U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   Form 10-QSB


 X       Quarterly report under Section 13 or 15(d) of the Securities  Exchange
         Act of 1934 (Fee  required) for the  quarterly  period ended March 31,
         1998.
         Transition report under Section 13 or 15(d) of the Securities  Exchange
         Act of 1934 (No fee required) For the transition period from to

Commission file number 1-11586

                                PTI HOLDING INC.
                 (Name of small business issuer in its charter)

              Delaware                   13-3590980
(State or jurisdiction                  (I.R.S. Employer
of incorporation or organization)       Identification No.)

c/o 15 East North Street, Dover, DE                       19901
(Address of principal executive offices)                  (Zip Code)

                                (302) 678-0855
                (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act:
Title of each class
                                                          Name of each exchange
                                                          on which registered
Common Stock, par value
  $.01 per share                                          None
Securities registered under Section 12(g) of the Act:
Title of each class

Common Stock, par value
$.01 per share

         -

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

         State the number of shares  outstanding  of each class of the  issuer's
classes of common equity, as of the latest  practicable date. As of May14, 1998,
4,796,506 shares of the issuer's common equity were outstanding.



<PAGE>





ITEM 1.  Financial Statements.

                                                                       Page
Consolidated Balance Sheet as of March 31, 1998                         F-1

Consolidated Statements of Income for the three months
ended March 31, 1998 and 1997                                           F-2

Consolidated Statements of Cash Flows for the three months              F-3
ended March 31, 1998 and 1997

Notes to Consolidated Financial Statements                              F-4 to
                                                                        F-5


                                 PART I



ITEM 2.  Management's Discussion and Analysis


         Statements  in this  Quarterly  Report on Form  10-QSB  concerning  the
Company's  business outlook or future economic  performance;  or other financial
items;  and plans and objectives  related  thereto;  and  statements  concerning
assumptions   made  or  expectations  as  to  any  future  events,   conditions,
performance or other matters, are  "forward-looking  statements" as that term is
defined  under the  Federal  Securities  Laws.  Forward-looking  statements  are
subject  to risks,  uncertainties  and other  factors  that could  cause  actual
results to differ materially from those stated in such statements.

         PTI  Holding  Inc.  (collectively  with its  wholly-owned  subsidiaries
referred  to herein  as the  "Company"),  manufactures  and  markets  protective
equipment,  primarily  bicycle  helmets and safety ear plugs.  In addition,  the
Company markets and distributes bicycles and bicycle-related products, and other
safety and medical supplies.

         On August 5, 1997, the Company expanded its line of protective products
by acquiring Flents Products Co., Inc., ("Flents"), which is principally engaged
in the business of the manufacture of wax earplugs and the marketing and sale of
earplugs and other  safety and medical  supplies,  such as an eye drop  delivery
system,  styptic  devices,  and  air-filter  masks.  For  purposes of  financial
accounting  and income  tax,  the Merger was deemed to have  occurred  as of the
opening of business on June 1, 1997.

         On May 12, 1998, Flents acquired certain assets of the Comfees division
of Magnivision,  a subsidiary of American Greetings Corporation,  for a purchase
price of approximately $1,700,000.  Comfees manufactures and distributes contact
lense cases,  liquid  dispensers,  medicine  dispensers,  finger splints and ear
protectors,  among other health and beauty care items. Comfees products are sold
through several mass merchandisers, including K-Mart and Target.

Results of Operations

         The  Company's  net sales were  $11,745,977  during the quarter ended
March 31, 1998, an increase of 89% from its net sales $6,229,506 of for the same
period in 1997.

         The  sales  increase  from  1997 to 1998  resulted  predominantly  from
increased sales to existing customers through the addition of new helmet models,
from increased market share at the expense of competitors,  from increased sales
in existing  models due to growth in the overall helmet  market,  from increased
sales of the Company's bicycle and bicycle accessory products, from the addition
of new retail outlets for the Company's products, from introducing new accessory
product lines, from the Company's  license  arrangements  both with Hasbro,
Inc., to manufacture and market helmets, bicycles and bicycle  accessories under
the PlayskoolTM brand name, and with Mattel,  Inc. to manufacture and market 
helmets under the Barbie(TM) name, and from net sales of its Flents subsidiary 
of $1,856,113, which was acquired June 1, 1997.

         The Company had a net income of $732,265 for the quarter  ended March
31, 1998  compared to the  Company's net income of $758,971 for the same period 
in 1997.

         The cost of sales for the quarter  ended March 31, 1998 was $ 8,054,509
(resulting in a gross profit margin of 31%),  compared to the Company's  cost of
sales of  $3,937,393  for the same period in 1997  (resulting  in a gross profit
margin of 37%). The gross profit margin for the period ended March 31, 1997 was
uncharacteristically high based on previous periods. The gross profit margin 
for the year ended December 31, 1997 was 31%.

         Selling,  general and  administrative  expenses  for the quarter  ended
March 31, 1998 was $2,381,616  compared to selling,  general and  administrative
expenses of $964,836 for the same period in 1997.  SG&A as a percentage of sales
were  20.28%  and  15.49%  for  the  periods  ended  March  31,  1998  and  1997
respectively. The increased selling, general and administrative spending in 1998
was  primarily  due to the higher  costs  associated  with the  expansion of the
helmet,  bicycle and bicycle accessory business,  the acquisition of Flents, and
the higher costs for human resources.


Capital Resources

         The Company has satisfied its capital requirements through the proceeds
of its initial public offering of securities,  which resulted in net proceeds of
approximately  $3,800,000,  through  the  proceeds  of  Regulation  "S"  private
placement in November 1994,  which  resulted in gross proceeds of  approximately
$750,000,  through the exercise of certain outstanding options held by employees
and consultants of the Company,  which resulted in net proceeds of approximately
$400,000,  through internal cash flow, through PTI's opening of a revolving line
of credit in May,  1996 and  through the  exercise  of public  warrants in 1997,
which resulted in gross proceeds of approximately $3,000,000.

         The  Company's  working  capital at March 31,  1998 was  $9,953,333  as
compared to $6,092,751 at March 31, 1997.

         The cash flows of the Company have fluctuated due to capital  spending,
working  capital  requirements,  and bank loans.  The Company  expects that cash
flows in the near  future  will be  primarily  determined  by the  levels of net
income, working capital requirements,  and financings, if any, undertaken by the
Company.  Net cash decreased by $302,126 and $450,056 in the three-month periods
ended March 31, 1998 and 1997, respectively.

         Net cash used in operating  activities was $4,493,785 and $1,605,890 in
the three-month periods ended March 31, 1998 and 1997, respectively.  Net income
was $732,265 and $758,971 for the same periods, respectively.

         Net cash used in investing  activities  was  $2,120,569 and $490,123 in
the three-month  periods ended March 31, 1998 and 1997,  respectively.  Net cash
used in investing  activities pertains to capital expenditures in these periods,
primarily for computer systems and manufacturing equipment.

         Net  cash  provided  by  financing   activities  was   $6,312,228   and
$1,645,957  in  the   three-month   periods  ended  March  31,  1998  and  1997,
respectively.  Cash flows from financing  activities were primarily  affected by
the net bank loans of $6,369,227 and $1,624,054 in these periods, respectively.

         The Company  pays its  employees  and  vendors on a weekly,  monthly or
bimonthly  basis,  while its customers pay for products on an average of 75 days
after  shipment,  and  therefore the Company has  substantial  needs for working
capital.  As of March 31, 1998,  the Company had $380,034 of cash  available for
its cash needs, compared to cash overdraft of $(88,178) as of March 31, 1997.

         On May 6, 1996,  the Company  opened a revolving  line of credit at Key
Bank of New York. The line of credit is collateralized by inventory, receivables
and other assets.  As of March 31, 1998, the Company had $8,437,488  outstanding
pursuant to such line of credit  ($12,000,000  available,  including  $2,000,000
specifically for the future capital expenditures).

         Based on the  Company's  current  plans,  management  anticipates  that
current cash balances,  together with the Company's line of credit and cash flow
generated from  operations,  will be sufficient to continue to fund  production,
purchase of equipment, increased marketing activities and continued research and
development,  as  well as the  rest  of the  Company's  cash  requirements,  for
approximately the next 18 months.

         The  Company's  research and  development  efforts are directed  toward
developing  new  products,   improving   existing   products  and  refining  its
manufacturing  processes.  Such  research  and  development  costs  amounted  to
approximately  $47,000  for the quarter  ended March 31, 1998 and  approximately
$25,000 for the quarter  ended March 31, 1997.  It is expected  that the Company
will spend  approximately  $150,000 on research and development  during the 1998
year.


Year 2000 Compliance

         The Company is currently in the process of finalizing its  installation
of the SAP R/3 accounting system, which will be year 2000 compliant. The Company
does not anticipate any material  additional  costs with regard to its year 2000
compliance.

         The year 2000  issue is  expected  to affect  the  systems  of  various
entities  with which the Company  interacts,  including  suppliers  and vendors.
However,  there can be no assurance that the systems of other companies on which
the  Company's  systems  rely will be  timely  converted,  or that a failure  by
another  company's  systems to be year 2000 compliant  would not have a material
adverse effect on the Company.













<PAGE>


ITEM 6.  Exhibits; List and Reports on Form 8-K.


         (a)      Exhibits

3.1      Registrant's  Articles of  Incorporation,  as amended,  incorporated by
         reference to the like numbered exhibit in the Registrant's Registration
         Statement on Form SB-2 under the  Securities  Act of 1933,  as amended,
         File No. 33-53466

3.2      Registrant's  by-laws,  incorporated  by reference to the like numbered
         exhibit in the Registrant's  Registration  Statement on Form SB-2 under
         the Securities Act of 1933, as amended, File No. 33-53466

4.2      Form of Warrant of Bridge Loan  lenders,  incorporated  by reference to
         the like numbered exhibit in the Registrant's Registration Statement on
         Form SB-2  under  the  Securities  Act of 1933,  as  amended,  File No.
         33-53466

4.4      Form of  Underwriters'  Warrant,  incorporated by reference to the like
         numbered  exhibit in the  Registrant's  Registration  Statement on Form
         SB-2 under the Securities Act of 1933, as amended, File No. 33-53466

10.1     Warrant Agreement dated , 1992 between  Corporate Stock Transfer,  Inc.
         and the Company,  incorporated  by reference to exhibit  number 10.9 in
         the  Registrant's   Registration  Statement  on  Form  SB-2  under  the
         Securities Act of 1933, as amended, File No. 33-53466

10.2     Form of Stock Option granted to employees,  independent contractors and
         consultants,  incorporated  by reference to exhibit number 10.14 in the
         Registrant's  Registration  Statement on Form SB-2 under the Securities
         Act of 1933, as amended, File No. 33-53466

10.3     Agreement and Plan of Merger dated  February 14, 1994 among  Protective
         Technologies International Inc., Foam-O-Rama, Inc., Ellen Schaeffer and
         Lori Hillsberg, as amended, incorporated by reference to exhibit number
         2 in the  Registrant's  Current Report on Form 8-K dated March 16, 1994
         under the Securities Exchange Act of 1934, as amended

10.4     Noncompetition   Agreement  dated  March  1,  1994  between  Protective
         Technologies International Inc. and Ellen Schaeffer and Lori Hillsberg,
         incorporated  by reference to exhibit  number 99.1 in the  Registrant's
         Current  Report on Form 8-K dated March 16,  1994 under the  Securities
         Exchange Act of 1934, as amended

10.5     Noncompetition   Agreement  dated  March  1,  1994  between  Protective
         Technologies   International   Inc.  and  Warren   Schaeffer  and  Alan
         Hillsberg,  incorporated  by  reference  to exhibit  number 99.2 in the
         Registrant's  Current Report on Form 8-K dated March 16, 1994 under the
         Securities Exchange Act of 1934, as amended

10.6     Form of Promissory Note memorializing loans from directors and officers
         as authorized by the Board of Directors on March 13, 1996, incorporated
         by reference to exhibit number 10.21 in the Registrant's  Annual Report
         on Form  10-KSB for the  period  ended  December  31,  1995,  under the
         Securities Exchange Act of 1934, as amended

10.7     Guarantee  from  Warren  Schaeffer  and Alan  Hillsberg  to  Protective
         Technologies  International Inc.,  incorporated by reference to exhibit
         number 10.21 in the  Registrant's  Quarterly  Report on Form 10-QSB for
         the period ended September 30, 1995, under the Securities  Exchange Act
         of 1934, as amended

10.8     Exclusive License and Purchase Guarantee Agreement, dated July 19, 1994
         between Toy Biz, Inc. and the Registrant,  incorporated by reference to
         exhibit  number  10.22 in the  Registrant's  Quarterly  Report  on Form
         10-QSB for the period ended  September 30, 1995,  under the  Securities
         Exchange Act of 1934, as amended

10.9     Amendment #1 dated October 18, 1995 to Warrant Agreement,  incorporated
         by reference  to exhibit  number  10.23 in the  Registrant's  Quarterly
         Report on Form 10-QSB for the period ended  September  30, 1995,  under
         the Securities Exchange Act of 1934, as amended

10.10    Line of Credit Agreement (Asset Based),  dated May 6, 1996, between Key
         Bank of New  York,  Protective  Technologies  International  Inc.,  PTI
         Holding  Inc.  and  Protective   Technologies   of  America  Inc.,  and
         collateral loan documents thereto, incorporated by reference to exhibit
         number 10.25 in the Registrant's  Quarterly Report on Form 10-QSB dated
         March 31, 1996, under the Securities Exchange Act of 1934, as amended

10.12    Amendment #2, dated June 6, 1996 to Warrant Agreement,  incorporated by
         reference to exhibit  number 2 in  Registrant's  Current Report on Form
         8-K dated July 9, 1996,  under the Securities  Exchange Act of 1934, as
         amended

10.13    Merger Agreement and plan of  Reorganization  dated July 25, 1997 among
         PTI  Holding  Inc.  and  Flents   Products   Co.,   Inc.,  as  amended,
         incorporated   by  reference  to  exhibit   numbers  1  and  2  in  the
         Registrant's  Current Report on Form 8-K date August 20, 1997 under the
         Securities Exchange Act of 1934, as amended.




         (b)  Reports on Form 8-K

                  No current  report on form 8-K was filed by the Company during
the quarter ended March 31, 1998.






















                                 SIGNATURES

         Pursuant  to the  requirements  of the  Securities  Exchange  Act,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.


Dated May 15, 1998


PTI HOLDING INC.



By  /s/ Meredith Birrittella
    Meredith W. Birrittella,
    Chairman of the Board
    Chief Executive Officer (authorized signatory)





By /s/ Anthony Costanzo
   Anthony Costanzo
   Chief Financial Officer
































<PAGE>
<TABLE>


                                         PTI HOLDING INC. AND SUBSIDIARIES

                                            CONSOLIDATED BALANCE SHEET
                                                    (Unaudited)

                                                  MARCH 31, 1998

<S>                                                                                                      <C>


ASSETS

Current assets:
   Cash                                                                                       $          380,034
   Accounts receivable, net of allowance for returns and doubtful collections of $208,500             11,489,538
   Inventories                                                                                        10,870,850
   Deferred tax asset                                                                                    171,780
   Prepaid expenses and other current assets                                                           1,954,995
                                                                                              -------------------

   Total current assets                                                                               24,867,197

Deferred tax asset                                                                                       182,280
Equipment and improvements, net of accumulated depreciation of $1,694,333                              2,695,629
Intangible assets, net of accumulated amortization of $706,559                                         4,220,847
                                                                                              -------------------

                                                                                              $       31,965,953
                                                                                              ===================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Loan payable, bank                                                                         $        8,437,488
   Accounts payable and accrued expenses                                                               5,889,578
   Income taxes payable                                                                                  586,798
                                                                                              -------------------

   Total current liabilities                                                                          14,913,864
                                                                                              -------------------


Commitments and contingent liabilities


Stockholders' equity:
   Common stock, $.01 par value; authorized 10,000,000 shares, issued and outstanding
      4,796,506 shares                                                                                    47,965
   Capital in excess of par                                                                           16,144,815
   Note receivable from exercise of common stock warrants                                                (58,322 )
   Retained earnings                                                                                     917,631
                                                                                              -------------------

   Total stockholders' equity                                                                         17,052,089
                                                                                              -------------------

                                                                                              $       31,965,953
                                                                                              ===================


</TABLE>


<PAGE>
<TABLE>




                                         PTI HOLDING INC. AND SUBSIDIARIES

                                         CONSOLIDATED STATEMENT OF INCOME
                                                    (Unaudited)

                                    THREE MONTHS ENDED MARCH 31, 1998 AND 1997

<S>                                                                            <C>                     <C>
                                                                             1998                    1997
                                                                      -------------------     -------------------

Net sales                                                             $       11,745,977      $        6,229,506

Cost of sales                                                                  8,054,509               3,937,393
                                                                      -------------------     -------------------

Gross profit                                                                   3,691,468               2,292,113

Selling, general and administrative expenses                                   2,381,616                 964,836
                                                                      -------------------     -------------------

Income from operations                                                         1,309,852               1,327,277

Interest expense, net of interest income                                          47,326                  14,380
                                                                      -------------------     -------------------

Income before income taxes                                                     1,262,526               1,312,897

Income taxes                                                                     530,261                 553,926
                                                                      -------------------     -------------------

Net income                                                            $          732,265      $          758,971
                                                                      ===================     ===================

Net income per share of common stock
   Basic                                                              $              .15      $              .22
   Diluted                                                                           .14                     .19


Weighted average shares outstanding
   Basic                                                                       4,796,506               3,494,797
   Diluted                                                                     5,279,497               4,054,506




</TABLE>



<PAGE>

<TABLE>




                                             PTI HOLDING INC. AND SUBSIDIARIES

                                           CONSOLIDATED STATEMENT OF CASH FLOWS
                                                        (Unaudited)

                                        THREE MONTHS ENDED MARCH 31, 1998 AND 1997

              <S>                                                                      <C>                     <C>

                                                                                     1998                    1997
                                                                              --------------------    -------------------
Cash flows from operating activities:
   Net income                                                                 $           732,265     $          758,971
   Adjustments to reconcile net income to net cash (used in) operating
      activities:
         Provision for returns and doubtful collections                                   100,000                      -
         Depreciation                                                                     236,317                 90,807
         Amortization of intangible assets                                                 52,172                 36,535
         Deferred income tax benefit                                                      (56,537)               (80,500)
                                                                                 
         (Increase) decrease in operating assets:
            Accounts receivable                                                        (6,362,367)            (1,123,060)
            Inventories                                                                (2,998,493)            (1,964,812)
            Prepaid expenses and other current assets                                       8,368                 21,800
         (Decrease) increase in operating liabilities:
            Accounts payable and accrued expenses                                       3,207,692              1,069,943
            Income taxes payable                                                          586,798               (415,574)
                                                                              --------------------    -------------------

   Net cash used in operating activities                                               (4,493,785)            (1,605,890)
                                                                              --------------------    -------------------

Cash flows from investing activities:
   Purchase of equipment and improvements                                              (1,258,309)              (289,660)
   Loan to stockholders                                                                  (862,260)              (200,463)
                                                                              --------------------    ------------------

   Net cash used in investing activities                                               (2,120,569)              (490,123)
                                                                              --------------------    -------------------


Cash flows from financing activities:
   Payments of other current liabilities                                                  (56,999)               (23,472)
   Proceeds from bank loan, net                                                         6,369,227              1,624,054
   Proceeds from issuance of common stock                                                       -                 45,375
                                                                              --------------------    -------------------

   Net cash provided by financing activities                                            6,312,228              1,645,957
                                                                              --------------------    -------------------

Net decrease in cash and cash equivalents                                                (302,126)              (450,056)

Cash and cash equivalents, beginning of period                                            682,160                361,878
                                                                              --------------------    -------------------


Cash and cash equivalents (overdraft), end of period                          $           380,034     $          (88,178)
                                                                              ====================    ===================

Supplemental disclosures:
   Interest paid                                                              $            77,886     $           28,890
   Income taxes paid                                                                            -              1,050,000

</TABLE>



<PAGE>




                       PTI HOLDING INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)



                                                         


1.      Basis of presentation:

        The consolidated financial statements included herein have been prepared
        by the Company,  without an audit,  pursuant to the rules and  
        regulations  of the  Securities  and Exchange  Commission.  Certain
        information and disclosures  normally  included in financial  statements
        prepared in accordance  with generally  accepted  accounting  principles
        have been condensed or omitted  pursuant to such rules and  regulations.
        These  unaudited  consolidated  financial  statements  should be read in
        conjunction with the consolidated financial statements and notes thereto
        included  in the  Company's  Annual  Report on Form  10-KSB for the year
        ended  December  31,  1997 and filed with the  Securities  and  Exchange
        Commission.

        In the opinion of the Company's management, these unaudited consolidated
        financial  statements  include  all  adjustments,  consisting  solely of
        normal recurring  adjustments,  necessary in order to present fairly the
        Company's  consolidated  financial position as of March 31, 1998 and the
        results of their  operations  and their cash flows for the three  months
        ended March 31, 1998 and 1997.  The results of operations for an interim
        period are not  necessarily  indicative of the results to be attained in
        any other fiscal period.


2.      Recently Issued Accounting Standards

        In February  1997,  the  Financial  Accounting  Standards  Board  issued
        Statement  of  Financial  Accounting  Standards  No. 128  ("SFAS  128"),
        "Earnings  Per Share".  This  statement  establishes  new  standards for
        computing  and  presenting  earnings  per  share  (EPS),  replacing  the
        presentation  of formerly  required  primary EPS with a presentation  of
        basic EPS. For entries with complex  capital  structures,  the statement
        requires dual presentation of both basic EPS and diluted EPS on the face
        of the statement of  operations.  Under this new standard,  basic EPS is
        computed based on weighted  average shares  outstanding and excludes any
        potential  dilution.  Diluted EPS reflects  potential  dilution from the
        exercise or  conversion  of  securities  into common stock or from other
        contracts to issue common  stock.  The Company  adopted SFAS 128 for its
        financial  statements  issued for the year ended  December 31, 1997. The
        Company  restated its EPS data for the three months ended March 31, 1997
        to conform to the provisions of SFAS 128.

        In June 1997, the Financial  Accounting  Standards Board ("FASB") issued
        Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
        Comprehensive  Income",  which  establishes  standards for reporting and
        display of comprehensive income and its components  (revenue,  expenses,
        gains,  and  losses)  in  a  full  set  of  general  purpose   financial
        statements.  The Company  adopted No. SFAS 130 in the first quarter 1998
        which did not have a material impact on its financial statements.

        In June 1997, the FASB issued SFAS No. 131,  "Disclosures about segments
        of an Enterprise and Related  Information",  which establishes standards
        for  the  way  public  business  enterprises  report  information  about
        operating segments in interim and annual financial  statements.  It also
        establishes   standards  for  related  disclosures  about  products  and
        services,  geographic areas and major customers.  The Company will adopt
        SFAS No. 131 for the year ending December 31, 1998.

        

3.      Contingent liabilities:

        Certain claims,  suits and complaints  arising in the ordinary course of
        business  have been filed or are  pending  against the  Company.  In the
        opinion of management, all matters are without merit or of such kind, or
        involve  such  amounts,  as would  not  have a  material  effect  on the
        financial position and results of operations of the Company if concluded
        unfavorably.

        While the Company has not experienced any product  liability  claims, it
        presently  cannot be  determined if its product  liability  insurance is
        adequate to cover any losses that may arise.


4.      Subsequent event:

        On May 12,  1998,  the Company  acquired  certain  assets of the Comfees
        division of Magnivision, a subsidiary of American Greetings Corporation,
        for a purchase price of approximately  $1,700,000.  Comfees manufactures
        and  distributes  contact  lense  cases,  liquid  dispensers,   medicine
        dispensers,  finger splints and ear  protectors,  among other health and
        beauty  care items.  Comfees  products  are sold  through  several  mass
        merchandisers, including K-Mart and Target.


5.      Related party transactions:

        At March 31, 1998, officers/directors owed the Company approximately
        $1,150,000.  These loans bear interest at 6% per annum. 

        For the period ended March 31, 1998, the Company recognized interest 
        income of approximately $10,750 from loans to officers/directors.