U.S. SECURITIES AND EXCHANGE COMMISSION
                                
                           Washington, D.C. 20549
                                
                                
                                
                                FORM 10-QSB
                                
                                
                                
         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE            
                    SECURITIES EXCHANGE ACT OF 1934.
                                
                                
                                
For the Quarter Ended Dec. 31, 1997       Commission file number  33-30476-D
                                
                                
                                
                      ISO BLOCK PRODUCTS  USA, INC.
                                
      (Exact name of small business issuer as specified in its charter)
                                
                                
                                
         COLORADO                                     84-1026503 
                                
 (State of Incorporation)                       (I.R.S. Employer ID No.) 
                                
                                   
                                
   8037 South Datura Street 
     Littleton, Colorado                                80120
(Address of Principal Executive                       (Zip Code)
           Offices)                             
                                
                                
                             (303) 795-9729
              (Registrant's Telephone No. incl. area code)       
                               
                                
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or 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  __                                      NO X 
                                
                                
The number of shares outstanding of each of the Registrant's class of common
equity, as of September 30, 1997 are as follows:
                                
                                   
                                
      Class of Securities                         Shares Outstanding 
      -------------------                         ------------------
   Common Stock, no par value                          2,273,249 
                                
                                
        This quarterly report on Form 10-QSB contains  9  pages.
                                
                                
                                
                                
                       ISO BLOCK PRODUCTS USA, INC. 
                                
                                     
                                
                                 INDEX                

                                                                    PAGE
PART 1

                              
Item 1.  FINANCIAL STATEMENTS       
                                
         Consolidated Comparative Balance Sheet (unaudited)
         as of December 31, 1997......................................    3 
                                
         Consolidated Comparative Statement of Operations (unaudited)
         for the periods ended December 31, 1997 and 1996.............    4 
                                
         Consolidated Comparative Statement of Cash Flows (unaudited)
         for the three month period ended December 31, 1997 and
         1996.........................................................    5 
                                
         Notes to Unaudited Financial Statements......................    6  
                                
                                
Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS...    7 
                                
                                
PART 2   
                                
                                
Item 6.  Exhibits and Reports on Form 8-K..............................   9 
                                
                                     
         Signatures....................................................   9 
                                



                        ISO Block Products USA, Inc.
                                                             
                    Consolidated Comparative Balance Sheet
                                                             
                                (UNAUDITED
                                                             
                                                             
  ASSETS                                     Dec. 31, 1997     March 31, 1997
                                             -------------     --------------
  Current Assets:           
                                                             
       Cash                                          4,321            302,931 
       Note receivable - Officer                     2,762              2,000 
       Mortgage Receivable                       1,170,136          1,176,590 
       Prepaid expenses                            141,218             72,033
       Other                                         2,000                  - 
                                              -------------        -----------
         Total current assets                    1,320,437          1,553,554 
                                                             
                                                             
                                                             
  Property and equipment:        
                                                             
       Office equipment                              5,996              2,860 
       Less:    Accumulated depreciation              (143)              (179) 
                                              -------------         ----------
         Net property and equipment                  5,853              2,681 
                                                             
                                                             
  Other                                             62,696                 -
                                                             
                                                             
                                              -------------        ------------ 
         TOTAL ASSETS                            1,388,986          1,556,235 
                                              =============        ============
                                                             
                                                             
  LIABILITIES AND SHAREHOLDERS' EQUITY         
                                                             
  Current Liabilities:           
                                                             
       Accounts payable                            47,425               8,780 
       Promissory note                            204,000                   -
                                              ------------        ------------
          Total                                   251,425               8,780
                                                             
                                                            
  Shareholders' equity:          
                                                             
       Preferred stock, no par value, 
         10,000,000 shares authorized, 
         1,464,500 and 924,000 shares
         outstanding, respectively.             1,457,198           1,427,700  
                                                             
       Common stock, 50,000,000 shares
         authorized, 2,195,821 and  
         3,185,821 shares outstanding,
         respectively                           1,522,055           1,472,556  
                                                             
       Accumulated deficit                     (1,841,692)         (1,357,440)
                                            --------------       -------------
                                                1,137,561           1,542,816 
                                                             
                                                             
  TOTAL LIABILITIES AND SHAREHOLDERS'
    EQUITY                                      1,355,986           1,556,235 
                                            ==============       =============
                                                             
                                                             
                                                             
  The accompanying notes are an integral part of these financial statements.
                                                             
                                                             
                                                             
                                                             
                         ISO BLOCK PRODUCTS USA, INC.
                                                             
               CONSOLIDATED COMPARATIVE STATEMENT OF OPERATIONS
                                                             
                                                             
              For the Periods Ended December 31, 1997 and 1996
                                                             
                                                             
                                                  
                        Nine Months Ended Dec. 31,  Three Months Ended Dec. 31,
                             1997         1996            1997          1996  
                             ----         ----            ----          ----
  Income                                  
  ------
    Sales                   55,376      123,133            8,363           -   
    Interest Income         12,839       24,056              245       12,540 
                         ----------   ----------       ----------   ----------
      Total Income          68,215      147,189            8,608       12,540 
                                                             
                                                             
                                                
  Cost Of Sales                                     
  -------------
    Cost of Goods Sold     152,953      162,128           24,683           -
    Cost of Materials      174,747            -           13,865           -   
    Labor                       -        62,621               -            - 
                         ----------   ----------       ----------   ----------
      Total Cost of Sales  327,700      224,749           38,548           - 
                                                             
                                                             
    Gross Profit (Loss)   (259,485)     (77,560)         (29,940)      12,540 
                                                             
                                                             
  Operating Expenses                                
  ------------------
    General and Admin.     224,767      127,281           82,522       67,803 
                         ----------   ----------       ----------   ---------- 
      Net Loss            (484,252)    (204,841)        (112,462)     (55,263) 
                                                             
                                                             
                                                             
  Loss Per Common Share       (.23)        (.14)            (.05)        (.04) 
                                                             
                                                             
  Weighted Average
    Shares Outstanding   2,145,792    1,480,821        2,222,335    1,480,821 
                                                             
                                                             
                                                             
                                                             
  The accompanying notes are an integral part of these financial statements.
                                                             
                                                             
                                                             
                                                             
                          ISO Block Products USA, Inc.
                                                             
                 Consolidated Comparative Statement of Cash Flows
                                                             
                                  (UNAUDITED
                                                             
                                                             
                                                             
                                                  Three Months Ended Dec. 31,
                                                        1997         1996    
                                                        ----         ----
  Cash Flows From Operating Activities
 
    Net Income (loss)                               (112,462)      (55,263)
    Adjustments to reconcile net loss to 
     cash used in operating activities:           
      Depreciation                                        -            222
      Note receivable - officer                         (462)      (50,000)
      Mortgage receivable                                 -          2,992
      Accounts receivable                                 -        121,887
      Prepaid expense                                     -             -
      Accounts payable                               (27,526)     (162,207)
      Other                                          (73,619)           -
                                                  -----------   -----------
  Net cash used in operating activities             (214,069)     (142,369)
                                                  -----------   ------------
                                                             
  Cash flows from investing activities:         
                                                  -----------   ------------
    Purchase of propert and equipment                   (340)           -
                                                  -----------   ------------
                                                             
  Cash flows from financing activities:         
                                                             
    Proceeds from sale of preferred stock             16,786            -
    Proceeds from sale of common stock                    -             -
    Promissory note                                  184,000            -
    Foreign exchange gain (loss)                          -             -
                                                 ------------   ------------
  Net cash provided by (used in)
    financing activities                             200,786            -
                                                 ------------   ------------
                                                             
                                                             
  Net Increase (decrease) in cash                    (13,623)     (142,369)
                                                 ------------   ------------
                                                             
  Cash,  at beginning of period                       17,944       589,499
                                                 ------------   ------------
                                                             
  Cash, at end of period                               4,321       447,130
                                                 ------------   ------------
                                                             
                                                             
  The accompanying notes are an integral part of these financial statements.

                                                             
                                                  
                      ISO BLOCK PRODUCTS USA, INC.
          NOTES TO UNAUDITED  FINANCIAL STATEMENTS
                                                  
                                                    
Note 1.
  
  Company Description.  ISO Block Products USA, Inc. ("Company") was 
incorporated in the State of  Colorado on April 28, 1986 under the name
Champion Computer Rentals, Inc.  The Company was formed to obtain funding 
from a public offering in order to engage in the sale and leasing of 
computers and related equipment.  As March 31, 1992, the Company ceased 
those sale and leasing operations.
   
  
Note 2.
  
  Summary of Significant Accounting Policies. The accompanying unaudited 
financial statements of the Company have been prepared on the accrual basis 
and in accordance with the instructions to Form 10-QSB and do not include all
of the information and footnotes required by generally accepted accounting 
principles for complete financial statements. In the opinion of management, 
all adjustments (considered necessary for a for a fair presentation have 
been included. These financial statements should 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 March 31, 1997. Following is 
a summary of significant accounting policies. 

       
Organization costs.
-------------------
  
  Certain costs incurred to set up the Company are capitalized and were 
amortized over five years.  These costs were fully amortized at March 31, 
1994.

  
Income taxes.
-------------
  
  The Company accounts for income taxes under SFAS No. 109.  Deferred income 
taxes result from temporary differences. Temporary differences are 
differences between the tax basis of assets and  liabilities and their 
reported amounts in the financial statements that will result in taxable or 
deductible amounts in future years.

  
Foreign Currency Translation.
-----------------------------
  
  The functional currency for the Company's operations is the applicable local 
currency.  The translation of the applicable foreign currency into U.S. 
dollars is performed for balance sheet accounts using current exchange rates 
in effect at the balance sheet date and for revenue and expense accounts 
using a weighted average rate during the period. The gains or losses 
resulting from such translation are included in stockholder's equity.


  
  
                  ISO BLOCK PRODUCTS USA, INC.
           NOTES TO UNAUDITED FINANCIAL STATEMENTS
                       (continued)
                           
  
Income (Loss) Per Common Share.
-------------------------------
  
  Income (loss) per common share is based upon the weighted average number of
common shares outstanding during each period. Options and warrants outstand-
ing to purchase common stock are included as common stock equivalents when 
diluted. 

  
Concentrations of Credit Risk.
------------------------------
  
  The Company's financial instruments that are exposed to concentrations of 
credit risk consist primarily of mortgages receivable. These mortgages 
receivable are concentrated in German real estate but are not concentrated in
a limited number of borrowers. The mortgages are from high quality entities 
and secured by high value German real estate to limit the Company's 
concentrations of credit risk.
  
  
Note 3.
  
  During the fiscal year ended March 31, 1997, the Company incurred a net 
loss of $348,921, and as of that date had accumulated a deficit of $1,357,440. 
The Company had slight operations during the third fiscal quarter covered by 
these statements but incurred a loss for the quarter of $112,462.
  
Note 4.
  
  Future working capital requirements are dependent on the Company's ability 
to attain profitable operations and  to obtain financing or new capital  as 
required. It is not possible at this time to predict the outcome of future 
operations or whether the necessary financing or investment can be arranged. 


  
Item 2.    Management's Discussion and Analysis or Plan of Operation           
  
  Current Business of the Company. During the current fiscal year, the Company
begin construction of one of two speculative residential houses in the 
Outlook subdivision in  Broomfield, Colorado.  Each  house will be priced at 
approximately $270,000.  The Company plans to continue its construction 
program as long as the residential real estate business climate remains at 
its present intensity in Colorado.
  
  The Company has formed a Colorado Limited  Liability Company " Magna-Dry USA
LLC" of which it is the sole member.  Magna-Dry USA has purchased the license
to operate and franchise the Magna-Dry concept in total cleaning throughout 
the United States. The Company has executed a five-year license agreement 
with continuous two-year renewal options.  The Company through its subsidiary
will offer Area and individual franchises for the proprietary system of 
cleaning included in the license. It will also offer  equipment and chemicals
involved with the process.        
  
  Magna-Dry has over one thousand (1,000) units operating internationally and 
has captured over sixty (60%) of the market in some areas. The Company will 
operate within its existing structure for the sale of franchises through its 
Franchise Connection, Inc. subsidiary.  With  the success of Magna-Dry  
International and its history, it is expected that the  growth in the US 
market will be successful.  
  
  To date, Magna-Dry has signed four franchise agreements,  located in Reno, 
NV, Memphis, TN, Denver, CO, and Canada.
  
  Franchise Connection, Inc. was incorporated in Colorado in 1996 with 
headquarters in Denver,. Colorado. The Company plans to form strategic 
partnerships with prospective or existing franchise operations ("Franchisors")
under which it will provide them with marketing and sales services plus 
business and legal services in return for an equity interest in, and/or a 
portion of their royalties. It is targeting private companies that are seeking
franchise expertise or financial capacity to successfully engage in franchis-
ing. The Company will offer comprehensive franchise marketing and consulting 
services to its Franchisors companies including operations, personnel, 
management, training, legal and financial advice. In addition, Franchise 
Connection will assume total responsibility for the recruitment of franchises.

  
Results of Operations.
----------------------
  
  During the third fiscal  quarter ended December 31, 1997, the Company had 
revenues of $8,608 and engaged in limited operations primarily those of a 
general contractor in the state of Colorado in comparison to revenues of 
$12,540 in the third fiscal quarter of 1996. The Company realized a loss of 
$112,462 in the third  quarter of 1997 compared to a loss of $55,263 in the 
third quarter of 1996. The loss realized was primarily due to $82,522 spent 
for general and administrative fees. The Company has accumulated a deficit 
since inception totaling $1,841692. 

  
Liquidity and Capital Resources.
--------------------------------
  
  The Company has total assets of $1,388,986 including cash or cash 
equivalents at the end of the third fiscal quarter 1997 of $4,321 compared to
total assets of $1,828,660 including cash or cash equivalents of $447,130 at 
the end of the third fiscal quarter of 1996. The Company also owned approx-
imately US $1,170,136 of mortgages receivable affecting German real estate.  
While there is a commercial market  for these mortgages receivable, the 
Company does not intend to sell them.
  
  During the third quarter, the company raised additional funding through 
preferred stock, and  promissory notes. The company sold 13,480 preferred 
shares at $1.25 raising $16,850,  and signed  several 1 year notes totaling 
$184,000  bearing 15% interest.   
  
   
  
Item 6.      Exhibits and Reports on Form 8-K
  
          (a)      Exhibits.     NONE 
  
          (b)      Reports on Form 8-K        NONE
                          
  
  
  
                     SIGNATURES
                           
  In accordance with the requirements of the Exchange Act, the Registrant 
caused this Report on Form 10-QSB to be signed on its behalf by the under-
signed thereunto duly authorized.                 
  
  
  Dated: February 17, 1998
  
                              ISO BLOCK PRODUCTS USA, INC.
  
  
                              By   /S/ Egin Bresnig
                              -----------------------------
                                       Egin Bresnig,
                                       Chief Executive Officer
  
  
                              By   /S/ Dean Wicker
                              -----------------------------  
                                       Dean Wicker,
                                       Chief Financial Officer