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 Sept. 30, 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                          2,195,821 


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 September 30, 1997...................................    3 

      Consolidated Comparative Statement of Operations (unaudited)
        for the periods ended September 30, 1997 and 1996..........    4 

      Consolidated Comparative Statement of Cash Flows (unaudited)
        for the three month period ended September 30, 1997 and
        1996.......................................................    5 

      Notes to Unaudited Financial Statements......................    6  


Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS   
8 


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                                     Sept. 30, 1997      March 31, 1997
                                           --------------      --------------
Current Assets:           

     Cash                                         17,944            302,931 
     Note receivable - Officer                     2,300              2,000 
     Mortgage Receivable                       1,170,136          1,176,590 
     Prepaid expenses                            141,218             72,033 
                                            -------------        -----------
       Total current assets                    1,331,598          1,553,554 

          

Property and equipment:        

     Office equipment                              5,656              2,860 
     Less:    Accumulated depreciation              (143)              (179) 
                                            -------------         ----------
       Net property and equipment                  5,513              2,681 


Other                                              1,814                 -


                                            -------------        ------------ 
       TOTAL ASSETS                            1,338,925           1,556,235 
                                            =============        ============


LIABILITIES AND SHAREHOLDERS' EQUITY         

Current Liabilities:           

     Accounts payable                            19,899                8,780 
     Promissory note                             20,000                   -
                                            -------------        ------------
        Total                                    39,899                8,780


Shareholders' equity:          

     Preferred stock, no par value, 
       10,000,000 shares authorized, 
       1,464,500 and 924,000 shares
       outstanding, respectively.            1,440,412             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                    (1,663,441)           (1,357,440)
                                         --------------         -------------
                                             1,299,026             1,542,816 

          
TOTAL LIABILITIES AND SHAREHOLDERS'
  EQUITY                                     1,338,925             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 September 30, 1997 and 1996

      

                      Six Months Ended Sept. 30,  Three Months Ended Sept. 30,
                           1997         1996            1997          1996  
                           ----         ----            ----          ----
Income                                  
------
  Construction Sales      47,013      123,133           24,670           -   
  Interest Income         12,591       11,516            6,454        5,574 
                       ----------   ----------       ----------   ----------
    Total Income          59,607      134,649           31,124        5,574 

                                    

Cost Of Sales                                     
-------------
  Cost of Goods Sold     128,270           -            41,698           -
  Cost of Materials      160,882      162,128          126,091           -   
  Labor                       -        62,621               -        39,931 
                       ----------   ----------       ----------   ----------
    Total Cost of Sales  289,152      224,749          167,789       39,931 

     
  Gross Profit (Loss)   (229,545)     (90,100)        (136,665)     (34,357) 


Operating Expenses                                
------------------
  General and Admin.     142,245       59,478           65,087       25,956 
                       ----------   ----------       ----------   ---------- 
    Net Loss            (371,790)    (149,578)        (201,752)     (60,313) 

                         

Loss Per Common Share       (.18)        (.05)            (.09)        (.02) 

                    
Weighted Average
  Shares Outstanding   2,112,071    3,185,821        2,154,154    3,185,821 




  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 Sept. 30,
                                                      1997         1996    
                                                      ----         ----
Cash Flows From Operating Activities

  Net Income (loss)                               (201,752)      (60,313)
  Adjustments to reconcile net loss to 
    cash used in operating activities:           
    Depreciation                                        -            222
    Note receivable - officer                           -             -
    Mortgage receivable                             (2,201)        3,558
    Accounts receivable                                 -            241
    Prepaid expense                                (26,894)           -
    Accounts payable                                23,983        (2,538)
    Other                                           (1,814)           -
                                                -----------   -----------
Net cash used in operating activities             (208,681)      (58,830)
                                                -----------   ------------

Cash flows from investing activities:         
                                                -----------   ------------
  Purchase of propert and equipment                     -             -
                                                -----------   ------------

Cash flows from financing activities:         

  Proceeds from sale of preferred stock             12,712       576,500
  Proceeds from sale of common stock                50,000            -
  Promissory note                                   20,000            -
  Foreign exchange gain (loss)                          -             -
                                               ------------   ------------
Net cash provided by (used in)
  financing activities                              82,712       576,500
                                               ------------   ------------
           

Net Increase (decrease) in cash                   (125,969)      517,670
                                               ------------   ------------

Cash,  at beginning of period                      143,913        71,829
                                               ------------   ------------

Cash, at end of period                              17,944       589,499
                                               ------------   ------------


  The accompanying notes are an integral part of these financial statements.



                                                                
                                                                
                     ISO BLOCK PRODUCTS USA, INC.                   NOTES TO
               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 un-
audited 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 applic-
able 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
outstanding 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 second fiscal
quarter covered by  these statements but incurred a loss for the quarter
of $201,752.


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 $250,000.  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 North and South America.  The Company has executed a 
five-year license agreement with continuous two-year renewal options.  The
Company contracted to pay  One Hundred thousand ( $100,000) US dollars and
will pay an ongoing license fee throughout the agreement.  The Company paid
Ten thousand ($10,000) dollars down and agreed to pay Ninety thousand 
($90,000) dollars within 120 days.  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.
               

       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 
franchising. The Company will offer comprehensive franchise marketing and 
consulting services to its Franchisors companies including operations, 
personnel, management, training, legal and financial advice. In addition, 
Franchise Connection will assume total responsibility for the recruitment of
franchises.


Results of Operations.          
----------------------

       During the second fiscal  quarter ended September 30, 1997, the
Company had revenues of $31,124 and engaged in limited operations primarily
those of preparation for a construction program as general contractor in the
State of Colorado in comparison to revenues of $5,574 in the second fiscal
quarter of 1996. The Company realized a loss of $201,752 in the second quarter
of 1997 compared to a loss of $60,313 in the second quarter of 1996. The
Company has accumulated a deficit since inception totaling $1,663,441. The
loss realized was primarily due to $126,091  spent for materials as general
contractor.


Liquidity and Capital Resources.          
--------------------------------

       The Company has total assets of $1,338,925 including cash or cash 
equivalents at the end of the second fiscal quarter 1997 of $17,944 compared
to total assets of $1,350,048 including cash or cash equivalents of $10,296
at the end of the second fiscal quarter of 1996. The Company also owned
approximately 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 second quarter, the Company raised additional funding
through preferred stock, common stock, and a promissory note. The Company 
sold 15,890 preferred shares at $0.80 raising $12,712, sold 125,000 common
shares at $0.40 raising $50,000, and  signed a 9 month $20,000 promissory
note 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:  November 14, 1997


                                  ISO BLOCK PRODUCTS USA, INC.



                                  By: /s/ Egin Bresnig
                                  --------------------
                                          Egin Bresnig


                                  By: /s/ Dean Wicker
                                  --------------------
                                          Dean Wicker