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

                     REPORT ON FORM 10-KSB 

/X/ Annual Report pursuant to Section 13 or 15(d) of the Securities
                      Exchange Act of 1934 

            FOR THE FISCAL YEAR ENDED OCTOBER 31, 1998 

                   COMMISSION FILE NO. 0-15076                   
           -------------------------------------------- 

     / / Transition Report pursuant to Section 13 or 15(d) of The
                 Securities Exchange Act of 1934 

                      VALUE HOLDINGS, INC. 
                      -------------------- 
       (Exact name of registrant as specified in its charter) 

   (State of or other jurisdiction         IRS Employer 
   of incorporation or organization):   Identification No.:
              Florida                     65-0377168 
                                       

                Address of Principal Executive Offices 
           2307 Douglas Road, Ste 400 Miami, Florida 33145 
                          (305) 447-8801 

  Securities registered pursuant to Section 12(b) of the Act: None.

                                                             -----
    Securities registered pursuant to Section 12(g) of the Act: 
               Common Stock, par value $.0001 per share          
              ----------------------------------------- 
                        (Title of Class) 

Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Sections 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.         Yes X No 
                                 ---   ---- 

Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of the Regulation S-B is not contained in this form,
and no disclosure will be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. /X/ 

The issuers revenues for its most recent fiscal year were $149,329.

The aggregate market value of the voting stock held by non-
affiliates of the Registrant, computed by reference to the closing
price of such stock on December 29, 1998 was approximately
$444,030.34. 

As of October 31, 1998, there were 92,806,068 shares of the
Registrant's Common Stock outstanding. 

DOCUMENTS INCORPORATED BY REFERENCE: None. 













































ITEM 1. BUSINESS: 

GENERAL DEVELOPMENT OF BUSINESS 

From 1986, the Company had been in the business of developing and
selling computer software and publishing a real estate newsletter
and Spanish language tabloid newspaper. The Company s computer
software operations were terminated in 1990. The Company s
publications were never profitable and by 1990, the Company s
publishing operations had been significantly curtailed. As of
February 28, 1993, the Company had discontinued all of its
publishing business. On August 30, 1991, the Company, through its
newly-formed subsidiaries, purchased the assets and operations of
Seashells, Inc.(Seashells) and its subsidiaries (the Seashells
Assets ). Seashells was organized as a Florida corporation in June
1986 with a view towards operating a chain of seafood restaurants
in South Florida offering quality seafood products at reasonable
prices in a family style setting. 

In February 1993, the Company s shareholders approved the
re-incorporation of the Company from the State of Delaware to the
State of Florida. A merger to effect the reincorporation was
completed on March 11, 1993. 

In the fall of 1994 the Company retained a financial consultant to
advise it on the management and viability of the Company. As a
result of the consultant s advice, the Company decided to
restructure and change direction by becoming a holding company that
would acquire independent businesses with solid market niches. The
current emphasis of the Company is on its restaurant holdings. 

THE RESTAURANTS 

The first result of the Company s decision to restructure its
operations was to restructure its restaurant operations as
described below. The restaurants are the core of the company s
operations and have been experiencing increasing revenues. 

At October 31, 1998 the Company owned one full-service retail
restaurant which was being managed by Cam Fam, Inc. ( Cam Fam ).
The Company also received licensing fees based on the gross sales
of four other restaurants ( the Restaurants ) operated under a
license by Cam Fam, Inc. and located in Dade and Broward Counties,
Florida. On the four licensed restaurants the Company receives a
license fee equal to 3% of the gross sales. Additionally, a sixth
Cami s Seafood and Pasta Restaurant was opened in May 1998 pursuant
to a license agreement with Oceancam Inc., wherein the Company
receives a license fee equal to 3% of gross fees less an
advertising allowance. 

On the one Company owned restaurant located in Pembroke Pines,
Broward County, Florida, the Company receives a license fee based
on the following scale: on monthly revenues of less than $100,000
a license fee equal to 3% of sales will be paid; monthly revenues
over $100,000 to $150,000 4% of all sales will be paid as a license
fee; monthly revenues over $150,000 to $200,000 5% of all sales
will be paid as a license fee; monthly revenues over $200,000 6%
of all sales will be paid as a license fee. 

The Restaurants feature quality, family style budget seafood and
non-seafood products. The Restaurants operate under the name 
Cami s Seafood and Pasta but are known locally as just Cami s. The
Restaurants have an informal atmosphere and offer a full compliment
of prepared seafood items and a limited number of non-seafood
items. The Restaurants stress high quality food and efficient,
friendly service at affordable family prices. The Restaurants
average single meal ticket price is $6.00 for lunch and
approximately $12.00 for dinner. 

During the fiscal year ended February 28, 1995, the Company opened
an additional restaurant at the Holiday Inn Cocoa Beach resort. Due
to weak sales the Company closed this restaurant in January 1995.
In May, 1995, a claim for breach of lease was filed by the landlord
against the Company. This suit has been settled by the Company for
$15,000 in cash and the issuance of 500,000 shares of the Company's
common stock. 

As a result of the decision to restructure its operations, the
Company is currently seeking to expand its operations through
licensing agreements with recognized restaurant operators. These
licensing agreements would typically allow an existing restaurant
chain or management team to convert and/or develop new restaurants
utilizing the Cami s format in return for a license fee payable to
the Company based on a percentage of sales. As noted above the
first such agreement was entered into by the Company on June 1,
1995 whereby its joint venture partner, Cam Fam (formerly Family
Steak Houses of Miami), licensed the Camis Seafood and Pasta
restaurant concept. Pursuant to the agreement the licensor assumed
operation of the Cami stores located in Pembroke Pines and South
Miami on June 1, 1995. The license agreements have since been
renewed with Cam Fam under the license structure noted above. 

The Company agreed to place a sum from licensing fees payable to
it equal to 1% of monthly sales into an escrow account to be used
for future development materials. Such materials are to be
developed by Family but belong to the Company. The Company agreed
to place a sum equal to 1/2% of monthly sales into an escrow
account to be used for a national advertising fund, such
advertising materials to be developed by the Company in conjunction
with Family and belong to the Company. The agreement further calls
for all future licensed units to pay a flat license fee of 3% of
monthly sales as well as a fee equal to 1/2% of monthly sales to
be designated for the national advertising fund. For these units
the Company agreed to place a sum equal to 1% of monthly sales into
a escrow account to be used for future development materials. The
agreement with Oceancam covering the newest Cami s location
contemplates an advertising allowance equal to 2% of gross monthly
sales during the first year of operations, going down to 1.5% in
the second and subsequent years of the agreement. 

Finally, the Company granted CamFam exclusive licensing rights for
the Cami s concept in Dade and Broward counties. The Company hopes
to use this licensing agreement as a model for its future
expansion. As yet it has not negotiated with nor entered into
similar arrangements with any other party. 

The South Miami, Miami Lakes and Pembroke Pines restaurants are
located in strip shopping centers, while the North Miami, West
Miami and Cutler Ridge operations are in stand alone buildings. A
strip center location may become disadvantageous if a center loses
one or more tenants, such as a major anchor. The resulting loss of
foot traffic could adversely impact the restaurant operated in the
mall; however, the Company believes it has not, to date,
experienced any loss of business in any such instance. The Company
has not conducted nor sponsored any market research but, instead,
has relied and will continue to rely on the judgment of its
managers and consultants in identifying future restaurant sites.
The Company seeks the best location, concentrating on (1) exposure
to passing vehicular traffic, (2) easy access to major traffic
arteries, (3) a population of 100,000 or more in a three-mile
radius, and (4) a location within one-half mile of a national
fast-food outlet such as McDonald's or Burger King. 

The expansion of the Cami Seafood and Pasta restaurant concept is
the center of the Company s plans for increasing revenue and
income. The company is actively seeking other restaurant operators
as partners to expand the number of stores using the licensing
formula detailed above. There cannot be any assurance that the
Company will successfully obtain other restaurant operations or
partners to expand its restaurant operations. 

ACQUISTION OF UPPER CANADA BEVERAGE 

As part of its continuing restructuring efforts, on November 30,
1995, the Company, acting through its majority owned subsidiary,
Value Beverage Corp., a corporation formed under the laws of the
Province of Ontario (the Purchaser ), acquired all of the issued
and outstanding shares of The Trade Group, Inc., a corporation
formed under the laws of the Province of Ontario ( Trade ), which
in turn owned all of the issued and outstanding shares of Upper
Canada Beverage Company, a Florida corporation ( UCBC ). The
consideration paid for the shares of Trade was US$100,000 in cash
and 2,400,000 shares of the Purchaser s Class A Shares valued at
US$1.00 per share. The seller of the Trade shares was Anthony
Pallante who was the President of the Company from May, 1995 to
December, 1996. However, the amount of the consideration was
determined by the provisions of a letter of intent that was entered
into between the Company and Mr. Pallante through arm s length
bargaining prior to the time that Mr. Pallante became the 
Company s President. 


In connection with the closing of the purchase, UCBC changed its
name to Consolidated Beverage Company ( Consolidated ) and now
operates under that name. Consolidated is engaged in the business
of selling and distributing beer and other alcoholic and
non-alcoholic beverages in the United States and Canada. In
September of 1995, the Company entered into a letter of intent with
Connors Brewing Company of St. Catherines, Ontario to distribute
beer brewed by Connors. Consolidated is now distributing the
Connors beer through its distribution system. It has also entered
into a letter of intent with Indian Motorcycle to manufacture and
distribute a full line of beer and clothing accessories in Canada
and the United States using the Indian Motorcycle trademark. 

In connection with the purchase of the Trade shares, the Company
and Mr. Pallante entered into an Exchange Agreement pursuant to
which Mr. Pallante has the right to exchange his Class A Shares of
the Purchaser for shares of the Company s Common Stock beginning
on November 1, 1996 at the rate of one Class A Share for two shares
of Common Stock. The exchange ratio is subject to adjustment in the
event of certain transactions affecting the capital structure of
the Company. 

In addition, the Company, Mr. Pallante, the Purchaser, Trade and
UCBC entered into a Unanimous Shareholders Agreement pursuant to
which the parties agreed to certain matters relating to the
governance of the Purchaser. Pursuant to the terms of this
Agreement, the Company has the right to designate two of the
Purchaser s three directors and Mr. Pallante has the right to
designate the third director. Further, the Agreement provides, in
accordance with the Business Corporations Act of the Province of
Ontario, that the Purchaser may not take certain actions without
the unanimous approval of its shareholders. 

Upon Mr. Pallante s resignation on December 3, 1996 Consolidated
was turned back to Mr. Pallante in exchange for his class A stock
and the release of all other claims against the Company. The
license for Indian Motorcyle was also canceled as Consolidated was
unable to meet its obligations under the license agreement. 

OTHER RESTRUCTURING ACTIVITIES 

FOREST HILL CAPITAL

In December, 1995, the Company purchased 14% of the shares of
Forest Hill Capital Corporation, a Canadian public company, for
Canadian $250,000 (US$185,185). Forest Hill has four operating
divisions: optical retailing, practice management, managed care and
nutritional health. Forest Hill has 70 locations in Hudson's Bay
and Zeller's department stores across Canada. 

In addition, the Company loaned $1,610,426 to Forest Hill during
the fiscal year ended February 29, 1996. Of the total amount
loaned, $840,000 consisted of Company s common stock issued to
creditors of a subsidiary of Forest Hill, and $770,426 in cash 
advanced for working capital purposes. Forest Hill used the cash
to liquidate outstanding debt and pay trade creditors. On August
31, 1996 the Company and Forest Hill agreed to convert the
outstanding debt to the Company into common stock of Forest Hill.
As the result of that transaction the Company now owns
approximately 4,256,000 shares of Forest Hill s common stock which
trades on the Canadian Dealing Network, trading symbol (FHCC). As
of October 31, 1998 Forest Hill has 13,479,093 shares outstanding.

Forest Hill Capital Corporation (Forest Hill) is a holding company
formed to develop and acquire profitable businesses in the health
care industry. Forest Hill has separate operating divisions in
Retail Optical, Practice Management, Managed Care and Nutritional
Health. 

Through its Retail Optical Division the Company holds the
license to operate Bay Optical, retail optical locations in
selected Bay department stores across Canada. The Bay (Hudson s Bay
Company), in business for more than 325 years, is Canada s oldest
department store and operates over 100 locations from coast to
coast. Forest Hill currently licenses 57 Bay Optical locations
across Canada, with the opportunity to open more. 

The Practice Management division manages optical practices on
behalf of vision care of Forest Hill practitioners, which include
15 Zellers Vision Centre stores for B&N Vision Associates, and 45
Bay Optical stores which have recently been sublicensed. 

Forest Hill s Managed Care Division is being readied for launch in
the first half of this year and will provide various supplementary
health services which consumers require, but are no longer covered
by public funds. These health services include dental, vision care,
hearing and podiatry among others. 

Through its Nutritional Health Division, Forest Hill owns 31% of
the shares of Virilite Neutracutical Corp (VNC) [Value Holdings
owns 4.5% of the shares of VNC separately], a company developing
and marketing a line of functional food and beverage products in
the United States and Mexico under the name Terbo. 

These productscontain a variety of proteins and nutrients directed
at the health care market. Some the products will contain the
dietary supplementVirilite, a protein derivative extracted from
fertilized hens eggs which has been demonstrated in scientific
studies to significantly increase in both men and women when
ingested. This dietary supplement does not require FDA premarket
approval before it is sold. The ingredient is covered under the
Dietary Supplement Health Education Act of 1994 (DSHEA) which
sought to eliminate the complicated patchwork of Federal regulation
covering the nutraceutical and health supplement industry. Further,
the FDA has not published final labeling rules or requirements in
the Federal Register. The company does however place the disclaimer
mentioned in the DSHEA on its labels. 

VNC began production of its first product, the apple-cinnamon
granola TERBO Energy Bar with Virilite in August 1997. Advertising
to support the product began in September 1997 with ad placements
in USA Today, Playboy, Esquire and on the Howard Stern Show. The
bars were also featured in the Living Section of the Miami Herald
on October 9, 1997. 

During the test marketing VNC sold approximately 10,000 Terbo bars.
However, the test marketing campaign did not produce significant
enough revenues to continue production and VNC has not produced any
new bars or line extensions while it seeks additional funding. 

The Company has substantially written down the value of its
investment in Forest Hill. See Item 6 and notes to the financial
statements.

GOVERNMENTAL REGULATION 

Restaurants are subject to state and local health and sanitation
laws. In addition, the Company s operations are subject to federal,
state and local regulations with respect to environmental and
safety matters, including regulations promulgated by the U.S.
Environmental Protection Agency ( EPA ) and the State of Florida
Department of Natural Resources ( DNR ) concerning discharge into
the air and water, as well as local zoning and health ordinances
and regulations under the Federal Occupational Safety and Health
Act. Management believes that it is in material compliance with
applicable EPA and DNR regulations. In addition, the Restaurants
are subject to and in material compliance with applicable state and
local laws and regulations that require designated non-smoking
areas. The Restaurants are also subject to the regulatory
jurisdiction of the Alcoholic Beverage Control Board of the State
of Florida with respect to such matters as the hours of service,
handling of alcoholic beverages, service to customers and other
matters. However, the Company believes that the operation of the
Restaurants complies with all applicable regulations and that
compliance does not have a material effect of the business of the
Company. 

In recent years, many states have adopted laws regulating franchise
operations in the franchisor-franchisee relationship, and similar
legislation is pending in additional states. Existing laws and
pending proposals vary from filing and disclosure requirements in
the offer and sale of franchises to the application of statutory
standards regulating established franchise relationships. The most
common provisions of the existing laws and pending proposals
regulating the substance of franchisor-franchisee relationships
establish restrictions on the ability of franchisors to terminate
or to refuse to renew franchise agreements. Other existing laws and
pending proposals contain provisions designed to insure the
fairness of the franchise agreements to franchisees. 

Included in these proposals are limitations or prohibitions and
restrictions pertaining to the assignability of the rights of 
franchisees, to franchisee ownership of interest in other business,
to restrictions on franchisee membership in trade associations and
to franchisor interference with franchisee employment practices. 

In addition to the foregoing state regulations, the Federal Trade
Commission (the FTC ) adopted rules and guidelines which became
effective in October 1979. The FTC s Trade Regulation Rule on
Franchising (the FTC Rule ) requires the Company to make certain
disclosures to prospective franchisees prior to the offer or sale
of franchises by use of a franchise offering circular. In addition
to requiring the disclosure of information necessary for a
franchisee to make an informed decision on whether to enter into
a franchise relationship, the guidelines delineate the
circumstances in which franchisors may make predictions on future
sales, income and profits. Failure to comply with such FTC Rule
constitutes an unfair trade practice under Section 5 of the Federal
Trade Commission Act. 

Recent decisions of several state and federal courts have indicated
increasing judicial sympathy and protection for the rights and
interests of franchisees in litigation with their franchisors. 

The law applicable to franchise operations and relationships is
rapidly developing and the Company is unable to predict the effect
on its operations of additional requirements or restrictions which
may be enacted or promulgated or of court decisions which may be
adverse to the franchise industry generally. 

Each Company-operated and franchised restaurant is subject to
licensing and regulation by a number of governmental authorities,
which may include health, sanitation, safety, fire, building and
other agencies in the state or municipality in which the restaurant
is located. Difficulties in obtaining or failure to obtain the
required licenses or approvals could delay or prevent the
development of a new restaurant in a particular area. More
stringent and varied requirements of local governmental bodies with
respect to zoning, land use and environmental factors could delay
or prevent the development of a new restaurant in a particular
area. 

The Company is also subject to state and federal labor laws that
govern its relationship with its employees, such as minimum wage
requirements, overtime and working conditions and citizenship
requirements. Significant numbers of the Company s food service and
preparation personnel are paid at rates related to the federal
minimum wage. Accordingly, further increases in the minimum wage
would increase the Company's labor costs. 


TRADEMARKS 

The Company utilizes and is dependent upon certain federally -
-registered trademarks, Cami s Seashells, the Seafood Place and
Cami s Seashells, the Seafood Place and Design, which were assigned
to the Company by Seashells in February 1992, and a service mark,
Cami s Express. The Company, in 1994 has also registered the
trademark Cami s Seafood & Pasta. The Company is not aware of any
party who could validly contest such marks. 

COMPETITION 

The food service business is highly competitive and the Company s
Restaurants and food processing operations currently compete and
will compete with numerous other restaurants and food service
operations, many of which possess substantially greater financial
resources and more experienced personnel and management than does
the Company. 

The restaurant and food service business is often affected by
changes in consumer tastes, national, regional or local economic
conditions, demographic trends, and for the restaurants, traffic
patterns and the type number and location of competing restaurants.

In addition, factors such as inflation, increased food, labor and
benefits costs and the availability of experienced management and
hourly employees may adversely affect the food service industry in
general and the Company s operations in particular. 

ITEM 2. PROPERTIES: 

The Company s South Miami, Florida restaurant comprised 11,667
square feet in a strip shopping center. The lease, which was
assigned to the Company, expired on March 31, 1997. The minimum
monthly base rent was approximately $8,891 plus real estate, sales
taxes and common area maintenance fees, the aggregate amount of
which averages approximately $12,531 per month. The lease for the
restaurant and executive office space was not renewed upon its
expiration and Camfam entered into a new lease for the South Miami
restaurant, to which the Company is not a party. 

ITEM 3. LEGAL PROCEEDINGS: 

In June 1994, a lawsuit was filed in the Circuit Court for Dade
County, Florida in which the plaintiff alleges that the Company's
wholly-owned subsidiary corporation, Cami Restaurant Corp., and
certain indirect wholly-owned subsidiary corporations of the
Company breached a certain agreement for and failed to make certain
payments on a promissory note given in connection with the purchase
of certain assets by Cami Restaurant Corp. in 1991. The plaintiff
also alleges that certain present and former officers of the
Company or Cami Restaurant Corp., defrauded the plaintiff, engaged
in conspiracy to defraud the plaintiff and breached certain
fiduciary duties to the plaintiff. The plaintiff sought damages in
excess of $4,600,000, interest and attorneys fees, as well as an
order declaring the purchase of assets void. 

The Company has settled this suit as of June 1997 for the sum of
$75,000 to be paid over 16 months and the issuance of 300,000
shares of stock. The Plaintiffs provided all Defendants with
general releases and the Defendants provided the Plaintiffs with
general releases. 

In May 1995, a claim for breach of lease against Cami Restaurant
Corp. and for breach of guaranty against the Company was filed by
Holiday Inn of Cocoa Beach. This suit has been settled for $15,000
and the issuance of 500,000 shares of common stock. 

The Company is currently a party to certain lawsuits brought in the
ordinary course of its business. None of these lawsuits, in
management's opinion, is material to the Company's business. 

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS: 

No matters were submitted to a vote of the shareholders of the
Company during the fiscal year ended October 31, 1998.

PART II ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS: 

The Company s Common Stock is currently traded in the
over-the-counter market. The Company's Common Stock was traded on
the NASDAQ Small Cap market from November 20, 1992 until August 9,
1996 when the stock of the Company was removed therefrom. Prior to
such time it was traded in the over-the-counter market on the
Electronic Bulletin Board. The following table sets forth the high
and low bid quotations for the Common Stock for the last two fiscal
years. These over-the-counter market quotations reflect prices
between dealers and do not include retail mark-ups, mark-downs or
commissions and may not necessarily represent actual transactions. 

Common Stock                                  High Low          
------------                                  ---- ---
February 29, 1996                            $.28 $.09 
March 1, 1996 - May 31, 1996                 $.09 $.01 
June 1, 1996 - August 31, 1996               $.10 $.01 
September 1, 1996 - November 30, 1996        $.10 $.01 
December 1, 1996 - February 28, 1997         $.10 $.01 
March 1, 1997 - May 31, 1997                 $.04 $.01 
June 1, 1997 - August 31, 1997               $.03 $.001 
September 1, 1997 - October 31, 1997         $.05 $.001 
November 1, 1997 - January 31, 1998          $.02 $.005 
February 1, 1998 - April 30, 1996            $.03 $.005 
May 1, 1998 - July 31, 1998                $.0625 $.001  
August 1, 1998 - October 31, 1998            $.01 $.001 
                            
On December 29, 1998, the closing bid price of the Common Stock as
quoted on the Bulletin Board was $0.005. 

Due to the Company s financial condition and inability to file its
10-K on time for Fiscal 1996 the Company was delisted from the
NASDAQ Small Cap Market. Because of the Company s current financial
condition there can be no guarantee or assurance that the Company
can be relisted on the NASDAQ Small Cap Market. 

As of October 31, 1998, the Common Stock was held by approximately
1,467 stockholders of record. The Company believes that the number
of beneficial owners of the Company s Common Stock is in excess of
1,600 individuals. 

The Company has never declared any cash dividend on its shares of
Common Stock.The Board of Directors may declare dividends on its
Common Stock from time to time, although it does not at present
have any intention to do so. 

The Company is obligated to pay dividends of $0.10 per share on its
outstanding shares of Series A Preferred Stock. Dividends in
arrears for the year ended October 31, 1998 amount to approximately
$50,000. This is in addition to the 1997 and 1996 arrearage of
approximately $150,000. 

As of February 10, 1999 one Market Maker has been cleared by the
NASD to post bid and ask prices for the Company's common shares on
the OTC Bulletin Board.


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS 

On October 31, 1997, the Company changed its fiscal year end from
February 28th to October 31st, the fiscal year end of its
unconsolidated foreign subsidiary. The fiscal period ended October
31, 1997, therefore, contains only eight months of operations,
compared to a full year of operations in fiscal 1998. 

Equity in Income of Unconsolidated Subsidiaries 

The Company had a 32% interest in Forest Hill Capital Corp.
(FHCC) at October 31, 1998 and 36% interest at October 31, 1997,
and accounted for its investment by the equity-method of
accounting. Subsequent to year end FHCC issued an additional
1,764,706 shares, diluting the Comoany's interest to 28%.

FHCC is a company that operates a chain of retail optical stores
throughout Canada.

On October 31, 1998 the Company adjusted investment in FHCC to
market based on recent trading prices of the stock in the Canadian
Stock Exchange (See Other Charges). Additionally, the Company has
established a reserve of $571,000 and a corresponding charge to
income in fiscal 1998 for the balance of the investment in FHCC, 
based on the Company's estimate of recoverability of its investment
(See Other Charges).
 
Equity in earnings of Forest Hill for the fiscal period ended
October 31, 1998, before the write down was $(210,278), compared to
$116,008 for the period ended October 31, 1997. 
Restaurant Operations 

The Company currently owns one restaurant which is managed by
another Company under a licensing agreement that calls for monthly
licensing fees ranging from 3% of sales under $100,000 to 6% of
sales over $200,000, and receives licensing fees on five other
restaurants under a licensing agreement that calls for monthly
licensing fees of 3% of sales. 

Licensing fee revenue for the fiscal periods ended October 31, 1998
and 1997, were $348,434 and $216,321 respectively. The Company is
currently seeking to expand its operations through licensing
agreements with recognized restaurant operators, whereby existing
restaurant chains or management teams would convert and/or develop
new restaurants utilizing the Cami s format in return for a license
fee based on a percentage of sales. For this purpose the Company
has placed a sum equal to 1% of monthly sales into an escrow
account to be used for future development materials, and 1/2% of
monthly sales into an escrow account to be used for a national
advertising fund. Such materials are to be developed by the Company
in conjunction with CamFam but belong to the Registrant. Future
licensed units will pay a fee as a percentage of monthly sales to
contribute to this fund. As of the date of this report the Company
has not negotiated with or entered into similar arrangements with
any other party. 

Interest and Other Income 

Other income for fiscal periods 1998 and 1997 includes $11,173 and
$6,337, respectively of interest income on notes receivable. 

COSTS AND EXPENSES 

Selling, and administrative expenses for the year ended October 31,
1998 were $352,582 compared to $240,466 for the period ended
October 31, 1997. The increase was due primarily to higher
professional and consulting fees incurred in relation to pending
acquisitions. 

Depreciation for the fiscal periods ended October 31, 1998 and 1997
was $52,979 and $42,289 respectively. 

Amortization of intangible assets for fiscal periods ended October
31, 1998 and 1997 were $202,169 and $134,779 respectively. 

Other Income and (Charges)

Interest expense for the fiscal year ended October 31, 1998 was
$109,251 compared to $43,353 for the period ended in 1997. The
increase was due primarily to interest on debt incurred to settle
payroll and sales taxes owed (see extinguishment of debt below).



Subsequent to year end, the Canadian taxing authorities imposed a
garnishment for unpaid taxes against the optical division of FHCC.
Due to the significance of the amount of unpaid taxes in relation
to the carrying value of the investment, FHCC's inability to pay
its employees and take new orders, and other concerns, including
estimated recoverability, managment of the Company has established
an allowance of $571,000 and a corresponding amount has been
charged to operations in fiscal year ended October 31, 1998. 

During the fiscal year ended October 31, 1998 the Company adjusted
the carrying value of its investment in Forest Hill Capital
Corporation to market based on the current trading prices of the
stock in the Canadian Stock Exchange. (See Equity in Unconsolidated
Subsdiaries). The write down resulted in a charge to income of
$1,758,094.

During fiscal period ended October 31, 1997, the Company sold
60,000 shares of FHCC common stock to raise operating funds at a
loss of $23,611, reducing its interest in FHCC from 40% to 36%. 

Extraordinary Items

The Company settled a lawsuit it was involved in of as of October
31, 1997 for $15,000 plus 500,000 shares of the Company s common
stock. The settlements were accrued for and charged to income in
fiscal period ended October 31, 1997. 

During fiscal period ended October 31, 1997 the Company recognized
credits to income of $1,199,647 from extinguishment of debt
relating to the restaurant operations, mainly accrued payroll and
sales taxes. The settlement of the outstanding tax liabilities was
paid using the proceeds of a loan from private sources in the
amount of $475,000 Canadian Dollars (approximately $307,434 US
Dollars). The loan is payable in equal monthly installments of
interest only with a maturity date of June 15, 1999. The interest
rate is 15%. The loan is secured by a General Security Agreement
covering all the assets of the company including the company s
licensing agreements with Cam Fam. Additionally, 3,125,000 shares
of Forest Hill Capital Corporation held by the company were pledged
as security. 














Liquidity and Capital Resources 

The following table presents a summary of the Registrant's cash
flows for the last two fiscal periods: 

                                       12 months     10 months 
                                         ended         ended
                                       October 31,   October 31,
                                         1998           1997
                                       ----------    ----------
 
  Net cash provided (required) 
    by operating activities           $ 329,137        $ 37,851
  Net cash provided (used) by 
    investing activities                (26,800)          6,397 
  Net cash provided by financing 
    activities                          335,475          44,902
                                        -------        -------- 
  Net increase (decrease) in cash     $ (20,462)       $ 13,448
                                        =======        ======== 

The financial resources of the Registrant have been provided by
cash flows from financing activities. 

In fiscal periods ended October 31, 1998 and 1997, the Registrant's
operating activities generated a negative cash flow of $329,137 and
$37,851, respectively. 

Net cash provided (used) by investing activities amounted to 
$(26,800) in fiscal year ended October 31, 1998 and $8,397 in
fiscal period ended October 31, 1997. For fiscal year ended October
31, 1998 net cash used by investing activities was for repayment of
loans to affiliates. For fiscal period ended October 31, 1997, net
cash provided by investing activities was composed primarily of 
proceeds from sale of unconsolidated subsidiary.

Net cash provided by financing activities in fiscal year ended
October 31, 1998 amounted to $335,475, primarily from stockholders'
and related party borrowings. Net cash provided by financing
activities during the fiscal period ended October 31, 1997 was
$44,902, primarily from stockholders' borrowings.

The Company anticipates that it will, from time to time, borrow
funds from its shareholders and other unrelated parties until it
is able to secure alternate sources of financing as to which there
are no assurances. The Company believes that all loans from
stockholders were on terms comparable to those which would have
been obtainable from a third party source, if such financing was
available to the Registrant at the relevant times. 

The Company will be required to secure additional capital for its
operations and for working capital purposes. These funds will have
to be raised either through borrowing, from the sale of securities
and or from stockholders loans. No assurance can be given that the
Registrant will be able to secure bank financing or such other
financing on satisfactory terms or successfully effect the sale of
securities in sufficient amounts to meet its capital requirements. 
        
The Registrant's current objective is to grow through the
acquisition of other profitable businesses. The Company also plans
to continue raising funds from private placements of its common
stock. Ability to Continue as a Going Concern The accompanying
consolidated financial statements have been prepared in accordance
with generally accepted accounting principles, which assume the
continuity of the Company as a going concern. However, as reflected
in the consolidated financial statements, the Company incurred a
loss of $2,896,746 during the fiscal year ended October 31, 1998
and has a working capital deficiency of $1,354,430 as of such date.
These conditions, absent successful effectuation of management s
plans, raises substantial doubt as to the ability of the Registrant
to continue as a going concern. Management s plans with regard to
these matters encompass the following actions: 

  1. Acquisition of new business 

     The Company plans to make strategic acquisitions of other    
     profitable businesses as the opportunities develop. The      
     Company has an agreement in principle to purchase most of the 
     assets of John Ziner Lumber Ltd., a Canadian corporation. The 
     Purchase Price is $20,176,995 (Canadian Dollars)  
         
     Financing for the transaction is being provided by certain
     term loans and lines of credit provided by BNY Financial -
     Canada, a subsidiary of the Bank of New York. This transaction
     has not closed and is subject to change and/or termination by
     the parties. 

  2. Licensing of restaurant operations 

     Effective June 1, 1995, the Company entered into a licensing
     agreement whereby it licensed the operations of its restaurant
     operations to an independent operator. The Company expects
     that its licensing agreement should result in the net cash 
     flows from operating activities over the term of the
     agreement. 
 
  3. Stockholder financing 

     Certain stockholders of the Company have provided financing by

     means of debt financing. The Company expects that these      
     stockholders will continue to provide financing for the      
     Company, by means off additional debt or equity financing. 





ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 

Reference is made to the Financial Statements set forth in F-1
through F-22 hereof which are hereby incorporated herein. 


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
        AND FINANCIAL DISCLOSURE 

The Company s Current Reports on Form 8-K dated May 6, 1997 and May
9, 1997 reporting a change of accountants are incorporated by
reference. The resignation of the company s auditor as reported on
Form 8-K were for reasons other than those relating to the Company.

                        PART III 

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY. 

The following persons are the executive officers and directors as
of October 31, 1998. 

        Name             Age                 Position 
        ----             ---                 -------- 

Alison Rosenberg Cohen    32       Interim President, Vice       
                                   President-Marketing and Director

Eugene Bialys             62       Director 

Ida Ovies                 40       Chief Financial Officer 

Jeffrey Kurtz             50       Director 

All directors hold office until the next annual meeting of
shareholders and the election and qualification of their
successor. 

Officers are elected annually by the Board of Directors
and serve at the discretion of the Board of Directors. 


Alison Rosenberg Cohen was named President of the Company in
September 1991 and had served in such capacity until May 1995 when
she stepped down to become Vice President of Marketing and Anthony
Pallante became president of the Company. On December 3, 1996, upon
Mr. Pallante s resignation as president of the Company, Ms. Cohen
was elected as interim president. She was elected a Director of the
Company in June 1990. From 1988-1991 Ms. Cohen held various
positions with the Company and with its predecessor, Seashells,
Inc. Ms. Cohen graduated from the University of Miami in 1988 with
a B.S. in advertising and marketing. She is the daughter of Leonard
Rosenberg, a former officer and director of, and now a consultant,
to the Company. 
Eugene Bialys was elected a Director of the Company in June 1994.
For more than 35 years Mr. Bialys has been involved in the men's
clothing industry. From 1958 - 1992, Mr. Bialys was the owner and
operator of the Male Shop Limited in Toronto, Ontario. Since 1992,
Mr. Bialys has acted as a consultant to businesses involved in the
men's clothing industry. 

Ida Ovies has been the Chief Financial Officer of the Company since
1994. Ms. Ovies received a BA in Accounting in 1979, from the
University of Puerto Rico in San Juan, Puerto Rico. Ms. Ovies also
received a Master of Science and Taxation in 1983 from the Florida
International University in Miami, Florida. Ms. Ovies is a licensed
CPA and is a member of the American Institute of Certified Public
Accountants and the Florida Institute of Certified Public
Accountants. Ms. Ovies has over twenty years of practice in both
public and private accounting. 

Jeffery Kurtz is the Chairman and President of Forest Hill Capital
Corporation of which the Company owns approximately 4,290,000
shares of common stock. Previously, Mr. Kurtz was the C.E.O. Of the
Bayview Group, Inc., a position he held for approximately 10 years.
Mr. Kurtz started his career with the accounting firm of Lavanthal
and Horvath. 

Dino Genise was elected a Director of the Company in June 1994 and
resigned as a director of the corporation on November 19, 1996 as
reported on Form 8-K incorporated herein by reference. 

ITEM 10. EXECUTIVE COMPENSATION. 

During the fiscal year ended October 31, 1999, none of the
executive officers received compensation in the form of salary
and/or bonus in excess of $100,000. The following table sets forth
certain information with respect to compensation for services paid
by the Company for the past three fiscal years to or on behalf of
the Company's executive officers who were executive officers at
October 31, 1998. In addition, the table below sets forth the
anticipated compensation to be paid to the Company's executive
officers in Fiscal 1999. 


                      Summary Compensation Table
                      -------------------------- 

Name and Principal      Fiscal 
  Position              Year-                        Other Annual
                         End      Salary    Bonus    Compensation
------------------     ------     ------    -----    ------------

Alison Rosenberg      10/31/98  $ 38,675
Cohen, Interim        10/31/97  $ 17,000 
President              2/28/97  $ 39,850 

Ida Ovies, Chief      10/31/98  $ 18,200 
Financial Officer     10/31/97  $ 10,300
                       2/28/97  $ 20,000 

                      Summary Compensation Table
                      -------------------------- 

Name and Principal     Fiscal         Awards            Payments
Position                Year-    Restricted   Options     LTIP 
                        End        Stock      /SARS     Payments
------------------     ------    ----------  --------   ---------

Alison Rosenberg      10/31/98 
Cohen, Vice           10/31/97 
President              2/28/97

Ida Ovies, Chief      10/31/98 
Financial Officer     10/31/97 
                       2/28/97 

--------------------- 

The only employment agreement between the Company and any of its
officers or directors is an Employment Agreement between the
Company and Mr. Pallante dated November 29, 1995, pursuant to which
Mr. Pallante was to be employed for period ending on December 31,
1998. This agreement was terminated upon Mr. Pallante s resignation
in December 1996. 

Stock Option Plan 

On March 30, 1994, the Board of Directors of the Company adopted
its 1994 Employee Stock Option Plan (the "Plan") and directed that
a proposal approving the adoption of the Plan be submitted to a
vote of the shareholders of the Company at its next Annual Meeting.

The Plan was approved by the shareholders at the Annual Meeting
held on July 29, 1994. 

Under the Plan, awards of options to purchase shares of Common
Stock may be granted to eligible employees, including officers and
directors who are employees, of the Company or its subsidiaries
(collectively, employees ). The Board of Directors adopted the Plan
in order to provide a special incentive to officers and other key
employees to remain in the employ of the Company and its
subsidiaries and to maximize their efforts to promote successful
conduct of the Company's business, by increasing their personal
interest in the continued success and progress of the Company. The
Plan is also intended to aid the Company and its subsidiaries in
attracting persons of outstanding ability to become employees. 

The Plan provides for awards to be made of options to purchase a
maximum of 1,000,000 shares of Common Stock. Shares in respect of
which options are granted under the Plan may be either authorized
but unissued shares of Common Stock or issued shares that have been
reacquired by the Company and held in its treasury, or both. Shares
of Common Stock that are subject to options that expire, terminate
or are annulled for any reason without having been exercised, or
are forfeited prior to become vested, will return to the pool of
such shares available for grant under the Plan. 

The Plan is administered by the Stock Option Committee of the Board
of Directors of the Company, or such other committee as the Board
may in the future appoint, which shall be comprised of at least two
persons (the Committee ). Each member of the Committee shall be a
member of the Board of Directors who, during the one year period
prior to service on the Committee, was not, and during such service
is not, granted or awarded equity securities (as defined in Rule
16a-1 under the Securities Exchange Act of 1934, as amended (the
Exchange Act ) pursuant to the Plan or any other plan of the
Company or any of its affiliates, is such grant or award or
participation is such plan would prevent such member from
being a disinterested person with respect to the Plan for purposes
of Rule 16b-3 under the Exchange Act ( Rule 16b-3 ). The members
of the committee are Eugene Bialys and Jeffrey Kurtz. 

The Committee has broad discretion in administering the Plan, and
is authorized, subject only to the express provisions of the Plan,
to determine the employees to whom grants of options may be made,
to determine the terms and conditions (which need not be identical)
of each such grant (including the timing of the grant, the pricing
and the amount of such grant and the terms related to the vesting,
exercisability, forfeiture and termination of such grant), and to
interpret the provisions of the Plan. The determinations of the
Committee are final and binding upon all participants. Options may
be granted under the Plan to such employees of the Company and its
subsidiaries as the Committee may select. In making such
selections, the Committee may take into account the nature of the
services rendered by the respective employees, their present and
potential contributions to the success of the Company and its
subsidiaries, and such other factors as the Committee in its
discretion deems relevant. 

Grants of options may be made to eligible employees whether or not
they participate or are entitled to participate in any other
compensation plan of the Company or any of its subsidiaries or
affiliates and whether or not they hold or have held any options
under the Plan. Other than the 1,000,000 share limit, there is not
maximum number of options which may be made to any one employee.
Directors of the Company are eligible to participate in the Plan
only if they are employees of the Company or one or more of its
subsidiaries. No member of the Committee, while acting as such,
will be eligible to receive any grants of options under the Plan. 

Options granted pursuant to the Plan may be either incentive stock
options ( Incentive Options ) within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the Code ), or
nonqualified stock options ( Nonqualified Options ) which do not
qualify under Section 422. The Committee is authorized to determine
whether an option is an Incentive Option or a Nonqualified Option. 
The exercise price of all options granted under the Plan will be
fixed by the Committee, and may be more than, less than or equal
to the fair market value of the shares of Common Stock on the date
the option is granted, except that, for Incentive Options, the
exercise price must be at least equal to 100% of the fair market
value of the Common Stock on the date the Option is granted, and
for Incentive Options granted to a person who owns more that 10%
of the total combined voting power of all classes of stock of the
Company at the time the option is granted ( a 10% shareholder ),
the exercise price must equal at least 110% of the fair market
value of the Common Stock at the time the option is granted. 

The term of each option will be fixed by the Committee at the time
of grant, but no Incentive Option granted under the Plan may be
exercisable for longer than ten years (five years in the case of
Incentive Options held by 10% stockholders) from the date it is
granted. Options may be exercised in whole or in part at any time
or only after a period of time or in installments, as determined
by the Committee at the time of grant, and the exercisability of
options may be accelerated by the Committee. 

If an otherwise qualifying Incentive Option becomes exercisable for
the first time in any one year for shares having a value in excess
of $100,000 as of the date of the grant, the portion of the
Incentive Option in respect of such excess shares will be treated
as a Nonqualified Option. The Committee will establish the
procedures for the exercise of an option. The method of payment of
the exercise price of any option, and of the amount required to
satisfy applicable Federal, state and local withholding tax
requirements, will be determined by the Committee and may consist
of cash, check, promissory note, the surrender of already owned
shares of Common Stock, the withholding of shares of Common Stock
issuable upon exercise of such option, delivery of a properly
executed exercise notice and irrevocable instructions to a broker
to deliver promptly to the Company the amount of sale or loan
proceeds required to pay the exercise price, any combinations of
the foregoing methods of payment or such other consideration and
method of payment as may be permitted for the issuance of shares
under the Florida Business Corporation Act. The permitted method or
methods of payment of the option exercise price and applicable
withholding taxes, if other than in cash, shall be set forth in the
agreement relating to the grant and may be subject to such
conditions as may be necessary to comply with the requirements of
Rule 16b-3 for relief from the short-swing trading prohibitions of
Section 16(b) of the Exchange Act. 

Shares of Common Stock surrendered in payment in whole or in part
of the option exercise price and applicable withholding taxes, and
shares of Common Stock issuable upon exercise of an option that
are withheld for such purposes, will be valued at their fair market
value on the date of exercise. In general, fair market value is
determined by reference to the last sale price for shares of Common
stock as reported on the National Association of Securities
Dealers, Inc. Automated Quotation System ( NASDAQ ) on the relevant
date. If the holder of an option elects to have shares withheld in
payment of all or part of the amounts payable upon exercise of an
option and such election is made during a ten day window period
following the release of quarterly or annual statements of the
Company's sales and earnings in order to comply with the
requirements of Rule 16b-3, then for purposes of valuing the shares
withheld, the option (other than an Incentive Option ) will be
deemed to have been exercised on the date during such window period
on which the highest last sale price of a share of Common Stock is
reported on NASDAQ, and the fair market value of such shares shall
be deemed to be such highest last reported sale price. The
Committee will have the right in its sole discretion to approve or
disapprove any election by the holder to have shares withheld to
pay the option exercise price or withholding taxes. 

Options granted under the Plan will not be transferable other than
by the laws of descent and distribution or pursuant to a qualified
domestic relations order and, except as otherwise required pursuant
to a qualified domestic relations order, may be exercised during
the lifetime of the holder of the option only by such holder (or
his or her court appointed legal representative). 

Under the terms of the Plan, if the employment of the holder of an
option terminates by reason of death or total disability, then,
unless the agreement relating to the grant provides otherwise, all
outstanding options will become immediately exercisable in full in
respect of the aggregate number of shares covered thereby. Under
the terms of the Plan, if the employment of the holder of an option
is terminated prior to the complete exercise of any option, then
such option will thereafter be exercisable. If the holder's
employment terminates by reason of death or total disability, then
any option outstanding on the date of such termination will remain
exercisable for a period of at least one year after such
termination (but not later than the scheduled expiration of such
option), and if the holder's employment is terminated for cause (as
defined), then any option outstanding on the date of termination
will immediately terminate.

Unless otherwise provided by the Committee in the agreement
relating to a grant of options, or unless approved by the Board
and, if required by law, by the shareholders, each option will vest
and become exercisable in full upon the occurrence of any
transaction which would be required to be reported in any filing
by the Company with the Securities and Exchange Commission. 

Such a transaction would include without limitation the following:
(a) the acquisition by any person or entity (other than the
Company, any subsidiary of the Company or any employee benefit plan
of the Company or any subsidiary) of securities representing 20%
or more of the combined voting power of the Company s outstanding
securities; (b) during any period of two consecutive years, the
individuals who at the beginning of such period constitute the
Board of Directors of the Company cease to constitute at least a
majority of the Board of Directors, unless the election of each
director was not a director at the beginning of such period was
approved in advance by the directors representing at least
two-thirds of the directors then in office who were directors at
the beginning of such period; (c) the Company s agreeing to merge
or consolidate with or into another corporation or other entity,
other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior
thereto continuing to represent not less than 80% of the combined
voting power of the voting securities of the Company or surviving
corporation or entity outstanding immediately after such merger or
consolidation; (d) the Company's agreeing to sell, lease, exchange
or otherwise dispose of all or substantially all of its assets; (e)
the adoption of any plan to liquidate or dissolve the Company.

Unless otherwise provided by the Committee in the agreement
relating to a grant of options, the Committee has the discretion
to determine that any or all outstanding stock option granted
pursuant to the Plan will not vest or become exercisable on an
accelerated basis in connection with any change in control of the
Company which has been approved by the Board of Directors, if
action that, in the opinion of the Committee, is equitable and
appropriate is taken by the Board of Directors or by the surviving
or acquiring corporation or entity, as the case may be, to assume
such grant or substitute a new grant or other consideration
therefor, and in order to make such assumed or new grant, as nearly
as may be practicable, equivalent to the old grant, taking into
account the kind and amount of securities, cash or other assets
into or for which the shares of Common Stock may be converted or
exchanged in connection with the approved change in control of the
Company. 

In the event of a stock split, stock dividend or distribution,
reclassification, recapitalization or other corporate event that
affects the Common Stock (including mergers or consolidations other
than those which constitute an Approved Change in Control of the
Company), the Plan provides for the Committee to make such
adjustments as it deems equitable and appropriate to any or all of
(i) the number and kind of shares subject to outstanding options,
(ii) the exercise price of outstanding options and (iii) the number
and kind of shares for which options may thereafter be granted
under the Plan. 

The Committee may require in the agreement relating to a grant of
an option that, if the holder acquires any shares of Common Stock
through the exercise of options, then prior to selling or otherwise
transferring any such shares to a third party, such holder must
offer to sell such shares to the Company, at their fair market
value, pursuant to a right of first refusal. 

The obligation of the Company with respect to grants of options
under the Plan are subject to all applicable laws. No options may
be granted under the Plan on or after the tenth anniversary of its
effective date. The Board of Directors or the Committee may
terminate or amend the Plan at any time; provided, however, that
any such amendment shall comply with all applicable laws, all
applicable stock exchange of NASDAQ listing requirements, and any
requirements for exemption (to the extent necessary) under Rule
16b-3. Without further shareholder approval, no amendment to the
Plan shall increase the number of shares of Common stock subject
to the Plan (except as authorized by the adjustment provisions
described above), change the class of persons eligible to receive
grants of options under the Plan or otherwise materially increase
the benefits accruing to participants under the Plan. Termination
or amendment of the Plan may not adversely affect the rights of any
holder of options without his or her consent. Subject to the
specific terms of the Plan, the Committee may accelerate the
vesting of any option or waive any condition or restriction
pertaining to an option at any time.

GRANT OF OPTIONS 

As of October 31, 1997, the following options have been granted
pursuant to the provisions of the Plan. None of such options have
been exercised.

               Incentive    Non-qualified    Date of    Exercise
  Name          Options       Options         Grant      Price 
------------   ---------    -------------    -------    --------

Alison Rosenberg 
 Cohen             -0-          200,000      2/23/95      $ .25

John Cami          -0-          100,000      2/23/95      $ .25

Richard Cami       -0-          100,000      2/23/95      $ .25

Frances Bonilla    -0-           50,000      2/23/95      $ .25 

Ida Ovies          -0-           50,000      2/23/95      $ .25

Brenda Sepulveda   -0-           50,000      2/23/95      $ .25

Holly Leinwand     -0-           50,000      2/23/95      $ .25



ITEM 11. SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth the number of shares of the Company
s Common Stock beneficially owned as of October 31, 1998 by (i) the
owners of more than five percent (5%) of the Company s Common
Stock, (ii) the number of shares of Common Stock owned by each
director and officer, and (iii) the number of shares of Common
Stock owned by all officers and directors as a group: 




Name and Address of       Number of Shares of       Percentage of
Beneficial Owner (1)         Common Stock           Common Stock
-------------------       -------------------       -------------

Alison Rosenberg Cohen (2)        500,000                0.90% 

Eugene Bialys (3)                  83,000                0.67%

Francis Bonilla (4)                50,000                0.01% 

Ida Ovies (5)                      50,000                0.01% 

All Executive Officers and 
  Directors as                    683,000                1.80% 
   a Group 
  (4 persons) (6) 

(1) The address for all officers and directors of the Company is
c/o Value Holdings, Inc., 2307 Douglas Road, Ste 400, Miami,
Florida 33145. 

(2) Includes 110,000 shares of Common Stock beneficially owned by
Alison Rosenberg Cohen and 390,000 options to purchase shares of
Common Stock which are immediately exercisable. 

(3) Includes 83,000 shares of Common Stock beneficially owned by
Eugene Bialys. 

(4) Represents 50,000 options to purchase shares of Common Stock
which are immediately exercisable. 

(5) Represents 50,000 options to purchase shares of Common Stock
which are immediately exercisable.

(6) Includes 193,000 shares of Common Stock and 490,000 options to
purchase shares of Common Stock immediately exercisable. 



ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. 

During fiscal 1995, Seashells, a shareholder of the Company,
returned to the Company 615,036 shares of Common Stock that it had
previously owned. Seashells was indebted to the Company s
subsidiary (Cami Restaurant) in an amount equal to $376,954 and
such shares were returned in consideration of forgiveness of such
debt. The stock was reported by the Company at its fair value equal
to $307,518 ($.50 per share) and such shares were retired. There
was a loss of $69,436 incurred on this transaction which was
charged to expense in Fiscal 1995. 

During fiscal 1995, 867,000 shares of Common Stock were issued in
connection with conversions of certain loans owed by the Company.
One of such loans was in the amount of $49,000 made by Konnazu
Investment Corp. ( Konnazu ), a shareholder of the Company. In
connection with the conversion of such loan, the Company issued
Konnazu 346,800 shares of Common Stock. An additional $73,500 loan
made by Tammuz Holding Inc. ( Tammuz ) to the Company was converted
into 520,200 shares of Common Stock. Both of such loan conversions
were made on September 29, 1994. 

On February 23, 1995, the Company issued 300,000 options under the
Plan as follows: Alison Rosenberg Cohen (Vice President) 200,000;
Francis Bonilla (Secretary) 50,000; Ida Ovies (Chief Financial
Officer) 50,000. All of such options are exercisable at $.25 per
share. In addition, on February 23, 1995, the Company issued
250,000 options to purchase shares of Common Stock to each of Dino
Genise and Eugene Bialys, Directors of the Company. Such options
are exercisable at $.25 per share. 

The Company entered into a Preferred Stock Purchase Agreement dated
as of December 30, 1993 with Holograph Investment Inc, (Holograph)
an unaffiliated party. Pursuant to the Preferred Stock Purchase
Agreement, which was subject to certain amendments to the Company's
Articles of Incorporation to authorize the issuance of shares of
Preferred Stock, the Company agreed to issue and sell to Holograph,
and Holograph agreed to purchase from the Company, 750,000 shares
of newly created series of Preferred Stock, for a purchase price
of $750,000. 

On January 15, 1996, the Company entered into a Consulting
Agreement with Leonard Rosenberg, the father of Alison Rosenberg
Cohen, Vice President of the Company. Under the terms of the
Consulting Agreement, Mr. Rosenberg is to provide advice to the
Company with respect to management, marketing, strategic planning,
corporate organization and structure and financial matters in
connection with the operations of the businesses in which the
Company is engaged. In return, the Company issued to Mr. Rosenberg
1,500,000 shares of the Company s Common Stock and registered these
shares for sale under the Securities Act of 1933. 

A proposal to amend the Company s Articles of Incorporation was
approved by the shareholders at the 1994 Annual Meeting of
Shareholders. As a result, the Board of Directors created a series
of Preferred Stock, consisting of 750,000 shares, known as Series
A Preferred Stock and issued all of such shares of Series A
Preferred Stock to Holograph. The Series A Preferred Stock does not
have any voting rights, except as may be otherwise required by law.
A dividend of $.025 per share will be paid on the Series A
Preferred Stock on a quarterly basis. Each share of Series A
Preferred Stock has a preference on liquidation of the Company of
$.25 per share. 

Commencing one year after the date of issuance of the Series A
Preferred Stock, the Company may, at its option, call at any time
and from time to time for redemption of any or all of the
outstanding shares of Series A Preferred Stock at a redemption
price of $1.00 per share plus any accrued but unpaid dividends
thereon. Commencing one year after the date of issuance of the
Series A Preferred Stock, each and every outstanding share of
Series A Preferred Stock may, at the option of the holder thereof,
be converted into two and two-thirds shares of Common Stock. 

The entire $750,000 transferred by Holograph to the Company was
utilized to purchase a certificate of deposit from County National
Bank of Florida. The certificate of deposit was pledged to such
bank to secure a line of credit made by the bank to the Company's
wholly-owned subsidiary, Cami Restaurant Corp. As a result of such
pledge, certain personal guaranties and certain collateral pledged
by certain shareholders of the Company to secure such loan were
released by the bank. 

ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K. 

(a) 1. Financial Statements. 

    (i) Reports of Independent Certified Public Accountants; 
   (ii) Consolidated Balance Sheets as of October 31, 1998 
  (iii) Consolidated Statements of Operations for the eight months
        and year ended October 31, 1997, February 28, 1997; 
   (iv) Consolidated Statement of Stockholders' Equity for the   
     eight months and year ended October 31, 1997, February 28,  
      1997; 
    (v) Consolidated Statements of Cash Flows for the eight months
        and year ended October 31, 1997, February 28, 1997; 
   (vi) Notes to Consolidated Financial Statements. 

    2. Financial Statement Schedules. 

       None. 
    
   (b) Reports on Form 8-K 

       Current Reports on Form 8-K dated December 3, 1996 and May
       6, 1997, May 9, 1997, September 18, 1997, October 28, 1997

   (c) Exhibits Required by Item 601 of Regulation S-K. 

       2 Agreement and Plan of Merger (Incorporated by reference
         to the Company s Proxy Statement dated January 18, 1993,
         filed with the Securities and Exchange Commission ( the
         Commission ) on January 18, 1993 

     2.1 Articles of Merger (Incorporated by reference to the
         Company s Form 8-K dated March 19, 1993, filed with the
         Commission on March 22, 1993). 

       3 Articles of Incorporation, as amended (Incorporated by
         reference to the Company's Form 8-K dated March 19, 1993,
         filed with the Commission on March 22, 1993). 

     

     3.1 Bylaws of the Company, as amended (Incorporated by      
         reference to the Company s Form 10-K for the fiscal year
         ended February 28, 1993) (the 1993 Form 10-K ). 

       4 Form of Common Stock Certificate (Incorporated by
         reference to Exhibit 4 to the Company s Registration
         Statement on Form S-1 (No. 33-61020) filed with the
         Commission on April 14, 1993 ( Form S-1 ). 

     4.1 Form of Common Stock Purchase Warrant (Incorporated by
         reference to the 1993 Form 10-K). 

     4.2 Common Stock Purchase Warrant to Gary D. Lipson dated
         February 23, 1993 (Incorporated by reference to the
         Company s Registration Statement on Form S-8 as filed with
         the Commission on March 10, 1993). 

     4.3 Warrant dated February 8, 1994 to Gary Lipson
         (Incorporated by reference to the Company s Statement on
         Form S-8, Registration No. 33-77400). 

     4.4 Warrant dated February 8, 1994 to Alison Rosenberg Cohen
         (Incorporated by reference to the Company s Statement on
         Form S-8, Registration No. 33-77400). 

      10 Lease for the South Miami, Florida restaurant
         (Incorporated by reference to the 1993 Form 10-K). 

    10.1 Lease for the West Miami, Florida restaurant (Incorporated
         by reference to the 1993 Form 10-K). 

    10.2 Lease for the Pembroke Pines, Florida restaurant
         (Incorporated by reference to the 1993 Form 10-K). 

    10.3 Lease for the Commissary (Incorporated by reference to the
         1993 Form 10-K). 

    10.4 Promissory Note dated August 30, 1991, payable to A.H. and
         R. Consultants, Inc. in the amount of $294,000 (purchase
         of Seashells assets) (Incorporated by reference to the
         Company s Form 8-K dated September 13, 1991). 

    10.5 Agreement for Purchase and Sale of Assets with Seashells,
         Inc. Seashells I, Inc., Seashells II, Inc. Seashells IV,
         Inc. dated August 30, 1991 Incorporated by reference to
         the Company's Form 8-K dated September 13, 1991). 

    10.6 Stock Option Plan dated August 13, 1986 (Incorporated by
         reference to the Company s Registration Statement on Form
         S-1, as amended, as filed with the Commission on March 13,
         1989). 

    10.7 Consulting Agreement between the Company and Leonard
         Rosenberg dated July 1, 1992 (Incorporated by reference
         to the Company s Form 8 as filed with the Commission on
         July 18, 1992 ( Form 8 ). 

    10.8 Employment Agreement of Mr. Leonard Rosenberg
         (Incorporated by reference to the Company s Form 10-Q for
         the quarterly period ended November 30, 1992). 

    10.9 Irrevocable Proxy for Seashells, Inc. In favor of the
         Directors of the Company dated August 30, 1991
         (Incorporated by reference to Exhibit 10.9 in Form S-1).

   10.10 Renewal Promissory Note in the Aggregate Amount of
         $900,000 with County National Bank (Incorporated by
         reference to Exhibit 10.10 in Form S-1). 

   10.11 Agreement between Cami Restaurant Corp., the Company,
         Renee Rosenberg, Leonard Rosenberg and Anne Lebow
         regarding Pledge of Security in Connection with County
         National Bank Renewal of Loan (Incorporated by reference
         to the Exhibit 10.11 in Form S-1). 

   10.12 Letter of Intent between the Company and Bi Allas
         Investment Corp. ( Bi Allas ) dated November 30, 1992
         (Incorporated by reference to the 1993 Form 10-K). 

   10.13 Letter Agreement dated February 26, 1993, extending Letter
         of Intent between the Company and Bi Allas (Incorporated
         by reference to the 1993 Form 10-K). 

   10.14 Conversion Agreement dated as of July 1, 1992, between the
         Company and Genesis Funding, Inc. ( Genesis )
         (Incorporated by reference to Form 8). 

   10.15 Promissory Note dated August 30, 1991, payable to Genesis
         in the amount of $181,337.50 (Incorporated by reference
         to the Form 8). 
   10.16 Conversion Agreement dated as of July 1, 1992, between the
         Company and Elar Financial Services, Inc. ( Elar )
         (Incorporated by reference to the Form 8). 

   10.17 Promissory Note date August 30, 1991, payable to Elar in
         the amount of $57,794.38 (Incorporated by reference to the
         Form 8). 

   10.18 Conversion Agreement dated as of July 1, 1992, between the
         Company and A.H. and R. Consultants, Inc. (Incorporated
         by reference to the Form 8). 

   10.19 Security Agreements dated September 12, 1991, between Cami
         I, Inc., Cami II, Inc., Cami IV, Inc., Cami Restaurant  
         Corp. and County National Bank of South Florida, and    
         related documentation (Hypothecation Security Agreements, 
         Collateral Assignments of Lease) (Incorporated by       
         reference to the 1993 Form 10-K). 10.20 Renewal Promissory

         Note dated September 16, 1992, payable to Renee Rosenberg 
         in the amount of $7,000 (Incorporated by reference to the 
         1993 Form 10-K). 

   10.21 Renewal Promissory Note dated September 11, 1992, payable
         to Renee Rosenberg in the amount of $5,000 Incorporated
         by reference to the 1993 Form 10-K). 

   10.22 Renewal Promissory Note dated September 16, 1992, payable
         to Globex Equity Corp. In the amount of $12,500         
         (Incorporated by reference to the 1993 Form 10-K). 

   10.23 Renewal Promissory Note dated July 29, 1992, payable to
         Anne Lebow in the amount of $150,000 (Incorporated by   
         reference to the 1993 Form 10-K). 

   10.24 Security Agreement between the Company and Anne Lebow
         (Incorporated by reference to the 1993 Form 10-K). 10.25
         Renewal Promissory Note dated September 11, 1992, payable
         to Renee Rosenberg in the amount of $2,000 (Incorporated
         by reference to the 1993 Form 10-K). 

   10.26 Renewal Promissory Note dated September 16, 1992, payable
         to Genesis in the amount of $3,500 (Incorporated by
         reference to the 1993 Form 10-K). 

   10.27 Renewal Promissory Note dated September 16, 1992, payable
         to Globex Equity Corp. in the amount of $12,500         
         (Incorporated by reference to the 1993 Form 10-K). 

   10.28 Renewal Promissory Note dated July 29, 1992, payable
         to Anne Lebow in the amount of $150,000 (Incorporated by
         reference to the 1993 Form 10-K). 

   10.29 Promissory Note dated January 3, 1989, payable to Naftali
         Reiter, Enrique Wolf and Hugo Reiter in the amount of   
         $34,005 (Incorporated by reference to the 1993 Form 10-K).

   10.30 Promissory Note dated February 3, 1989, payable to
         Naftali Reiter, Enrique Wolf and Hugo Reiter in the amount
         of $91,885 (Incorporated by reference to the 1993 Form  
         10-K). 

   10.31 Renewal Warehouse Lease for the Commissary (Incorporated
         by reference to Form S-1). 

   10.32 Renewal Promissory Note dated July 23, 1993, with County
         National Bank (Incorporated by reference to Form S-1). 
   10.33 Guarantee dated July 23, 1993, by Linium Technology, Inc.
         for Cami Restaurant Corp. (Incorporated by reference to
         1993 Form S-1). 
   10.34 Restaurant Lease Agreement dated as of February 21, 1994
         by and between Bass Cocoa Beach, Inc. and Cami Restaurant
         Corp. (Incorporated by reference to the 1994 Form 10-K).

   10.35 Preferred Stock Purchase Agreement dated as of December
         30, 1993 by and between Linium Technology, Inc. and 
         Holograph Investments, Inc. (Incorporated by reference to
         the 1994 Form 10-K). 

   10.36 Share Purchase Agreement dated December 31, 1994 among
         Cyril Levenstein, Marilyn Levenstein, Steven Levenstein,
         Karen Sokoloff, Richard Levenstein, the Levenstein Family
         Trust (collectively, the Vendors) and the Company and
         Readyfoods Acquisition Corp., an Ontario corporation (RAC)
         (Incorporated by reference to Form 8-K dated February 24,
         1995). 

   10.37 First Amendment to Share Purchase Agreement dated December
         31, 1995 among the Vendors, Company and RAC (Incorporated
         by reference to Form 8-K dated February 24, 1995). 

   10.38 Interim Unanimous Shareholders Agreement dated February
         24, 1995 among Company, the Vendors, RAC and certain other
         parties Incorporated by reference to Form 8-K dated
         February 24, 1995). 

   10.39 Share Purchase Agreement dated February 24, 1995 among the
         Vendors, the Company, RAC and certain other parties
         (Incorporated by reference to Form 8-K dated February
         24, 1995). 

   10.40 Escrow Agreement dated February 24, 1995 among the
         Company, RAC, the Vendors and Minden, Gross, Grafstein &
         Greenstein (Incorporated by reference to Form 8-K dated
         February 24, 1995).

   10.41 Exchange Agreement dated February 24, 1995 among the
         Company, Cyril Levenstein, Marilyn Levenstein and the   
         Levenstein Family Trust (Incorporated by reference to Form
         8-K dated April 6, 1995).

   10.42 Share Purchase Agreement dated March 13, 1995 among Arnold
         Unger, Renee Unger and the Unger Family Trust
         (collectively, the Vendors ) and Excelle Acquisition
         Corp., an Ontario corporation ( EAC ) and the Company
         (Incorporated by reference to Form 8-K dated April 6,
         1995). 

   10.43 Agreement Amending Share Purchase Agreement dated April
         6, 1995 among the Vendors, EAC and the Company
         (Incorporated by reference to Form 8-K dated April 6,
         1995). 

   10.44 Unanimous Shareholders Agreement dated April 6, 1995 among
         the Company, the Vendors, EAC and certain other parties
         (Incorporated by reference to Form 8-K dated April 6,
         1995). 

   10.45 Exchange Agreement dated April 6, 1995 among the Company
         and the Vendors (Incorporated by reference to Form 8-K
         dated April 6, 1995). 

   10.46 License Agreement dated June 1, 1995 by and between Cami
         Restaurant Corp. and Family Steak Houses of Miami, Inc.
         (Incorporated by reference to Annual Report on Form 10-K
         for the fiscal year ended February 28, 1995). 

   10.47 Share Purchase Agreement dated October 30, 1995 between
         Value Holdings, Inc. and Cyril Levenstein, Inc. Trust
         (incorporated by reference to Form 8-K dated November 8,
         1995). 

   10.48 Termination Agreement dated October 30, 1995 among
         Value Holdings, Inc.; Cyril Levenstein; Marilyn
         Levenstein; The Levenstein Family Trust; Stephen
         Levenstein; Richard Levenstein and Karen Sokoloff;
         Readyfoods Acquisition Corp; 41 Paquin Drive, Inc.;
         and ReadyFoods Limited (incorporated by reference to Form
         8-K dated November 8, 1995). 

   10.49 Share Purchase Agreement dated October 27, 1995 between
         Anthony Pallante, Value Beverage Corp. and Value Holdings,
         Inc. (incorporated by reference to Form 8-K dated December
         28, 1995). 

   10.50 Exchange Agreement dated October 31, 1995 between Value
         Holdings, Inc. and Anthony Pallante (incorporated by
         reference to Form 8-K dated December 28, 1995). 

   10.51 Unanimous Shareholders Agreement dated November 30, 1995
         by and among Value Holdings, Inc., Anthony Pallante, Value
         Beverage Corp., The Trade Group, Inc. and Upper Canada
         Beverage Company (incorporated by reference to Form 8-K
         dated December 28, 1995). 

   10.52 Consulting Agreement between Value Holdings, Inc. and
         Leonard Rosenberg dated January 15, 1996 (incorporated by
         reference to Form S-8 Registration Statement No
         333-00945). 

      22 Subsidiaries of the Company (Incorporated by reference as
         Exhibit 22 to Form S-1). 

      27 Financial Data Schedule 





                           SIGNATURES 

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

Dated: Coral Gables, Florida 
October 31, 1998 

                                   VALUE HOLDINGS, INC. 

February 9, 1999                   By: /s/ Alison Rosenberg Cohen
                                           Alison Rosenberg Cohen, 
                                           Interim President-
                                           Vice President

February 9, 1999                   By: /s/ Ida Ovies 
                                           Ida Ovies,            
                                           Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act
of 1934, this Report has been signed by the persons above in the
capacities and on the dates indicated. 

 SIGNATURE                          DATE               TITLE 
-----------                         ----               ----- 

/s/ Alison Rosenberg Cohen   February 9, 1999    Interim President
    Alison Rosenberg Cohen                       -Vice President &
                                                 Director

/s/ Eugene Bialys              Februaru 9, 1999      Director
    Eugene Bialys 

/s/ Ida Ovies                  February 9, 1999    Chief Financial
    Ida Ovies                                         Officer 























                      VALUE HOLDINGS, INC.

                     FINANCIAL STATEMENTS

             FOR THE YEAR ENDED OCTOBER 31, 1998











































                       VALUE HOLDINGS, INC.

                       TABLE OF CONTENTS

                                                                  
                                                         PAGE

REPORT OF INDEPENDENT AUDITORS                            F-1     
   

CONSOLIDATED FINANCIAL STATEMENTS

Balance Sheet                                             F-2

Statements of Operations                                  F-3

Statements of Stockholders' Equity                        F-4

Statements of Cash Flows                           F-5 to F-7     

       
Notes to Consolidated Financial Statements         F-8 to F-22






























                  REPORT OF INDEPENDENT AUDITORS

To the Shareholders and Board of Directors
Value Holdings, Inc. and its Subsidiaries
Coral Gables, Florida 

We have audited the accompanying consolidated balance sheet of
Value Holdings,  Inc. ( the Company ) and its Subsidiaries as of
October 31, 1998, and the related consolidated statements of
operations, shareholders  equity and cash flows for the year in the
period ended October 31, 1998 and the eight months ended October
31, 1997.  These consolidated financial statements are the
responsibility of the Company's management.  Our responsibility is
to express an opinion on these consolidated financial statements
based on our audit. 

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

In our opinion, based on our audits, the consolidated financial
statements referred to above present fairly, in all material
respects, the consolidated financial position of Value Holdings,
Inc. and its Subsidiaries as of October 31, 1998, and the
consolidated results of its operations and its cash flows for the
year in the period ended October 31, 1998 and the eight months
ended October 31, 1997, in conformity with generally accepted
accounting principles.

As more fully discussed in Note 2 to the consolidated financial
statements, there are significant matters concerning the Company
which raise substantial doubt as to the ability of the Company to
continue as a going concern. Management's plans with regard to
these matters are also described in Note 2 to the consolidated
financial statements.  The consolidated financial statements do not
include any adjustments that might result from the outcome of these
significant uncertainties. 
                     


/s/ Infante, Lago & Company
January 19, 1999

                             F-1
           VALUE HOLDINGS, INC. AND ITS SUBSIDIARIES
                CONSOLIDATED BALANCE SHEET

                           ASSETS
                                                 October 31,
                                                    1998       
CURRENT ASSETS
 Accounts receivable                           $     27,261 
 Prepaid expenses and other assets                   29,602
                                                   --------  
   TOTAL CURRENT ASSETS                              56,863      
                                                   -------- 
INVESTMENTS IN AND ADVANCES TO AFFILIATES, NET        3,993 
PROPERTY AND EQUIPMENT, NET OF 
  ACCUMULATED DEPRECIATION                           24,711 
COSTS IN EXCESS OF NET ASSETS OF BUSINESSES
   ACQUIRED, NET OF ACCUMULATED AMORTIZATION        439,167 
INTANGIBLE ASSETS, NET OF ACCUMULATED AMORTIZATION  105,752 
NOTE RECEIVABLE - AFFILIATE                         120,400 
                                                  ---------
     TOTAL ASSETS                            $      750,886 
                                                   ========       
            LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
 Accounts payable                            $      163,827
 Accrued liabilities, other                         535,522
 Note payable, related party                        307,404
 Note payable and advances to stockholders          404,540
                                                  ---------
TOTAL CURRENT LIABILITIES                         1,411,293      
                                                  ---------
DEFERRED GAIN ON SALE                                86,251 
LONG-TERM LIABILITY, STOCKHOLDERS                   287,874 

STOCKHOLDERS' EQUITY 
Series A preferred stock, par value $.0001; 
 20,000 shares authorized; 750,000 issued 
 and outstanding at October 31, 1997 at 
 liquidation value                                  750,000 
Common stock, par value $.0001; 180,000,000 
 shares authorized; issued and outstanding 
 56,806,068 at October 31, 1998                       9,230 
Capital in excess of par                         14,210,466 
Accumulated deficit                             (16,004,228)
                                                -----------
TOTAL STOCKHOLDERS' DEFICIT                      (1,034,532)
                                                -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $      750,886  
                                                ===========
The accompanying notes are an integral part of these financial
statements.  The financial statements and the notes should be read
in conjunction with the accountants' report.  
                                F-2 
            VALUE HOLDINGS, INC. AND ITS SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF OPERATIONS
          
                                  For the Year    For the Eight
                                     Ended         Months Ended   
                                   October 31,     October 31,
                                     1998            1997      
Revenues

Equity (loss) in earnings
 -unconsolidated subsidiaries   $   (210,278)    $    116,008
Licensing fee                        348,434          216,321
Interest and other income             11,173            6,337 
                                    --------         --------
                                     149,329          338,666 
                                    --------         --------
Costs and Expenses            

General and administrative           352,582          240,466 
Depreciation                          52,979           42,289 
Amortization, intangible assets      202,169          134,779 
                                    --------         --------
                                     607,731          417,534     
                                    --------         --------     
          
Loss Before Other Income (Charges)  (458,401)         (78,868)

Other Income (Charges)   
Interest expense                    (109,251)         (43,353)
Provision for losses in affiliates  (571,000)          - 0 -     
Write down of investment in 
  affiliate                       (1,758,094)          - 0 -     
Loss on disposition of interest 
  in investee                         - 0 -           (23,611)
                                   ---------        ---------
Loss From Continuing Operations 
  before extraordinary items      (2,438,345)         (66,964)

Litigation Settlement                 - 0 -           (35,000) 
Write Off of Liabilities              - 0 -         1,199,647
                                   ---------        ---------  
Net Income (Loss)             $   (2,896,746)     $ 1,018,815    
                                   =========        =========
 
Weighted Average Number Of 
  Shares Outstanding              63,030,642       55,904,844 
Net Income ( Loss)  Per Share          (0.01)            0.01 


The accompanying notes are an integral part of these financial
statements. The financial statements and the notes should be read
in conjunction with the accountants' report.   

                                F-3
            VALUE HOLDINGS, INC. AND ITS SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

                                               Common
                                               Stock       Note
                      Preferred    Common   Conversion  Receivable
                        Stock      Stock      Rights    Affiliate
                      ----------  --------  ----------  ----------


Eight Months Ended
October 31, 1997     $ 750,000   $  5,440    $   -0-    $    -0-

Issuance of common
 stock                                240   
Dividends accrued
Net Income
                       --------     ------     --------    -------

Balance October 31,
1997                 $ 750,000    $  5,680   $   -0-     $    -0-

Issuance of common
 stock                               3,550 
Dividends accrued
Deferred consulting
 agreements
Net Income
                       --------     -------    --------    -------

Balance October 31, 
1998                  $ 750,000    $  9,230  $    -0-     $    -0-
                       ========     =======    ========    ========
















The accompanying notes are an integral part of these financial
statements. The financial statements and the notes should be read
in conjunction with the accountants' report.   

                                F-4
            VALUE HOLDINGS, INC. AND ITS SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

                                                     
                                                        Dividends
                      Capital In             Deferred  on Preferred
                    Excess of par  Deficit  Consulting    Stock
                    ------------- --------- ----------  ----------


Eight Months Ended
October 31, 1997   $ 13,821,256 $(13,766,194) $  -0-    $ (75,000)

Issuance of common
 stock                   47,760      
Dividends accrued                                         (50,000)
Net Income                         1,018,815
                     ----------  -----------   --------  ---------

Balance October 31,
1997               $ 13,859,016 $(12,747,379) $  -0-     $(125,000)

Issuance of common
 stock                  351,450       
Dividends accrued                                          (75,000)
Deferred consulting
 agreement                                     (156,731)
Net Income                        (2,896,746)  
                     ----------  -----------  ---------   --------

Balance October 31, 
1998               $ 14,210,466 $(15,644,125) $(156,731) $(200,000)
                    ===========  ===========   ========   ========
















The accompanying notes are an integral part of these financial
statements. The financial statements and the notes should be read
in conjunction with the accountants' report.   

                                F-4
            VALUE HOLDINGS, INC. AND ITS SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

                                                     
                                                         
                                          Currency      
                                          Exchange      Total
                                         ----------  ----------


Eight Months Ended
October 31, 1997                          $ ( 3,372) $  722,130

Issuance of common
 stock                                                   46,000
Dividends accrued                                       (50,000)
Net Income                                            1,018,815
                                            --------  ---------

Balance October 31,
1997                                      $  ( 3,372) $1,738,945

Issuance of common
 stock                                                   355,000
Dividends accrued                                          
(75,000)
Deferred consulting
 agreement                                              (156,731)
Net Income                                            (2,896,746)
                                           ---------   ---------

Balance October 31, 
1998                                     $  ( 3,372) $(1,034,532)
                                           =========   =========















The accompanying notes are an integral part of these financial
statements. The financial statements and the notes should be read
in conjunction with the accountants' report.   

                                F-4
         VALUE HOLDINGS, INC. AND ITS SUBSIDIARIES
          CONSOLIDATED STATEMENTS  OF CASH FLOWS


                                   For the Year    For the Eight 
                                      Ended         Months Ended
                                   October 31,      October 31, 
                                      1998             1997       

Cash flows from operating activities:        

Net Income (loss) from continuing 
 operations before extraordinary 
 credit                          $  (2,896,746)   $  1,018,815
Adjustments to reconcile net 
 income from operations to 
 net cash provided by (used in) 
 operations:
   Extraordinary credit                 - 0 -       (1,199,647)
   Depreciation                         52,979          42,291 
   Amortization, intangible assets 
   and goodwill                        202,168         134,779    
   Dividends, in preferred stock       (75,000)           -0-
   Loss on disposition of shares in 
   unconsolidated subsidiary            - 0 -           23,611 
   Equity in earnings of unconsolidated 
   subsidiary                          210,278        (116,008)
   Write-down investment in 
   equity-method investee            1,758,094           - 0 - 
   Provision for losses in affiliate   571,000           - 0 -
   Deferred consulting agreement      (156,731)          - 0 - 
   Expenses paid by issuance of 
   common stock for services           355,000          48,000 
                                                              
   Changes in working capital of 
   continuing operations:
   (Increase) decrease in 
     Accounts receivable                (1,170)         (4,431)
     Prepaid expenses and other        (10,835)          4,666 
   Increase (decrease) in
     Accounts payable                  (14,316)         44,752 
     Accrued liabilities               (67,888)        (34,679)
     Other                            (255,970)          - 0 -
                                    -----------      ----------
Net cash used in operating 
 activities                           (329,137)        (37,851)
                                    ----------       ---------- 

The accompanying notes are an integral part of these financial
statements. The financial statements and the notes should be read
in conjunction with the accountants' report
                         
                                F-5
            VALUE HOLDINGS, INC. AND ITS SUBSIDIARIES
             CONSOLIDATED STATEMENTS  OF CASH FLOWS
                              
                                   For the Year    For the Eight 
                                      Ended         Months Ended
                                   October 31,      October 31, 
                                      1998             1997       


Cash flows from investing activities:                  

 Proceeds from sale of stock of 
  unconsolidated subsidiary            - 0 -           26,797  
 Advances to related company           - 0 -          (20,400) 
 Repayment of loans - affiliates     (26,800)           - 0 -  
                                   ---------         --------
Net cash provided by (used in) 
 investing activities                (26,800)           6,397   
                                   ---------         --------
Cash flows from financing activities:                  
 Proceeds from stockholder 
 borrowings                            58,518          73,402 
 Proceeds from related party          304,707           - 0 -
 Payments on debt                     (27,750)        (28,500)
                                    ---------        --------
Net cash provided by financing 
 activities                           335,475          44,902  
                                    ---------        --------

Net increase (decrease) in cash       (20,462)         13,448

Cash at beginning of the year          20,462           7,014  
                                    ---------        -------- 
Cash at end of the year          $      - 0 -      $   20,462 
                                    =========        ========    














The accompanying notes are an integral part of these financial
statements. The financial statements and the notes should be read
in conjunction with the accountants' report.

                           F-6
           VALUE HOLDINGS, INC. AND ITS SUBSIDIARIES
           CONSOLIDATED STATEMENTS  OF CASH FLOWS

                                  For the Year    For the Eight 
                                      Ended        Months Ended
                                   October 31,     October 31, 
                                      1998            1997       
          

Supplemental disclosure of cash flow information:

Cash paid during the year 
 for interest:                      $   35,246    $   25,311
          
Non-cash investing and 
 financing activities

Stock issued for consulting 
 services           
  Officer/stockholder/director      $   355,000   $   48,000      
 
          


























The accompanying notes are an integral part of these financial
statements. The financial statements and the notes should be read
in conjunction with the accountants' report.






                           F-7
     Value Holdings, Inc. and its Subsidiaries

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS

Value Holdings, Inc. and its Subsidiaries (the Company) is in the
business of acquiring businesses with the goal of building
well-run, independent subsidiaries who have solid market niches. 
In addition to U.S. operations, the Company has invested in a
Canadian company which operates retail optical stores (See Note 3).

Until June 1, 1995, the Company operated a chain of seafood
restaurants (Cami s, The Seafood Place) primarily in South Florida
(Dade and Broward counties).  On that date, the Company licensed
the operations of the restaurants to an independent operator (See
Note 5).

 As of October 31, 1998, the Company had a 32% interest in Forest
Hill Capital Corporation ( FHCC ).  FHCC operates a chain of retail
optical stores throughout Canada. The Company has been accounting
for its investment in FHCC under the equity method of accounting
for long term investments (See Note 3).


PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries.  All significant
intercompany balances and transactions are eliminated in
consolidation.  During 1997, the Company changed its reporting year
end to October 31.  The accompanying statements of operations
reflect the operations of the Company for the year ended October
31, 1998 and the eight months ended October 31, 1997.

USE OF ESTIMATES

The preparation of financial statements in accordance with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amount of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amount of revenues and expenses during the reported
period.  Actual results could differ from those estimates.

Estimates that are particularly susceptible to change in the near
term include the  evaluation of the recoverability of goodwill and
other intangible assets.


                            F-8
     Value Holdings, Inc. and its Subsidiaries

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost.  Expenditures for major
betterment and additions are charged to the asset accounts, while
replacements, maintenance and repairs which do not extend the lives
of the respective assets are charged to expense in the period the
costs are incurred.


COST IN EXCESS OF NET ASSETS OF BUSINESS ACQUIRED

Cost in excess of net assets of businesses acquired ( goodwill )
represents the unamortized excess of the cost of acquiring a
business over the fair value of the identifiable net assets
received at the date of acquisition, and is primarily from the
acquisition of Cami s and The Seafood Place restaurants.  Such
goodwill is being amortized on the straight-line method over a
period of  6 years.

It is the Company s policy to evaluate the recoverability of
goodwill and other intangible and long-lived assets on a periodic
basis, based primarily on estimated future net cash flows generated
by the assets giving rise to the goodwill, intangibles and other
long-lived assets, and the estimated recoverable values of these
assets.  Such estimated future net cash flows take into
consideration management s plans with regard to future operations
(See Note 2), and represent management's best estimate of expected
future results.  In the opinion of management, the results of the
projected future operations are considered adequate to recover the
Company's investment in the goodwill and other long-lived assets.

INTANGIBLE ASSETS

Intangible assets are stated at cost and are being amortized on a
straight-line basis over their estimated useful lives ranging from
5 to 10 years.

NET INCOME (LOSS) PER COMMON SHARE

Net Income (Loss) per common share has been computed based on the
weighted average number of shares of common stock outstanding
during the periods.  The number of shares used in the computation
was 55,904,844  shares as of October 31, 1997 and 63,030,642 shares
as of October 31, 1998.  All calculations of shares give effect to
the reverse stock split effected in August 1992.


                       F-9
     Value Holdings, Inc. and its Subsidiaries

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

RECLASSIFICATION

Certain prior period amounts within the accompanying consolidated
financial statements have been reclassified to conform with the
current year presentation.


NOTE 2.   SUMMARY OF CERTAIN SIGNIFICANT RISKS AND UNCERTAINTIES

GOING CONCERN CONSIDERATIONS

The accompanying consolidated financial statements have been
presented in accordance with generally accepted accounting
principles, which assume the continuity of the Company as a going
concern.  However, during the eight months ended October 31, 1997 
and the year ended October 31, 1998 the Company experienced, and
continues to experience, certain going concern and liquidity
problems.  The Company has incurred net income of $1,018,815 for
the eight months ended October 31, 1997 and net losses of 
$2,896,746 for the year ended October 31, 1998.  The net income for
the eight months ended October 31, 1997 is primarily due to the
reversal of accrued liabilities that the Company believes are not
due by the Company or have been settled, and not as a result of
operations.  The net losses for the year ended October 31, 1998 is
primarily the result of the write down of the investment in an
unconsolidated subsidiary and a provision for losses.  The
Company's consolidated financial position reflects a working
capital deficiency of  $1,354,430 at October 31, 1998.  Because of
the Company s deteriorating financial condition, the Company was
notified in August 1996 by NASDAQ Stock Market of its decision to
delete the Company s securities from the exchange. 

The Company had a significant investment in an affiliate, FHCC,
(See Note 3) which generated approximately 77  percent of its
revenues for the year ended October 31, 1997 from the sale of
optical stores . The majority of the stores have been sold as of
October 31, 1997. Future revenue is dependent upon the affiliate
developing more stores for future sale. The affiliate s financial
ability to develop stores for future sales cannot be determined at
this time.   As of October 31, 1998 the investment in affiliate
(See Note 3) was written down to fair market value due to the
inability of the Company to justify the carrying amount of the
investment.  The fair market value was determined based on the
asking price for the stock reflected on the Canadian OTC Exchange. 
Subsequent to year end, the Canadian taxing authorities imposed a
garnishment for unpaid taxes against the optical division of FHCC. 
Due to the significance of the amount of unpaid taxes in relation
to the carrying value of the investment, FHCC s inability to pay
its employees and take new orders, and other concerns, including
                        F-10
      Value Holdings, Inc. and its Subsidiaries

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2.   SUMMARY OF CERTAIN SIGNIFICANT RISKS AND UNCERTAINTIES
(CONTINUED)

GOING CONCERN CONSIDERATIONS (CONTINUED)


estimated recoverability, management of the Company has established
an allowance of $571,000 and a corresponding amount has been
charged to operations for the year ended October 31, 1998.

The Company has a significant investment in goodwill and other
intangible assets, the recoverability of which is dependent upon
the success of forecasted future operations (See Notes 5 and 6).

These conditions raise substantial doubt as to the ability of the
Company to continue as a going concern.

Management s plans with regard to these matters encompass the
following actions:

 1.  Licensing of restaurant operations


Effective June 1, 1995, the Company entered into a licensing
agreement whereby it licensed the operations of its restaurant
operations to an independent operator.  The Company expects that
this licensing agreement should result in net cash flows from
operating activities over the term of the agreement.  This
agreement was renewed on March 1, 1997 and expires March 1, 2002. 
Additionally, a sixth Cami s Seafood and Pasta Restaurant was
opened in May 1998 pursuant to a license agreement with an
unrelated third-party.              
 

2.   Equity infusion from sale of securities

The Company  plans to  raise equity funds  from private placements
of its  common stock, and plans to sell additional shares of common
stock in a proposed public offering.  From the proceeds of these
anticipated public offering the Company plans to pay outstanding
liabilities and continue to explore acquiring potentially
profitable businesses (See note 20).

3.   Stockholder financing

Certain stockholders of the Company have provided financing by
means of debt financing.  The Company   expects that these
stockholders will continue to provide financing for the Company by
means of additional debt or equity financing.
                        F-11
      Value Holdings, Inc. and its Subsidiaries
  
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2.   SUMMARY OF CERTAIN SIGNIFICANT RISKS AND UNCERTAINTIES
(CONTINUED)

GOING CONCERN CONSIDERATIONS (CONTINUED)


The eventual outcome of the success of management s plans cannot be
ascertained with any degree of certainty.  The accompanying
consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

NOTE 3.   INVESTMENTS IN AFFILIATED COMPANIES
                                                As of     
  Investments in Affiliated Companies:       October 31,
                                                1998              
                                                 
  a) Forest Hill Capital Corporation      $     468,247     
  b) Virilite Neutracutical Corporation          68,746     
  c) 660407 Alberta, Ltd.                        38,000           
                                             ----------  
                                                574,993
Less: Provision for losses                     (571,000)         
                                             ----------          
                                          $       3,993
                                             ==========
In its effort to make strategic investments in other profitable
businesses,  the Company acquired 14% of the shares of Forest Hill
Capital Corporation (FHCC), a Canadian public company for an
investment of $185,185 (U.S.) (Canadian $250,000) during December
1995.   

In addition, during the fiscal year ended February 1996,  the
Company loaned   $1,610,426 (U.S.) to FHCC which was made up of
$770,426 in cash to satisfy the working capital needs of FHCC and 
common stock of the Company, valued at $840,000 and given to
creditors of  FHCC's  subsidiary to satisfy unpaid balances.

During August 1996, FHCC repaid the loan of $1,610,426 and accrued
interest of $83,771 by issuing common stock of FHCC to the Company.

At February 28, 1997, the Company owned approximately  40%  of the
outstanding common stock of FHCC and accordingly, accounted for its
investment by the equity-method of accounting.  At February 28,
1997, the Company adjusted its investment in Forest Hill Capital
Corporation to market based on recent trading prices of the stock
in the Canadian Exchange.  This write down was reflected in the
consolidated statement of operations for the year ended February
28, 1997.  During April 1997, the Company sold 60,000 shares of 
                          F-12
      Value Holdings, Inc. and its Subsidiaries
  
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 3.   INVESTMENTS IN AFFILIATED COMPANIES (CONTINUED)

FHCC for $26,797.  Loss from disposition of these shares amounted
to $23,611 which has been reflected in the accompanying
consolidated statement of operations for the eight months ended
October 31, 1997.

Due to the uncertainty regarding the ultimate recovery of the
investment in FHCC, the Company recorded an approximate $1.76
million asset write down, which is included in the Company s
consolidated results of operations in 1998.  As of October 31,
1998, the Company owns approximately 32% of FHCC.  Subsequent to
year end, FHCC issued an additional 1,764,706 shares.  This diluted
the Company s interest to 28%.  Refer to Note 2 for discussion on
the estimated recoverable value of this investment.

On February 29, 1996, the Company sold its Libido license to
Virilite Neutracutical Corporation (Virilite) for $50,000 
in cash, a $200,000 promissory note, and 500,000 shares of Virilite
common stock, representing 12.5% of that company's stock.  During
May 1996, $100,000 of the promissory note was paid.  The Company
has accounted for its investment in Virilite at cost.  The gain on
the sale of the Libido license is being recognized on the
installment method of accounting.

The Company seized assets worth $50,000  from one of its debtors on
a default of payment on a loan receivable and sold them to 660407
Alberta Ltd. in exchange for cash of $12,000 and investments of
$12,000 in shares of 660407 Alberta Ltd. The Company accounts for
this investment at cost.  


NOTE 4.   PROPERTY AND EQUIPMENT                                 
                                                                  
                                               October 31,       
                                                  1998           
                                                        
Furniture, fixtures and equipment              $  435,311 
Leasehold improvements                             29,101 
                                                ---------
                                                  464,412        
Accumulated depreciation                         (439,701)  
                                                ---------
                                               $   24,711        
                                                =========


                                        
                           F-13
        Value Holdings, Inc. and its Subsidiaries

       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 


NOTE 5.   COST IN EXCESS OF NET ASSETS ACQUIRED (GOODWILL)

It is the Company s policy, as discussed in Note 1, to evaluate
periodically the recoverability of goodwill.  On June 1, 1995, the
Company entered into a licensing agreement effective as of June 1,
1995, whereby it licensed the operations of its restaurant
facilities to an independent operator who is involved as a joint
venture partner in one of the Company's other restaurant locations.

These agreements were renewed on March 1, 1997.  The Company is to
receive a monthly license fee ranging from 3% to 6% based upon
monthly revenues of the restaurants ranging from $100,000 to over
$200,000.  The licensing agreement is for an initial term of five
years, with an option on the part of the licensee to renew the
agreement for an additional five years.  As a result of this change
in method of utilizing its restaurant facilities, the Company has
re-evaluated the recoverability of goodwill.  Such goodwill has
been evaluated based upon management s estimate of the amount of
licensing fees reasonably expected to be received over the initial
term of the licensing agreement.  This agreement was renewed on
March 1, 1997 and expires March 1, 2002. 

The Company has reduced the amortization period  in conjunction
with the licensing agreement to six years.  Amortization expense
for the eight months ended October 31, 1997 and for the year ended
October 31, 1998 concerning goodwill arising from the purchase of
its restaurant locations was $113,333 and $170,000,  respectively.


NOTE 6.   INTANGIBLE ASSETS

Intangible assets are stated at cost and are being amortized on a
straight-line basis over their estimated useful lives ranging from
5 to 10 years.                                         
                                           October 31,
                                              1998               
                         
Leasehold interests                     $     117,583 
Customer lists                                105,000  
Liquor licenses                               120,000            
                                            ---------
                                              342,583  
Accumulated amortization                     (236,831)
                                            ---------
                                         $    105,752 
                                            =========   


                         F-14
       Value Holdings, Inc. and its Subsidiaries

       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 


NOTE 7.   NOTE PAYABLE, RELATED PARTY

The Company has a note payable to Capbanx Corporation, a Company
related to the former President of the Company who is also related
to the current Vice President, which has an outstanding balance of
$307,404 as of October 31, 1998. The note bears an interest rate of
15% and is due on December 31, 1998.  This note payable 
has been renewed and will be due June 15, 1999.


NOTE 8.   NOTES PAYABLE AND ADVANCES TO STOCKHOLDERS 

                                             October 31,         
                                                1998     

Advances to stockholders                   $    22,742
Notes payable to various stockholders;
interest at 12% in 1998                        381,798      
                                             ---------
                                           $   404,540
                                             =========

NOTE 9.   LONG-TERM DEBT
                                              October 31,   
                                                 1998       

Note payable, stockholder                  $    287,874
                                             ==========
  
This obligation was incurred in connection with the acquisition of
the Cami s Seashells restaurants in August 1991.  The terms of the
note provide for interest at the rate of 9% per annum, with no
interest to be paid for the first year of the note; during the
second year and for the next nine years, monthly payments of
principal and interest are based upon a thirty-year amortization
schedule, with the unpaid principal balance due August 30, 2001. 
Notwithstanding these terms, if there is a secondary offering of
the Company s stock, the net proceeds of the offering, to the
extent sufficient to do so, are to be used to liquidate the notes
as an additional amortization thereof, which will not be subject to
reborrowing.

As collateral for the note, the Company has pledged an interest in
substantially all of its assets.  This obligation has been
subordinated to the note payable, related party (see Note 7 ).

Annual maturities of long-term debt at October 31, 1998 for each of
the succeeding five years are summarized as follows:
                          F-15
       Value Holdings, Inc. and its Subsidiaries

       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 


NOTE 9.   LONG-TERM DEBT (CONTINUED)

Year Ending October 31:

        1999                  $    20,836 
        2000                        3,712
        2001                      263,326  
                                 --------
                              $   287,874
                                 ========

As of October 31, 1998, the note is in default.  No payment has
been made since the inception of the note, and management has no
plan in place concerning repayment terms. A waiver has been
obtained by the Company from this stockholder in connection with
the current payment terms of this note.


NOTE 10.   PAYROLL TAXES 

The Company reversed payroll and sales tax liability, including
penalties and interest, in the amount of $824,191 which had been
recorded in prior years and recorded it as income in the
accompanying consolidated statement of operations for the eight
months ended October 31, 1997 as an extraordinary item.  Management
reversed this portion of the accrued liability after settling with
the Internal Revenue Service for the trust fund portion of the
employment tax liabilities owed by the officers.  In the opinion of
management and legal counsel the chances of the Internal Revenue
Service and the Department of Revenue for the State of Florida
collecting this unpaid portion from the Company for liabilities of
a former subsidiary is remote. 


NOTE 11.   ACCOUNTS PAYABLE                                       
                          
                                            October 31, 
                                               1998              
                                                                 
                    
Accounts payable, trade                 $     163,827            
                                            =========             
                                                                 
The Company recorded income of $375,456 by writing off accounts
payable representing aged outstanding vendor bills. These bills
were dormant and no collection attempts have been made by the
creditors.  This write-off has been included in the accompanying
statement of operations for the eight months ended October 31, 1997
as an extraordinary item.     F-16 
       Value Holdings, Inc. and its Subsidiaries

       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 


NOTE 12.   ACCRUED LIABILITIES, OTHER

                                             October 31,
                                                 1998     
          
Accrued dividends                           $   200,000
Accrued interest - stockholders                 161,581
Accrued consulting fees                         136,278
Other accrued liabilities                        37,663          
                                              ---------          
                                            $   535,522          
                                              =========

NOTE 13.   COMMON STOCK, WARRANTS AND STOCK OPTIONS
          
STOCKS ISSUED TO FORMER PRESIDENT

On the sale of Upper Canadian Beverage, a former President, Mr.
Pallante, was issued 3,200,000 shares for $786,666 in lieu of
giving up certain stock conversion rights that were issued
originally as part of his employment agreement.                  
                                                                 
WARRANTS OUTSTANDING

In connection with consulting agreements entered into in February
1993 and February 1994, the Company issued warrants to purchase a
total of 250,000 shares of common stock at a price of $.75 per
share, exercisable until February 1998 and February 1999.  The
warrants that were exercisable February 1998 expired.   

In addition, in connection with a bonus plan for the Company s
former president, the Company issued a warrant to purchase 50,000
shares of common stock at an exercise price of $.75 per share,
exercisable until February 1999.

Additionally, in connection with a private placement tendered
during 1994, the Company issued warrants to purchase a total of
70,770 shares of common stock at a price of $1.50 per share,
exercisable until September 1998.  The warrants that were
exercisable September 1998 expired.

During the year ended February 28, 1995, the Company issued
warrants to purchase an aggregate of 910,000 shares of common stock
in  connection with various loans made to the Company, including
140,000 shares to the Company's former president.  These warrants
are exercisable for a period of five years at an exercise price of
$.1875 per share.

                            F-17
       Value Holdings, Inc. and its Subsidiaries

       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 


NOTE 13.   COMMON STOCK, WARRANTS AND STOCK OPTIONS (CONTINUED)

On February 23, 1995, the Company issued warrants to several groups
to purchase an aggregate of 5,350,000 shares of common stock,
exercisable for five years at an exercise price of $.25 per share:

Service warrants                 $  3,750,000
Service warrants to stockholder       500,000
Directors' warrants                   500,000
Employee warrants                     350,000
Other warrants including 200,000 
 to a former president                250,000
                                   ----------
                                 $  5,350,000
                                   ==========

On December 1, 1995, the Company issued warrants to purchase up to
1,250,000 shares of its common stock at a price of $ 0.15 per share
for a period of three years in connection with the acquisition of
the Indian motorcycle license.  These warrants have expired. 

STOCK OPTION PLAN

On March 30, 1994, the Board of Directors adopted the 1994 Employee
Stock Option Plan, subject to shareholder approval.  A maximum of
1,000,000 shares of common stock are reserved for award under this
plan.  The plan provides, among other things, that the exercise
price of an incentive stock option shall be at least 110% of the
fair market value at date of grant if granted to a 10% shareholder,
and 100% of the fair market value at date of grant to any other
person.  No shares have been issued under the terms of this plan.


NOTE 14.   PREFERRED STOCK
On July 29, 1994, the stockholders approved an amendment to the
Articles of Incorporation which provides, among other things, that
the authorized capital stock is to consist of 20,000,000 shares of
preferred stock having a par value of $.0001 per share and
180,000,000 shares of common stock having a par value of $.0001 per
share.  The Board of Directors is authorized to provide for the
issuance of shares of preferred stock in series, and to establish,
from time to time, the number of shares to be issued in each such
series and to determine and fix the designations, powers,
preferences and rights of the shares of each such series.

The Company entered into a Preferred Stock Purchase as of  December
30, 1993,  which provides  for  the sale and issuance of 750,000
shares of Series A Preferred Stock for $750,000.  The Series A 
                          F-18
       Value Holdings, Inc. and its Subsidiaries

       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 


NOTE 14.   PREFERRED STOCK (CONTINUED)


Preferred Stock shall, among other things, be entitled to cash
dividends at the rate of $.10 per annum, which shall accrue and be
cumulative from the issue date and be payable quarterly, commencing
on September 30, 1994; shall be entitled to $1.00 per share plus
any accrued and unpaid dividends upon liquidation; may be called by
the Company, commencing one year from the issue date, at a
redemption price of $1.00 per share plus any accrued and unpaid
dividends; and commencing one year from issue date, each share may,
at the option of the holder, be converted into 2 2/3 shares of
common stock.

As of October 31, 1998, dividends were in arrears on the preferred
stock amounting to approximately $200,000. 


NOTE 15.   COMMITMENTS

EMPLOYMENT AGREEMENTS

On January 15, 1996, the Company entered into a Consulting
Agreement with Leonard Rosenberg, the father of Alison Rosenberg
Cohen, Vice President of the Company.  Under the terms of the
Consulting Agreement, Mr. Rosenberg is to provide advice to the
Company with respect to management, marketing, strategic  planning,
corporate organization and structure, and financial matters in
connection with the operations of the businesses in which the
Company is engaged.  In return, the Company issued to Mr. Rosenberg
1,500,000 shares of the Company's common stock and registered these
shares for sale under the Securities Act of 1933.


NOTE 16.   PENDING LITIGATION

The Company is subject to certain other pending litigation which
arose in the ordinary course of business.  In the opinion of
management, the outcome of these matters is not expected to have a
material effect on the Company's financial position or results of
operations.







                          F-19
     Value Holdings, Inc. and its Subsidiaries 

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 17.   INCOME TAXES

The following temporary differences give rise to a deferred tax
asset at October 31, 1998:

Excess of financial over tax 
accounting for amortization of goodwill        $    204,000

Capital losses expensed for financial 
accounting purposes but available to 
offset future capital losses for tax purposes  $  1,144,442

Section 1231 losses expensed for financial 
accounting purposes but available to offset 
future gains for tax purposes                  $    595,590

Equity in losses of unconsolidated 
subsidiaries, net of write-down of 
investment to market                           $  1,341,993

Deferred consulting fees                       $    156,731

No deferred  tax asset or liability has been provided for as of
October 31, 1998 because there can be no assurance of future
earnings and there are net operating losses to offset future
taxable income.  The extraordinary items reflected on the
accompanying consolidated statement of operations for the eight
months ended October 31, 1997 are not  tax effected due to the
benefits that are available to offset  any future tax liability.

No provision or (credit) for income taxes has been provided for in
the accompanying consolidated financial statements because
realization of such income tax benefits is not reasonably assured. 
The Company will recognize the benefit from such carry forward
losses in the future, if and when they are realized, in accordance
with the applicable provisions of accounting principles for income
taxes.

At October 31, 1998, the Company had net operating loss carry
forwards for income tax purposes of approximately $11,440,000 which
expire at various years to 2011.






                         F-20
     Value Holdings, Inc. and its Subsidiaries 

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 18.   RELATED PARTY TRANSACTIONS

As of October 31, 1998 and October 31, 1997, the Company has
accrued consulting fees in the amount of $136,278 and $221,300 due
to Gemini Integrated Financial Services Corp.,  respectively, which
is an entity owned by the former President of the Company.  


NOTE 19.   LITIGATION SETTLEMENT

The Company was involved in a lawsuit filed in June 1994 in the
Circuit Court for Dade County, Florida in which the plaintiff
alleged that the Company s wholly-owned subsidiary, Cami Restaurant
Corp. and certain indirect wholly-owned subsidiary corporations of
the Company breached a certain agreement for and failed to make
payments on a promissory note given in connection with the purchase
of certain assets by Cami Restaurant Corp. in 1991.  The plaintiff
sought damages in excess of $4,600,000, interest and attorney s
fees, as well as an order declaring the purchase of assets void. 
This case was settled in June 1997 for $75,000 and the transfer of
300,000 shares of restricted stock of the Company.  The 300,000
shares of restricted stock were cancelled in June of 1998 and were
supposed to have been reissued.  Subsequent to year end, these
shares have been reissued.

The Company was also involved in a claim for breach of lease
against Cami Restaurant Corporation and for breach of guarantee
against Value Holdings, Inc.  Cami Restaurant Corp. and the Company
had  filed counterclaims.  This case was settled for $15,000 and
500,000 shares of stock.  As of October 31, 1998, $4,000 remains
payable.

NOTE 20.   SUBSEQUENT EVENTS

During November 1998, the Company, through a newly established
subsidiary Network Forest Products, Ltd. ( Network ), a Canadian
corporation, entered into an asset purchase agreement in connection
with the acquisition of certain assets of John Ziner Lumber Limited
( Ziner ), a Canadian company in the business of lumber and
forestry products.  

The Company owns one hundred percent of the outstanding Class A
common stock of Network.  In connection with this certain asset
purchase agreement between Ziner, Network and Value, Network will
pay a management fee to Value for management, accounting, legal,
investment and business services.  Additionally, Network is
expected to pay a fee to Value for the guarantee of a loan made to
Network by a financial institution.
                         F-21
     Value Holdings, Inc. and its Subsidiaries 

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 20.   SUBSEQUENT EVENTS (CONTINUED)


The approval of the revolving credit facility and term loan
facility by the financial institution is dependent upon the
satisfaction of certain closing documents and other requirements,
as determined in the term sheet and the commitment letter dated
December 9, 1998.  As of the date of our accountants' report these
agreements have not been finalized or executed.  Management can not
determine at this time the eventual outcome of the asset purchase
agreement and the related financing arrangement, and as such, the
accompanying financial statements do not include the effects of
these transactions.


NOTE 21.   IMPACT OF YEAR 2000 (UNAUDITED)

The Company has determined that it will be required to upgrade
certain portions of software, hardware and equipment so that its
systems and equipment will function properly with respect to dates
in the year 2000 and thereafter.  Affected systems do not include
those used within the Company for purposes of individual care.  The

Company plans to utilize both internal and external resources to
upgrade and test certain software for year 2000 readiness.  To
date, the Company has not determined the costs related to the
assessment of, and preliminary efforts on, developing its Year 2000
compliance project plan, purchase of new software and equipment,
and installation of vendor supplied upgrades.

The Company s operating results could be materially impacted if
actual costs of the Year 2000 project are significantly higher than
management estimates or if the systems and equipment of the Company
or those of other companies on which it relies are not compliant in
a timely manner.

The Company has not initiated formal communications with all of its
significant suppliers and large payors to determine the extent to
which the Company s operations are vulnerable to those third
parties  failure to remediate their own Year 2000 Issues.  There
can be no guarantee that the systems of other companies or payors
will be timely converted and would not have an adverse effect on
the Company s operations.




                          F-22