UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

Form 10-KSB/A

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
SECURITIES EXCHANGE ACT OF 
1934 (NO FEE REQUIRED)

FOR THE FISCAL YEAR ENDED MARCH 31, 1997

			Commission File Number		0-8164

		MOUNTAIN STATES RESOURCES CORPORATION
		(Exact name of registrant as specified in charter)
	UTAH				              87-0280886
 State or other jurisdiction of	(IRS Employer I.D. No.)
 Incorporation or organization
501 Waller St., Austin, Texas				78702
(Address of principal executive offices)

Issuer's telephone number, including area code	(512)476-6925

Securities registered pursuant to section 12(b) of the Act:

Title of each class			Name of each exchange 
                                     on which registered
	None							N/A

Securities registered pursuant to section 12(g) of the Act:

Title of each class			Name of each exchange 
                                     on which registered
Common Stock, 						None
Par Value  $.10

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 report(s),and (2) has 
been subject to such filing requirements for the past 90 days.  
(1)  Yes  (  ) No  (X)    (2)  Yes (X)  No  (  )
Check if disclosure of delinquent filers in response to 
Item 405 of Regulation S-B is not contained in this form, and no
disclosure will be contained, to the best of registrant's 
knowledge, in definitive proxy or information statements 
incorporated by reference in Part III of this Form 10-KSB or any 
amendment to this Form 10-KSB.	(  )

State issuer's revenues for its most recent fiscal year:  
$ 4,665,802

State the aggregate market value of the voting stock held by 
non-affiliates computed by reference to the price at which the 
stock was sold, or the average bid and asked prices of such stock, 
as of a specified date within the past 60 days.  The Company 
does not have an active trading market and it is, therefore, 
difficult, if not impossible, to determine the market value of 
the stock.  Based on the bid price for the Company's Common 
Stock at June, 1997 of $1.00 per share, the market value of 
shares held by non-affiliates would be approximately $1,455,000.

As of June 30, 1997 the Registrant had 10,764,733 shares 
of common stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by 
reference and the part of the form 10-KSB (e.g., part I, 
part II, etc.) into which the document is incorporated:  
(1) Any annual report to security holders; (2) Any proxy 
or other information statement; and (3) Any prospectus 
filed pursuant to rule 424 (b) or (c) under the 
Securities Act of 1933: None.


MOUNTAIN STATES RESOURCES CORPORATION (THE "COMPANY") WAS 
DELINQUENT IN FILING ITS PERIODIC REPORTS SINCE SEPTEMBER 
31, 1989.  SEVERAL REPORTS WERE FILED ESSENTIALLY 
SIMULTANEOUSLY IN ORDER TO BRING THE COMPANY CURRENT 
IN ITS REPORTING OBLIGATIONS.  THE REPORTS PROVIDED 
INFORMATION FOR THE PERIOD DESCRIBED IN THE COVER PAGES 
TO WHICH IT RELATED. SUCH INFORMATION SHOULD BE 
CONSIDERED IN LIGHT OF ALL OTHER REPORTS FILED 
BY THE COMPANY, PARTICULARLY REPORTS BEING FILED FOR 
SUBSEQUENT PERIODS. 

PART I

Item 1.  Business

(A)  History and Organization

MOUNTAIN STATES RESOURCES CORPORATION, (the "Registrant" 
or the "Company" or "MSRC"), was organized under the laws 
of the State of Utah on April 15, 1969.

On June 23, 1997, the Registrant executed an agreement 
and plan of reorganization with the stockholders of 
Micro-Media Solutions, Inc. (MSI), a Texas corporation, 
whereby the Registrant acquired 100% of the outstanding 
shares of MSI, in exchange for the issuance of 9,310,000 
shares (86.48%) of the Registrant's common stock.  The 
transaction was a tax free exchange and was accounted for 
as a reverse merger with MSRC being the survivor.  MSRC 
intends to change its name to MSI.  The Registrant 
intends to continue to pursue those activities formerly 
pursued by the predecessor, MICRO-MEDIA SOLUTIONS, INC., 
the Texas corporation.




Business Activities

The initial business objective of the Registrant was to 
acquire, explore for and hold interests in mineral 
prospects and properties for further explorative 
development or sale.  The Registrant discontinued its 
operations in 1993 and was considered a development stage 
company for accounting purposes until June 23, 1997 when 
the merger with Micro-Media Solutions, Inc. (MSI) took 
place.
 
MSI is considered a leading computer networking services 
provider primarily for institutional customers and was 
recently listed by the Austin Business Journal in their 
December, 1996 issue as number six of the largest 25 
networking services companies in the Central Texas 
region. MSI provides computer networking services, 
distribution services, computer products, cable 
installations, and personal computer hardware and 
software support.



Marketing

Networking Systems.  In the mid to late 1980s, networks 
were centrally managed with a much smaller number of 
intelligent end points. Local area network procedures 
allow employees in small departments or work groups to 
share files or expensive peripherals. These LANs 
increased network complexity , but network design still 
involved relatively few choices - for example, whether to 
use either Ethernet or Token Ring topologies to connect 
users. In today's increasingly connected world, networks 
are more distributed, complex, and pervasive.

Network technology has evolved to support a broader group 
-- from employee communications to suppliers and clients. 
In addition, an increasing number of remote users may be 
accessing what once was local data. Distinctions between 
LANs, enterprise networks, and inter-enterprise 
networks have blurred in recent years. 

Networks are no longer limited to simple data exchange or 
the sharing of peripherals. Client/server, imaging, 
multimedia, internet access, and videoconferencing 
applications are now common in many organizations. These 
data and graphically intensive applications often require 
increased network bandwidth to ensure that users 
experience adequate response times. 

New technologies include Asynchronous Transfer Mode 
(ATM), Fast Ethernet, and Fiber Distributed Data Interface 
(FDDI). These technologies can increase bandwidth at least 
tenfold over traditional 10-Mbps Ethernet and offer a 
growth path and new application opportunities for 
customers. Bridges, modems,
remote access devices, routers, or switches can connect 
different work groups into enterprise networks, and a 
variety of protocols can move information from location 
to location. 

Transmission media and wiring types have evolved from 
copper to combinations of twisted-pair copper, coaxial 
cable, fiber optic, and telephone leased lines; satellite 
and wireless based service options; and more variations in 
the future. Purchasing decisions now focus less on media 
choices, as organizations have moved to Category 5 
twisted-pair to the desktop and fiber in the backbone, 
and more on how to incorporate new technologies using 
existing media. Vendors have found ways to use ATM and 
FDDI with existing infrastructure to boost performance, 
rather than force people to bear the expense of ripping 
out and replacing wiring.

All of these developments described above involve making 
a series of trade-offs'. The products that offer the 
most bandwidth and the most sophisticated features are 
the most expensive and often are not compatible with the 
existing infrastructure.

Internet Market. The internet market shares information 
and related services among millions of people around the 
world. The internet opens up the possibility of 
redefining the desktop paradigm into one that uses more 
affordable, easier  use, and easier  maintain platforms. 
Bulky PCs will be replaced with a new type of desktop 
computer, the Network Computer that is designed 
specifically for use with the Internet and corporate 
Intranets. Latest surveys estimate that over 20 million 
individuals are currently using the Internet. Most 
organizations have either implemented or are planning
to implement Internet (INET) applications. At least 60% 
of U.S. consumers have not bought a home PC.

MSI is currently focusing on the large public agency and 
private sector business segment and working diligently 
on providing desktop network computers targeting 
telecommunications providers as strategic partners. 
In working strategically with  telecom companies, MSI 
will provide network products and services for work at 
home, education, government, health care, finance, and 
general business segments. Telecommunications companies' 
growth strategy is focused on strengthening network based 
business and that is where MSI`s business opportunities lie.

Competition

The computer and information access markets are 
characterized by rapidly changing technology and 
evolving industry standards. The Company experiences 
significant competition from other network computer 
manufacturers, suppliers of personal computers and 
workstations, and software developers.
	
MSI includes several important features that set their 
products and services apart from others that may be 
considered competitive: 

Established experience computer services corporation

Performed and performing as a historically 
  underutilized business (HUB)
  
Established strategic partnerships and alliances

Certified Minority Business Enterprise (MBE) by City, 
  State and Federal Agencies 

Field Installation Services.  MSI is carrying out state-
wide field installation services for key clients for the 
installation of lottery equipment and electronic benefit 
transfer equipment. MSI is positioned to increase the 
service base with its statewide coverage of 35 technicians 
working throughout the state of Texas. MSI's strategic 
positioning has become a leader in the field installation 
and maintenance services market.  

Network Computers (NCs).   MSI has positioned itself as a 
technology leader in NCs and INET services. MSI is 
positioned in its physical location and is strategically 
positioned to become a leader in this market. There are no 
identified competitors at this time. In addition, there are 
no minority owned NCs OEMs  identified in all of Central 
Texas.

Our strategy has based on serving niche markets well. In 
particular, in this case, NCs and INET services will be a 
key to MSI's growth and business stability. The specific 
education niche is relevant to MSI's sales growth. 
Education markets require a heavy investment of resources 
for computer networking, servers, and computer work 
stations. MSI is geared to provide these services and offer 
the TelaVista, MSI's version of he network computer as an 
affordable alternative to PC purchases. 

Cabling Services.   As a minority owned company, MSI is 
positioned to enlarge its market presence in the 
communications area. MSI currently has capabilities in 
fiber optic cabling through installation services, and 
MSI's extensive expertise in cable types, splicing, 
connectors/terminations, and testing. MSI's personnel 
are certified in copper and fiber optic wiring systems 
for data, voice, and video applications.







Employees

At June 30, 1997, MSI had 75 full-time employees.  None 
of MSI's employees are subject to a collective 
bargaining agreement.  MSI considers its relations with 
its employees to be good and anticipates that it will 
hire additional field personnel to implement its growth 
plans.

Offices

MSI leases approximately 36,000 square feet of executive 
office, manufacturing and distribution space in Austin, 
Texas.  If it were to require added space, MSI believes 
that additional space is readily available for lease.  
MSI leases field offices, storage facilities and equipment 
yards in Dallas, Texas and San Antonio, Texas.

Item 2.  Properties

MSI's principal administrative, marketing, manufacturing 
and research and development operations are located in a 
36,000 square foot building in Austin, Texas.  These 
facilities are occupied under a lease which expires November 
2001. The annual gross rent for these facilities currently 
approximates $95,000. The Company believes that its 
existing facilities are adequate for its present 
requirements.  The Company's field sales and service
offices consist of leased office space totaling 
approximately 1,000 square feet under and office sharing 
arragement with a customer in exchange for services.
Current aggregate gross rents were insignificant for 1997.

Item 3.  Legal Proceedings

There is no material, pending litigation incidental to 
the business to which MSRC or MSI is a party or against 
any of its Officers or Directors as a result of their 
corporate capacities.

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

No matters were submitted to a vote of security holders 
of MSRC during the quarter ending July 31, 1997.  
Annual meetings of the shareholders of MSRC are held 
in accordance with Utah law.

PART II

Item 5.  Market for Registrant's Common Equity and 
Related Stockholder Matters

These prices are believed to be representative of inter-
dealer quotations without retail markup, markdown or 
commissions, but may not represent actual transactions.  
There can be no assurance that a public market for the 
Registrant's common stock will be sustained in the 
future.
Quarter Ended               					
                                   Bid
                            low            high
March 31, 1996              1.00           1.00
June 30, 1996               1.00           1.00
September 30, 1996          1.00           1.00
December 31, 1996           1.00           1.00
March 31, 1997              1.00           1.00
June 30, 1997               2.00           2.00

On June 30, 1997 there were approximately 5,400 
registered holders of the Registrant's common stock, 
including those persons having beneficial positions in 
street name holdings.

Holders of common stock are entitled to receive such 
dividends as may be declared by the Registrant's Board 
of Directors.  The Registrant has not yet paid any 
dividends, and the Board of Directors of the Registrant 
presently intends to pursue a policy of retaining earnings, 
if any, for use in the Registrant's operations and to 
finance expansion of its business.  With respect to the 
Common Stock, the declaration and payment of dividends in 
the future, of which there can be no assurance, will be 
determined by the Board of Directors in light of conditions 
then existing, including the Registrant`s earnings, 
finacial condition, capital requirements and other factors.

Item 6.  Management's Discussion and Analysis of 
Financial Condition and Results of Operations

The following discussion addresses the Company's results 
of operations forthe years ended March 31, 1997 and 1996, 
as well as liquidity and capital resources as of 
March 31, 1997.

As a result of the acquisition of Micro-Media Solutions, 
Inc. on June 23, 1997, the financial condition of the 
Registrant changed dramatically.  The acquisition was 
accounted for as a recapitalization and resulted in a 
significant change in the business of the Registrant.  
The Registrant considers its results to be comparative 
for the purposes of this discussion and analysis.

MSI's past operating results have been, and its future 
operating results may be, subject to seasonality and other 
fluctuations, on a quarterly and an annual basis, as a 
result of a wide variety of factors, including, but not 
limited to, critical component availability, the timing 
of new product introductions by MSI and its competitors, 
fluctuating market pricing for computer and semiconductor 
memory products, industry competition, fluctuating 
component costs, inventory obsolescence, seasonal cycles 
common in the computer industry, seasonal government 
purchasing cycles, the effect of product reviews and 
industry awards, manufacturing and production constraints, 
changes in product mix and the timing of orders from and 
shipments to OEM customers.  As a result, the operating 
results for any particular period are not necessarily 
indicative of the results that may occur in any future 
period.

Results of Operations

Year Ended March 31, 1997 Compared to March 31, 1996

Revenues decreased $ 76,357 or 1.6% from 1996 to 1997.  
The decrease was a result of normal business activity 
and is not attributed to any particular item or event.

Cost of goods sold decreased $ 152,677 or 4.4% from 1996 
to 1997. This resulted from efforts to increase margins 
on sales by improving relationships with vendors that 
offer discounts on inventory purchases and focusing on 
finding competitive pricing for inventory purchases.




Selling, general, and administrative expenses increased 
substantially for theyear ended March 31, 1997 as compared 
to the year ended March 31, 1996 primarily due to the 
increase of statewide employees and related personnel 
costs.  Management anticipates a slight increase in 
selling, general, and administrative expenses in the 
immediate future.

Liquidity and Capital Resources

During the twelve months ended March 31, 1997, working 
capital decreased $691,000 from the prior year as a result 
of increased borrowings, new debt,and failure by Management 
to complete restructuring arrangements with various 
financial institutions.  During this period the Company's 
accounts payable increased $178,000 or 33%.  

At the present time, the Registrant is more than thirty 
(30) days past due onthe majority of its accounts payable.  
If the Registrant's financing efforts are not successful 
in the immediate term, Management cannot reasonably predict 
the outlook for continuing operations.  Management intends 
to devote material effort toward satisfying the immediate 
need for working capital.  Management has received a letter 
of commitment from a private financing source for $3,000,000
 of equity and debt.

Inflation

The Registrant does not believe that inflation will have 
a material impact on the Registrant's future operations.


Item 7.  Financial Statements and Supplementary Data

Please see accompanying index to Financial Statements

Item 8.  Changes in and Disagreements With Accountants on 
Accounting and Financial Disclosure

There have been no disagreements between the Registrant 
and its independent accountants on any matter of 
accounting principles or practices or financial statement 
disclosure since the Registrant's inception. Jones, Jensen,
 and Company resigned as auditors on June 23, 1997.  The 
Registrant hired Salazar and Associates, P.C. during June 
1997 and filed an 8-K reporting the change.	

PART III

Item 9.   Directors and Executive Officers of the 
Registrant

The executive officers, key employees and directors of 
the Registrant and their ages and positions with the 
Registrant or its subsidiaries are as follows:

Name\                 Age    Position                   
Period from
which served

Jose G. Chavez        46     Chairman of the Board      
June 23, 1997                of Directors and President 

Mitchell C. Kettrick  30     Vice-President and
June 23, 1997                Director                   

George Villalva       61     Vice-President and
June 23, 1997                Director                   

Frank Rodriguez       46     Chief Financial and
June 23, 1997                Accounting Officer         

The Registrant has no knowledge of any arrangement or 
understanding in existence between any executive officer 
named above and any other person pursuant to which any 
such executive officer was or is to be elected to such 
office or offices.  All officers of the Registrant serve 
at the pleasure of the Board of Directors.  No family 
relationship exists among the directors or executive 
officers of the Registrant.  All Officers of the 
Registrant will hold office until the next Annual Meeting 
of the Registrant.

The following sets forth biographical information as to 
the business experience of each Officer and Director of the 
Registrant for at least the past five years.



Jose G. Chavez, President, has over 20 years experience 
in manufacturing, engineering, system design and 
development, energy engineering, and computer technology 
management.  As co-founder of MSI in 1993, he has overseen 
the development of a start-up to a multi-million dollar 
business enterprise.  He previously was plant manager for 
HDS, a division of Hart Graphics, Inc. from 1991 to 1993,
 and manufacturing manager for Compuadd Corporation from 
1989 to 1991.  Mr. Chavez holds an electrical engineering 
degree from UTEP and a business degree from the University 
of Redlands, Redlands, Califonia.

Mitchell C. Kettrick, Vice-President of Technical 
Operations has over 6 yearsexperience in manufacturing, 
test diagnostics, and networking.  As co-founder of MSI 
in 1993, and MSI's Chief Technology Officer, he oversees 
technical services, system design, and information services.  
Previously, he was manager for quality assurance for Hart 
Distributions Services during 1992, and manufacturing 
systems test manager for Compuadd Corporation from 1987 to 
1991. Mr. Kettrick holds an Associate of Applied Science 
1992. in Computer Technology from TSTC.

George Villalva, Vice-President of Operations, is a 
registered architect and has designed and planned many 
projects of distinguished value.  As Vice-President of 
Operations since 1993, he oversees day to day operations 
and MSI's building expansion and space planning.  He 
carries out important strategic marketing tasks for MSI 
with public and private sector clients.  Mr. Villalva has 
been in private practice for 25 years and devotes 50% of 
is time to the Company.

Frank Rodriguez, Director of Finance and Corporate 
Development since 1995, has over 20 years of financial 
planning and market development experience in the public 
and private sectors, most recently serving as Director of 
Consumer Services and Economic Development for Pedernales 
Electric Cooperative from 1988 to 1995.  Mr. Rodriguez has 
served in upper levels of City and State government as an 
Assistant City Manager, Budget Director, Finance Director, 
and Treasurer.  In the private sector, he has served as a 
finacial advisor to business with specialties in finacial 
planning and market development. Hehas worked in diverse 
industries such as in electric utility, real estate, 
housing, and computer tecnology businesses. Mr. Rodriguez 
holds a Business degree for O.L.L.U., San Antonio, Texas.

During the past five years, there have been no petitions 
under the Bankruptcy Act or any state insolvency law filed 
by or against, nor have there been any receivers, fiscal 
agents, or similar officers appointed by any court for the 
business or property of any of the Registrant's incumbent 
directors or executive officers, or any partnership in 
which any such person was a general partner within two 
years before the time of such filing, or any corporation 
or business association of which any such director or 
executive officer was a executive officer within two years 
before the time of such filing.

During the past five years, no incumbent director or 
executive officer of the Registrant has been convicted 
of any criminal proceeding (excluding traffic violations 
and other minor offenses) and no such person is the subject 
of a criminal prosecution, which is presently pending.

Item 10.  Executive Compensation
Summary Compensation Table
						
                              Annual Compensation                          
Payouts
(a)      (b)      (c)      (d)      (e)
Name and 
Principal  Year  Salary  Bonus     Other
Position                           Annual    
                                   Compen
                                  -sation 
Jose G.    1997 $105,000 $-0-       $-0-
Chavez,    1996 $ 51,000 $34,000    $-0-     
CEO &      1995 $ 87,000 $13,000    $-0-
President         
  Long Term Compensation
(f)      (g)      (h)      (I)    
-0-      -0-      -0-      -0-
-0-      -0-      -0-      -0-
-0-      -0-      -0-      -0-

Employment Contracts

There are no written employment contracts as of the 
date of this report.

Compensation of Directors

Each director who is not an employee of the Registrant 
(the "Outside Directors") will be paid the sum of $1,000 
for each meeting of the Board of Directors attended by them.  
Additionally, they will be reimbursed for expenses incurred 
in attending meetings of the Board of Directors and related 
committees.  As of the date of this report, the Registrant 
has no outside directors.  No compensation was paid to any 
outside Director during fiscal 1997.

Item 11.  Security Ownership of Certain Beneficial Owners 
and Management 

As of July 31, 1997, there were 10,764,733 shares of 
common stock issued and outstanding.

The following table sets forth, as of the date of this 
Report, the common stock ownership of each person known 
by the Registrant to be the beneficial owner of five 
percent or more of the Registrant's common and preferred 
stock , all Directors individually, and all Directors and 
Officers of the Registrant as a group.  Except as noted, 
each person has sole record and beneficial ownership and 
voting power with respect to the shares shown.

Name and Address of  Common Stock (1) Percent of Class (1)
Beneficial Owner
Jose G. Chavez       7,125,000            66.18%
Mitchell C. Kettrick 1,425,000            13.24%
George Villalva        475,000             4.41%

All Directors and
Officers as a Group  9,025,000            83.83%
(3 persons)
________

(1) Calculations assume exercise and conversion of all 
warrants, option and conversion rights into the underlying 
shares of common stock.  All common and preferred shares 
held by the Officers, Directors and Principal Shareholders 
listed above are "restricted securities" and as such are 
subject to limitations on resale.  The shares may be sold 
pursuant to Rule 144 under certain circumstances.

Rule 13d-3 under the Securities Exchange Act of 1934, 
involving the determination of beneficial owners of 
securities, includes as beneficial owners of securities, 
among others, any person who directly or indirectly, 
through any contract, arrangement, understanding, 
relationship or otherwise has, or shares, voting power 
and/or investment power with respect to such securities; 
and, any person who has the right to acquire beneficial 
ownership of such security within sixty days through means, 
including, but notise of any option, warrant or conversion 
of a security. Any securities not outstanding which are 
subject to such options, warrants or conversion privileges 
shall be deemed to be outstanding securities of the class 
owned by such person, but shall not be deemed to be 
outstanding for the purpose of computing the percentage of 
the class by any other person.

All shares are "restricted securities" and as such are 
subject to limitations on resale.  The shares may be sold 
pursuant to Rule 144 under certain circumstances.

There are no contractual arrangements or pledges of the 
Registrant's securities, known to the Registrant, which 
may at a subsequent date result in a change of control 
of the Registrant.

Item 12.  Certain Relationships and Related Transactions

Certain information concerning the Registrant's executive 
officers and directors is included under Item 11 of 
this report.  

Certain officers, directors, stockholders and employees 
of the registrant have ownership interests in entities 
where the registrant has advanced monies for working 
capital and expenses.  The advances have been converted 
to notes and are personally guaranteed by the shareholders 
of the related entities.  The schedule below lists the name 
of the stockholder and the percentage of ownership.

Name of       Prima           Quality           Salas 
Stock-     Development &   Communications,    Concessions  
holder   Construction, Inc.     Inc.             Inc.

                            (Percentage of Ownership)
Jose G. Chavez   26              28               33

Frank Rodriguez  15               5                -

Andrew Ramirez   26              27               35

George Villalva  15               5                4

Mitchell C.      18              10               13
Kettrick

Bruce Funderburk --              20               --

Laurel Funderburk--               5               --

Tammie Delaney   --              --               15
                100             100              100

The Registrant's officers and directors serve as officers 
directors and advisors on an as needed basis and total 
involvement is minimal. 

Item 13.  Exhibits, Financial Statement Schedules, and 
Reports on Form 8-K

Exhibits
Exhibit    Description                 Location

3A         Articles of Incorporation   Incorporated by 
           and Bylaws                  reference to Exhibit
                                       No. 3 to the 
                                       Registrant's 
                                       Registration
                                       Statement 
                                       (#33-24265-LA)

3B         Amended Articles of         Incorporated by 
           Incorporation               reference to Exhibit
                                       No. 2B of 
                                       Registrant's Form 
                                       8-A Registration 
                                       Statement 
                                       (File #0-20760)



4          Specimen of Securities      Incorporated by 
                                       reference to Exhibit
                                       Nos. 1A and 1B of 
                                       Registrant's Form
                                       8-A Registration 
                                       Statement 
                                       (File #0-20760)

10A       Agreement and Plan of        Incorporated by 
          Reorganization               reference to Form
                                       8-K dated 
                                       August 12, 1992

The Registrant filed no Reports on Form 8-K during the 
last quarter of the fiscal year covered by this Report 
on Form 10-KSB.

MOUNTAIN STATES RESOURCES CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND SCHEDULES REQUIRED BY ITEM 8 AND ITEM 14

FINANCIAL STATEMENTS                               PAGE
Reports of Independent Public Accountants           F-2

Consolidated Balance Sheet as of March 31, 1997     F-3

Consolidated Statements of Operations for 
the Years Ended March 31, 1997 and 1996             F-4

Consolidated Statements of Stockholders' Equity 
for the Years Ended March 31, 1997 and 1996         F-5

Consolidated Statements of Cash Flows for the 
Years Ended March 31, 1997 and 1996                 F-6

Notes to Consolidated Financial Statements          F-7 
                                                to F-17

FINANCIAL STATEMENT SCHEDULES (1)

(1) Schedules are omitted because of the absence of the 
conditions under which they are required, or because the 
information required by such omitted schedule is 
contained in the consolidated financial statements or 
the notes thereto.












Salazar & Associates
CERTIFIED PUBLIC ACCOUNTANTS
Jose Salazar, CPA 	   Frances Ortiz-Salazar, CPA


INDEPENDENT AUDITOR'S REPORT

To the Board of Directors of Mountain States Resources 
Corporation 

We have audited the accompanying consolidated balance 
sheet of Mountain States Resources Corporation and 
subsidiary (the "Company") at March 31, 1997 and the 
related consolidated statements of operations and cash 
flows for the year ended March 31, 1997.  These 
consolidated financial statements are the responsibility 
of the Company's management.  Our responsibility is to 
express an opinion on the consolidated financial 
statements based on our audit. 

We conducted our audit in accordance with generally 
accepted auditing standards. Those standards require 
that we plan and perform the audit to obtain a reasonable 
assurance about whether the financial statements are free 
of material misstatement.  An audit includes examining on 
a test basis, evidence supporting the amounts and 
disclosures in the financial statements. An audit also 
includes assessing the accounting principles used and 
significant estimates made by management, as well as 
evaluating the overall financial statement presentation. 
We believe that our audit provides a reasonable basis for 
our opinion.

In our opinion the consolidated financial statements 
referred to above present fairly, in all material 
respects, the financial position of Mountain States 
Resources Corporation and subsidiary as of March 31, 
1997, and the consolidated results of their operations 
and cash flows for the years then ended in conformity 
with generally accepted accounting principles.

The accompanying consolidated financial statements have 
been prepared assuming that the Company will continue as 
a going concern.  As discussed in Note 10 to the 
consolidated financial statements, the Company has 
suffered losses from operations and has a working capital 
deficiency, which raises substantial doubt about its 
ability to continue as a going concern.  Management's 
plans regarding these matters is presented in Note 10 of 
this financial statement.







As more fully described in Note 11 and 12, subsequent to 
the issuance of the Company's March 31, 1997 financial 
statements and our report thereon dated June 22, 1997, 
we became aware that those financial statements did not 
reflect certain adjustments as described in Notes 11 and 12. 
In our original report we expressed an unqualified opinion 
on the March 31, 1997 financial statement as described 
in paragraph four above, and our opinion on the revised 
statements, as expressed herein, remains unqualified 
with respect to paragraph four above.





Salazar and Associates,
Austin, Texas
June 22, 1997, except as to the fifth paragraph above and 
Notes 11 and 12, which are as of June 10, 1998






































MOUNTAIN STATES RESOURCES CORPORATION AND SUBSIDIARY
Consolidated Balance Sheet
March 31, 1997

ASSETS

	Current Assets
	 Cash and Cash Equivalents	           $    18,112
	 Accounts Receivable - Trade              983,352
	 Inventory (Note 2)                       181,060
	 Other Receivables - Advances (Note 3)    127,971
	           Total Current Assets    	    1,310,495

	Property, Plant, and Equipment (Note 4)   784,039

      Long Term Notes Receivable (Note 5)		419,774
	TOTAL ASSETS                          $ 2,514,308	
	
                                            
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
	     Accounts Payable - Trade	        $   875,734
	     Bank Line of Credit (Note 6)	        725,000
	     Other Accrued Expenses	              113,185
	     Current Maturities of 
          Long-term Debt	(Note 7)          174,026
	     Current Portion of Obligations 
          Under Capital Leases (Note 8)     41,097
	          Total Current Liabilities     1,929,042

	Long Term Liabilities
    	     Notes Payable (Note 7)           506,806
	     Obligations under 
          Capital Leases (Note 8)          182,044
	          Total Long Term Notes    	      688,850

	Stockholders Equity
	     Preferred stock at $2 par value;
	       Authorized 10,000,000 shares; 
             no shares issued or outstanding	         
	     Common stock at $.10 par value;
	       Authorized 50,000,000 shares;  
	       10,764,733 shares issued and 
          outstanding                    1,076,473
	     Discount of Paid-in capital	      (1,046,058)
	     Accumulated Deficit	              (  133,999)

      Total Stockholders Deficit        (  103,584)
 
     TOTAL LIABILITIES AND 
       STOCKHOLDERS EQUITY             $ 2,514,308      
									
		


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

MOUNTAIN STATES RESOURCES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operation                    
For the Twelve Months Ended March 31






		                                              
                                       1997      1996

Net Revenues     	                $ 4,665,802 $ 4,742,159

Cost of Goods Sold                  3,306,490   3,459,167

Gross Margin                        1,359,312   1,282,992

Selling, General and Administrative 1,839,493     920,873

Operating Income (Loss)	           (  480,181)    362,119

Other Income (Expense)             (    2,204)    (81,417)

Net Income (Loss)                $ (  482,385) $  280,702
 
Earnings (Loss) Per Share        $       (.05) $      .03

Weighted average number of shares	             
outstanding used in earnings (loss) per-
shares calculation.                10,026,400  	9,784,733























The accompanying notes are an integral part of these 
financial Statements.
MOUNTAIN STATES RESOURCES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
For the Years Ended March 31, 1997 and 1996


								      
                               Additional    Accum-
              Common Stock    (Discount on)  lated  
             Shares   Amount Paid in capital Deficit Total
Balance
3/31/96   9,784,733   978,473 (1,046,058)  348,386  280,801 

Common stock
Issued for
services    480,000    48,000                        48,000

Common stock
issued for services
under S-8   500,000    50,000                        50,000 

Net Loss for the
year ended
3/31/97                                   (482,385)(482,385)


Balance
3/31/97  10,764,733 1,076,473 (1,046,058) (133,999)(103,584)




























The accompanying notes are an integral part of these 
financial Statements.
MOUNTAIN STATES RESOURCES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flow
For the years ended March 31
		                                     

                                       1997        1996

Cash Flows from Operating Activities:
  Net Income (loss)              $  (482,385)   $ 280,702
Adjustments to reconcile net income
  To net cash, provided by 
    operating activities:
      Depreciation expense           116,628	   58,126
      Change in accounts receivable	(165,619)    (810,224)
      Change in inventory	           189,040     (362,645)
      Change in accounts Payable	    351,644      524,090
      Change in accrued expenses     395,989       63,008
  Net Cash provided by (Used by)
    Operating Activities             405,297     (246,943)

Cash Flows from Investment Activities:
  Investment in 
    property & equipment            (632,900)    (297,394)
  Investment in other assets        ( 19,370)     (15,390)
  Issuance of loans                 (398,331)    (149,413)
  Net Cash provided by (Used by)
    Investing Activities          (1,050,601)    (462,197)

Cash Flows from Financing Activities:
  Borrowings of long term debt(net)  501,301      665,160
  Change in capital lease 
    obligations(net)                 160,565
  Change in other 
    long term liabilities             41,667
  Net Cash provided by (Used by)
    Financing Activities             661,867      706,827

Net Increase (Decrease) in Cash       16,563       (2,313)

Cash at Beginning of Period            1,549        3,832

Cash at End of Period            $    18,112    $   1,519
									  












The accompanying notes are an integral part of these 
financial statements.
MOUNTAIN STATES RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMEMTS
MARCH 31, 1997

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business and Organization
Mountain States Resources Corporation (MSRC), (the 
"Company") was organized under the laws of the State 
of Utah on April 15, 1969. MSRC began operations in 
April 15, 1969 as a mining, mineral extraction and oil 
and gas exploration company.  MSRC discontinued its 
operations in 1993 and became a development stage company 
as described in the Statement of Financial Accounting 
Standards #7. Since then, MSRC has actively sought new 
business opportunities. On June 23, 1997 MSRC entered into 
a reverse merger agreement and plan of reorganization with 
the shareholders of Micro Media Solutions, Inc. (MSI) in 
which MSRC acquired 100% of the common stock of MSI.  As 
part of the reorganization, MSRC plans to change its name 
to Micro Media Solutions, Inc.  The transaction was 
accounted for as a recapitalization as described in Note 11 
to the financial statements.

MSI is an Austin, Texas-based, technology corporation 
formed to provide Computer hardware, software programming, 
system support, maintenance, media duplication, and kitting 
to the public and private sectors. MSI is a business 
solutions technology integrator with infrastructure design 
and implementation services.  MSI's computer networking 
services includes system integration and local and wide-area 
networks. MSI is HUB certified to do business with state and 
corporate clients.

Principles of Consolidation
The consolidated financial statements for 1997 and 1996 
include the accounts and transactions of MSRC and MSI.  
All significant inter-company accounts and transactions 
have been eliminated in the accompanying consolidated 
financial statements.  MSRC, however, did not have any 
material balance sheet accounts or account balances, with 
the exception of a net operating loss of $5.7 million which
was eliminated in the recapitalization. The significant 
account balances were MSI's.

Cash and Cash Equivalents
The Company considers all liquid investments purchased 
with an original maturity of three months or less to be 
cash equivalents. 

Accounts Receivable
The Company provides an allowance for uncollectable 
receivables when it determined that collection is doubtful.  
A reserve for uncollectable Receivables is provided and 
uncollectable accounts are written off when such a 
determination is made.Property, Plant, and Equipment

MOUNTAIN STATES RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(Continued)

Property, Plant & Equipment
Property, plant and equipment are stated at cost. 
Depreciation is provided over the estimated useful 
lives of five to ten years using the straight -line 
method of depreciation.  Renewals and betterment are 
capitalized when incurred.  Costs of maintenance and 
repairs that do not improve or extend asset lives are 
charged to expense.

Revenue Recognition
For financial reporting purposes, revenues are recognized 
in the accounting period that corresponds with the 
performance of the service to the customer.  The related 
costs and expenses are recognized when incurred.  Revenues 
are derived from local and state government contracts and 
local businesses.

Federal Income Tax
Deferred tax liabilities and assets are determined based 
on differences between the financial statement and tax 
basis of assets and liabilities using enacted tax rates 
expected to be in effect for the year in which the 
differences are expected to reverse.  The net change in 
deferred tax assets and liabilities is reflected in the 
statement of operations.

Earnings (loss) Per Share
The earnings (loss) per share are computed based on the 
weighted average number of shares outstanding during the 
year.  All historical per share data has been restated to 
reflect stock splits and the effect of the merger 
transaction of Micro Media Solutions, Inc. and 
recapitalization.
Use of Estimates and Certain Concentrations
Management of the Company has made a number of estimates 
and assumptions relating to the valuation and reporting of 
assets and liabilities and the disclosure of contingent 
assets and liabilities to prepare these consolidated 
financial statements in conformity with generally accepted 
accounting principles.  Although actual results could 
differ from those estimates, Management believes its 
estimates are reasonable.  Certain components, subassemblies 
and software included in the Company's computer systems are 
obtained from sole suppliers or a limited number of 
suppliers.  The Company relies, to a certain extent, upon 
its suppliers' abilities to enhance existing products in a 
timely and cost-effective manner, to develop new products 
to meet changing customer needs and to respond to emerging 
standards and other technological developments in the 
computer industry.  The Company's reliance on a limited 
number of suppliers involves several risks, including the 
MOUNTAIN STATES RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(Continued)

possibility of shortages and/or increases in costs of 
components and subassemblies, and the risk of reduced 
control over delivery schedules.

Financial Instruments
Cash equivalents include highly liquid short-term 
investments with original maturities of three months 
or less, readily convertible to known amounts of cash.  
The amounts reported as cash equivalents, receivables, 
other assets, accounts payable and accrued expenses and 
debt are considered by the Company to be reasonable 
approximations of their fair values, based on market 
information available to management as of March 31, 1997.  
The use of different market assumptions and estimation 
methodologies could have a material effect on the estimated 
fair value amounts.  The reported fair values do not take 
into consideration potential taxes or other expenses that 
would be incurred in an actual settlement.

Financial instruments that potentially subject the 
Company to concentration of credit risk consist 
principally of cash and cash equivalents and trade
accounts receivable.  A concentration of credit risk
 may exist with respect to trade receivables, as many of 
the Company's customers are affiliated with the computer 
and telecommunications industries. The Company has a large 
number of customers on which it performs ongoing credit 
evaluations and generally does not require collateral from 
its customers. Historically, the Company has not 
experienced significant losses related to receivables from 
individual Customers or groups of customers in any particular 
industry of geographic area.

NOTE 2. INVENTORY

Inventories are valued at cost using the first-in first-
out (FIFO) method.  Inventory consists principally of 
hardware and software needed for maintaining and building 
network technology for customers.

NOTE 3. OTHER RECEIVABLES

Other receivables include employee advances for travel and lodging in 
preparation and set up of projects 
across the state.







MOUNTAIN STATES RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(Continued)

NOTE 4. PROPERTY PLANT AND EQUIPMENT

A summary of the Company's investment in property, plant 
and equipment at March 31, 1997 is as follows:

Equipment, furniture and fixtures     	$ 805,759
Leasehold Improvements	                  177,077
		                                       982,836
Less Accumulated Depreciation            198,797

Net Property Plant and Equipment      	$ 784,039
						
Depreciation charged against income for the years ended 
March 31, 1997 and 1996 was $116,628 and $58,126 
respectively.

NOTE 5. RELATED PARTY - NOTES RECEIVABLE - LONG TERM

As of March 31, 1997, the Company had advanced funds to 
the following Entities:

Prima Development and Construction, Inc.    $ 251,983
(1O% Note Receivable from a related party)

Quality Communications, Inc.                   84,394
(1O% Note Receivable from a related party)

Salas Concessions, Inc.                        83,397
(10% Note Receivable from a related party)
                                        
                TOTAL                       $ 419,774

Prima Development and Construction, Inc. (a construction 
and fiber optics cabling corporation) - The original loan 
agreement is dated April 1, 1997.  The principal amount of 
this loan is $185,000.  Interest is due and payable monthly 
as it accrues, commencing on April 10, 1997 and continuing 
on the same day of each month thereafter during the term of 
the note.  Principal and interest are payable in monthly 
installments of $2,444.79. The annual interest rate on the 
note is 10%.  Prima Development and Construction, Inc. has 
the right to prepayment without penalties.

An amendment to the loan agreement was executed on April 
15, 1997 to incorporate funds advanced to MSI for the 
period January 1, 1997 through March 31, 1997.  The 
principal amount of this loan is $66,983. Interest is due
and payable monthly as it accrues, commencing on January 
2, 1998 and continuing on the same day of each month 
thereafter during the term of the note.  Principal and 
interest are payable in monthly installments of $885.19.  
The annual interest rate on the note is 10%.  Prima 
MOUNTAIN STATES RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(Continued)

Development and Construction, Inc. Has the right to 
prepayment without penalties. The ownership of Prima 
Development and Development, Inc. includes owners of 
MSI and other outside investors.  The primary purpose
 of establishing Prima was to enable MSI to sub-contract 
critical services relevant to MSI's service mix.  By 
setting up a company to exclusively provide support 
services for MSI reduces the overhead to MSI and avoids 
carrying expenses that vary seasonally such as outside 
fiber optic cabling and related construction.  MSI 
contracts with Prima on a project to project basis.  
Currently, Prima has under contract several projects. 
This will provide the basis for the loan repayment to MSI.

Quality Communications, Inc. (a telecommunications 
corporation) - The loan agreement is dated April 1, 
1997. The principal amount of this loan is $77,600.  
Interest is due and payable monthly as it accrues, 
commencing on April 10, 1997 and continuing on the same 
day of each month thereafter during the term of the note.  
Principal and interest are payable in monthly installments 
of $1,025.49. The annual interest rate on the note is 10%. 
Quality Communications, Inc. has the right to prepayment 
without penalties.

The ownership of Quality Communications, Inc. (QCI) 
includes owners of MSI and other outside investors.  
The primary purpose of establishing QCI was to enable 
MSI's to sub-contract critical services relevant to MSI's 
service mix.  By setting up a company to exclusively 
provide support services for MSI reduces the overhead to 
MSI and avoids carrying expenses.  MSI contracts with QCI 
on a project to project basis.  QCI has under contract 
several significant cabling projects that will provide 
funds for pay-off of MSI's loan.

Salas Concessions, Inc. (a food services corporation) - 
The loan agreement is dated April 1, 1997.  The principal 
amount of this loan is $83,397.  Interest is due and 
payable monthly as it accrues, commencing on April 1O, 1997 
and continuing on the same day of each month thereafter 
during the term of the note.  Principal and interest are 
payable in monthly installments of $1,766.86.  The annual 
interest rate on the note is 10%. Salas Concessions, Inc. 
has the right to prepayment without penalties.

This investment loan was extended when MSI was expanding.  
Salas Concessions located at Robert Mueller Airport 
offered a unique opportunity to show MSI's point of sale
 and telecommunications services and equipment in a 
commercial environment.  MSI also planned to use a $80,000 
MOUNTAIN STATES RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(Continued)

carry-over loss write-off to offset MSI's 1995-1996 
operating profits.  Subsequently, MSI went into as 
statewide expansion and headquarter expansion that 
eliminated the need for taking over Salas Concession.

Salas Concessions entered an agreement to pay-off initial 
capital and operating expense for funds advanced by MSI. 
The concessions are growing in by 6% annually and beginning 
to show profit; therefore, there is no risk to MSI's note.
NOTE 6.  SHORT - TERM BORROWINGS.

The Company has a secured credit agreement with Bank One 
providing for borrowings of up to $725,000 based on the 
amount of the Company's eligible receivables.  As of 
March 31, 1997 the Company was eligible to borrow $725,000 
pursuant to the agreement, and had borrowed the full 
amount.  Under the agreement, the Company is subject to 
certain financial and other covenants including certain 
financial ratios.

NOTE 7. NOTES PAYABLE.
Long-term notes payable consists of the following amounts 
at March 31, 1997:

Austin Community Development Corporation,       $ 98,538
$ 100,000 Equipment loan dated May 29, 1996 
secured by equipment and accounts receivable.  
Loan requires interest payments at 9% for the 
first six months, principal and interest 
payments of $2,224.44 beginning in 
February 1997.  Loan will mature over a 
60 month period ending January 2002.

Austin Community Development Corporation,         79,554
$100,000 working capital loan dated 
June 14, 1995 secured by equipment and 
accounts receivable.  Loan is due in 48 
monthly principal installments of $2,083.33 
along with interest of 9% beginning in 
July 1996. Loan will mature in June 2000.

Neighborhood Commercial Management Program        54,407
$75,000 loan from City of Austin dated 
June 8, 1995 secured by second lien 
on equipment and accounts receivable.  Loan 
is due in 60 monthly installments of principal 
and interest of $1,347.65 beginning 
January 1996.  Interest rate of 0% until 
December 1995, thereafter3% rate to maturity.  
Loan will mature over a 60 month period 
ending December 2000.

MOUNTAIN STATES RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(Continued)

Neighborhood Commercial Management Program     $ 250,000
$250,000 loan from City of Austin dated 
July 15, 1996 secured by second lien one 
equipment and accounts receivable.  Loan is 
due in 60 monthly installments of principal 
and interest of $4,492.17 beginning January 
1997. Interest rate of 0% until December 1996
Thereafter 3% rate to maturity. 
Loan will mature over a 60 month 
period ending December 2001.

Bank One $200,000 loan dated June 12, 1996       173,333
secured by a First lien equipment and leasehold 
improvements of the Company. Loan  is due in 60 
monthly principal installments of $3,333.33 
along with interest equal to the Bank One, 
Texas base rate plus 2%. Loan will mature in 
June 2001.

Bank One $50,000 loan dated July 3, 1995          25,000
secured by a first lien equipment of the 
Company.  Loan is due in 36 monthly principal 
installments of $1,388.88 along with interest 
equal to the Bank One, Texas base rate plus 2%. 
Loan will mature in August 1998.
                                                                      
                                               $ 680,832

Following are maturities of long-term debt for each of 
the next five years:

									
                                  Amount
         1998                    174,026	
         1999                    157,114
         2000                    153,054
         2001                    134,340
         2002                     62,298	
		

The shareholders of MSI signed personal guarantees for 
all the notes.

Note 8. OBLIGATIONS UNDER CAPITAL LEASES

The Company is lessee of transportation and telephone 
equipment under capital leases expiring in various 
years through September 2001. The asset and 
liabilities under capital leases are recorded at the 
lower of the present value of the minimum lease 
payments or the fair value of the assets.  The assets 
are depreciated over the lower of their related lease 
MOUNTAIN STATES RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(Continued)

terms or their estimated productive lives.  Depreciation 
of assets under capital leases is included in depreciation 
expense.

Following is a summary of property held under capital 
leases:

Transportation equipment           $ 210,321
Communication equipment               47,401

Minimum future lease payments under capital leases as of 
March 31, 1997 for each of the next five years and in the 
aggregate are:
              Year Ended March 31,     Amount
                      1998            $56,769
                      1999             56,769
                      2000             56,769
                      2001             72,006
                      2002                -0- 		
Total minimum lease payments          242,313  
Less: Amount representing interest   ( 19,172)
                                     $223,141
					
NOTE 9. FEDERAL INCOME TAXES

Deferred tax liabilities and assets are determined based 
on differences Between the financial statement and tax 
basis of assets and liabilities using enacted tax rates 
expected to be in effect for the year in which the 
differences are expected to reverse.  The net change in 
deferred tax assets and liabilities is reflected in the 
statement of operations, if any.

NOTE 10. GOING CONCERN

As shown in the consolidated financial statements, the 
Company has incurred a net loss in the current year of 
$482,385 and as of that date, the Company's current 
liabilities exceeded its current assets by $618,547.  Also, 
the Company owes accounts payable with dates due in excess 
of thirty (30) days.  These factors create an uncertainty 
about the Company's ability to continue as a going concern.  
The ability of the Company to continue as a going concern is 
dependent on the Company's attaining additional financing to 
fund the expenses related to operations and capital 
improvements.  The Company is currently negotiating with 
several investors to obtain an infusion of new capital.  
In addition, the Company is continuing discussions with 
private investment groups, and plans a secondary offering in 
fiscal 1998.  The financial statements do not include any 
adjustments that might be necessary if the Company is unable to 
continue as a going concern.
MOUNTAIN STATES RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(Continued)

NOTE 11. RECAPITALIZATION

On June 23, 1997, MSRC and MSI were combined in a reverse 
merger which has been treated as a recapitalization.  
In a recapitalization MSI is treated as the acquirer of 
MSRC.  Goodwill is not recorded in a recapitalization as
 the difference in the par value of the stock issued in 
MSRC and net assets of the acquirer is treated as a 
reduction of Paid in Capital.  A reduction of Paid in 
Capital in excess of the account balance is treated as 
a "Discount on Paid in Capital"

NOTE 12. SUBSEQUENT ADJUSTMENTS

Subsequent to issuing the March 31, 1997 audited 
financial statements and accompanying auditor's report 
dated June 22, 1997, additional adjustments to the 
financial statements were discovered.  The following 
adjustments have been included in accompanying financial 
statements:
                     Balance as              Balance After
                     Previously                Subsequent
                     Reported    Adjustments  Adjustments
Trade Receivables $ 1,383,207   $(399,855)   $  983,352

Property, Plant 
  and Equipment       723,783	     60,256	      784,039

Goodwill              751,329    (751,329)          -0-

Long Term 
  Notes Receivables   476,914	   ( 57,140)      419,774

Other Accrued 
  Expenses            255,608	    142,423       113,185

Additional 
  Paid in Capital   5,600,652  (5,600,652)          -0-

Discount on 
  Paid in Capital         -0-  (1,046,058)   (1,046,058)

Accumulated Deficit
                   (5,746,125)  5,612,126    (  133,999)

All other 
  Accounts, net                (   28,939)

Net Loss           (  199,130)(   283,255)   (  482,385)





SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of 
the Securities Exchange Act of 1934, the Registrant has 
duly caused this Report to be signed on its behalf by the 
undersigned, thereunto duly authorized.





Date__06/21/98_________        By __/s/__Jose G Chavez
                                       Jose G. Chavez, 
                                           President


	Pursuant to the requirements of the Securities 
Exchange Act of 1934, this report has been signed below 
by the following persons on behalf of this Registrant and 
in the capacities and on the dates indicated.

Signature                Capacity           Date

/s/ Jose G. Chavez
Jose G. Chavez        Chairman of the Board   06/21/98
                      Directors and President

/s/ Mitchell Kettrick
Mitchell Kettrick     Vice-President and 
                      Director                06/21/98    

/s/ Stephen Hoelscher
Stephen Hoelscher     Comptroller             06/21/98