U.S. SECURITIES  AND  EXCHANGE  COMMISSION
                        WASHINGTON,  D. C.  20549
                                    
                              FORM  10-QSB


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

        For the quarterly period ended March 31, 1999
                                    

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

        For the transition period from _______________ to ___________

                        Commission file number  0 - 24608
                                                ---------

                              FOTOBALL USA, INC.
       ---------------------------------------------------------------
      (Exact name of small business issuer as specified in its charter)

                 Delaware                          33 - 0614889
       ---------------------------------------------------------------
       (State or other jurisdiction of           (I.R.S. Employer
        incorporation or organization)          Identification No.)


             3738 Ruffin Road, San Diego, California,      92123
       ---------------------------------------------------------------
             (Address of principal executive offices)    (Zip Code)

                                 (619) 467 - 9900
                        ----------------------------------
                           (Issuer's telephone number)
                                    
     Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days.  Yes  (X)  No( )

     As of April 30, 1999, the Company had 2,699,242 shares of its common
stock issued and outstanding.


  Transitional Small Business Disclosure Format  Yes ( )  No (X)

                                    
                                    












































                                       1<PAGE>
       

                                    
                           FOTOBALL USA, INC.

                                  INDEX
                                                                            
                                                                    Page No.
PART I.   FINANCIAL INFORMATION

  Item 1. Financial Statements

          Condensed Balance Sheets as of December 31, 1998 and
               March 31, 1999                                           3

          Condensed Statements of Operations for the three months
               ended March 31, 1998 and 1999                            4

          Condensed Statements of Cash Flows for the three months
               ended March 31, 1998 and 1999                            5

          Notes to Condensed Financial Statements                     6-8

  Item 2. Management's Discussion and Analysis or
               Plan of Operations                                    9-13

PART II.  OTHER INFORMATION

  Item 6. Exhibits and Reports on Form 8-K                             14

SIGNATURES                                                             15
                                    
























                                       2<PAGE>
                        Part I. FINANCIAL INFORMATION
                        ITEM I. FINANCIAL STATEMENTS

                              FOTOBALL USA, INC.
                          CONDENSED BALANCE SHEETS
                                 (Unaudited)
                                        December 31, 1998    March 31, 1999
                                         -----------------    --------------
                                     ASSETS
CURRENT ASSETS
  Cash and equivalents                       $       8,498     $     120,824
  Accounts receivable less allowances of                           
   $157,000 in 1999 and $147,000 in 1998         3,041,633         3,503,450
  Inventories                                    3,438,552         3,835,130
  Prepaid expenses and other                       157,608           197,351
  Deferred income taxes                                            
                                                    90,000                --
                                             -------------     -------------
      TOTAL CURRENT ASSETS                       6,736,291         7,656,755
                                             -------------     -------------
PROPERTY AND EQUIPMENT, net                      1,126,551         1,379,375
                                             -------------     -------------
OTHER ASSETS                                                       
  Deposits and other                                31,767            30,385
                                             -------------     -------------
      TOTAL OTHER ASSETS                            31,767            30,835
                                             -------------     -------------
                                             $   7,894,609     $   9,066,515
                                             =============     =============   
                    LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES                                                             
  Note payable to bank                       $     400,000     $   1,175,000
  Current portion of capital leases                 95,970           131,192
  Accounts payable and accrued expenses          1,315,831         1,250,923
  Income taxes payable                              39,800                --
                                             -------------     -------------
      TOTAL CURRENT LIABILITIES                  1,851,601         2,557,115
CAPITAL LEASES, net of current portion             154,503           332,841
                                             -------------     -------------
      TOTAL LIABILITIES                          2,006,104         2,889,956
                                             -------------     -------------
STOCKHOLDERS' EQUITY                                               
  Preferred stock, $.01 par value;                                 
   authorized -1,000,000 shares; issued
   and outstanding-none
  Common stock, $.01 par value;                              
   authorized - 15,000,000 shares;                 
   issued and outstanding - 2,699,242 shares        26,992            26,992
  Additional paid-in capital                     8,590,994         8,595,869
  Accumulated deficit                           (2,729,481)       (2,446,302)
                                             -------------     -------------
      TOTAL STOCKHOLDERS' EQUITY                 5,888,505         6,176,559
                                             -------------     -------------
                                             $   7,894,609     $   9,066,515
                                             =============     =============
          See accompanying notes to condensed financial statements
                                       3<PAGE>

                              FOTOBALL USA, INC.
                     CONDENSED STATEMENTS OF OPERATIONS
                                 (Unaudited)
                                 
                                                      Three Months Ended
                                                           March 31
                                               -----------------------------
                                                     1998           1999
                                               ------------     ------------
SALES                                          $  3,761,403     $  5,593,349
COST OF SALES                                     2,423,082        3,469,360
                                               ------------     ------------
     GROSS PROFIT                                 1,338,321        2,123,989
                                               ------------     ------------
OPERATING EXPENSES                                                 
   Royalties                                        235,925          469,796
   Marketing                                        447,630          589,998
   General and administrative                       501,097          566,848
   Depreciation and amortization                     76,780           98,107
                                               ------------     ------------
     TOTAL OPERATING EXPENSES                     1,261,432        1,724,749
                                               ------------     ------------
     INCOME BEFORE OTHER (INCOME) 
      EXPENSE AND INCOME TAX                         76,889          399,240
                                               ------------     ------------
OTHER (INCOME) EXPENSE                                             
   Interest expense                                   9,806           26,660
   Interest income                                   (8,083)            (599)
                                               ------------     ------------
     TOTAL OTHER (INCOME) EXPENSE                     1,723           26,061
                                               ------------     ------------
     INCOME BEFORE INCOME  TAX                       75,166          373,179
     INCOME TAX EXPENSE                              29,900           90,000
                                               ------------     ------------
     NET INCOME                                $     45,266     $    283,179
                                               ============     ============
NET INCOME PER COMMON SHARE                                        
        BASIC                                  $        .02     $        .10
                                               ============     ============
        DILUTED                                $        .02     $        .10
                                               ============     ============
WEIGHTED AVERAGE NUMBER OF COMMON                                  
SHARES OUTSTANDING
        BASIC                                     2,691,842        2,699,242
                                               ============     ============
        DILUTED                                   2,691,842        2,926,385
                                               ============     ============  
                                                                   








          See accompanying notes to condensed financial statements
                                       4<PAGE>
                              FOTOBALL USA, INC.
                     CONDENSED STATEMENTS OF CASH FLOWS
                                 (Unaudited)
                                 
                                                      Three Months Ended
                                                           March 31
                                               -----------------------------
                                                   1998             1999
                                               ------------     ------------
CASH FLOWS FROM OPERATING ACTIVITIES                                
 Net income                                    $     45,266     $    283,179
 Adjustments to reconcile net income to
  net cash used in operating activities:
   Depreciation and amortization                     81,067          102,030
   Amortization of stock compensation expense         2,625            4,875
   Changes in operating assets and liabilities:
    Accounts receivable                            (596,983)        (461,817)
    Inventories                                      52,788         (396,578)
    Prepaid expenses and other                      (10,846)         (39,743)
    Deferred income taxes                            29,900           90,000
    Accounts payable and accrued expenses            17,051          (64,908)
    Income taxes payable                                 --          (39,800)
                                               ------------     ------------ 
NET CASH USED IN OPERATING ACTIVITIES              (379,132)        (522,762)
                                               ------------     ------------  
CASH FLOWS FROM INVESTING ACTIVITIES                                
  Purchase of property and equipment                (28,121)        (108,420)
  Change in long-term deposits                      (27,109)           1,382
                                               ------------     ------------ 
NET CASH USED IN INVESTING ACTIVITIES               (55,230)        (107,038)
                                               ------------     ------------ 
CASH FLOWS FROM FINANCING ACTIVITIES                                 
  Repayment of capital lease obligations            (26,617)         (32,874)
  Net additions to short-term credit facilities           -          775,000
                                               ------------     ------------
NET CASH PROVIDED BY (USED IN)                              
 FINANCING ACTIVITIES                               (26,617)         742,126
                                               ------------     ------------
NET INCREASE (DECREASE) IN CASH AND             
 EQUIVALENTS                                       (460,979)         112,326
CASH AND EQUIVALENTS, Beginning of period           764,855            8,498
                                               ------------     ------------ 
CASH AND EQUIVALENTS, End of period            $    303,876     $    120,824
                                               ============     ============ 










          See accompanying notes to condensed financial statements
                                       5<PAGE>
                              FOTOBALL USA, INC.
               NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
                    THREE MONTHS ENDED MARCH 31, 1998 AND 1999             
                                 
1. CONSENSED FINANCIAL STATEMENTS

The  condensed  balance  sheet as of March  31,  1999,  the  condensed
statements of operations for the three months ended March 31, 1998 and
1999,  and the condensed statements of cash flows for the three months
ended  March  31,  1998  and 1999 have been prepared  by  the  Company
without  audit.  In the opinion of management, all adjustments  (which
include  only  normal  reoccurring adjustments) necessary  to  present
fairly  the  financial position, results of operations and cash  flows
for all periods presented have been made.

Certain  information  and footnote disclosures  normally  included  in
financial  statements prepared in accordance with  generally  accepted
accounting  principles have been omitted, pursuant to  the  rules  and
regulations  of  the  Securities  and  Exchange  Commission.   It   is
suggested  that  these  condensed  financial  statements  be  read  in
conjunction  with the financial statements and notes thereto  included
in  the  Company's Annual Report on Form 10-KSB for  the  fiscal  year
ended December 31, 1998.

The  results of operations for the three months ended March  31,  1999
are  not  necessarily indicative of the results of  operations  to  be
expected for the year ending December 31, 1999.

2. DISCLOSURE OF CERTAIN SIGNIFICANT RISKS AND UNCERTAINTIES

Significant  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  as of the date of the financial statements  and  the
reported   amounts  of  revenue  and  expenses  during   the   period.
Significant estimates have been made by management with respect to the
realizability  of the Company's deferred tax assets and the  provision
for  discontinued and excess inventories.  Actual results could differ
from  these estimates making it reasonably possible that a  change  in
these estimates could occur in the near term.

Dependence  Upon  Licensing Arrangements - The Company's  business  is
based  primarily upon its use of the insignia, logos,  names,  colors,
likenesses and other identifying marks and images borne by many of its
products  pursuant  to  license arrangements  with  NFL,  Professional
Baseball,  and  to a lesser extent, Colleges. The Company's  licensing
arrangements  expire  at various times through March  31,  2000.   The
following  table  summarizes,  in descending  order  of  1998  revenue
contribution, the Company's significant license agreements  and  their
terms:
       Licensor         Product Term                     Expiration Date
       --------         ------------                     ---------------
       NFL Team Logo    Football 2 years                 March 31, 2000
       MLBPA            Baseball 1 year (2 year option)  December 31, 1999
       MLBP             Baseball 3 years                 December 31, 1999

                                       6<PAGE>

                              FOTOBALL USA, INC.
               NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
                    THREE MONTHS ENDED MARCH 31, 1998 AND 1999             
                                  (continued)

The  Company believes that its relationships with these licensors are
satisfactory and anticipates that each of the license agreements will
be  renewed  on  acceptable terms and conditions.  The non-renewal or
termination  of  one  or more of the Company's licenses,  particularly
with  NFL or Professional Baseball, could have a material adverse
effect on the Company's business.

Dependence on Promotions Business - The Company's promotions business
depends  primarily  upon  a  series  of  one-time  projects with  its
customers.   In prior years, the Company's  promotions business
contributed  the largest percentage of the Company's total  sales  and
earnings  and as such resulted in significant reliance upon generating
promotion  sales sufficient to operate profitably. The large  increase
in the Company's retail business in 1998 reduced the importance of the
promotions business in determining the Company's profitability. During
the  year  ended  December 31, 1998, 25% of the  Company's  sales  was
derived from promotions, of which one customer accounted for aggregate
sales  of  $1,383,000  or 7% of total sales.  During  the  year  ended
December  31,  1997,  33%  of  the Company's sales  was  derived  from
promotions  of  which one customer accounted for  aggregate  sales  of
approximately $2,438,000 or 20% of total sales.

Variability of Gross Margins - Historically, the Company has  realized
higher  gross  margins on its retail sales as compared to  promotional
sales. In 1997, the Company realized gross margins of 36%, excluding a
$1,175,000 provision for discontinued and excess inventory.  In  1998,
the Company realized gross margins of 39%.  The increase was primarily
due to the greater concentration of higher margin retail sales in 1998
as   compared  to  1997.   The  Company's  gross  margins   fluctuate,
particularly  between quarters, based in part on the concentration  of
promotions and retail sales during the reporting period.  The type  of
product sold, the size of the promotion and extent of competition also
create variability in realized gross margins.

Variability   of  Operating  Results;  Seasonality;  Dependence   Upon
Baseball  Related  Sales  -  The Company has historically  experienced
significant  quarter-to-quarter  variability  in  its  sales  and  net
income.   This  was  due in part to the seasonality  of  its  licensed
sports  product business combined with a significant concentration  of
its  business  from baseball. The second factor which in  prior  years
significantly   contributed  to  the  variability  of  the   Company's
operations  was its dependence on promotions business  as  more  fully
explained   above.    The  Company  realized  increasing   sales   and
profitability  in  each quarter of 1998 primarily due  to  significant
increases in its retail businesses.





                                       7<PAGE>

                              FOTOBALL USA, INC.
               NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
                    THREE MONTHS ENDED MARCH 31, 1998 AND 1999             
                                  (continued)

Dependence Upon Key Personnel - The success of the Company is  largely
dependent on the personal efforts of Michael Favish, its President and
Chief  Executive  Officer.  Mr. Favish has entered  into  a  five-year
employment agreement with the Company, commencing on August 11,  1994,
which,  among  other things, precludes Mr. Favish from competing  with
the  Company  for a period of two years following termination  of  his
employment  with the Company.  The loss of the services of Mr.  Favish
would  have  a  material adverse effect on the Company's business  and
prospects.  The Company and Mr. Favish are discussing an extension  of
Mr.  Favish's employment agreement.  The Company maintains  "key  man"
life  insurance  on  the  life of Michael  Favish  in  the  amount  of
$1,000,000.

Dependence on Suppliers - In 1998, the Company purchased approximately
87%  of  its  raw materials and finished retail and promotions  goods,
consisting  primarily of synthetic baseballs, footballs,  basketballs,
hockey  pucks  and  playground balls, from six  companies  located  in
China,  with  two  manufacturers  accounting  for  77%  of  total  raw
materials  and finished goods purchased.  China currently  holds  most
favored  nation  ("MFN") trading status with the  United  States.  Any
conditions  imposed  by  the President of the United  States  and  any
legislation   in  the  United  States  revoking  or  placing   further
conditions on China's MFN trading status could have a material adverse
effect  on the cost of all of the Company's products because  products
originating  from  China  could be subjected to  substantially  higher
rates of duty.

3. INVENTORIES

Inventories  are  valued  at the lower of cost  or  market.   Cost  is
determined  on  the  first-in  first-out (FIFO)  method.   Inventories
consist of the following:

      Finished goods             December 31, 1998    March 31, 1999
                                 -----------------    --------------
                                       $   808,407      $  1,950,179
      Raw material                       1,668,408         1,884,951
                                       -----------      ------------
      Total inventory                  $ 2,476,815      $  3,835,130
                                       ===========      ============
                                                         










                                       8<PAGE>
             ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
                         OR PLAN OF OPERATION
     
Results of Operations:

     The following table sets forth certain operating data (in dollars
and as a percentage of the Company's sales) for the periods presented:
(unaudited)

                                      Three Months Ended
                                            March 31,
                               ----------------------------------
                                    1998                1999
                               ----------------------------------

    Sales                      $  3,761,403   100%  $  5,593,349  100%
    Cost of Sales                 2,423,082    64      3,469,360   62
    Operating Expenses            1,261,432    34      1,724,749   31
    Operating Income                 76,889     2        399,240    7
    Interest Expense                  9,806     1         26,660    1
    Interest Income                   8,083     1            599    1
    Income Before Income Tax         75,166     2        373,179    7
    Income Tax Expense               29,900     1         90,000    2
    Net Income                 $     45,266     1%  $    283,179    5%
                                         
Three Months Ended March 31, 1998 and 1999:

Sales:

    Sales were $5,593,000 for the three months ended March 31, 1999,
an increase of 49% from sales of $3,761,000 for the three months ended
March 31, 1998.  The increase was due to the Company's retail business
realizing  substantial  increases  over  the  prior  year  period  and
moderate  increases  in  its  promotions  sales.   Retail  sales  were
$4,541,000  for the three months ended March 31, 1999, an increase  of
62%  from retail sales of $2,796,000 for the three months ended  March
31,  1998.  Retail sales increases were primarily attributable to  the
$1,200,000 or 164% increase in football-related sales and, to a lesser
extent,  the $252,000 or 27% and $259,000 or 259% increases in baseball
and playground ball related sales, respectively.  Contributing also  to
the  rapid  retail sales growth are national account sales, which  are
expanding  both in sales per store and the number of stores  serviced.
Additionally,  the Company's entertainment/amusement-related  business
experienced  significant growth during the first quarter of  1999  and
this  growth is expected to accelerate in the second half of 1999  due
to  certain millennium related projects.  The Company expects that, in
1999, its retail business should continue to grow at a rapid rate  and
should  represent a significant percentage of the Company's  aggregate
sales.   The  Company  will, however, continue  to  pursue  promotions
business  aggressively,  focusing  on  leveraging  its  sports   league
relationships.  For the three months ended March 31, 1999,  promotions
sales  were  $1,052,000,  or 19% of sales, as compared  to  promotions
sales  of $965,000, or 26% of sales, for the three months ended  March
31,  1998.   Promotions sales increased by 9% or  $87,000  due  to  an
increase in football, hockey and lapel pin promotions sales offset  in
part by a decrease in baseball-related sales.

                                       9<PAGE>

Gross Profit:

    Gross profit was $2,124,000 for the three months ended March 31,
1999, an increase of 59% from gross profit of $1,338,000 for the three
months  ended March 31, 1998.  Gross profit as a percentage  of  sales
increased  from 36% for the three months ended March 31, 1998  to  38%
for  the  three  months ended March 31, 1999.  Gross profit  increased
both  on  an absolute basis and as a percentage of sales due primarily
to  the  significant gross margin contribution in the quarterly period
ending  March 31, 1999 from its full-size football product  line.   As
previously  noted, the Company's gross margins fluctuate, particularly
between quarters, based on several factors including sales and product
mix  (See Footnote 2, "Notes to Condensed Financial Statements").  The
Company anticipates that its gross margins for the fiscal year  ending
December 31, 1999 should be consistent with the gross margins realized
during the fiscal year ended December 31, 1998.

Operating Expenses:

    Operating  expenses were $1,725,000, or 31% of  sales,  for  the
three  months ended March 31, 1999, as compared to operating  expenses
of  $1,261,000, or 34% of sales, for the three months ended March  31,
1998.  The increase in operating expenses on an absolute basis was due
to  increases  in the Company's variable costs, such as royalties  and
marketing  expenses,  as  a  result  of  significantly  higher  sales.
Operating  expenses  also increased due to increases  in  general  and
administrative expenses.

    Royalties expenses were $470,000 for the three months ended March
31,  1999, an increase of 99% from royalties expenses of $236,000  for
the  three  months  ended  March 31, 1998.  Royalties  expenses  as  a
percentage  of  sales increased to 8% of sales for  the  three  months
ended March 31, 1999 from 6% of sales for the three months ended March
31, 1998, due to the increased concentration of higher royalty bearing
sales  in  1999 as compared to 1998.  Royalties expense  increased  in
1999  due  to several factors: a greater concentration of both  retail
sales  and  products, such as the football product lines,  that  carry
higher  royalty rates.  Additionally,  royalty rates on the  Company's
MLB  product  lines  increased from 9% to 11% in 1999.   Finally,  the
Company's  entertainment character license business, such  as  Rugrats
carry higher royalty rates.  All of these factors should contribute in
the future to higher royalty expenses both in absolute terms and as  a
percentage  of sales.  As previously noted, the Company  is  dependent
upon  its  licensing  arrangements and their successful  renewal  (See
Footnote 2, "Notes to Condensed Financial Statements").  Most  of  the
Company's significant licenses expire on December 31, 1999 except  for
the  NFL  Team  Logo license, which expires on March  31,  2000.   The
Company  anticipates that royalties expenses as a percentage of  sales
for  the  fiscal  year ending December 31, 1999 should  be  moderately
higher  than the percentage of royalties expenses realized during  the
first quarter of 1999 due to the greater concentration of higher royalty 
bearing sales such as retail and entertainment character licensed sales.



                                      10<PAGE>

    Marketing expenses were $590,000 for the three months ended March
31,  1999, an increase of 32% from marketing expenses of $448,000  for
the  three  months  ended  March 31, 1998.  Marketing  expenses  as  a
percentage  of  sales decreased to 11% of sales for the  three  months
ended  March  31,  1999 from 12% of sales for the three  months  ended
March  31,  1998.  The increase in marketing expenses of $142,000  was
primarily  the  result  of  higher  wages  and  related  expenses  and
significantly  higher outside sales commissions corresponding  to  the
significant   sales  increases  during  the  quarter.    The   Company
anticipates  that marketing expenses for the year ending December  31,
1999  in  absolute terms, should be higher than marketing expenses  in
1998  but as a percentage of sales should be lower than the percentage
of marketing expenses realized in 1998.

    General and administrative expenses were $567,000 for the  three
months  ended  March  31, 1999, an increase of 13%  from  general  and
administrative expenses of $501,000 for the three months  ended  March
31,  1998.   This  $66,000 increase is a result  of  several  factors,
including  higher legal and professional services costs.  The  Company
anticipates that general and administrative expenses will continue  to
increase in each of the remaining quarters of 1999 as a result of  the
need   to   expand   the  Company's  infrastructure   to   accommodate
substantially higher anticipated sales in the future.

Other Income (Expense) and Income Taxes:

    Interest expense was $27,000 for the three months ended March 31,
1999, an increase of $17,000 from interest expense of $10,000 for  the
three  months ended March 31, 1998.  The increase reflects an increase
in  interest  charges on the line of credit as a result  of  a  higher
average  loan balance during the period, combined with an increase  in
interest charges from capitalized leases.  Total capitalized equipment
and  machinery leases were $464,000 at March 31, 1999, an increase  of
$143,000  from  $321,000 at March 31, 1998.  The  Company  anticipates
that  interest  expense  in  future periods will  increase  moderately
reflecting  additional  capital lease purchases  and  higher  line  of
credit  usage  as  more  fully explained  in  "Liquidity  and  Capital
Resources" below.

    Interest  income  was insignificant for the three  months  ended
March 31, 1999, as compared to interest income of $8,000 for the three
months  ended  March 31, 1998.  This decrease is due  to  the  Company
having insignificant cash balances available for investment during the
three  months  ended  March 31, 1999 as compared  to  the  prior  year
period.  The Company anticipates that interest income in 1999 will  be
insignificant.









                                      11<PAGE>
    Income tax expense was $90,000 for the three months ended March 31, 1999, 
an effective tax rate of 24%, as compared to income tax expense of $29,900,
or 40% for the prior year period.  The deferred tax asset of $90,000 at 
December 31, 1998 was eliminated as a result of the income tax expense 
recognized during the three month period ended March 31, 1999.  Had the 
Company been taxed at a combined federal and state effective tax rate of 40%,
then earnings per share would have been as follows:

              Income before income taxes                $ 373,179
               Proforma Income tax expense                149,272
                                                        ---------
              Proforma Net Income                       $ 223,907
                                                        =========
              Proforma Diluted Earnings per Share       $     .08
                                                        =========

    As of March 31, 1999 the Company had gross deferred tax assets of 
$1,091,000, consisting of unutilized loss carryforwards, which will 
expire through 2012.  The full amount of the deferred tax assets was
offset by a valuation allowance due to uncertainties associated with
the future realization of these loss carryforwards.

Liquidity and Capital Resources:

    The  Company's  net working capital increased  by  $216,000  from
December 31, 1998 to March 31, 1999, to a net working capital  surplus
of  $5,100,000 at March 31, 1999 from a net working capital surplus of
$4,884,000  at  December  31,  1998.  Cash  flow  used  in  operations
increased by $144,000 from cash used in operations of $379,000 for the
three  months  ended  March 31, 1998 to cash  used  in  operations  of
$523,000 for the three months ended March 31, 1999.  This increase was
primarily the result of increases in accounts receivable and inventory
during the periods.  Accounts receivable increased by $462,000 or  15%
from  December  31,  1998 to March 31, 1999.   This  increase  is  due
primarily  to  a  greater percentage of sales  derived  from  national
retail  accounts, which typically require longer repayment terms  than
the  Company's  normal  thirty-day credit terms.   Since  the  Company
expects  an  increasing contribution from national  retailers  in  the
future,  it expects a corresponding moderate increase in its  accounts
receivable days sales outstanding.  Inventories increased by  $396,000
or  12%  due  to  rapid growth of its retail business.  The  Company's
expanding  line of products, and its expectation of increasing  demand
for these products in future periods also contributed to the increase.

    Cash  and  equivalents aggregated $121,000 at March 31, 1999,  an
increase  of $113,000 from cash and equivalents of $8,000 at  December
31,  1998.  This increase reflects the increased borrowings under  the
credit  line  at  March  31,  1999.  The Company  also  utilized  cash
resources   for  the  acquisition  of  non-current  assets,  including
property  and  equipment.  For the next  twelve  months,  the  Company
anticipates that its capital expenditure requirements will approximate
$600,000,  which  will be used to purchase additional  product  molds,
production  machinery, leasehold improvement and office  and  computer
equipment.   It  is  anticipated that  a  significant  amount  of  the
Company's  capital  expenditures  will  be  financed  through  capital
leases.
                                 12<PAGE>
     
    At  March  31,  1999,  the  Company has commitments  for  minimum
guaranteed  royalties under licensing agreements totaling $487,000  in
the  aggregate through 2000, of which $383,000 is due at various times
during 1999.  Based upon the net income realized by the Company during
the  first quarter of 1999 and the expectation of continuing increases
in  its retail business, management expects these guaranteed royalties
to be funded from operating cash flows.

    In  December  1998,  the Company amended and renewed  a  one-year
credit agreement with Scripps Bank, increasing the amount of the credit 
line to $3,500,000.  This credit line is collateralized by the assets
of the Company and  actual borrowings  are  limited to available 
collateral, as  defined  in  the agreement.   Borrowings under the 
credit line  bear  interest  at  the bank's  prime  rate  plus  .75%.  
The credit line  contains  financial covenants requiring the Company to 
maintain minimum net worth  levels, minimum  working capital and debt 
to equity ratios.  The  credit  line expires April 15, 2000. 
Outstanding borrowings under the credit  line totaled  $1,175,000 at 
March 31, 1999 as compared to no borrowings  at March 31, 1998.

    The  Company  has  a  $3,000,000 line  of  credit  facility  (the
"facility")  with  Merrill  Lynch International  Bank  Limited  at  an
interest  rate of 1.75% above the London Interbank Offering Rate  term
that  the Company chooses to select.  Any borrowing under the line  of
credit, which is used solely to collateralize the issuance of stand-by
letters of credit to manufacturers, are required to be secured by cash
collateral   deposited  with  Merrill  Lynch  equal  to   the   credit
outstanding.   The  line of credit extends until  December  10,  2001.
There was no borrowing under the line of credit as of March 31, 1999.

    Management  believes that the Company's existing  cash  position,
credit facilities, combined with internally generated cash flows, will
be  adequate to support the Company's liquidity and capital  needs  at
least through the end of 1999.

Cautionary Statement Pursuant to Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995:

    This  report  contains  "forward-looking statements"  within  the
meaning   of  the  federal  securities  laws.   These  forward-looking
statements include, among others, statements concerning the  Company's
outlook  for 1999, overall sales, gross margin, and operating  expense
trends,   the  Company's  expectations  as  to  funding  its   capital
expenditures  and  operations during 1999,  and  other  statements  of
expectations, beliefs, future plans and strategies, anticipated events
or  trends,  and similar expressions concerning matters that  are  not
historical  facts.  The forward-looking statements in this report  are
subject to risks and uncertainties that could cause actual results  to
differ   materially  from  those  expressed  in  or  implied  by   the
statements.




                                      13<PAGE>

                      PART II.  OTHER INFORMATION



Item 6.        Exhibits and Reports on Form 8-K
          (a)  Exhibits
                  27    Financial Data Schedule
          (b)  Reports on Form 8-K for the three months ended
                March 31, 1999 - None















































                                      14<PAGE>

                                   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.






                                            FOTOBALL USA, INC
                                   --------------------------------
                                             (Registrant)


Dated: May 14, 1999                BY:  /s/ Michael Favish
                                        ----------------------
                                        Michael Favish
                                        President and Chief Executive Officer
     
     
Dated: May 14, 1999                BY:  /s/ David G. Forster
                                        ----------------------
                                        David G. Forster
                                        Executive Vice President-Finance,
                                        Chief Financial Officer
                                        (Principal Financial and Accounting
                                        Officer)




















                                       15