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 June 30, 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 Number)



           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 August 1, 1999 the Company had 2,785,907 shares of its
common stock issued and outstanding.

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












































                                       1



                               FOTOBALL USA, INC.

                                     INDEX
                                                                     Sequential
                                                                      Page No.
                                                                     ----------
PART I.   FINANCIAL INFORMATION

  Item 1. Financial Statements

          Condensed Balance Sheets as of December 31, 1998
           and June 30, 1999                                               3

          Condensed Statements of Operations for the three months
            and six months ended June 30, 1998 and 1999                    4

          Condensed Statements of Cash Flows for the six months
            ended June 30, 1998 and 1999                                   5

          Notes to Condensed Financial Statements                          6-9

  Item 2. Management's Discussion and Analysis or Plan of Operations      10-16


PART II.  OTHER INFORMATION

  Item 4. Submission of Matters to a Vote of Security Holders             17

  Item 6.  Exhibits and Reports on Form 8-K                               17


SIGNATURES                                                                18



















                                       2
                        PART 1. FINANCIAL INFORMATION
                         ITEM 1. FINANCIAL STATEMENTS

                               FOTOBALL USA, INC.
                            CONSENSED BALANCE SHEETS
                                    (Unaudited)

                                            December 31, 1998    June 30, 1999
                                            -----------------    -------------
                                   ASSETS
CURRENT ASSETS
  Cash and equivalents                        $      8,498       $    236,312
  Accounts receivable                            3,041,633          3,968,479
  Inventories                                    3,438,552          4,102,014
  Prepaid expenses and other                       157,608            347,518
  Deferred income taxes                             90,000                ---
                                              ------------       ------------
      TOTAL CURRENT ASSETS                       6,736,291          8,654,323
                                              ------------       ------------
PROPERTY AND EQUIPMENT, net                      1,126,551          1,364,171
                                              ------------       ------------
OTHER ASSETS
  Deposits and other                                31,767             30,385
                                              ------------       ------------
      TOTAL OTHER ASSETS                            31,767             30,385
                                              ------------       ------------
                                              $  7,894,609       $ 10,048,879
                                              ============       ============
                    LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Note Payable to Bank                        $    400,000       $  1,500,000
  Current portion of capital leases                 95,970            129,097
  Accounts payable and accrued expenses          1,315,831          1,260,392
  Income Taxes Payable                              39,800                ---
                                              ------------       ------------
      TOTAL CURRENT LIABILITIES                  1,851,601          2,889,489
CAPITAL LEASES, net of current portion             154,503            301,263
                                              ------------       ------------
      TOTAL LIABILITIES                          2,006,104          3,190,752
                                              ------------       ------------
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 in 1998 and 2,781,741 shares
   in 1999                                          26,992             27,817
  Additional paid-in capital                     8,590,994          8,744,503
  Accumulated deficit                           (2,729,481)        (1,914,193)
                                              ------------       ------------
      TOTAL STOCKHOLDERS' EQUITY                 5,888,505          6,858,127
                                              ------------       ------------
                                              $  7,894,609        $10,048,879
                                              ============       ============
               See accompanying notes to condensed financial statements.
                                       3
                               FOTOBALL USA, INC.
                       CONSENSED STATEMENTS OF OPERATIONS
                                  (Unaudited)

                               Three Months Ended       Six Months Ended
                                     June 30,               June 30,
                             -------------------------------------------------
                                1998          1999        1998        1999
                             -----------  -----------  ----------- -----------
SALES                        $ 4,025,943  $ 6,281,210  $ 7,787,346 $11,874,559
COST OF SALES                  2,553,550    3,826,838    4,976,632   7,267,547
                             -----------  -----------  ----------- -----------
     GROSS PROFIT              1,472,393    2,454,372    2,810,714   4,607,012
                             -----------  -----------  ----------- -----------
OPERATING EXPENSES
  Royalties                      266,429      412,357      502,353     882,153
  Marketing                      420,124      586,217      867,755   1,204,865
  General and administrative     514,100      790,561    1,015,197   1,357,408
  Depreciation and amortization   78,412      100,128      155,192     198,236
                             -----------  -----------  ----------- -----------
    TOTAL OPERATING EXPENSES   1,279,065    1,889,263    2,540,497   3,642,662
                             -----------  -----------  ----------- -----------
    INCOME FROM OPERATIONS       193,328      565,109      270,217     964,350
                             -----------  -----------  ----------- -----------
OTHER EXPENSE
  Interest expense                17,558       34,055       27,435      60,715
  Interest income                   (124)      (1,055)      (8,279)     (1,654)
                             -----------  -----------  ----------- -----------
    TOTAL OTHER EXPENSE           17,434       33,000       19,156      59,061
                             -----------  -----------  ----------- -----------
    INCOME BEFORE INCOME TAX     175,894      532,109      251,061     905,289
    INCOME TAX EXPENSE            70,100           --      100,000      90,000
                             -----------  -----------  ----------- -----------
NET INCOME                   $   105,794  $   532,109  $   151,061 $   815,289
                             ===========  ===========  =========== ===========
NET INCOME PER COMMON SHARE:
     BASIC                   $       .04  $       .19  $       .06 $       .30
                             ===========  ===========  =========== ===========
     DILUTED                 $       .04  $       .18  $       .06 $       .28
                             ===========  ===========  =========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING:
     BASIC                     2,691,742    2,739,117    2,691,742   2,722,028
                             ===========  ===========  =========== ===========
     DILUTED                   2,810,624    2,992,056    2,738,795   2,961,260
                             ===========  ===========  =========== ===========










               See accompanying notes to condensed financial statements.
                                       4

                               FOTOBALL USA, INC.
                       CONSENSED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

                                                    Six Months Ended
                                                         June 30,
                                                 -------------------------
                                                    1998          1999
                                                 ----------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES
 Net income                                      $  151,061    $   815,289
 Adjustments to reconcile net income to net
  cash provided by (used in) operating
  activities:
   Depreciation and amortization                    163,672        206,080
   Amortization of stock compensation expense         4,950         15,019
   Changes in operating assets and liabilities
    Accounts receivable                          (1,135,023)      (926,846)
    Inventories                                    (650,899)      (663,462)
    Prepaid expenses and other                      (19,853)      (189,909)
    Deferred income taxes                            67,800         90,000
    Accounts payable and accrued expenses           323,322        (55,439)
    Income taxes payable                                 --        (39,800)
                                                 ----------    -----------
NET CASH USED IN OPERATING ACTIVITIES            (1,094,970)      (749,068)
                                                 ----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES
 Purchase of property and equipment                 (59,461)      (197,267)
 Increase (decrease) in long term deposits          (71,661)         1,380
                                                 ----------    -----------
NET CASH USED IN INVESTING ACTIVITIES              (131,122)      (195,887)
                                                 ----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES
 Net additions of short-term credit facilities      700,000      1,100,000
 Repayment of capital lease obligations             (51,759)       (66,546)
 Proceeds from exercise of stock options                150        139,315
                                                 ----------    -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES           648,391      1,172,769
                                                 ----------    -----------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS    (577,701)       227,814
                                                 ----------    -----------
CASH AND EQUIVALENTS, Beginning of period           764,855          8,498
                                                 ----------    -----------
CASH AND EQUIVALENTS, End of period              $  187,154    $   236,312
                                                 ==========    ===========










                See accompanying notes to condensed financial statements.
                                       5

                               FOTOBALL USA, INC.
                   NOTES TO CONSENSED FINANCIAL STATEMENTS (Unaudited)
                THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1998 AND 1999

1.  CONDENSED FINANCIAL STATEMENTS

The  condensed  balance  sheet as  of  June  30,  1999,  the
condensed statements of operations for the three months  and
six  months ended June 30, 1998 and 1999, and the  condensed
statements of cash flows for  the six months ended June  30,
1998  and  1999  have been prepared by the  Company  without
audit.  In the opinion of management, all adjustments (which
include  only  normal  recurring 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  and  six
months ended June 30, 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  Professional Baseball,  NFL  and,  to  a
lesser    extent,   Colleges.   The   Company's    licensing
arrangements expire at various times through March 31, 2000.

                                       6

                                 FOTOBALL USA, INC.
                   NOTES TO CONSENSED FINANCIAL STATEMENTS (Unaudited)
                THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1998 AND 1999
                                  (continued)

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

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  Professional
Baseball or the NFL, 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  and 1999 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 total sales was
derived from promotional sales, of which no customer accounted
for greater than 10% of total sales.  During the six month period
ended June 30, 1999, 21% of the Company's total sales were
derived from sales of promotional products, with no customer
accounting for greater than 10% 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 Company's gross margins fluctuate, particularly between
quarters, based in part on the concentration of promotions and retail
sales during the reporting period.  The types of products 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 resulting primarily from two factors.  The first factor is
the seasonality of the Company's licensed sports product business

                                       7

                               FOTOBALL USA, INC.
                   NOTES TO CONSENSED FINANCIAL STATEMENTS (Unaudited)
                THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1998 AND 1999
                                  (continued)

combined with a significant concentration of its business from
baseball.  The  Company believes that the  decrease  in  the
dependence upon baseball-related sales during the past several
years will continue in the future.  The introduction of quality
product lines involving other sports and entertainment related
products  in  addition to baseball will  help  mitigate  the
seasonality.   The  second  factor  which  in  prior   years
significantly contributed to the variability of the Company's
operations, was its dependence on the promotions business as more
fully explained above.   However, the Company realized increasing
sales and profitability in each quarter of 1998 primarily due to
significant  increases in its retail business.  The  Company
anticipates that the contribution of retail sales in  future
periods should mitigate this quarter-to-quarter variability.

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  three-year employment agreement with  the  Company,
commencing  on  August 11, 1999, 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 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 material and finished  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
the Company's products because products originating from China
could be subjected to substantially higher rates of duty.










                                     8

                            FOTOBALL USA, INC.
                NOTES TO CONSENSED FINANCIAL STATEMENTS (Unaudited)
             THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1998 AND 1999
                                (continued)


3.  ACCOUNTS RECEIVABLE

Accounts receivable consists of the following:

                                   December 31, 1998      June 30, 1999
                                   -----------------      -------------
    Accounts receivable - Trade        $   3,188,445       $  4,126,730
    Less Allowance for Bad Debt             (146,812)          (158,251)
                                       -------------       ------------
    Total Accounts Receivable          $   3,041,633       $  3,968,479
                                       =============       ============


4.  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:

                                   December 31, 1998      June 30, 1999
                                   -----------------      -------------
    Finished goods                     $   2,715,860       $  3,449,399
    Raw material                           1,738,404          1,665,346
                                       -------------       ------------
         Total  Inventory                  4,454,264          5,114,745
                                       -------------       ------------
    Less inventory reserve                (1,015,712)        (1,012,731)
                                       -------------       ------------
    Total inventory                    $   3,438,552       $  4,102,014
                                       =============       ============
















                                       9

                  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
                               OR PLAN OF OPERATION

Results of Operations

      The  following table sets forth certain unaudited operating
data (in dollars and as a percentage of the Company's sales)  for
the periods presented:
<TABLE>
<CAPTION>
                      Three Months Ended                    Six Months Ended
                            June 30,                             June 30,
            -------------------------------------------------------------------
                  1998              1999              1998                 1999
            --------------------------------------------------------------------
<S>         <C>        <C>   <C>        <C>   <C>         <C>   <C>         <C>
Sales       $4,025,943 100%  $6,281,210 100%  $7,787,346  100%  $11,874,559 100%
Cost
 of Sales    2,553,550  63    3,826,838  61    4,976,632   64     7,267,547  61
Operating
 Expenses    1,279,065  32    1,889,263  30    2,540,497   33     3,642,662  31
Operating
 Income        193,328   5      565,109   9      270,217    3       964,350  8
Interest
 Expense        17,558   -       34,055   1       27,435    -        60,715  1
Interest
 Income           (124)  -       (1,055)  -       (8,279)   -        (1,654) -
Income Before
 Income Tax    175,894   4       532,109  8       251,061   3       905,289  8
Income Tax
 Expense        70,100   2             -  -       100,000   1        90,000  1
Net Income  $  105,794   3%  $   532,109  8%   $  151,061   2%   $  815,289  7%

</TABLE>
For the Three Months Ended June 30, 1998 Compared to the Three Months
 Ended June 30, 1999:

Sales:
       Sales increased 56% for the three months ended June 30, 1999 from
sales for the three months ended June 30, 1998.  The increase was due
primarily to the Company's  retail  business realizing  substantial increases
over the prior year period combined with  moderate increases in its promotions
sales.   The Company realized a 63% increase in retail sales and a 37%
increase in promotions sales, as compared to the prior year period.  For the
three  months ended  June 30, 1999, retail  sales  were  76% of total sales,
as compared to retail sales of 73% for the three months ended June 30, 1998.
Also contributing to the rapid retail sales growth were 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 three months ended
June 30, 1999, and  this  growth  is  expected  to  accelerate  in  the

                                   10

second  half  of 1999   due  to  certain  millennium  related  projects.
Although   there was   significant  growth  in  retail  sales  and
anticipated continued growth for the remainder of 1999, the Company will
continue to  pursue the promotions  business aggressively, focusing on
leveraging its sports league relationships.   For the three months ended
June 30, 1999, promotions  sales  were 24% of sales compared to
promotions sales of 27% for the three months ended June 30, 1998.

Gross Profit:

       Gross  profit increased 67% for the three months ended June 30, 1999
from gross profit for the three months ended  June 30, 1998.   Gross  profit
increased on an absolute basis as a result of the significant increase in
total sales.  Gross margins as a percentage of sales increased to 39% for
the  three  months ended June 30, 1999  from  37%  for  the  three  months
ended June 30, 1998.   The  gross  margins  as  a  percentage  of   sales
increased   from  1998  to  1999  due  to  both   a   greater percentage of
higher  margin  retail  sales  combined   with certain promotional programs
which  realized  high  margins.    As previously noted,  the Company's gross
margins may fluctuate, particularly between quarters,  based  on  several
factors  including  sales  and product mix. See Footnote 2, "Notes to
Condensed Financial Statements."

Operating Expense:

      Operating  expenses  were  30% of sales for the three months ended
June  30,  1999, as compared to 32%  of  sales  for  the  three months ended
June  30,  1998.   The increase in operating expenses on an absolute  basis
was due primarily to increased  royalty expenses  resulting  from
significantly  higher  sales.  Operating  expenses  as  a  percentage   of
sales   decreased   due   to  the  fixed  component   of   marketing   and
general    and    administrative    expenses    being    allocated    over
significantly higher sales volumes.

       Royalty   expense   increased  55%  for   the   three months ended
June 30, 1999  from royalty expense for the three months ended June  30, 1998
due to a significant increase in sales.  As a percentage of sales, royalty
expense  remained  constant  at  7% during  the  second  quarter  of  1999
and  1998.   As  previously  noted, the  Company  is  dependent  upon  its
licensing   arrangements  and  their  successful  renewal.  See   Footnote
2, "Dependence Upon Licensing Arrangements."

      Marketing  expenses  increased  40%  for the  three months  ended
June 30, 1999 from marketing expenses for the three months ended June 30, 1998.
Marketing expenses as a percentage of sales decreased to 9% of sales for the
three months  ended  June  30, 1999 from 10%  of  sales  for  the  three
months   ended   June 30, 1998,   primarily   as a result of allocating the
fixed components of marketing expenses over significantly  higher  sales
volume.   Marketing expenses increased from  1998 to 1999 in absolute terms
due primarily to an increase in outside  sales  commissions.

      General   and   administrative   expenses   increased   54%   for
the three months ended  June  30,  1999 from  general and administrative
expenses for the three months ended June 30, 1998.  This  increase  is  a

                                    11

result of increases in rent expense, administrative  salary expense and
professional  services  fees.  As a percentage of sales, general and
administrative expenses remained constant at 13% during the second quarter of
1999 and 1998.  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  higher sales in the future.

Interest Expense:

      Interest  expense  was  $34,055 for  the  three  months  ended  June
30,  1999,  an  increase  of  $16,497 from  interest  expense  of  $17,558
for   the   comparable   period  in  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   $430,000 at
June 30, 1999,  an increase from total capitalized  equipment  and  machinery
leases  of   $297,000 at June 30, 1998.

Income Tax Expense:

      The   Company  incurred  no  income  tax  expense  for  the   three
months   ended   June  30,  1999  compared  to  income  tax   expense   of
$70,100,   or   40%,  for  the  prior  year  period.    Had  the   Company
been  taxed  at  a  combined  federal and  state  effective  tax  rate  of
40%, then diluted earnings per share would have been as follows:

      Income before income taxes                        $  532,109
      Proforma Income tax expense (40% tax rate)           212,844
                                                        ----------
      Proforma Net Income                               $  319,265
                                                        ==========
      Proforma Diluted Earnings per Share               $      .11
                                                        ==========

      As  of  June  30, 1999 the Company had gross  deferred  tax
assets   of   approximately  $559,000  consisting  primarily   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.


For the Six Months Ended June 30, 1998 Compared to the Six Months
Ended June 30, 1999:

Sales:

      Sales increased 52% for the six months ended June 30, 1999
from  sales for the six months ended June 30, 1998.   The  increase
was  due  primarily  to a 202% increase in the  Company's  retail
sales during the six month period ended June 30, 1999, as compared to

                                    12

June 30, 1998.  Sales increased in all retail product categories,
with  the  most  significant increases in football  ($1,991,787),
basketball  ($1,251,350)  and soccer  ($307,699)  product  lines.
Promotions sales also increased in 1999 as compared to 1998  due
primarily to one $400,000 baseball promotion.  Promotions  sales
increased 24% for the six months ended June 30, 1999 compared  to
June 30, 1998.

Gross Profit:

     Gross profit increased 64% for the six months ended June 30, 1999
from gross profit for the  six  months  ended June 30, 1998.  As previously
noted, gross  profit increased on an absolute basis due to higher sales.
Gross  margins as a percentage of sales increased from 36% to 39% for
the six months ended June 30, 1998 and 1999, respectively, reflecting
a greater percentage of higher margin  retail  sales.

Operating Expenses:

     Operating expenses were 31% of sales for the six  months  ended
June 30, 1999, as compared to 33% of sales for the six months ended
June 30, 1998.  Operating expenses as a percentage of sales decreased as
a result of  the  Company's  fixed operating costs  being  allocated  over
higher  sales  volumes.  Operating expenses on an absolute  basis
increased  43%  during this period for the reasons  noted  below.

      Royalty expense increased 76% for the six months ended June
30,  1999 from royalty expense for the six  months  ended  June  30,
1998.  Royalty expense as a percentage of sales increased  to
7%  for the six months ended June 30, 1999 from 6% for the
six  months  ended June 30, 1998 principally due to a  higher
percentage of sales coming from licensed products in 1999 versus 1998.

      Marketing expenses increased 39% for the six months  ended
June 30, 1999 from  marketing expenses for the  six months ended
June  30, 1998.  Marketing  expenses as a percentage of sales decreased
to 10% for  the  six months ended June 30, 1999 from 11% for  the
six  months  ended  June 30, 1998, primarily as a result  of  the
non-variable  component  of marketing expenses,  such  as  wages  and
exhibiting costs, being allocated over substantially higher sales
volumes.

       General  and  administrative  expenses  increased  34% for the
six months ended June 30, 1999 from general and administrative expenses for
the six months ended June 30, 1998.  General  and  administrative expenses
as a  percentage  of  sales decreased to 11% for the six months ended
June 30, 1999 from  13% for  the  six  months ended June 30, 1998.
This  decrease is a result of several factors, including the Company's sales
growing at a faster rate than the Company's fixed costs.



                                  13

Interest Expense:

      Interest expense was $60,715 for the six months ended  June
30, 1999, an increase of $33,280 from interest expense of $27,435
for the comparable period in 1998.  The increase in interest
expense  reflects  the increase in the amount  of  the  Company's
outstanding  borrowings  under the Company's  revolving  line  of
credit.

 Income Tax Expense:

      The Company incurred $90,000 in income tax expense for  the
six months ended June 30, 1999 compared to income tax expense  of
$100,000,  or 40%, for the prior year period.   Had  the  Company
been taxed at a combined federal and state effective tax rate  of
40%, then diluted earnings per share would have been as follows:


      Income before income taxes                   $  905,289
      Proforma Income tax expense (40% tax rate)      362,116
                                                   ----------
      Proforma Net Income                          $  543,173
                                                   ----------
      Proforma Diluted Earnings per Share          $      .18
                                                   ==========

Liquidity and Capital Resources

      The Company's net working capital increased $880,144 during  1999
to $5,764,834 at June 30, 1999 from $4,884,690 at December 31, 1998. Cash
flow used in operations decreased  by  $345,902 to cash used  in operations
of $749,068 for the six months ended June 30, 1999 from cash used in
operations  of  $1,094,970  for the six  months  ended  June  30, 1998.
This  decrease can  be  attributed  primarily  to approximately $664,000 of
additional net income generated  during the  first six months of 1999
compared to 1998, partially  offset by lower accounts payable and accrued
expenses and higher prepaid assets.   Additionally, accounts receivable
increased by $926,846 and inventory increased by $663,462 from December 31,
1998 to June 30, 1999.  The increase in accounts receivable 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.   The Company's
increase in inventories is due primarily to the rapid growth in its retail
business, its expanding line of products and its expectation of increasing
demand for these products in future periods.

      Cash and equivalents totaled $236,312 at June 30, 1999, an increase of
$227,814 from cash and equivalents of $8,498 at December  31, 1998.   This
increase can be attributed primarily  to the increased borrowings  under the
credit line during  1999.  The Company also utilized cash  resources  for
the  acquisition  of non-current assets, including  property  and equipment.

                                   14

For the next twelve months, the Company  anticipates that its capital
expenditure  requirements  will  approximate $500,000 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.

      On  June 24, 1999 the Company announced that it was reducing
the exercise price of its publicly traded redeemable common stock
purchase  warrants from $6.50 to $4.00 and extending  the  term  of  the
warrants until  August  27,  1999.  During the special exercise price period
of June 24, 1999 through August 27, 1999, warrantholders who exercise each
warrant for $4.00 will receive one share of Fotoball common stock.  After the
special exercise period expires at the  close of business on August 27, 1999,
the warrants will expire in accordance with its terms.   The Company's Board
of Directors arrived at the special exercise  price  based  upon a number of
factors,  including  the existing exercise price, the expiration date of the
warrants, the current  trading  price of the Company's  common  stock  and
the recommendation  of  Southwest  Securities,  Inc.,  the  Company's
financial  advisor.   If all warrants are  exercised  during  the special
exercise period, the Company would receive in excess of $5.6 million in gross
proceeds (before costs associated with the offering).   All  funds  received
will  be  applied  for  working capital purposes to finance the Company's
continued rapid  growth and possible acquisitions.  The Company has previously
registered the  shares underlying the warrants for resale by the holders and
has  filed  a  prospectus  supplement  in  order  to  update  the prospectus
to  reflect  the  repricing  and  extension  of the warrants. As of June 30,
1999, no warrants had been exercised.

     At June 30, 1999 the Company has commitments for minimum  guaranteed
royalties  under licensing  agreements  approximating $775,000 in the
aggregate through 2002, of which $295,000 is  due  at various
times in 1999.  Given the Company's expectation that it  will realize
operating profits due to increases in its retail business during the
third and fourth quarter of 1999, these guaranteed royalties are anticipated
to be funded from operations.

      The Company currently has a one-year credit agreement with Scripps Bank
with a credit line of $3,500,000  which expires April 15, 2000.  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 Company is in complaince with the covenants through June 30, 1999.
Outstanding  borrowings under the credit line totaled  $1,500,000 at
June 30, 1999 as compared to $700,000 at June 30, 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

                                    15

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
June 30, 1999.

     Management believes that the Company's existing cash position, credit
facilities, internally generated cash flows, as well as the expected proceeds
from the warrants will be adequate to support the Company's growth, liquidity
and capital needs at least through the end of 1999.

     The  Company has implemented a plan and believes it is Year 2000
compliant.  Pursuant to the Company's Year 2000  plan,  the Company has
upgraded and tested its information technology ("IT") and non-IT
computerized systems to assure that the transition  to a  Year  2000 compliant
system will not disrupt  the  Company's operations.    The Company is also
evaluating the systems of  its key  customers  and suppliers to ensure that
these companies are Year 2000 compliant.  The cost of this evaluation is
expected  to be nominal.  In the event that its current suppliers are  either
unable  to  certify  that they will be Year 2000 compliant or unable  to
give the Company reasonable assurance that Year 2000 issues  will have no
material adverse impact on their operations, then the Company will review its
alternatives with  respect  to other suppliers.  There can be no assurance
that the Company will be able to find suppliers that are acceptable to the
Company.  In the event that its key customers are unable to certify that they
will  be Year 2000 compliant by late 1999, the Company will be assessing  the
accounts receivable collection risk of such key customers.

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,
its ability to  realize  increasing profitability in the third quarter of
1999, overall sales trends, gross  margin  trends, operating cost trends and
cost  reduction strategies  and their results, 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 and those  included  in  the Annual  Report on Form 10-KSB for the
fiscal year ended  December 31, 1998 are subject to risks and uncertainties
that could cause actual  results to differ materially from those expressed
in or implied by the statements.











                                      16

                           PART II. OTHER INFORMATION

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDER

The Annual Meeting of Stockholders of the Company was held on May 18, 1999
at the Company's offices.  The matters considered at the meeting consisted
of the following:

The election of one Class II director to serve for a term of three
years  and  until  his successor is elected and  qualified.   The
results of the voting were as follows:

          Nominee               For       Against         Total Votes
          -------              ----        -------        ------------
       Joel Rubenstein        2,118,188    10,910          2,129,098

The  amendment of the Fotoball  USA,  Inc.  1998  Stock Option Plan,
increasing the number of the Corporation's shares of common stock reserved
for issuance from 500,000 to 700,000.   The  results of the voting were as
follows:

          For       Against        Abstain      Not Voted   Total Votes
          ---       -------        -------      ---------   -----------
         933,989    135,240         26,500      1,033,369    2,129,098

The  ratification  of  the  Board of  Directors'  appointment  of
Hollander,  Lumer  &  Co. LLP as  the Company's  independent  public
accountant  for the 1999 fiscal year.  The results of the  voting
were as follows:

          For       Against        Abstain      Total Votes
          ---       -------        -------      -----------
        2,127,048      700          1,350        2,129,098

A  proxy may confer discretionary authority on management of  the
Company  to vote on any matter brought at the 2000 Annual Meeting
of Stockholders unless the Company receives notice of such matter
not  less  than 60 nor more than 90 days prior to the anniversary
date of the 2000 Annual Meeting of Stockholders (between February
18,  2000  and March 30, 2000), except that, if the  2000  Annual
Meeting  of  Stockholders is not held within 30  days  before  or
after May 18, 2000, a proxy may confer discretionary authority on
management  of the Company to vote on any manner brought  at  the
2000  Annual Meeting of Stockholders unless the Company  receives
notice of such matter within 10 days after notice of the  date
of the meeting is publicly given.

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
                June 30, 1999 - None

                                      17

                                  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: August 13, 1999             BY:  /s/Michael Favish
                                        --------------------------
                                        Michael Favish
                                        President and Chief Executive Officer
                                       (Duly Authorized Officer)


Dated: August 13, 1999             BY:  /s/Clifford A. Lyon
                                        --------------------------
                                        Clifford A. Lyon
                                        Senior Vice President and
                                        Chief Financial Officer
                                        (Principal Accounting Officer)





















                                      18