching for manufacturing space, 
and shipping microbial blends to existing and new 
customers.  The company also formed Sol Tech 
Corporation for sales of its sewage treatment products, 
West Coast Fermentation Center for microbial blend 
manufacturing, and Bio-Con Microbes for 
agricultural and  aqua/mariculture applications.  
Bio-Con Microbes granted a license for golf course 
applications aimed at cutting water consumption.

The company is finalizing its manufacturing location 
and new office space for occupancy during the third 
quarter. 

Buildout of the facility is expected to be complete by 
the end of the fiscal year, however blending operations 
should commence within the third quarter thus 
generating revenue for the company. 

Results of Operations
Quarter Ended March 31, 1998 compared to the 
March 31, 1997. During the quarter ended March 31, 
1997 the Company was developing its retail store strategy 
in Houston and had no revenues and an operating loss 
of $(150,376). During the quarter ended March  31, 
1998, the Company was developing its manufacturing 
plans, raising capital and orchestrating a strategic plan 
for  its subsidiaries. A license was granted by Bio-Con 
Microbes to Gran Verde, Inc., a subsidiary of 
Customer Sports, Inc. for $250,000 prepayment and
minimum payments over the next five years.  As a 
result of this license and additional shipments of microbial
blends by Sub-Surface Waste Management, the Company 
showed revenue of $259,124 and a net profit of $96,421 
for the quarter.

Selling, general and administrative (S, G & A) expenses 
for the quarter ending on March 31, 1997 totaled $140,940.
Selling, general and administrative expenses were 
comprised mainly of Houston startup operations, 
accounting expenses arising from the preparation of 
SEC reporting forms for public disclosure, consulting 
fees, and filing fees. S, G & A expenses for the period 
ending March 31, 1998 were comprised of accounting, 
legal, public relations, and expenses associated with the
new subsidiaries startup and organization.  

Interest expense for related parties was $9,436 during 
the second quarter of fiscal 1997.  The interest is related 
to notes payable to related parties for past services 
rendered. These notes, due in 18 months from the date 
of issuance, bear interest at the rate of 10% per annum.  
Interest expense for the quarter ending March 31, 
1998 consisted of interest associated with notes from 
consultants that were settled with stock and cash 
payments during the quarter.   

Primarily, as a result of the above mentioned expenses 
and revenues, Net Income from Operations increased 
by $246,797 in the quarter ended March  31, 1998 
compared to the quarter ending March 31, 1997. 

There was no provision for income taxes in either 
1997 or 1998 due to the existence of net operating 
loss carry forwards from prior years, and the 
likelihood of the Company being able to utilize these 
net operating losses in the future.

Net Income per share increased from a loss of $(0.04) 
to profit of $0.03 in March 31, 1998 primarily due to 
the increase in the revenue generated from the 
environmental technology operations. 

The Company experienced a profit from operations 
of $96,421 during the quarter ending March 31, 1998.  
This profit risks the first time the company has shown 
positive earnings since it began trading on November 
1996. This achievement marks the turning point in the 
Company's history and illustrates the ability to generate 
sales from a prior successful technology and customer 
base.  

In order to implement the company's strategic plan 
with its subsidiaries, the Company is planning on 
raising additional capital through the issuance of stock 
in U.S. Microbics and its subsidiaries. The funds 
are targeted to establish the fermentations manufacturing 
operation and the staffing of the sales subsidiaries.   
The Company is also seeking new business opportunities 
that may be acquired or developed internally.  Based on 
the current status of the Company, additional capital
will be required in order for the Company to complete 
any business acquisitions or development, or to maintain 
their ongoing operations. 
Liquidity and Capital Resources
Cash and equivalents totaled $15,232 and $1,700 at 
March 31, 1998 and  September 30, 1997 respectively.  
During the quarter ending March 31, 1998, net cash 
used by operating activities totaled $93,664 compared to 
$38,387 in the same period in 1997.  Operating activities 
includes payments for accounting, legal fees and 
professional services. 

Net Working Capital (Current Assets less Current 
Liabilities) was $195,969 as of March 31, 1998.  As 
of  September 30, 1996, net working capital was 
$(210,900) including a $76,900 discontinued operation 
liability which was expensed during the current quarter.  
The company was able to convert most notes payable 
and much of the accounts payable to stock at values of
approximately $1.00 per share during fiscal 1998. 
Additional working capital was generated from
Private Placement Equity sales. 

To date the Company has financed its operations 
principally through borrowings and private placements 
of equity securities and debt.  During the second quarter 
of 1998, the Company raised $104,000 in a private 
placement for which Series C, Preferred stock was 
issued for 1,680 shares. 

Net proceeds to the company after placement fee's 
was $91,520  The Company will need additional capital 
to continue its existence and will endeavor to raise 
sufficient funds through the sale of shares, licensee 
fees, or other means. 

Non-cash investing and financing activities
For the quarter ending March 31, 1998:
Preferred shareholders exercised their right to convert 
Series II Preferred stock and Series B Preferred stock 
to common stock.  Under the conversion 12,995 
shares of Series II preferred were converted to 
6,497 shares of common stock and 13,990 
shares of Series B preferred  stock were 
converted to 3,497 shares of common stock.    

During the quarter, 40,000 shares of treasury 
stock were canceled thus reducing the common
stock outstanding.  An additional 1,000 shares of 
Series D preferred stock were also canceled due to 
lack of performance of the shareholder.  

For the period ending March 31, 1997:
During the quarter ended March 31, 1997, 7,550 shares 
of Series II preferred stock and 3,500 shares of Series 
B preferred stock were converted into 93,000 shares of 
common stock.  The Company issued 3,000 shares 
of Series C preferred stock and 100,000 shares of 
common stock for  future consulting services.  The 
contract negotiations were not completed and 
the stock was in the possession of the Company.  
These shares were subsequently canceled.  The 
Company also issued 27,000 shares of common 
stock for placement fees in consideration of funds 
received by the Company from sale of shares under 
the private placement memorandum. 

Future Funding Requirements
The Company's working capital and other capital 
requirements during the next year or more will vary 
based on a number of factors, including the rate at 
which microbial products are shipped and generate 
profits, the level of sales and marketing activities for 
environmental products, and the level of effort needed 
to develop additional distribution channels to the 
point of commercial viability.  

Continuation Of Business
In order for the Company to be successful, additional 
funding will be required.  The Company had generated 
initial revenues and has paid operating costs from equity 
sales.  The failure of the company or its subsidiaries to 
successfully obtain additional funds may jeopardize 
its existence. 

The company intends to raise additional working 
capital by the sale of common stock, borrowings
and/or possible licensing of its developed business 
arrangements.  

Employees 
As of March 31, 1998, the Company had 3 full-time 
employees and many part time consultants. 
By September 30, 1998, the Company expects to 
significantly increase the number of employees, 
principally in microbial manufacturing operations, and 
sales and marketing through operating subsidiaries. 
The Company's employees are not represented by a 
labor union and the Company believes its employee 
relations are good.  

On March 24, 1998 Mery Robinson was appointed 
the position of Secretary after the resignation of Sy 
Phillips.

Factors Affecting Future Performance
From time to time, in reports filed with the Securities 
and Exchange Commission, in press releases, and in 
other communications to shareholders or the investing 
public, the Company may comment on anticipated 
future financial performance.  Such forward looking 
statements are subject to risks and uncertainties, 
including but not limited to, the impact of competitive
products and services, technological changes in the 
Company's industry, the ability of the Company to
develop and successfully deploy it's products through 
a distribution network, the Company's ability to 
attract and retain customers, product demand and 
market acceptance risks, reliance on key strategic 
alliances, fluctuations in operating results, delays in 
development of highly complex products and 
services and other risks detailed from time to time in 
USMX's filing with the Securities and Exchange 
Commission.  These risks could cause the company's 
actual results for 1998 and beyond to differ materially 
from those expressed in any forward looking statements
made by, or on behalf of, the Company. 

Although the environmental technology 
opportunities are numerous and the Company enjoys
Letters of Intent for its products, and the company has 
shipped products and has licensed its technology, the 
ability to finance, build and manufacture the microbial 
blends has not yet commenced although plans to 
startup a pilot plant operation indicate such a plant 
could be in operation as soon as June 1998.  The 
Company's failure to operate such a plant in a profitable
manner could materially effect the financial results and 
the amount of capital required to operate the business 
in the future.
                                 
         PART II  Item 1 - Legal Proceedings
There are no known legal proceedings to which the 
Company is a party as of March 31, 1998

Item 2 - Changes In Securities
None

Item 3 - Defaults Upon Senior Securities
None

Item 4 - Submission of Matters To A Vote Of 
Security Holders
None.  
Subsequent to March 31, 1998, a special shareholders 
meeting was convened and the name of the Company was 
changed to U.S. Microbics. 

Item 5 - Other Information - Subsequent Events
In April 1998, two employees exercised their rights 
to convert 14,000 shares of series D preferred
to 1,400,000 restricted shares of common stock.  
The company also issued four blocks of 50,000
shares of restricted common stock to Sub-Surface 
Waste Management, Sol Tech Corporation,
Bio-Con Microbes, and West Coast Fermentation 
Center in return for all outstanding stock in 
each subsidiary.

Item 6 - Exhibits and Reports on Form 8-K
     (a)  None

Reports on Form 8-K - None filed during quarter ended 
 March 31, 1998. 
Subsidiaries of Registrant as of March 31, 1998 
  -XyclonyX; 100% owned, Sub-Surface Waste 
 Management, Inc.; 100% owned. Bio-Con Microbes; 
 100% owned, West Coast Fermentation Center; 
 100% owned, Sol Tech Corporation; 100 % 
 owned. 
                                       SIGNATURES 
In accordance with the requirements of the Exchange 
Act, the registrant caused this report to be signed on 
its behalf by the undersigned, thereunto duly authorized.
                                           U.S. Microbics   
Date:   05/15/98                 By:   /s/  Robert C. Brehm 
                                             Robert C. Brehm, President