FORM 10-KSB/A

                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549

            [X] AMEND. NO. 3 TO ANNUAL REPORT PURSUANT TO SECTION 13 OR
                                    15(d) OF THE
                           SECURITIES EXCHANGE ACT OF 1934

                      For the fiscal year ended: March 31, 1997

                                         OR

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OR THE
                           SECURITIES EXCHANGE ACT OF 1934

                    For the transition period from _____ to _____

                          Commission file number: 33-8819-D

                              HALLMARK PROPERTIES, INC.
                              -------------------------
                   (Name of small business issuer in its charter)

                     Colorado                          84-1036901
                     --------                          ----------
          (State or other jurisdiction of           (I.R.S. Employer
          incorporation or organization)          Identification No.)

               7810 W.  70th Drive
                 Arvada, Colorado                        80004
               -------------------                       -----
          (Address of principle executive offices)     (Zip code)

                      Issuer's telephone number: (303) 901-4238

           Securities registered under Section 12(b) of the Exchange Act:
                                        None

           Securities registered under Section 12(g) of the Exchange Act:
                                        None

               Indicated  by  check  mark  whether the issuer (1) filed all
          reports  required by Section 13 or  15(d)  of  the  Exchange  Act
          during the  preceding  12 months (or for such shorter period that
          the registrant was required  to  file  such reports), and (2) has
          been subject to such filing requirements for at least the past 90
          days.  Yes [X]    No [ ].

               Check  if  there is no disclosure of  delinquent  filers  in
          response  to Item  405  Regulation  S-b  in  this  form,  and  no
          disclosure  will  be  contained,  to  the  best  of  registrant's
          knowledge, in 10-KSB or any amendment to this Form 10-KSB. [X]

               Issuer's revenues for its most recent fiscal year:   $-0-
               Aggregate   market  value  of  voting  stock  held  by  non-
          affiliates as of May 15, 1998: $-0-

          There  is  currently  no  trading  market  for  the  Registrant's
          securities.
   
               Number  of shares of Common Stock, no par value, outstanding
          as of March 31 1998: 43,393,333.
    
               Documents incorporated by reference: None.
<PAGE>
                              HALLMARK PROPERTIES, INC.

                                     FORM 10-KSB

                                       PART I

          Item 1.   Description of Business

               (a)  Business Development.

               Hallmark Properties, Inc., ("Hallmark" or the "Company") was
          organized under  the  laws of the State of Colorado on August 11,
          1986,  for  the  purpose  of   evaluating   and   seeking  merger
          candidates.   Commencing  in  December, 1986, under the  name  of
          Diversified Management Acquisitions, Inc., the Registrant sold in
          a public offering 15,000,000 units  at  $0.02 per unit, for total
          proceeds of $300,100 which closed on April  28,  1987.  Each unit
          contained one share of Common Stock and one Callable Common Stock
          Purchase  Warrant.   All  Warrants expired, without exercise,  on
          December 2, 1988.

               (b)  Business of Issuer.

               Since inception in 1986,  management  of  Hallmark  has been
          actively   seeking  business  opportunities.   Several  potential
          candidates were  identified  between  1986  and the end of fiscal
          1997,  however,  no combination with any of these  companies  was
          ever completed.  The Company has no agreement in principle or any
          formal contract to acquire or enter into any business opportunity
          as of the date of this 10-KSB/A Report.

               The Company has  engaged  in limited activities but has been
          hampered in its efforts due to its lack of capital.  It is likely
          that  the Company will need a substantial  amount  of  additional
          capitalization  before  it  will  be  able  to participate in any
          merger activities.  There is no assurance that  the  Company will
          obtain any additional capitalization.

               The Company competes with numerous companies and firms which
          are larger, better established, have greater financial  and other
          resources, more employees, and more extensive facilities than the
          Company.   The Company is at a competitive disadvantage to  these
          other entities.

               The Investment  Company  Act of 1940 defines an  "investment
          company" as an issuer which is  or  holds  itself  out  as  being
          engaged  primarily  in  the business of investing, reinvesting or
          trading in securities.  While  the  Company  does  not  intend to
          engage  in  such activities, the Company could become subject  to
          regulation under  the Investment Company Act of 1940 in the event
          the Company obtains or continues to hold a minority interest in a
          number of enterprises.   The  Company  could be expected to incur
          significant  registration  and compliance  cost  if  required  to
          register under the Investment Company Act of 1940.

               The Company intends to  structure  any merger or acquisition
          in  such  a  manner  as  to  minimize  federal  and   state   tax
          consequences to the Company and any target company.

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               The Company presently is a "shell" or "blank check" company,
          because  it has no specific business plan or purpose; the Company
          intends to  locate  and consummate a merger or acquisition with a
          company  or companies,  or  other  entities  or  persons.   Under
          Section 7(b) of the Securities Act of 1933, as amended (the "1933
          Act"), and  rule  419  adopted  by  the  Securities  and Exchange
          Commission (the "Commission"), the ability of the Company  (as  a
          shell  or  blank check company) to raise capital through a public
          offering of its securities by a registration statement filed with
          the  Commission   is   subject  to  certain  limitations.   These
          limitations, which would  apply  to  the  Company  if  it were to
          conduct  a  registered public offering as a blank check or  shell
          company, generally  are as follows:  all securities issued by the
          Company  in connection  with  such  an  offering  and  the  gross
          proceeds from  the  offering  must  be deposited promptly into an
          escrow account with an insured depository  institution (usually a
          commercial bank) covered by insurance maintained  by  the Federal
          Deposit  Insurance Corporation ("FDIC").  The funds are  held  in
          escrow for the benefit of the investors in the offering.  Initial
          payments out  of  the  escrow  account  are permitted only to pay
          underwriting  commissions,  underwriting  expenses   and   dealer
          allowances;  an  additional  amount  of  up  to 10 percent of the
          amount  remaining  after  payment  of commissions,  expenses  and
          dealer allowances may be paid to the  Company;  and  the  balance
          must remain in escrow.  The securities issued in connection  with
          the  offering also must be deposited into the escrow account, for
          the benefit  of  the  purchasers  thereof,  with  the  purchasers
          retaining any voting rights with respect to the securities  which
          they otherwise would have.

               The  securities and offering proceeds are required to remain
          in the escrow  account  until  such  time  as the Company were to
          execute an agreement to acquire a business or  assets  that  will
          constitute  the  business  (or a line of business) of the Company
          and for which the fair value  of the business or net assets to be
          acquired  represents  at  least 80  percent  of  the  net  public
          offering proceeds (including  any  proceeds  received  or  to  be
          received  from exercise of securities such as warrants which were
          purchased in  the  public  offering).   Upon execution of such an
          agreement,  the  Company  would  be required  to  file  with  the
          Commission   a   post-effective   amendment   to   the   original
          registration statement, which amendment  would  disclose detailed
          information about the business or assets to be acquired.

               Within five business days after the post-effective amendment
          to  the  registration  statement  is  declared effective  by  the
          Commission, the Company would be required  to send the prospectus
          (which would be part of the amendment) to each  of the purchasers
          of securities in the public offering.  Each purchaser  would have
          not  less  than  20  and no more than 45 business days to decide,
          based on the information in the prospectus as so amended, whether
          to remain an investor or get his or her money back out of escrow.
          If by the end of the 45th  business  day,  the  Company  had  not
          received  the   affirmative  written  election  by a purchaser to
          remain  an  investor,  the  Company  would  have  to return  that
          purchaser's funds (plus interest) to that purchaser.   If  enough
          purchasers  elected  to  remain  investors so that their invested
          funds  equal  at  least 80 percent of  the  net  public  offering
          proceeds,  then the  acquisition  could  be  consummated  by  the
          Company and  the  investors  would  receive  certificates for the
          securities of the Company which they had paid  for  in the public
          offering.

               If there is no acquisition consummated within 18  months  of
          the effective date of the original registration statement for the
          public  offering,  all  of  the funds in the escrow account would
          have  to
                                         3
<PAGE>
          be  returned  to investors  by  the  Company,  and  the
          securities would be retired  to authorized and unissued status by
          the Company.

               If an acquisition were to  be  consummated  by  the  Company
          under  rule  419,  all  security  holders of the Company would be
          entitled to receive audited financial  statements  for  the first
          full  fiscal year of operations following such consummation,  and
          other information,  no  later  than  90 days after the end of the
          Company's fiscal year.

               The Company presently is filing periodic  reports  under the
          Securities  Exchange  Act of 1934 (the "1934 Act") on a voluntary
          basis.  These reports consist  of  annual reports on Form 10-KSB,
          quarterly reports on Form 10-QSB, and  interim reports on Form 8-
          K.  Under Section 15(d) of the 1934 Act, the Company was required
          to file such reports through the remainder  of  the  fiscal  year
          when  its  public  offering  registration  statement was declared
          effective  by  the Commission (December 1986).   Thereafter,  the
          Company was not required to file such reports because the Company
          never has had the  300  shareholders  of  record which would make
          such reporting mandatory under Section 15(d).

               At   such  time  as  the  Company  were  to  consummate   an
          acquisition of a business or assets after conducting a registered
          public offering  as  a  blank check or shell company, the Company
          would be required to file  audited  financial  statements for the
          first full fiscal year of operations after consummation  of  such
          an  acquisition  (see  above).   Thereafter, the Company would be
          required to file reports with the  Commission only if the Company
          had voluntarily registered a class of  its  securities  with  the
          Commission under Section 12(g) of the 1934 Act, or if the Company
          had  more  than  $10  million in assets as of the last day of its
          most recent fiscal year.   It should be noted that if the Company
          raised funds in a public registered  offering as a shell or blank
          check company, any business or assets acquired would have to have
          financial  statements  which  either had  been  audited  or  were
          capable of audit, in order for  the Company to be able to acquire
          such business or assets.

               If an acquisition were to be  made  by  the  Company without
          funds  from a registered public offering, then the Company  would
          not be legally  required  to  acquire  only  a business or assets
          which  had been or could be audited; however, the  Company  as  a
          matter of prudent business practice most likely would not acquire
          any business  or  assets  which  did  not  have audited financial
          statements or financial statements capable of audit.

               The Company presently does not intend to  use any notices or
          advertisements   in   its   search  for  business  opportunities.
          Instead, the Company intends  to rely primarily upon the business
          contacts  of  its  President  in  locating  possible  acquisition
          candidates.

               The  Company  has  had no discussions  with  any  particular
          consultants regarding the  business  of  the  Company or possible
          acquisition  candidates  for  the  Company.  The Company  has  no
          agreements or understandings with any  consultant.   None  of the
          Company's  officers,  directors  or principal shareholders in the
          past have used particular consultants  or  advisers  on a regular
          basis.

               Any independent consultants which the Company may hire would
          be  retained  on  the  basis  of  their  experience in evaluating
          business opportunities. Any such hires probably would be on a per

                                         4
<PAGE>
          project as needed basis.  If the Company had cash funds, such
          consultants  would be paid cash fees, and possibly also be issued
          small amounts of restricted shares of Common Stock.

               The Company  presently  does  not  have any funds to loan to
          prospective  business  acquisition  candidates   in   advance  of
          consummation of an acquisition transaction.  Such loans would not
          be  made  even  if  the Company were to obtain cash funds in  the
          future, which funds would  be used for general and administrative
          expenses  and  to  pay  the  costs   of   evaluating  prospective
          acquisition candidates.

               As  an  alternative  to  the  raising  of  capital   through
          registered  public offerings under rule 419, it is possible  that
          the Company may  seek  to  raise  cash  funds through the private
          placement of its securities under rule 506  of Regulation D.  See
          below.

               It is likely that the Company will undergo  a  change in its
          control  in  the event an acquisition transaction is consummated,
          because the Company  most  likely will issue a significant amount
          of restricted shares of Common Stock as the main component of the
          consideration in such a transaction.   For  example,  a  business
          could be acquired by the issuance of sufficient shares of  Common
          Stock  so  that  such acquired business or its shareholders owned
          more than 80 percent,  on  a  pro  forma  basis, of the shares of
          Common Stock outstanding after consummation of such a transaction

               The  Company  will  not borrow funds and  use  the  proceeds
          therefrom to make any payments  to  promoters  of the Company, or
          officers  or directors of the Company or any of their  affiliates
          or associates.   Further,   the  Company  will not enter into any
          agreement to acquire any entity or assets in  which  any officer,
          director  or principal shareholder of the Company has any  direct
          or indirect interest of any kind.

               The officers  and directors of the Company will not seek any
          different or additional  consideration for their shares of Common
          Stock,   or  otherwise,  in  connection   with   an   acquisition
          transaction.   For  example, if the Company acquires an entity by
          issuing additional shares  of Common Stock to the shareholders of
          the entity, all of the shareholders of the Company (including its
          officers  and  directors  and  principal  shareholders)  will  be
          diluted equally with respect to  the  percentage  of  outstanding
          shares  such  persons  own after consummation of the transaction.
          Further, the officers and  directors  of  the  Company  would not
          consent to a proposed purchase of their stock in the Company,  in
          connection   with  an  acquisition  transaction,  which  proposed
          purchase would not be offered pro rata to all shareholders of the
          Company.  This  is  a policy of the board of directors which will
          not be changed by the board of directors.

               The officers and directors of the Company will negotiate the
          terms and conditions of any acquisition transaction.  Approval by
          the shareholders will  not  be  required  under  Colorado  law to
          consummate any proposed acquisition transaction, and the board of
          directors will not seek to obtain such approval.

               There  are  no  arrangements,  agreements  or understandings
          between  non-management shareholders and management  under  which
          non-management    shareholders   may   directly   or   indirectly
          participate  in or influence  the  management  of  the  Company's
          affairs. However,  non-management

                                         5
<PAGE>
          shareholders  will  continue  to  have  voting  rights  to  elect
          directors  to  the  Company's  board  of  directors  pursuant  to
          Colorado law.

               No  finder's  fees  (whether  in the form of cash or debt or
          equity) will be paid to anyone in connection with the business of
          the  Company.   Further, no finder's fees  or  other  acquisition
          related  compensation   will  be  paid  to  officers,  directors,
          promoters or their affiliates  or associates from the revenues or
          other funds of an acquisition or  merger  candidate,  or  by  the
          issuance of debt or equity of such an entity.

               The  Company  will  not  acquire or merge with a business or
          company in which the Company's  promoters,  management  or  their
          affiliates  or  associates,  directly  or  indirectly,  have  any
          ownership or other type of interest.  This is a policy adopted by
          the board of directors of the Company by resolution.  However, it
          should  be noted that if the Company were to violate this policy,
          any legal  remedy  available  to  the shareholders of the Company
          under  Colorado  corporate or other laws  would  most  likely  be
          prohibitively expensive  and  time consuming for the shareholders
          of the Company to seek to have enforced.

               Because the Company does not  have  cash  funds to acquire a
          business or assets of another company, the Company would effect a
          consummation of such a business or assets by the  issuance  of  a
          large  number  of  shares of Common Stock.  As a result of such a
          transaction, the control  of  the  Company  would be shifted away
          from the current shareholders over to the new  shareholders,  who
          would  then  be  in  position  to  replace current directors with
          persons of their own choosing.

               The officers and directors of the  Company  are  expected to
          devote  from a few hours per week, up to their full time  on  the
          business  of the Company, depending on the level of activities at
          the time.   For  example,  relatively little time may be required
          when acquisition candidates  have  been  identified  but  further
          evaluation   awaits   delivery   of   documents   and  background
          information  on  the candidates.  However, a great deal  of  time
          would be required  to  evaluate  the candidate once documents are
          available,  and  to  negotiate  and  finalize  the  terms  of  an
          acquisition transaction.

               It  is  not anticipated that additional  securities  of  the
          Company will be issued to management or promoters of the Company,
          or to the associates or affiliates of such persons.

               The officers  and directors of the Company presently have no
          interests in any other  blank  check or shell companies.  If such
          persons were to acquire interests  in  such other companies, they
          would be faced with conflicts of interest  in  resolving how they
          would   choose,   for   different   companies,   among  different
          acquisition  or  merger  candidates which became available.   The
          Company presently does not have a policy for dealing with such an
          eventuality, because that  type  of  situation  does  not  appear
          likely  to  develop.   However,  if  such  a conflict of interest
          should be presented, the officers and directors  of  the  Company
          which would be confronted with such a conflict would be asked  by
          directors  and officers which were not so involved, either to not
          vote on approving  or  rejecting conflicting opportunities, or to
          resign their positions as officers and directors.

               The Company anticipates  that  additional  securities of the
          Company  may  be  offered  for  sale  in  a private placement  of
          securities under rule 506 of Regulation D, to raise cash to cover
          future

                                         6
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          general and administrative expenses,  and  the  costs  of
          evaluating   and   negotiating   with   prospective   acquisition
          candidates.   However,  there  is  no  assurance such an offering
          would be successful, and no such private  placement  is presently
          contemplated to be undertaken in the immediate future.

               Officers  and  directors  of  the Company intend to increase
          their  communications  to  persons and  companies  which  may  be
          interested in an acquisition  transaction  with the Company.  The
          communications  will  be  made  personally by letter  or  private
          telecommunications.  No advertising campaign will be initiated by
          the Company.

               In  late  summer  1997 the Company  discussed  with  Lumiere
          Securities,  Inc.,  a  small   NASD  brokerage  firm  in  Denver,
          Colorado,  whether that firm would  be  interested  in  making  a
          market in the  securities  of  the  Company.   Lumiere  expressed
          preliminary   interest   in   the   proposal,  and  submitted  an
          application to the NASD on Form 211 for  permission  to  initiate
          quotation  and trading activities in the Company's securities  in
          the NASD's Electronic  Bulletin  Board  trading  system.  In late
          1997, Lumiere withdrew its application from the NASD, and advised
          the  Company  that  it  was no longer interested in participating
          with the Company in the proposal.

               In the future, the Company  intends  to initiate discussions
          with other brokerage firms regarding market making activities for
          the Company's securities.  To date the Company  has not initiated
          any  such  discussions,  but  the officers and directors  of  the
          Company may begin such discussions with one or more firms in June
          or July 1998.  No consultants will  be  used  in  connection with
          such discussions.

               The  promoters  and  management  of  the  Company have  been
          involved  in  the  following previous blank check offerings:  Mr.
          Wynn was president,  a  director,  and  principal  shareholder of
          Diversified  Management  Acquisitions,  II,  Inc.   ("DMAII"),  a
          Colorado  corporation which completed an initial public  offering
          (as a blind  pool)  of  shares  in  May  1988 for net proceeds of
          approximately $420,000 ($.01 per share).   In November 1988 DMAII
          completed an acquisition of a private marble  quarry company, and
          Mr.  Wynn  resigned as an officer and director.   Thereafter,  in
          1996, DMAII  acquired Carpet Holdings, Inc.  and changed its name
          from  DMAII to  Carpet  Holdings,  Inc.   Mr.  Wynn  has  had  no
          involvement  in  DMAII since 1988, and has owned a nominal amount
          of shares in that corporation since 1996.

               The former officers  and  directors  of  the  Company (Louis
          Porter and James Porter), who resigned in April, 1998,  had  been
          involved   in   one   other   blank   check  offering:  Strategic
          International,   Inc.   ("SII"),  a  blind  pool   which   raised
          approximately $420,000  in  its  initial public offering in 1986.
          Messrs.    Porter   were   the  executive   officers,   principal
          shareholders and directors of  SII; they resigned their positions
          and sold their stock in connection  with  a  change in control of
          SII in 1991.  The subsequent history of SII is  not  known to the
          Company.

               The  shares  of  Common Stock of the Company are defined  as
          "penny stock" under rule  3a51-1  adopted by the Commission under
          the  1934  Act.   In general, "penny stock"  includes  securities
          which (i) are not listed  on the principal stock exchanges or the
          National Association of Securities  Dealers  Automated  Quotation
          System ("NASDAQ"); or (ii) securities which are not so listed and
          which have a bid price in the market of less than $5.00; or (iii)
          securities of an issuer with net tangible assets of

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          less  than $2 million ($5  million  if the  issuer  has  been  in
          continuous operation for less than three years), or which has had
          average revenue of less than $6 million for the last three years.

               As "penny stock,"  the  Company's  securities are subject to
          rule 15g-9 adopted by the Commission under  the  1934  Act.  Rule
          15g-9  imposes additional sales practice requirements on  broker-
          dealers   which  sell  such  securities  to  persons  other  than
          established  customers  and  "accredited  investors"  (generally,
          individuals  with  net  worth  in  excess of $1 million or annual
          incomes  exceeding  $200,000,  or $300,000  together  with  their
          spouses, or individuals who are  the officers or directors of the
          issuer  of  the securities).  For transactions  covered  by  this
          rule,  a  broker-dealer   must   make   a   special   suitability
          determination for the purchaser and have received the purchaser's
          written  consent to the transaction prior to sale.  Consequently,
          the rule may  adversely  affect  the ability of broker-dealers to
          sell the Company's securities, and therefore may adversely affect
          the  ability  of  owners  of the Company's  securities,  whenever
          purchased, to resell any of  the securities of the Company in the
          public market.

               The Company will provide to all of its shareholders complete
          documentation of any acquisition candidate with which the Company
          has signed a definitive acquisition  agreement, including audited
          financial information for such candidate  if  available,  at such
          time  as the Company files a Current Report on Form 8-K with  the
          Commission  regarding the execution of such acquisition agreement
          and the terms and conditions thereof.

               As of the  date of this Form 10-KSB/A, none of the officers,
          directors,  or  promoters   of  the  Company,  or  any  of  their
          affiliates or associates, have  had  any  preliminary  contact or
          discussions  with  and  there  are  no  present plans, proposals,
          arrangements  or understandings with any representatives  of  the
          owners of any business or company regarding the possibility of an
          acquisition or merger transaction.

               The present management of the Company became acquainted with
          the  Company when  it  was  organized  in  1986.   Mr.  Wynn  was
          president  and  a  director  of  the  Company  from 1986 until he
          resigned such positions in 1988.  Mr. Wynn subsequently (in April
          1998)  again  became president and a director in connection  with
          his purchase of  shares  from Louis Porter and James Porter, in a
          transaction to which the Company  was  not a part.  From the time
          he resigned in 1988, until he became president  in  April,  1998,
          Mr.  Wynn  was  not  involved  with the management of the Company
          directly or indirectly, and he did  not  provide any services tot
          he Company during that 10 year period of time.

               There are no agreements or understandings for any officer or
          director to resign at the request of another person.  None of the
          officers or directors of the Company are acting  on  behalf of or
          will act at the direction of any other person.

               The activities of the following persons will be material  to
          the  operations  of the Company: its President and its directors.
          The President and directors of the Company are the only promoters
          of the Company.

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<PAGE>
               Until the end  of fiscal 1998, the Company's office facility
          was provided to the Company  without  cost  by  Shield Technology
          Corporation,  which is a private corporation engaged  in  private
          business consulting  and  management services.  Shield Technology
          Corporation is affiliated with  Louis  Porter  and  James Porter,
          former  officers  and  directors  of  the Company.  The Company's
          current  offices  are  located at 7810 W.   70th  Drive,  Arvada,
          Colorado, in a building  owned  by Karen Bejarano, an officer and
          director of the Company.  The offices  are  provided without cost
          to the Company.  There are no present plans to move the office of
          the Company.

               There  are approximately 225 record holders  of  the  Common
          Stock of the  Company,  as of the date of this Report on Form 10-
          KSB/A.  See Item 5(b), below.

               The securities laws,  rules  and/or  regulations of numerous
          states prohibit or limit both the initial sale  of  securities of
          blank  check  or shell companies to investors in such states,  as
          well as the resale  of such securities by any person or brokerage
          firm to investors in  such states.  The Company has an obligation
          not to violate such laws  with respect to sales of its securities
          effected by the Company through  its officers and directors.  The
          Company does not presently intend to conduct any offering, public
          or private, of its securities.  If  the Company or its affiliates
          were  to  conduct  sales  of the Company's  securities  (for  the
          Company  or  for  their  own accounts)  in  states  wherein  such
          activities were prohibited, the Company and such affiliates could
          be  subjected  to  injunctive   proceedings  initiated  by  state
          securities  administrators  in  state  courts  and  to  fines  or
          penalties for violations of law.   In addition, the purchasers of
          such  securities  could initiate proceedings  for  rescission  of
          their investments.   The  initiation  of any of these proceedings
          would be costly for the Company to defend,  and the imposition of
          fines or penalties and/or the adjudication of civil liability for
          illegal sales of securities would impair the Company's ability to
          continue in business.

               If  a  brokerage  firm  initiates  market making  and  other
          activities  with  respect  to  the  Company's   securities,   the
          compliance  officers  of  such  brokerage firm must supervise the
          brokerage firm personnel to prevent  sales to residents of states
          where such transactions are illegal.

               Numerous  states  (including the following  states)  do  not
          allow resale of securities  of  shell  or  blank check companies;
          certain of the states do not allow resale of  companies which are
          not  listed  on  the principal stock exchanges or  NASDAQ,  other
          states require companies  to  meet  minimum operating revenues or
          net worth tests, and other states prohibit  resales of securities
          of   blank   check   or   shell  companies.   In  any  of   these
          jurisdictions, the result is  the  same  for  a  company  such as
          Hallmark  Properties,  Inc.,  i.e., no trading could commence  in
          such states until an acquisition  is  consummated, and until such
          time, shareholders in the restrictive states  may  not be able to
          resell  their  shares.   Those  states  which  do not allow  such
          resales    include:    Arkansas,    Connecticut,   Massachusetts,
          California,   Delaware,  Idaho,  Illinois,   Indiana,   Kentucky,
          Louisiana,   Michigan,    Minnesota,    Oklahoma,   Pennsylvania,
          Tennessee, Texas and Utah.  The foregoing  list could be expanded
          in the future.

               Because  the Company conducted its original  initial  public
          offering before  rule  419  was  enacted  by  the Commission, and
          before laws and regulations similar to rule 419  were  enacted by
          many states, none of the shareholders of the Company are  subject
          to  any "lock up" letter agreement.  Such lock up agreements  are
          often  entered  into  by blank check companies in connection with
          their

                                          9
<PAGE>
          initial  public  offerings  of  securities,  by  which agreements
          the founders and other  holders of restricted securities of blank
          check companies agreed not  to sell their respective shares until
          a merger or acquisition had been consummated.

               During the fiscal year ended  March  31,  1997,  the Company
          issued a total of 40 million shares of restricted Common Stock to
          2 persons (Louis Porter and James Porter).  The issuances in 1996
          to  Louis  Porter  and  James Porter were made by the Company  in
          reliance upon Section 4(2)  of  the  1933  Act  and  Rule  501 of
          Regulation D, because such persons were officers or directors  of
          the  Company  at  that  time  and  therefore  were  deemed  to be
          "accredited  investors."   No  underwriter  was involved in these
          transactions.

               With respect to possible computer malfunctions  at  the turn
          of the millennium on December 31, 1999, the Company uses personal
          computers  ("PCS")  which  incorporate  software  which  does not
          permit  programming  errors regarding the year 2000.  As part  of
          its future evaluation  of  any acquisition candidate, the Company
          will assess the ability of the computer systems of such candidate
          to transition to year 2000 without  malfunction.   It is possible
          that  a  candidate  would  be  rejected  if  its  systems do  not
          adequately  address  possible  year 2000 malfunction issues,  and
          such  candidate  evidences reluctance  to  revise  its  operating
          systems to avoid such malfunctions.

          Item 2.   Description of Property

               The Registrant's  current  offices  are  located  at 7810 W.
          70th   Drive,  Arvada,  Colorado  80004.   These  facilities  are
          provided free for the Registrant.  See above.

          Item.  3  Legal Proceedings

               The  Company  is not a party to any legal proceedings and no
          such proceedings are known to be contemplated.

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

               None.
                                       PART II

          Item 5.   Market  for   Common  Equity  and  Related  Stockholder
          Matters

          (a)  Market Information.

               The Company's Common  Stock  is  not eligible for listing on
          the NASDAQ system, and trading, if any,  has  been limited to the
          over-the-counter market.  The Common Stock has  been  quoted from
          time  to  time  in  the  "Pink Sheets" maintained by the National
          Quotation Bureau, Inc., however, the Common Stock has not been so
          quoted for the last three fiscal years.


                                          10
<PAGE>
          (b)  Holders.

               (b)(1)  The  approximate  number  of  record  holders of the
          Company's  Common Stock, no par value, as of March 31,  1998  was
          225.  This figure  does  not  reflect an indeterminable number of
          shareholders whose shares are held in "street name."

          (c)  Dividends.

               The Company has not paid a  dividend  with  respect  to  its
          Common  Stock and is not expected to pay a dividend on its Common
          Stock in the foreseeable future.

               The  Company's  ability  to  pay  dividends is restricted by
          provisions  of  the  Colorado  Business  Corporation   Act  which
          provides  that a Colorado corporation may only pay dividends  if,
          after giving  effect  to  the  dividend, the corporation would be
          able to pay its debts as they become  due  in the usual course of
          business, or the corporation's total assets  would  be  less than
          its  total  liabilities plus the amount that would be needed,  if
          the corporation were to be dissolved at the time the dividend, to
          satisfy the preferential  rights upon dissolution of shareholders
          whose preferential rights are  superior  to  those  receiving the
          dividend.

          Item 6.   Management's   Discussion  and  Analysis  or  Plan   of
          Operation

          Results of Operations

          Years Ended March 31, 1996 and 1997.
   
               The Company raised $300,100  in  April 1987 in consideration
          for  the issuance of 15,000,000 shares of  the  Company's  Common
          Stock in a public offering.  The Company was essentially inactive
          from 1990 until the 1996 fiscal year.  The  Company  spent all of
          its public  offering  cash  in  unsuccessful  merger transactions
          prior to fiscal 1997.
    
               In the course of the audit of financial statements for prior
          years, the Company determined that significant reductions  in the
          number  of  outstanding shares of Common Stock, and other changes
          to prior entries  in  the  books and records of the Company, were
          needed.  Included in the changes  were  a  reduction in the total
          number of outstanding shares of Common Stock.  The amount of such
          reduction  was 43,281,637 shares, as a result  of  the  following
          adjustments:

               First,  11,281,637  shares of Common Stock issued in 1992 in
          connection  with  the proposed  merger  transaction  between  the
          Company, and Tierra  Environmental,  Inc.   and  Dichlor Chemical
          Co.,  were  canceled  and  retired  to authorized unissued  share
          capital  of  the Company, because the merger  was  abandoned  and
          never consummated.


                                         11
<PAGE>
               Second,  2,000,000 of the shares resulting out of a 1 for 15
          reverse split of  the  outstanding  shares  of  Common Stock (the
          2,000,000 shares were issued in the name of "DMA  I") in December
          1997  were  canceled  and  retired  to authorized unissued  share
          capital of the Company.  These 2,000,000  shares  had  originally
          been  issued  in connection with the Tierra - Dichlor transaction
          subsequently abandoned,  and the subject shares had been shown in
          the stock transfer books and on the books of the Company as being
          held in "DMA Treasury."

               Third,  30,000,000  shares   of   Common   Stock  issued  in
          connection  with  the  1986  proposed  merger  transaction   with
          Tunnelvision,  Inc.   and  its  division  Viewpoint  Video, which
          shares  were returned to the Company because the transaction  was
          abandoned,  were canceled and retired to the status of authorized
          unissued share capital of the Company.

               Reference  is  made  to  the  financial statements and notes
          thereto included with this Form 10-KSB/A report.

          Liquidity and Capital Resources

               The Company had been without adequate  funds  to conduct any
          actual  business from 1990 through the date of this Report.   The
          Company settled  its  outstanding debt ($24,386.81) with proceeds
          of sale of restricted shares of Common Stock in fiscal 1997.  The
          debt consisted of legal  and  accounting fees, and transfer agent
          fees.  See Item 12.  The Company  presently  has no cash or other
          liquid assets.

          Plan of Operations

               In  August  1996,  the  Company  sold 40,000,000  shares  of
          restricted Common Stock to two individuals  for  $24,386.81 cash,
          which the Company used to pay debts the Company had incurred.  In
          connection  with  the change in control of the Company  resulting
          from the issuance of  such 40,000,000 shares of its Common Stock,
          the Company subsequently changed its name to Hallmark Properties,
          Inc.   No  brokers  were involved  in  this  transaction  and  no
          commission or discounts  were  paid.   The  Company relied on the
          4(2)  exemption  from  registration  to  sell  these   restricted
          securities.

               The Company will continue reviewing opportunities to  merger
          with  or  acquire  other  companies.   The  Company  may  need  a
          substantial  amount  of  capital  from third parties to close any
          merger  or  acquisition transaction,  however  there  can  be  no
          assurance that  the  Company  will  be  able to raise such needed
          funds.

          Item 7.   Financial Statements

               The following financial statements are  filed  as  a part of
          this Form 10-KSB immediately following the signature page:

               Report of Independent Certified Public
                 Accountants..........................................F-1

                                         12
<PAGE>
               Balance Sheet - March 31, 1996 and 1997................F-2

               Statement of Operations - For the Years
                 Ended March 31, 1996 and 1997 and
                 Cumulative Amounts from Inception of
                 the Development Stage (August 11, 1986)
                 through March 31, 1997...............................F-3

               Statement of Stockholders' Equity (Deficit) -
                 For the Period from Inception of the Development
                 Stage (August 11, 1986) through March 31, 1997...... F-4-6

               Statements of Cash Flows - For the Years
                 Ended March 31, 1996 and 1997 and
                 Cumulative Amounts from Inception of
                 the Development State (August 11, 1986)
                 through March 31, 1997...............................F-7

               Notes to Financial Statements - For the
                 Years Ended March 31, 1996 and 1997..................F-8-9


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

               Subsequent to fiscal  year  end  March 31, 1997, the Company
          filed a report on Form 8-K in December  1997 reporting the change
          (as of October 16, 1997) of independent public  accountants.  The
          Company  dismissed  J.   Karean  Henderson ("Henderson")  as  its
          principal  independent  public accountant.   Henderson  had  been
          engaged in 1997 to audit  the  Company's financial statements for
          the two fiscal years which ended  on  March 31, 1997.  During the
          period when Henderson was engaged, there  were  no  disagreements
          with  Henderson  on  any  matter  of  accounting  principles   or
          practices,  financial  statement  disclosure or auditing scope or
          procedure which if not resolved to  the satisfaction of Henderson
          would have caused Henderson to make reference  to any such matter
          in her reports, nor were there any other reportable events.

               Henderson's  reports  on  the  financial statements  of  the
          registrant for the two fiscal years ended  March 31, 1997 did not
          contain an adverse opinion or a disclaimer of  opinion  nor  were
          they  qualified  or  modified  as  to uncertainty, audit scope or
          accounting principles.

               The decision to change the Company's  principal  independent
          public accountants was approved by its Board of directors.

               As  of  December 8, 1997 the Board of Directors appointed  a
          new firm of independent public accountants to audit the financial
          statements of the Company.  The new firm is Tannenbaum & Company,
          P.C., 1873 south  Bellaire,  Suite  908,  Denver, Colorado 80222.
          The new firm has audited

                                        13
<PAGE>
          the financial statements of the Company for the  two fiscal years
          ended  March 31, 1997.  This  Form  10-KSB/A report  includes the
          financial statements and audit reports thereon for such years.

               The Company  has  not  consulted  with Tannenbaum & Company,
          P.C. regarding either the application of accounting principles to
          a specified transaction or the type of audit  opinion  that might
          be rendered.

               A  letter  from  Henderson  addressed to the Securities  and
          Exchange Commission, which letter  concurs  with  the  statements
          made  by the Company concerning Henderson in its Form 8-K  report
          was filed  as  an  exhibit  with  the  Form  8-K  report,  and is
          incorporated into this Form 10-KSB/A by reference.

                                      PART III

          Item 9.   Directors,  Executive  Officers,  Promoters and Control
          Persons:
                    Compliance With Section 16(a) of the Exchange Act

          (a)  Identification of Directors and Executive Officers.

               The  directors  of the Company are elected  to  hold  office
          until the next meeting of shareholders and until their respective
          successors have been elected  and  qualified.   Officers  of  the
          Company  are  elected  by  the Board of Directors and hold office
          until their successors are elected and qualified.

          Name                Age                 Position

          Miles D.  Wynn      44                  Director,  President  and
          Treasurer

          Karen J. Bejarano   51                  Director and Secretary

               Miles  D.   Wynn,   President, Treasurer and a Director, has
          served as the President and as a Director of the Registrant since
          April 9, 1998.  Mr. Wynn has  been  a licensed commercial realtor
          in Denver, Colorado since 1982.

               Karen  J.  Bejarano,  Secretary and  a  Director,  has  been
          Secretary and a Director of the Company since April 9, 1998.  For
          the past 10 years, she has been  employed by a family real estate
          construction company in Arvada, Colorado.

          (b)  Significant Employees.

               The  Company has no significant  employees  at  the  present
          time.

          (c)  Family Relationships.

               Karen J.  Bejarano is a sister of Miles D.  Wynn.


                                        14
<PAGE>
          (d)  Involvement in Certain Legal Proceedings.

               During  the past five years, no director, executive officer,
          promoter or control person of the Company has:

               (1)  Had  any  bankruptcy  petition  filed by or against any
          business of which such person was a general  partner or executive
          officer either at the time of the bankruptcy or  within two years
          prior to that date;

               (2)  Been convicted in a criminal proceeding or been subject
          to  a  pending criminal proceeding (excluding traffic  violations
          and other minor offenses);

               (3)  Been  subject  to  any  order, judgment, or decree, not
          subsequently reversed, suspended or  vacated,  of  any  court  of
          competent  jurisdiction,  permanently  r  temporarily  enjoining,
          barring, suspending or likewise limiting his involvement  in  any
          type of business, securities or banking activities; or

               (4)  Been  found  by a court of competent jurisdiction (in a
          civil action), the Commission  or  the  Commodity Futures Trading
          Commission  to  have violated a federal or  state  securities  or
          commodities law,  where  the  judgment  has  not  been  reversed,
          suspended, or vacated.

          (e)  Compliance with Sections 16(a) of the Exchange Act.

               Not applicable.

          Item 10.  Executive Compensation

          Cash Compensation.

               During  the  past  three  fiscal  years,  no  officer of the
          Company received any cash compensation.  Neither James L. Porter,
          the  Company's former president and chief executive officer,  nor
          Louis  Porter,  the Company's former, vice-president received any
          stock options employee  benefits,  or  other  form  of  direct or
          indirect remuneration from the Company during the 1995, 1996  and
          1997  fiscal  years.   Messrs.  Porter  resigned  as officers and
          directors  on  April  9,  1998.   Mr.  Wynn  is not paid for  his
          services to the Company.  He is currently devoting  such  time as
          is necessary to the affairs of the Company.

          Compensation Under Plans.

               Stock  Options and Bonus Plans.  No stock options or bonuses
          have been granted under any stock option or bonus plan.



                                        15
<PAGE>
          Other Compensation.

               No other compensation was paid or distributed to any officer
          or director of  the Company for services rendered as such, during
          the last three fiscal years.

          Compensation of Directors.

               The Company does not pay its directors for their services in
          that  capacity; however,  officers  and  directors  will  receive
          reimbursement  for  out-of-pocket  expenses  incurred  by them in
          connection  with  the business of the Company, and would be  paid
          therefor when the Company  had any money.  Currently, the Company
          does not pay any directors fees for attendance at board meetings.

          Termination of Employment and Change of Control.

               The Company has no compensation  plan  or  arrangement  with
          respect   to   any  executive  officer  in  connection  with  the
          resignation, retirement or other termination of such individual's
          employment  with  the  Company.   The  Company  has  no  plan  or
          arrangement with  respect  to  any persons which will result in a
          change in control of the Company  or a change in the individual's
          responsibilities following a change in control.

          Item 11.  Security  Ownership of Certain  Beneficial  Owners  and
          Management

          (a)(b)  Security  Ownership  of  Certain  Beneficial  Owners  and
          Management.

               The following table sets forth information as of the date of
          filing of this Report as to the beneficial ownership of shares of
          the Company's Common  Stock, by each person who, to the knowledge
          of the Company at that date, was a beneficial owner of 5% or more
          of the outstanding shares  of Common Stock, by each person who is
          an officer and/or director of the Company and by all officers and
          directors of the Company as  a group.  The table does not include
          information regarding shares of  Common  Stock  held  in names of
          certain  depositories/clearing  agencies  as  nominee for various
          brokers  and  individuals.   No  such  broker  or  individual  is
          believed to hold more than 5% of the Company's Common Stock.



                                        16
<PAGE>
                                              Amount and
                Name and Address               Nature of            Percent
   Title of     of Beneficial                  Beneficial             of
    Class       Owner                          Ownership             Class
   --------     ---------------              -------------           ------
   Common       Karen J.  Bejarano*          -0-                      -0-
   Stock        7810 W.  70th Drive
                Arvada, CO 80004

   Common       Esther Entertainment, Inc.    21,500,000              51%
   Stock        4415 Cahita Court
                Denver, CO 80216

   Common       Miles D.  Wynn*               29,000,000(1)           69%
   Stock        4415 Cahita Court
                Denver, CO 80216

   Common       Robert Chester                6,000,000               14%
   Stock        1507 Macley Court
                Kelowna, BC, Canada V1Y 9L6

   Common       Officers and directors        29,000,000              69%
   Stock        as a group (two persons)

   *Officers and directors.

          (1)  Includes  7,500,000  shares  owned  directly, and 21,500,000
          shares owned by Esther Entertainment, Inc., a private corporation
          controlled by Mr. Wynn.

          (c)  Changes in Control.

               Management is not aware of any arrangements which may result
          in a change of control of the Company.

          Item 12.  Certain Relationships and Related Transactions

          (a)(b)(c) Transactions with Management and Others.

               In fiscal 1997, James L.  Porter and Louis Porter, directors
          and  officers  of  the  Company  who  resigned  in  April,  1998,
          invested  $24,387  cash  in  the  Company, for which the  Company
          issued 20,000,000 restricted shares  of  Common Stock to James L.
          Porter and an additional 20,000,000 restricted  shares  of Common
          Stock to Louis Porter.  The Company used the capital to pay third
          party  accounts payable, legal and accounting bills, and transfer
          agent fees.


                                        17
<PAGE>
          (d)  Transactions with Promoters.

               Not applicable.

          Item 13.  Exhibits and Reports on Form 8-K

               (a)  Exhibits  required  to  be  filed are listed below and,
          except where incorporated by reference,  immediately  follow  the
          Financial Statements.

          Number         Description

          3.1            Articles    of    Incorporation,    as    amended,
                         incorporated  by  reference from the Annual Report
                         on Form 10-KSB for  the  five  fiscal  years ended
                         March 31, 1991.

          3.2            Bylaws, incorporated by reference form the  Annual
                         Report  on  Form  10-KSB for the five fiscal years
                         ended March 31, 1991.

          3.3            Articles  of  Amendment   to   the   Articles   of
                         Incorporation,  incorporated by reference from the
                         Form 8-K dated August  19,  1996  filed August 21,
                         1996.

               (b)  During the last quarter of the period covered  by  this
          report the Company filed no reports on Form 8-K.

          SUPPLEMENTAL  INFORMATION  TO  BE  FURNISHED  WITH  REPORTS FILED
          PURSUANT  TO  SECTION  15(d)  OF  THE EXCHANGE ACT BY REGISTRANTS
          WHICH HAVE NOT REGISTERED SECURITIES  PURSUANT  TO  SECTION 12 OF
          THE EXCHANGE ACT:

               The  Registrant  has  not  sent to its security holders  any
          annual report or proxy material during  the last fiscal year.  If
          such report of proxy material is furnished  to  security  holders
          subsequent  to  the  filing of this Form 10-KSB/A, the Registrant
          shall furnish copies of  such  material to the Commission when it
          is sent to security holders.







                                        18
<PAGE>

                                     SIGNATURES

               In accordance with Section  13  or  15(d)  of the Securities
          Exchange Act of 1934, the Registrant caused this 10-KSB/A (Third
          Amendment) report to be signed on its behalf by the  undersigned,
          thereunto duly authorized.

          Dated: May 26, 1998
                                        HALLMARK PROPERTIES, INC.



                                        By    /s/ Miles D.  Wynn
                                           ---------------------------
                                           Miles D.  Wynn, President


               In accordance with the Securities Exchange Act of 1934, this
          report has been signed below by the following person on behalf of
          the Registrant and in the capacities and on the date indicated.



          Dated: May 26, 1998           By    /s/ Miles D.  Wynn
                                           -----------------------------
                                           Miles D.  Wynn, President,
                                           Principle Executive Officer,
                                           Principle Accounting Officer,
                                           Principle Financial Officer,
                                           and Director


          Dated May 26, 1998            By      /s/ Karen Bejarano
                                           -----------------------------
                                           Karen Bejarano,
                                           Secretary and Director






                                        19
<PAGE>
          January 23, 1998


          The Board of Directors
          Hallmark Properties, Inc.
          2761 East Skelly Drive
          Tulsa, Oklahoma  74105

          We  have  audited the Balance Sheet of Hallmark Properties,  Inc.
          (formerly Tierra Environmental Corporation), (a development stage
          company) as of March 31, 1996 and 1997, and the related Statement
          of Operations,  Stockholders' Equity and Cash Flows for the years
          then ended.  These financial statements are the responsibility of
          the Company's management.   Our  responsibility  is to express an
          opinion on these financial statements based upon our audits.

          We  conducted  our  audits in accordance with generally  accepted
          auditing standards.   Those  standards  require  that we plan and
          perform the audits to obtain 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 audits provide a reasonable basis for our opinion.

          In  our  opinion,  the  financial  statements  referred  to above
          present  fairly, in all material respects, the financial position
          of Hallmark  Properties,  Inc. as of March 31, 1996 and 1997, and
          the results of its operations  and  its  cash flows for the years
          then  ended  in  conformity  with  generally accepted  accounting
          principles.




   
          TANNENBAUM & COMPANY, P.C.
    
          CERTIFIED PUBLIC ACCOUNTANTS










                                         -F1-

<PAGE>
<TABLE>
<CAPTION>
          Hallmark Properties, Inc.
          (A Development Stage Company)
          Balance Sheet
          (In Thousands, Except Per Share Data)
          March 31, 1996 and 1997

                                                        1996         1997
                                                        ----         ----
          ASSETS

           <S>                                        <C>           <C>
           Current assets
            Cash and cash equivalents                  $     -      $    -
            Accounts receivable                              -           -
            Inventory                                        -           -
            Short term notes receivable                      -           -
                                                       -------      ------
              Total current assets                           -           -
                                                       -------      ------
           Other assets
            Real estate
            Other                                            -           -
                                                       -------      ------
              Total other assets                             -           -
                                                       -------      ------
                                                             -           -
                                                       =======      ======
          LIABILITIES  AND  STOCKHOLDER'S  EQUITY

           Current liabilities
            Accounts payable                                24           -
            Notes payable                                    -           -
                                                       -------      ------
              Total current liabilities                     24           -
                                                       -------      ------
           Stockholder's Equity
            Common stock, no par value, 400,000,000
             shares authorized, issued and outstanding
             3,393,333 and 43,393,333 at March 31,
             1996 and 1997 respectively                    272         296

            Deficit accumulated during the
            development stage.                         (   296)     (  296)
                                                       -------      ------
              Total Stockholder's Equity               $(  24)      $    -
                                                       =======      ======
                                                       $     -      $    -
                                                       =======      ======
           See accompanying notes
</TABLE>
                                        - F2 -
<PAGE>
<TABLE>
<CAPTION>
          Hallmark Properties, Inc.
          (A Development Stage Company)
          Statement of Operations
          (In Thousands, except per share data)
          Years Ended March 31, 1996 and 1997
                                                            Cumulative
                                                            amount from
                                                   1996         1997      inception
                                                   ----         ----      ---------
           <S>                                    <C>         <C>          <C>
           Income from operations                 $     -     $     7      $     7

           Cost of sales                                -           -            -
                                                  -------     -------      -------
           Gross profit                                 -           7            7
                                                  -------     -------      -------
           Expenses
          Organizational costs
            SEC (State and Federal)                     -           -            1
          Bank charges                                  -           -            -
          Dues, fees, postage,
            printing and telephone                      -           1            1
          Legal, professional and
            consulting                                  -           2           10
          Merger expense                                -           -          261
          Miscellaneous                                 -           3            4
          Rent expense                                  -           -            6
          Salaries                                      -           -           19
          Taxes                                         -           1            -
          Travel and entertainment                      -           -            1
                                                  -------     -------      -------
          Total expenses                                -           7          303
                                                  -------     -------      -------
           Net income before income taxes               -           -      (   296)
                                                  -------     -------      -------
           Income taxes                                 -           -            -
                                                  -------     -------      -------
           Net income                                   -           -      (   296)

           Retained Earnings
            (Accumulated deficit),
            beginning of the year                 (   296)    (   296)           -
                                                  -------     -------      -------
           (Accumulated deficit),
            end of the year                       $(  296)    $(  296)     $(  296)
                                                  =======     =======      =======
           Per share earnings during
            reporting period                      $     -     $     -      $     -
                                                  -------     -------      -------
           Weighted average number
            of shares                             3,393,333   18,845,378   32,710,844

           See accompanying notes
</TABLE>
                                          - F3 -
<PAGE>
<TABLE>
<CAPTION>
     Hallmark Properties, Inc.
     (A Development Stage Company)
     Statement of Stockholder's Equity
     (In Thousands, Except Per Share Data)
     Years Ended March 31, 1996 and 1997

                                   Common Stock                                          Total Stock
                                    Number of               Accumulated     Stock Sub-     Holders
                                      Shares      Amount      Deficit       scriptions     Equity
                                   ------------  --------   ------------    ----------   -----------
      <C>                           <C>          <C>          <C>           <C>           <C>
      Balance August  11, 1986               -   $     -      $     -       $     -       $    -

      Issuance of stock
      for cash, August 12, 1986
      ($0.0001 per share            33,500,000         3            -             -            3

      Issuance of stock
      for cash, August 27, 1986
      ($0.005 per share              2,200,000        11            -             -           11

      Issuance of stock
      for cash, August 27, 1986
      ($0.005 per share                200,000         1            -             -            1

      Stock subscriptions
      received                                         -            -            20           20

      Loss for period ended
      March 31, 1987                         -         -       (    4)            -        (   4)
                                    ----------   -------      -------       -------       ------
      Balance                                              
      March 31, 1987                35,900,000        15       (    4)           20           31

      Issuance of stock
      for cash, April 1987
     ($.02) per share               15,000,000   $   257      $     -       $  ( 20)      $  237


      See accompanying notes
</TABLE>




                                        - F4 -
<PAGE>
<TABLE>
<CAPTION>
     Hallmark Properties, Inc.
     (A Development Stage Company)
     Statement of Stockholder's Equity
     (In Thousands, Except Per Share Data)
     Years Ended March 31, 1996 and 1997

                                    Common Stock                                        Total Stock
                                     Number of             Accumulated    Stock Sub-      Holders
                                      Shares     Amount      Deficit      scriptions      Equity
                                    ----------   -------   ------------   ----------    -----------
      <C>                           <C>          <C>          <C>           <C>           <C>
      Loss for period ended
      March 31, 1988                         -         -      (  268)             -       (  268)
                                    ----------   -------      -------       -------       ------
      Balance
      March 31, 1988                50,900,000       272      (  272)             -            -

      Loss for through
      period ended
      March 31, 1989                         -         -           -              -            -
                                    ----------   -------      -------       -------       ------
      Balance
      March 31, 1989                50,900,000       272      (  272)             -            -
                                    ----------   -------      -------       -------       ------
      Loss for through
      period ended
      March 31, 1990                         -         -           -              -            -
                                    ----------   -------      -------       -------       ------
      Balance
      March 31, 1990                50,900,000       272      (  272)             -            -
                                    ----------   -------      -------       -------       ------
      Loss for through
      period ended
      March 31, 1991                         -         -           -              -            -
                                    ----------   -------      -------       -------       ------
      Balance
      March 31, 1991                50,900,000       272      (  272)             -            -
                                    ----------   -------      -------       -------       ------
      Loss for through
      period ended
      March 31, 1992                         -         -      (   24)             -       (   24)
                                    ----------   -------      -------       -------       ------
      Balance
      March 31, 1992                50,900,000       272      (  296)             -       (   24)
                                    ----------   -------      -------       -------       ------
      See accompanying notes.
</TABLE>
                                         -F5-
<PAGE>
<TABLE>
<CAPTION>
     Hallmark Properties, Inc.
     (A Development Stage Company)
     Statement of Stockholder's Equity
     (In Thousands, Except Per Share Data)
     Years Ended March 31, 1996 and 1997

                                   Common Stock                                         Total Stock
                                    Number of               Accumulated   Stock Sub-      Holders
                                     Shares        Amount     Deficit     scriptions      Equity
                                   ------------    ------   -----------   ----------    -----------
     <S>                           <C>            <C>         <C>           <C>
     Reverse stock
     split (15:1),
     November 10, 1992
     ($.00 per share)              (47,506,667)        -            -             -            -

     Loss for through
     period ended
     March 31, 1993                          -         -            -             -            -

     Balance
     March 31, 1993                  3,393,333       272       (  296)            -       (   24)
                                    ----------   -------      -------       -------       ------
     Loss for through
     period ended
     March 31, 1994                          -         -            -             -            -

     Balance
     March 31, 1994                  3,393,333       272       (  296)            -       (   24)
                                    ----------   -------      -------       -------       ------
     Loss for through
     period ended
     March 31, 1995                          -         -            -             -            -

     Balance
     March 31, 1995                  3,393,333       272       (  296)            -       (   24)
                                    ----------   -------      -------       -------       ------
     Loss for through
     period ended
     March 31, 1996                          -         -            -             -            -

     Balance
     March 31, 1996                  3,393,333       272       (  296)            -       (   24)
                                    ----------   -------      -------       -------       ------
     Issuance of stock
     for cash, August 19, 1996
     ($.0006) per share             40,000,000       24             -             -           24

     Balance
     March 31, 1997                 43,393,333       296       (  296)            -            -
                                    ----------   -------      -------       -------       ------
     See accompanying notes
</TABLE>
                                         -F6-
<PAGE>
<TABLE>
<CAPTION>
          Hallmark Properties, Inc.
          (A Development Stage Company)
          Statement of Cash Flows
          (In Thousands, except per share data)
          Years Ended March 31, 1996 and 1997

                                                                  Cumulative
                                                                  amount from
                                                           1996       1997    inception
                                                           ----       ----    ---------
          <S>                                            <C>        <C>       <C>
          Cash flows from operating activities

            Net Loss                                     $     -    $     -   $(  272)

            Adjustments to reconcile Net
               Loss to Net Cash used in
              operating activities
          Increase (decrease) in
             accounts payable                                  -     (   24)   (   24)

            Net cash used in operations                        -     (   24)   (  296)
                                                         -------    -------   -------
           Cash used in investing activities                   -          -         -
                                                         -------    -------   -------
           Cash flows from financing activities
            Proceeds from sale of common
             Stock                                             -         24       296
                                                         -------    -------   -------
           Cash balance at beginning of year                   -          -         -
                                                         -------    -------   -------
           Cash balance at end of year                   $     -    $     -   $     -
                                                         =======    =======   =======


           See accompanying notes
</TABLE>








                                          - F7 -

<PAGE>
          Hallmark Properties, Inc.
          Notes to Financial Statements
          March 31, 1997

           1.  Summary of significant accounting policies
               ------------------------------------------
          Organization

               Hallmark  Properties,  Inc.  ("Hallmark"  or  the  "Company"
               formerly  Tierra  Environmental  Corporation)  was organized
               under the laws of the State of Colorado on August  11, 1986,
               for the purpose of evaluating and seeking merger candidates.
               The Company is currently considered to be in the development
               stage  as  more  fully  defined  in the Financial Accounting
               Standards Board Statement No. 7.  The Company has engaged in
               limited  activities,  but  has  not  generated   significant
               revenues to date.  The Company is currently seeking business
               opportunities.

           Accounting methods

               The  Company  records  income  and  expenses  on the accrual
          method.

           Fiscal year

               The Company has selected March 31 as its fiscal year.

           Deferred offering cost

               Costs  associated with any public offering were  charged  to
               proceeds of the offering.

           Loss per share

               All stock  outstanding prior to the public offering had been
               issued at prices substantially less than that which was paid
               for the stock in the public offering (Note 3).  Accordingly,
               for the purpose  of  the  loss per share calculation, shares
               outstanding at the end of the  period  were considered to be
               outstanding during the entire period.

           2.  Income taxes
               ------------
               Since  its  inception,  the  Company  has  incurred   a  net
               operating loss.  Accordingly, no provision has been made for
               income taxes.

               The  Company  has  a  net  operating  loss  of approximately
               $296,000,  of  which  $272,000  expires in 2003 and  $24,000
               expires in 2007.


                                         -F8-
<PAGE>
          Related Party Transactions
          --------------------------
               On  August 19, 1996 the Company entered  into  an  agreement
               with  James Porter and Louis Porter whereby the Porters paid
               $24,817  to the Company and the Company issued 40,000,000 of
               its common  stock  to the Porters (20,000,000 to each).  The
               Company  used the cash  to  settle  outstanding  liabilities
               (approximately $24,000 at March 31, 1996 and $0 at March 31,
               1997).

          3.   Public Offering
               ---------------
               The Company  sold to the public 15,000,000 units at a public
               purchase price of $0.02 per unit.  Each unit consists of one
               share of the Company's  no par value common stock and common
               stock purchase warrant.   The warrants entitle the holder to
               purchase one share of common  stock  in  the  Company  at  a
               purchase  price of $0.10 per share and are exercisable for a
               two-year period  commencing January 6, 1987.  Upon notice to
               the warrantholders, the Company may redeem the warrants at a
               price  of  $0.0001  per   warrant.    At   March  31,  1987,
               subscriptions for 980,050 units had been received.  At April
               28,  1987,  the Company had received subscriptions  for  the
               remaining 14,091,950 units and the stock was issued.



























                                         -F9-