SECURITIES AND EXCHANGE COMMISSION
                           Washington, D. C.  20549


                                  FORM 10-QSB


(MARK ONE)
   [X]         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
               OF THE SECURITIES EXCHANGE ACT OF 1934

               FOR THE QUARTERLY PERIOD ENDED March 31, 1999   


                                      OR

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

               FOR THE TRANSITION PERIOD FROM _________________ TO
               _________________



                       Commission File Number   0-17594


                            USA BIOMASS CORPORATION  
      (Exact name of small business issuer as specified in its charter)


               DELAWARE                               33-0329559
   (State or other jurisdiction of                 (I.R.S. Employer
    incorporation or organization)                Identification No.)


      52300 ENTERPRISE WAY, COACHELLA, CALIFORNIA         92236
      (Address of principal executive offices)          (Zip Code)

                                (760) 398-9520
             (Registrant's telephone number, including area code)


    Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days.  Yes [X]      No [ ]


    The number of shares outstanding of issuer's only class of Common
Stock, $.002 par value, was 7,761,385 on May 14, 1999.


<PAGE>






                    PART I.  FINANCIAL INFORMATION



Item 1. Financial Statements



Introduction

     The consolidated financial statements have been prepared by USA Biomass
Corporation ("Company"), without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission.  Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations.  The Company believes that the disclo-
sures are adequate to make the information presented not misleading when read
in conjunction with the Company's consolidated financial statements for the 
four months ended December 31, 1998 and the year ended August 31, 1998.  The
financial information presented reflects all adjustments, consisting only of
normal recurring adjustments, which are, in the opinion of management,
necessary for a fair statement of the results for the periods presented.  

<PAGE>






                           USA Biomass Corporation



                Index to the Consolidated Financial Statements
                  As of March 31, 1999 and December 31, 1998
            And For the Three Months Ended March 31, 1999 and 1998  






     Consolidated Financial Statements for USA Biomass Corporation:

        Balance Sheets  . . . . . . . . . . . . . . . . . . . . . . F-2

        Statements of Operations  . . . . . . . . . . . . . . . . . F-5

        Statements of Shareholders' Equity    . . . . . . . . . . . F-6

        Statements of Cash Flows   . . . . . . . . . . . . . . . .  F-10

     Notes to the Financial Statements  . . . . . . . . . . . . . . F-13

<PAGE>
<TABLE>







                           USA Biomass Corporation

                         Consolidated Balance Sheets
                     March 31, 1999 and December 31, 1998
                                 (Unaudited)
                            (Amounts in Thousands)

                                    ASSETS

<CAPTION>
                                                     March 31,    December 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                              <C>            <C>
Current assets:

  Cash and equivalents                                    $478          $801

  Accounts receivable                                    1,126           554

  Income taxes recoverable                                 316           293 

  Other current assets                                     345           384 

  Net current assets of discontinued 
   operations                                            8,057         7,942 
                                                    -----------   -----------
     Total current assets                               10,322         9,974 

Property and equipment, net                              7,669         8,874 
	
Note receivable, noncurrent                              7,959         7,650 

Other assets                                               305           142 

Intangible assets, net                                     442           449 

Net noncurrent assets of discontinued  
 operations                                                686           769 
                                                    -----------   -----------
Total assets                                           $27,383       $27,858 
                                                    ===========   ===========








<FN>
        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                    F-2
</FN>


</TABLE>
<PAGE>
<TABLE>






                           USA Biomass Corporation

                         Consolidated Balance Sheets
                      March 31, 1999 and December 31, 1998
                                 (Unaudited)
                            (Amounts in Thousands)



                     LIABILITIES AND SHAREHOLDERS' EQUITY


<CAPTION>
                                                      March 31,    December 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                              <C>            <C>
Current liabilities:
  Accounts payable                                      $2,826        $1,796
  Accrued remediation costs                                499           507
  Line of credit                                           850           875
  Notes payable:
    Related parties                                      1,694         2,323
    Other                                                  721           721 
  Capitalized lease obligations                            462           765 
  Income taxes payable                                       6             6 
  Accrued interest                                         346           252 
                                                    -----------   -----------
     Total current liabilities                           7,404         7,245 

Notes payable, net of current portion:
   Related parties                                         966           966
   Officers and directors                                  178           815
   Other                                                 7,702         6,417 
Capitalized lease obligations, net of current 
 portion                                                 2,588         3,538
Other noncurrent liabilities                             1,061           973
                                                    -----------   -----------
Total liabilities                                       19,899        19,954 

Commitments and contingencies











<FN>
        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                    F-3
</FN>



</TABLE>
<PAGE>
<TABLE>





                           USA Biomass Corporation

                         Consolidated Balance Sheets
                      March 31, 1999 and December 31, 1998
                                 (Unaudited)
                            (Amounts in Thousands)



               LIABILITIES AND SHAREHOLDERS' EQUITY, CONTINUED


<CAPTION>
                                                     March 31,    December 31,
                                                        1999           1998
                                                    -----------   -----------
<S>                                              <C>            <C>
Shareholders' equity:

  Preferred Stock (2,000,000 shares authorized):

   Series A, 9% Convertible Preferred Stock, 
   $0.01 par value; cumulative nonvoting, 
   $7,475,000 aggregate liquidation preference; 
   812,500 shares authorized, 747,500 shares
   issued and outstanding.                                  $7            $7

   Series B, 6% Convertible Preferred Stock, 
   $0.01par value; cumulative nonvoting, 
   $4,044,140 aggregate liquidation preference; 
   750,000 shares authorized, 404,414 shares 
   issued and outstanding.                                   4             4 

   Common stock, $0.002 par value; 25,000,000 
   shares authorized, 7,761,385 shares issued
   and outstanding at March 31, 1999 and      
   December 31, 1998.                                       16            16 

   Additional paid-in capital                           21,970        21,970
   Accumulated earnings (deficit)                      (14,395)      (13,975)
   Treasury stock, at cost (24,250 common shares 
    at March 31, 1999 and December 31, 1998)              (118)         (118)
                                                    -----------   -----------
      Total shareholders' equity                         7,484         7,904 
                                                    -----------   -----------
   Total liabilities and shareholders' equity          $27,383       $27,858 
                                                    ===========   ===========










<FN>
        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                    F-4
</FN>

</TABLE>
<PAGE>
<TABLE>





                           USA Biomass Corporation

                     Consolidated Statements of Operations
              For the Three Months Ended March 31, 1999 and the
                      Three Months Ended March 31, 1998
                                 (Unaudited)

                (Amounts in Thousands, except per share data)


<CAPTION>
                                                     March 31,      March 31,
                                                        1999           1998
                                                    -----------   -----------
<S>                                              <C>            <C>
Revenues                                                $2,067          $543 
                                                        
Costs and expenses:
  Cost of revenues                                       1,679           571 
  General and administrative expenses                      584           712 
  Interest expense, net of interest income                 212            55 
  Loss on sale of assets                                    12           278
                                                    -----------   -----------
                                                         2,487         1,616 
                                                    -----------   -----------
Loss from continuing operations 
 before income taxes                                      (420)       (1,073) 
(Expense)/benefit from income taxes                        -             362 
                                                    -----------   -----------
Loss from continuing operations                           (420)         (711) 
                                                    -----------   -----------
Discontinued operations:
 Income from discontinued operations                       -             -  
                                                    -----------   -----------
Net loss                                                 $(420)        $(711)
                                                    ===========   ===========



Loss from continuing operations per common
 share, basic and diluted                                $(0.08)       $(0.12)
                                                         ======        ======
Net loss per common share, 
 basic and diluted                                       $(0.08)       $(0.12)
                                                         ======        ======









<FN>
        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                    F-5
</FN>



</TABLE>
<PAGE>
<TABLE>






                           USA Biomass Corporation

              Consolidated Statements of Shareholders' Equity
           For the Three Months Ended March 31, 1999 and the Four
                 Months ended December 31, 1998 (Unaudited)




<CAPTION>
                                    Series A         Series B
                                   Preferred        Preferred      Common
                                     Shares          Shares        Shares
                                    -------        ---------     ----------
<S>                              <C>            <C>           <C>
Balance, August 31, 1998            747,500          404,414      7,761,385

Net loss                              -                -              -
                                    -------        ---------     ----------
Balance, December 31, 1998          747,500          404,414      7,761,385

Net loss                              -                -              -
                                    -------        ---------     ----------
Balance, March 31, 1999             747,500          404,414      7,761,385
                                    =======        =========     ==========
                                






















<FN>
        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                      F-6
</FN>
</TABLE>
<PAGE>
<TABLE>






                           USA Biomass Corporation

         Consolidated Statements of Shareholders' Equity, Continued
           For the Three Months Ended March 31, 1999 and the Four
                 Months ended December 31, 1998 (Unaudited)



<CAPTION>

                                     Common          Series A     Series B
                                    Treasury        Preferred    Preferred
                                     Shares          Shares        Shares
                                    -------        ---------     ----------
<S>                              <C>            <C>          <C>
                                                     (Amounts in Thousands)

Balance, August 31, 1998            (24,250)          $7             $4    

Net loss                              -                -              -
                                    -------        ---------     ----------
Balance, December 31, 1998          (24,250)           7              4     

Net loss                              -                -              -
                                    -------        ---------     ----------
Balance, March 31, 1999             (24,250)          $7             $4
                                    =======        =========     ==========
























<FN>
        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                      F-7
</FN>
</TABLE>
<PAGE>
<TABLE>





                           USA Biomass Corporation

         Consolidated Statements of Shareholders' Equity, Continued
           For the Three Months Ended March 31, 1999 and the Four
                 Months ended December 31, 1998 (Unaudited)

                            (Amounts in Thousands)



<CAPTION>
                                                    Treasury     Additional
                                     Common          Common       Paid-in
                                     Stock           Stock        Capital
                                    -------        ---------     ----------
<S>                             <C>             <C>           <C>
Balance, August 31, 1998                $16           $(118)        $21,970

Net loss                              -                -              -
                                    -------        ---------     ----------
Balance, December 31, 1998               16            (118)         21,970
                                    
Net loss                              -                -              -
                                    -------        ---------     ----------
Balance, March 31, 1999                 $16           $(118)        $21,970
                                    =======        =========     ==========

<FN>





















        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                      F-8
</FN>
</TABLE>
<PAGE>
<TABLE>







                           USA Biomass Corporation

         Consolidated Statements of Shareholders' Equity, Continued
           For the Three Months Ended March 31, 1999 and the Four
                 Months ended December 31, 1998 (Unaudited)

                               (Amounts in Thousands)


<CAPTION>
                                                 Accumulated              
                                             Earnings(Deficit)      Total
                                                 -----------    -----------
<S>                                        <C>                <C>
Balance, August 31, 1998                            $(13,024)        $8,855

Net loss                                                (951)          (951)
                                                 -----------    -----------
Balance, December 31, 1998                           (13,975)         7,904

Net loss                                                (420)          (420)
                                                 -----------    -----------
Balance, March 31, 1999                             $(14,395)        $7,484
                                                 ===========    ===========



















<FN>

        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                       F-9 
</FN>
</TABLE>
<PAGE>
<TABLE>





                           USA Biomass Corporation
                  Consolidated Statements of Cash Flows

              For the Three Months Ended March 31, 1999 and 1998
                                (Unaudited)
                           (Amounts in Thousands)



<CAPTION>
                                                      March 31,      March 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                               <C>           <C>
Cash flows from operating activities:
 Net income (loss)                                        $(420)        $(711)
                                                    -----------   -----------
 Net loss from continuing operations                       (420)         (711)
 Adjustments to reconcile net loss to net cash
  used in operating activities:
   Depreciation and amortization                            277            10
   Loss on sale of assets                                    12         -
 Decrease (increase) in assets:
   Accounts receivable                                     (595)         (221)
   Other current assets                                      39           252 
   Other assets                                            (156)          510
   Notes receivable                                        (309)        -
 Increase (decrease) in liabilities:
   Accounts payable                                       1,022           109 
   Income taxes payable                                   -              (331)
   Accrued interest payable                                  94           229
                                                    -----------   -----------
 Net cash provided by (used) in operating
  activities of continuing  operations                      (36)         (153)
 Net cash used in operating 
  activities of discontinued operations                     (32)         (893)
                                                    -----------   -----------
Cash provided by (used) in operating activities             (68)       (1,046)
                                                    -----------   -----------












<FN>
        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                      F-10
</FN>
</TABLE>
<PAGE>
<TABLE>





                           USA Biomass Corporation
                  Consolidated Statements of Cash Flows

            For the Three Months Ended March 31, 1999 and the Four
                       Months ended December 31, 1998
                                (Unaudited)
                           (Amounts in Thousands)




<CAPTION>
                                                      March 31,      March 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                              <C>            <C>
Cash flows provided by (used in) investing
activities:
 Purchases of property and equipment                       $(32)        $(985)
 Sales of property and equipment                             11         -    
                                                    -----------   -----------
Net cash provided by (used in) investing 
 activities of continuing operations                        (21)         (985)
                                                    -----------   -----------
Cash flows provided by (used in) financing
activities:
 Payment of line of credit                                  (25)        -    
 Proceeds from notes and loans                            1,025           250
 Repayment of notes, loans, leases                       (1,234)         (158)
                                                    -----------   -----------
Net cash provided by (used in) financing
 activities of continuing operations                       (234)           92
Net cash provided by (used in) financing
 activities of discontinued operations                    -             1,689 
                                                    -----------   -----------
Cash provided by (used in) financing activities            (234)        1,781
                                                    -----------   -----------
Net increase (decrease) in cash                            (323)         (250)

Cash and equivalents at beginning of year                   801           640
                                                    -----------   -----------
Cash and equivalents at end of year                        $478          $390
                                                    ===========   ===========









<FN>
        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                      F-11
</FN>
</TABLE>
<PAGE>
<TABLE>





                           USA Biomass Corporation

                  Consolidated Statements of Cash Flows
            For the Three Months Ended March 31, 1999 and the Four
                       Months ended December 31, 1998
                                (Unaudited)
                           (Amounts in Thousands)

              Supplemental Disclosures of Cash Flow Information



<CAPTION>
                                                      March 31,   December 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                              <C>             <C>
Cash paid during the year for:
  Interest:
   Continuing operations                                   $348          $305
   Discontinued operations                                  285           450
                                                    -----------   -----------
                                                           $633          $755
                                                    ===========   ===========
  Income taxes                                            -             -    
                                                    ===========   ===========
</TABLE>


<TABLE>

<CAPTION>
                           Supplemental Schedule of
      Non-Cash Investing and Financing Activities of Continuing Operations


<S>                                               <C>         <C>
Assets offset against liabilities:
  Related party receivables                          (1,131,000)        -    
  Related party notes payables                        1,131,000         -    

	



















<FN>
        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                      F-12
</FN>
</TABLE>
<PAGE>


                           USA Biomass Corporation

                Notes to the Consolidated Financial Statements
                  For the Three Months Ended March 31, 1999
            and the Four Months Ended December 31, 1998 (Unaudited)



1.  Description of the Company's Business

The continuing operations of USA Biomass Corporation (the "Company"), a Delaware
corporation, consist of waste transport, clean green waste processing, and tree
trimming serices. In order to focus on expanding its biomass operation and its
waste transport operation, the Company's Board of Directors adopted a plan to
discontinue its agribusiness and real estate activities on December 23, 1998.
As a result, the agribusiness and real estate activities have been presented
as discontinued operations in the consolidated financial statements.

In January, 1999, the Company's Board of Directors elected to change the
Company's year end to December 31.

2.  Summary of Significant Accounting Policies

    Principles of Consolidation

The consolidated financial statements include the accounts of USA Biomass
Corporation and subsidiaries.  TransPacific Environmental, Inc. and AMCOR
Biomass Farms, LLC (99% owned) are the Company's continuing operating
subsidiaries. Sun Goddess Farms, Inc., AMCOR Properties, Inc., Las Palomas
Country Club Estates, LLC (99% owned) and AMCOR Builders, LLC (99% owned) are
discontinued operations. All significant intercompany transactions have been
eliminated.  Certain reclassifications have been made to the Consolidated
Balance Sheet at December 31, 1998 and the Statement of Operations for the
three months ended March 31, 1998 to conform to the 1999 presentation.

On December 23, 1998, the Company adopted a plan to discontinue its
agribusiness and real estate operations and to sell the related assets.
Assets of discontinued operations are recorded at the lower of cost or market
(net realizable value).

    Revenue Recognition

Biomass revenues are recognized on the accrual method at the time the related
services are performed.

    Use of Estimates

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

    Cash and Equivalents

Cash and equivalents include short-term, highly liquid instruments with original
maturities of three months or less.

                                      F-13
<PAGE>




2.  Summary of Significant Accounting Policies, Continued

    Property and Equipment

Property and equipment are recorded at cost and are depreciated using the
straight-line method over the expected useful lives noted below.

                                                           Estimated Useful
                                                                  Life
                                                           ----------------
     Vehicles and equipment                                    3-10 years
     Office furniture and equipment                            3-10 years
     Buildings                                                   30 years

Leasehold improvements are amortized over the shorter of the life of the assets
or the life of the related lease.

    Intangible Assets

Intangible assets include licenses and agreements, customer lists, and con-
tracts. Intangible assets are amortized using the straight line method over a
period of 10 years. Regularly, the Company assesses the intangible assets for
impairment based on recoverability of the balances from expected future opera-
ting cash flows on an undiscounted basis.

    Long Lived Assets

Long-lived assets held and used by the Company are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. The estimated undiscounted cash flows
associated with the assets are compared to the carrying amounts to determine if
a writedown to fair value is required.

    Stock Based Compensation

The Company accounts for stock-based compensation using the intrinsic value
method prescribed in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees". Compensation cost for stock options,
if any, is measured as the excess of the quoted market price of the Company's
stock at the date of grant over the amount an employee must pay to acquire the
stock.  Compensation cost is recorded over the requisite vesting periods based
on the market value on the date of grant.

Statements of Financial Accounting Standards ("SFAS") No. 123, "Accounting for
Stock-Based Compensation," established accounting and disclosure requirements
using a fair-value-based method of accounting for stock-based employee and non-
employee compensation plans. The Company has elected to remain on its current
method of accounting as described above for employee compensation plans, and has
adopted the disclosure requirements of SFAS No. 123.

    Earnings per Common Share
 
In 1997 the Financial Accounting Standards Board issued SFAS No. 128 - "Earnings
Per Share". This pronouncement replaced the previously reported primary and
fully diluted earnings per share with basic and diluted earnings per share,
respectively. Earnings per share for the three months ended March 31, 1999 and
1998 been calculated in accordance with this pronouncement.

                                      F-14
<PAGE>







2.  Summary of Significant Accounting Policies, Continued

    Earnings per Common Share, Continued

Basic earnings per share is computed by dividing income available to common
shareholders by the weighted average number of common shares outstanding for
the year. Diluted earnings per share reflects the potential dilution that could
occur if dilutive securities and other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the Company's earnings.

    Significant Accounting Policies Specific to Discontinued Operations

    Revenue Recognition

Revenues from the Company's discontinued agribusiness and real estate operations
are generated through management service and development fees charged to various
partnerships engaged in agribusiness and real estate. Management service fee
income, primarily due from affiliates, is recognized when contractually due,
which approximates the time that services are performed. Crop sales, other farm
income and real estate sales are recognized by the accrual method at the time
of sale.

    Inventories - Real Estate

All direct and indirect costs of real estate development are accumulated and
valued at the lower of cost or net realizable value.

    Investment

The Company uses the equity method of accounting for its 50% investment interest
in PS III Farms, LLC, an Oregon limited liability company.

3.  Discontinued Operations

On December 23, 1998, the Company adopted a formal plan to discontinue its agri-
business and real estate operations and to sell the related asset in order to
focus on its biomass and waste transportation segments. The Company plans to
dispose of its agribusiness and real estate operations by November 30, 1999.
As a result, the financial statements of the Company reflect the net assets and
operating results of the agribusiness and real estate segments as discontinued
operations.


The assets of discontinued agribusiness and real estate segments are summarized
as follows:






                                      F-15
<PAGE>




3.  Discontinued Operations, Continued




<TABLE>

<CAPTION>
                                                 As of March 31, 1999 
                                        ----------------------------------
                                     Agribusiness    Real Estate        Total
                                     ------------    -----------    -----------
<S>                               <C>             <C>            <C>
 Current assets:
  Accounts receivable                      -            $236,985      $236,985
  Due from managed limited
   partnerships                         $137,444       8,842,465     8,979,909
  Inventory                                -           2,085,137     2,085,137
  Other current assets                    16,331         133,181       149,512
                                     ------------    -----------    -----------
    Total current assets                 153,775      11,297,768    11,451,543
                                     ------------    -----------    -----------
 Current liabilities:
  Accounts payable                       229,001         130,350       359,351
  Lines of credit                          -           1,222,000     1,222,000
  Due to managed limited
   partnerships                          874,984         540,052     1,415,036
  Notes and capitalized lease
   obligations payable                   268,855         127,755       396,610
  Other current liabilities                -               1,823         1,823
                                     ------------    -----------    -----------
    Total current liabilities          1,372,840       2,021,980     3,394,820
                                     ------------    -----------    -----------
 Net current assets (liabilities)
  of discontinued operations         $(1,219,065)     $9,275,788    $8,056,723
                                     ============    ===========    ===========
 Noncurrent assets:
  Property and equipment, net         $4,147,351           -        $4,147,351
  Investment                               -          $2,489,199     2,489,199
                                     ------------    -----------    -----------
    Total noncurrent assets            4,147,351       2,489,199     6,636,550
                                     ------------    -----------    -----------
 Noncurrent liabilities:
  Notes payable, others,
   net of current portion              1,817,948       4,110,154     5,928,102
  Capital lease obligations, 
   net of current portion                 22,036           -            22,036
                                     ------------    -----------    -----------
    Total noncurrent liabilities       1,839,984       4,110,154     5,950,138
                                     ------------    -----------    -----------
 Net noncurrent assets (liabilities)
  of discontinued operations          $2,307,367     $(1,620,955)     $686,412 
                                     ============    ===========    ===========





</TABLE>
                                      F-16
<PAGE>





3.  Discontinued Operations, Continued




<TABLE>

<CAPTION>
                                               As of December 31, 1998
                                        ----------------------------------
                                     Agribusiness    Real Estate        Total
                                     ------------    -----------    -----------
<S>                               <C>             <C>            <C>
 Current assets:
  Accounts receivable                      -            $336,985      $336,985
  Due from managed limited
   partnerships                         $137,444       8,839,455     8,976,899
  Inventory                                -           2,085,137     2,085,137
  Other current assets                    16,331         143,246       159,577
                                     ------------    -----------    -----------
    Total current assets                 153,775      11,404,823    11,558,598
                                     ------------    -----------    -----------
 Current liabilities:
  Accounts payable                       254,001         230,668       484,669
  Lines of credit                          -           1,322,000     1,322,000
  Due to managed limited
   partnerships                          874,984         540,052     1,415,036
  Notes and capitalized lease
   obligations payable                   392,406           -           392,406
  Other current liabilities                -               1,823         1,823
                                     ------------    -----------    -----------
    Total current liabilities          1,521,391       2,094,543     3,615,934
                                     ------------    -----------    -----------
 Net current assets (liabilities)
  of discontinued operations         $(1,799,616)     $9,310,280    $7,942,664
                                     ============    ===========    ===========
 Noncurrent assets:
  Property and equipment, net         $4,150,486           -        $4,150,486
  Investment                               -          $2,489,199     2,489,199
  Other noncurrent assets                162,999           -           162,999
                                     ------------    -----------    -----------
    Total noncurrent assets            4,313,485       2,489,199     6,802,684
                                     ------------    -----------    -----------
 Noncurrent liabilities:
  Notes payable, others,
   net of current portion              4,790,151       1,221,018     6,011,169
  Capital lease obligations, 
   net of current portion                 22,036           -            22,036
                                     ------------    -----------    -----------
    Total noncurrent liabilities       4,812,187       1,221,018     6,033,205
                                     ------------    -----------    -----------
 Net noncurrent assets (liabilities)
  of discontinued operations           $(498,702)     $1,268,181      $769,479 
                                     ============    ===========    ===========





</TABLE>
                                      F-17
<PAGE>







4.  Note Receivable

Note receivable arising from the sale of undeveloped real estate in Riverside
County, California consists of the following:


<TABLE>
                                                      March 31,   December 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                              <C>           <C>
Noninterest-bearing note receivable collateralized
by a deed of trust on real property; face amount
of $10,000,000 due in August 2000, discounted to
yield a representative market effective interest
rate of 17.4%.  The note provides that the
maturity date may be extended until August, 2001.
In December 1998, the Company obtained a
$4,000,000 loan, collateralized by this note
receivable.  The loan terms provide, among other
things, that the Company may not sell, encumber,
or dispose of the note without the written consent
of the lender.  In March, 1999, the Company
obtained an additional loan of $1,025,000 from
the same lender under substantially the same
terms.                                               $7,958,895    $7,649,880
                                                     ==========    ==========



</TABLE>



















                                      F-18
<PAGE>




5.  Notes Payable

    Notes payable consist of the following:

      Continuing Operations

 Notes payable to related parties: 

  Uncollateralized
<TABLE>
<CAPTION>
                                                       March 31,  December 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                              <C>           <C>
 Notes payable with interest ranging from 6.0% to 
 17.0% per annum, principal amounts of $1,180,014, 
 $15,713 and $810,153 plus accrued interest due 
 July 31, 1999, December 31, 1999, and 2001,
 respectively. Notes with aggregate principal
 amounts of $1,180,014 are payable to share-
 holders of the Company who are investors in
 limited partnerships managed by the Company.
 The $15,713 and the $810,153 notes
 payable are due to affiliated real estate
 limited partnerships managed by the Company.        $2,005,880    $2,495,285

 Note payable to estate of former shareholder
 who was an officer of the Company, with interest
 at 10% per annum and is currently due and
 payable.                                               283,389       283,389

 Notes payable to officers, with interest at 8%
 per annum.  Principal of $140,159 and $37,994
 plus interest due December 31, 1999 and 2001,
 respectively.                                          178,153       955,343
                                                    -----------   -----------
     Total due to related parties                     2,467,422     3,734,017
       Less:  current portion                        (1,324,111)   (1,952,806)
                                                    -----------   -----------
     Total noncurrent due to related parties         $1,143,311    $1,781,211
                                                    ===========   ===========
 Note payable to an employee:

 Note payable to an employee, with interest at
 8.0% per annum, principal and interest due in 
 September 1999.                                       $370,189      $370,189
                                                    -----------   -----------
     Total due to an employee                           370,189       370,189
       Less:  current portion                          (370,189)     (370,189)
                                                    -----------   -----------
     Total noncurrent due to an employee                  -             -    
                                                    ===========   ===========





</TABLE>
                                      F-19
<PAGE>



5.  Notes Payable, Continued



 Notes payable to third parties:

  Uncollateralized
<TABLE>

<CAPTION>
                                                       March 31,  December 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                              <C>            <C>
 Note payable with interest at 8.0% per annum,
 with monthly payments of $11,182, due in 
 March 1999.                                            $11,182       $45,474


  Collateralized

 Notes payable to individuals, collateralized by
 the Company's interest in PS III Farms LLC with  
 a carrying amount of approximately $2,490,000, 
 interest at 5% per annum, due in December, 1997.
 The notes are in default.                              206,164       206,164

 Notes payable collateralized by equipment, with 
 interest ranging from 8.0% to 18.7% per annum, 
 monthly principal and interest payments ranging 
 from $381 to $8,272, which aggregate $51,355. 
 Maturity dates range from December 1998 to 
 March 2003.                                          1,142,619     1,142,619
                                                                            
 Note payable collaterialized by note receivable
 (Note 4) bearing interest at 12.25% per annum,
 principal and accrued interest due August 21,
 2000.                                                5,025,000     4,000,000

 Note payable to bank, collateralized by real
 property with a net carrying amount of
 $1,001,053 with interest at 8.75% per annum,
 monthly principal and interest payment of
 $8,098, due in December, 2003 with a balloon
 payment of $634,901.                                   800,000       800,000

 Notes payable collateralized by transportation
 equipment with a net carrying amount of
 $860,081, with interest of 8.75% per annum,
 monthly principal and interest payments of
 $19,872, due in October and November, 2003.          1,237,644       943,293
                                                    -----------   -----------
    Total due to third parties                        8,422,609     7,137,550
      Less: current portion                            (720,550)     (720,550)
                                                    -----------   -----------
    Total noncurrent due to third parties            $7,702,059    $6,417,000
                                                    ===========   ===========



</TABLE>
                                      F-20
<PAGE>


5.  Notes Payable, Continued

 Discontinued Operations

  Agribusiness:
<TABLE>
<CAPTION>
                                                      March 31,   December 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                              <C>           <C>
 Notes payable collateralized by equipment, with 
 interest ranging from 10.4%  to 10.5% per annum, 
 principal of $22,735 plus accrued interest
 payable annually with the final payment due in
 August 1999.                                           $47,479       $47,479

 Note payable to an insurance company,
 collateralized by real and personal property, 
 with interest at 7.75% per annum. Semi-annual 
 payments of principal and interest of $188,005, 
 due on October 1 and April 1 of each year, with 
 final payment due in April 2011. The interest 
 rate will be reviewed in April 2006 and adjusted 
 per the terms of the loan.                           2,039,324     2,039,324
                                                    -----------   -----------
    Total agribusiness notes payable due to 
     third parties                                    2,086,803     2,086,803
      Less: current portion                            (268,855)     (268,855)
                                                    -----------   -----------
    Total noncurrent due to third parties            $1,817,948    $1,817,948
                                                    ===========   ===========

  Real estate operations:

 Note payable collateralized by real property, with 
 interest at 9.25% per annum, principal and interest 
 of $806 payable monthly. The final payment is
 due in March 2000.                                     $81,231       $84,731


 Note payable to a bank, collateralized by real 
 property, guaranteed by two shareholders who 
 are officers of the Company, with interest at 
 prime (8.25% at August 31, 1998) plus 1.75%, 
 interest payable monthly. Installments of $12,000 
 due upon the sale of each residential lot from the 
 Texas development project.  All unpaid principal 
 and interest due in January 2000.                    1,118,583     1,138,110

 Note payable to a bank, collateralized by real
 property in Texas, with interest at 8.75% per 
 annum. Monthly payments of interest only until 
 May 31, 1998; thereafter, monthly payments of 
 principal and interest of $31,727, with final 
 payment due June 1, 2003.                            3,038,095     3,087,333
                                                    -----------   -----------
    Total real estate notes payable due to 
     third parties                                    4,237,909     4,310,174
      Less: current portion                            (127,755)     (127,755)
                                                    -----------   -----------
    Total noncurrent due to third parties            $4,110,154    $4,182,419
                                                    ===========   ===========

</TABLE>
                                      F-21
<PAGE>


5.  Notes Payable, Continued


<TABLE>
<CAPTION>
                                                       March 31,  December 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                              <C>            <C>
    Total discontinued operations notes payable      $6,324,712    $6,396,977
      Less: current portion                            (396,610)     (396,610)
                                                    -----------   -----------
    Total noncurrent portion                         $5,928,102    $6,000,367
                                                    ===========   ===========

</TABLE>

Maturities of Notes Payable for the quarter ending March 31, 1999:

   Continuing operations

               2000                                  $2,414,855
               2001                                   1,731,089
               2002                                   4,735,341
               2003                                     807,075
               2004 and thereafter                    1,571,860

   Discontinued operations

     While the Company's plan to discontinue the agribusiness and
   real estate operations contemplates the retirement of these
   obligations during 1999, the contractually required payments at
   March 31, 1999, are as follows:

               2000                                    $396,610
               2001                                   1,572,660
               2002                                     380,989
               2003                                     412,798
               2004 and thereafter                    3,561,655

6.  Capital Leases

The Company leases vehicles and equipment under long-term noncancellable capital
leases.  Obligations under capital leases consist of the following:

 Continuing Operations

<TABLE>
<CAPTION>
                                                       March 31,  December 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                              <C>           <C>
 Capital leases with effective interest rates of
 9.50% and 9.75% per annum, with aggregate monthly 
 principal and interest payments of $3,545 through 
 December 1998.                                             -          $3,482

 Capital lease with an effective interest rate of
 8.50% per annum, with monthly principal and
 interest payments of $1,525 through September
 2002.                                                  $49,415        49,960

 Capital leases with interest ranging from 9.10% to 
 12.62% per annum, with monthly principal and 
 interest payments ranging from $924 to $5,564, 
 which aggregate $21,515. Maturity dates range 
 from August 2000 to June 2001.                         469,769       516,171

                                      F-22
<PAGE>


6.  Capital Leases, Continued


 Continuing Operations

                                                       March 31,  December 31,
                                                         1999          1998
                                                    -----------   -----------
 Capital leases with interest ranging from 7.8% to 
 17% per annum, with monthly principal and interest
 payments ranging from $1,040 to $6,691, which 
 aggregate $16,426. Maturity dates range from 
 February  2001 to March 2003.                          583,836       617,477

 Capital leases with effective interest rates of
 7.07% to 7.50% with monthly principal and interest
 payments of $59,024 through November, 2003           1,947,393     3,116,122
                                                    -----------   -----------
    Total obligations under capital leases - 
     continuing operations                           $3,050,413    $4,303,212
                                                    ===========   ===========

Future minimum lease payments under capital leases at March 31, 1999 are as
follows:

          2000                                         $669,645
          2001                                          669,645
          2002                                          669,645
          2003                                          669,645
          2004                                          657,345
                                                      ---------
          Total minimum lease payments                3,335,925
          Less:  amount representing interest
            at the incremental borrowing rate          (285,512)
                                                      ---------
          Present value of minimum lease payments     3,050,413
          Less:  current maturities                    (462,400)
                                                      ---------
          Obligations under capital leases -
            long-term                                $2,588,013
                                                      =========
</TABLE>










                                      F-23
<PAGE>





7.  Deferred Income Taxes



The components of the provision for income taxes are as follows:

                                                    (Amounts in Thousands)

<TABLE>
<CAPTION>
                                                     March 31,    December 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                             <C>             <C>
 Current tax expense (benefit):      
   Federal                                                  -              - 
   State                                                    -             $3 
                                                    -----------   -----------
                                                            -              3 
                                                    -----------   -----------
 Deferred tax expense (benefit):
   Federal                                                  -              - 
   State                                                    -              -  
                                                    -----------   -----------
                                                            -              -  
                                                    -----------   -----------
 Total provision (benefit)                                  -             $3  
                                                    ===========   ===========





Reconciliation of the effective tax rate to the U.S. federal statutory income
tax rate is as follows:


                                                     March 31,    December 31,
                                                         1999          1998
                                                    -----------   -----------
 U.S. federal statutory income tax rate                   (34.0)%       (34.0)%
 State tax provision                                        0.3           0.3 
 Change in valuation allowance                             33.7          34.0 
                                                    -----------   -----------
   Effective income tax rate                                0.0           0.3%
                                                    ===========   ===========


</TABLE>








                                      F-24
<PAGE>



7.  Deferred Income Taxes, Continued


The Company has a state tax credit carryforward of $250,462 that expires in
2010. The Company also has federal and state net operating loss carryforwards
of $4,214,963 and $3,570,846, respectively. The federal and state net operating
losses begin to expire in 2018 and 2003, respectively.


8.  Stock Based Compensation Plans


A summary of the activity relating to the Company's stock option plans as of
March 31, 1999 and December 31, 1998, and changes during the years then ended
is presented below:


<TABLE>
<CAPTION>
                                         March 31, 1998       December 31, 1998
                                     --------------------   -------------------
                                                 Weighted              Weighted
                                                  Average               Average
                                                 Exercise              Exercise
                                       Shares      Price      Shares     Price
                                      -------    ---------   -------   --------
<S>                              <C>           <C>       <C>         <C>
 Outstanding at beginning of year   1,012,883       $2.43  1,012,883     $2.43
 Exercised                              -            -         -          -   
 Granted                               15,000        2.09      -          -   
 Returned/repriced                      -            -         -          -   
 Forfeited                              -            -         -          -    
                                    ---------    ---------   -------   --------
 Outstanding at end of year         1,027,883        2.43  1,012,883      2.43
                                    =========    =========   =======   ========


</TABLE>

The following table summarizes information about stock options outstanding at
March 31, 1999:

<TABLE>
<CAPTION>
                                         Weighted Average
    Range of       Outstanding at      Remaining contractual   Exercisable at
 Exercise Prices   March 31, 1999        Life (in Years)       March 31, 1999
 ---------------  ---------------      ---------------------   ---------------
<C>             <C>                <C>                      <C>
     $1.30             87,500                     6                  87,500
      1.60            454,133                     2                 454,133
      2.00             71,250                     9                  24,602
      3.00            255,000                    10                  25,000
      4.00             10,000                     9                   7,500
      5.00            150,000                    10                  37,500
                  -----------                                     ---------
  1.30 to 5.00      1,027,883                                       636,235
                  ===========                                     =========




</TABLE>


                                      F-25
<PAGE>






8.  Stock Based Compensation Plans, Continued


The Company continues to account for stock-based compensation using the intrin-
sic value method prescribed by the Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees". Therefore, under the principles of
APB Opinion No. 25, the Company does not recognize compensation expense asso-
ciated with the granting of stock options. SFAS No. 123, "Accounting for
Stock-Based Compensation", requires the use of option valuation models to prov-
ide supplemental information regarding options granted after 1994.  Pro forma
information regarding net income and earnings per share shown below was deter-
mined as if the Company had accounted for its employee stock options under the
fair value method of that statement.

The fair value of each option granted was estimated at the date of grant using
the Black-Scholes option pricing model (the "BSOPM") with the following weight-
ed average assumptions used for grants in 1999 and 1998, respectively: dividend
yield of 0% for both years, expected volatility of 0.946 to 1.17, risk-free
interest rate at 4.90% to 5.26%, and expected contractual life of 10 years for
both years. The weighted average fair value of options granted during 1999 and
1998 was $1.47 and $3.07, respectively.

The BSOPM was developed for use in estimating the fair value of traded options.
The Company's employee stock options have characteristics significantly differ-
ent from those of traded options such as vesting restrictions and extremely
limited transferability.  In addition, the assumptions used in option valua-
tion models are highly subjective, particularly the expected stock price vol-
atility of the underlying stock.  Because changes in these subjective input
assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not provide a reliable single measure of the
fair value of its employee stock options.

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized over the options' vesting periods.  The pro forma effect on net
income for 1999 and 1998 is not representative of the pro forma effect on net
income in future years because it does not take into consideration pro forma
compensation expense related to grants made prior to 1994.  Pro forma informa-
tion in future years will reflect the amortization of a larger number of stock
options granted in several succeeding years.  The Company's pro forma informa-
tion is as follows:


                                                      3 Months Ended March 31,
                                                         1999          1998
                                                    -----------   -----------
 Net income (loss), as reported                       $(420,000)    $(711,000)
 Net income (loss), pro forma                         $(709,938)    $(978,969)
 Basic earnings (loss) per share, as reported            $(0.08)       $(0.12)
 Basic earnings (loss) per share, pro forma              $(0.09)       $(0.12)









                                      F-26
<PAGE>






8.  Stock Based Compensation Plans, Continued



A summary of the activity relating to common stock warrants as of March 31,
1999 and December 31, 1998 and changes during the periods then ended is
presented below:


<TABLE>
                                       March 31, 1999       December 31, 1998
                                     and 3 Months Ended     and 4 Months Ended
                                       March 31, 1999       December 31, 1998
                                    ---------------------  --------------------
                                                 Weighted              Weighted
                                                  Average               Average
                                                 Exercise              Exercise
                                     Warrants      Price    Warrants     Price
                                     --------    ---------  --------   --------
<S>                               <C>          <C>        <C>        <C>
 Outstanding at beginning of year     427,500      $2.88     427,500     $2.88
 Granted                                -           -          -          -   
                                     --------    ---------  --------   -------- 
 Outstanding at end of year           427,500       2.88     427,500      2.88
                                     ========    =========  ========   ======== 


</TABLE>
The range of exercise prices of warrants outstanding at March 31, 1999 was
$2.00 to $6.67.  

The following table summarizes information about warrants outstanding at
March 31, 1999:


                                                                      Estimated
                              Volatility    Dividend     Risk Free      Lives
Warrant Grants                  Factor       Yield    Interest Rates  (In Years)
-----------------------       ----------    --------  --------------  ----------
March 31, 1999                     1.032         0%        5.20%           5
December 31, 1998                  1.032         0%        5.20%           5












                                      F-27
<PAGE>

9. Income (loss) Per Common Share

   Basic earnings per share are computed by dividing earnings available to
   common stockholders by the weighted average number of common shares out-
   standing during the period.  Diluted earnings per share reflect per share
   amounts that would have resulted if dilutive potential common stock had
   been converted to common stock.  The following reconciles amounts reported
   in the financial statements:

                                  For the Three Months Ended March 31, 1999
                                 ------------------------------------------
                                 Income            Shares        Per-Share
                               (Numerator)      (Denominator)     Amount
                               -----------      -------------    ---------
     Loss from continuing
       operations               ($420,000)
     Less preferred stock
       dividends                 (228,850)
                                ---------
     (Loss) available to
       common stockholders
       - basic earnings per
         share                   (648,850)       7,761,385         $(0.08)
                                                                 =========
     Effect of dilutive
       securities:

       Options                          0          425,355
                                ---------       ----------
     (Loss) available to
       common stockholders
       - diluted earnings
         per share              $(648,850)       7,813,948         $(0.08)
                                =========       ==========       =========

                                  For the Three Months Ended March 31, 1998
                                 ------------------------------------------
                                 Income            Shares        Per-Share
                               (Numerator)      (Denominator)     Amount
                               -----------      -------------    ---------
     Loss from continuing
       operations               ($711,000)
     Less preferred stock
       dividends                 (228,850)
                                ---------
     (Loss) available to
       common stockholders
       - basic earnings per
         share                   (939,850)       7,742,753         $(0.12)
                                                                 =========
     Effect of dilutive
       securities:

       Options                        -              -    
                                ---------       ----------
     (Loss) available to
       common stockholders
       - diluted earnings
         per share              $(939,850)       7,742,753         $(0.12)
                                =========       ==========       =========


                                      F-28
<PAGE>






9. Income (loss) Per Common Share, Continued

   During 1999, the Company had 747,500 shares of Series A convertible
   preferred stock (entitled to a 9% per share cumulative dividend) and
   404,414 shares of Series B convertible preferred stock outstanding.  Each
   share of preferred stock is convertible into one share of common stock.
   The convertible preferred stock was not included in the computation of
   diluted earnings per share because the effect of conversion would be
   antidilutive.  The Series A and Series B convertible preferred stock was
   still outstanding at March 31, 1999.











































                                      F-29
<PAGE>




Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations



Overview
--------

Following the Company's acquisition of TransPacific Environmental, Inc. ("TPE")
in November, 1997, the Company's focus shifted from agribusiness and land
planning to biomass.  Subsequently, in June 1998, the Company broadened its
new focus to include solid waste transportation and developed a strategic
alliance with Waste Management of California, Inc. ("Waste Management").  In
light of the Company's strategic alliance with Waste Management and relatd
actual and potential biomass and solid waste transportation opportunities, the
Company's Board of Directors determined that the Company's shift in focus from
agribusiness and land planning/development to solid waste transportation and
biomass should be complete and permanent.  Consequently, the Board of
Directors approved the Company's name change effective August 31, 1998, and
subsequently, on December 22, 1998, adopted the Plan of Discontinued Operations
(the "Plan"), pursuant to which the Company intends to discontinue its
agribusiness and land planning/development activities by November 30, 1999,
and focus on its solid waste transportation and biomass activities.

Implementation of the Plan is in process and has had a material impact on the
presentation of the Company's financial statements.  The operations, cash
flows and net assets of these operations for both fiscal 1999 and fiscal 1998
have been reclassified as discontinued operations, and the assets of these
operations were reduced to the lower of cost or net realizable value.  The
Company's agribusiness and land planning/development operations have been
accounted for as discontinued operations and the results thereof have been
excluded from continuing operations in the Company's consolidated financial
statements.  The Company had no biomass activities prior to fiscal 1997.


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

The Company's continuing operations consist of solid waste transportation and
biomass activities, which include green waste processing. The Company has sold
its unprofitable municipal tree maintenance operations in March 1999. The
Company's dscontinued operations consist of agribusiness and land planning/
development. A discussion of the material factors that affected the Company's
results of continuing operations and, where applicable, the results of its
discontinued operations, are presented separately below.
      

Results of Continuing Operations
--------------------------------

Revenues:

The Company's revenues from continuing operations for the three months ended
March 31, 1999, reflect principally its biomass activities and waste transport
revenue, while revenues for the three months ended March 31, 1998, reflect
only biomass activities as the waste transport contract did not commence
until October 1998.
<PAGE>





Results of Continuing Operations, Continued
-------------------------------------------


Revenues for the three months ended March 31, 1999, of $2,067,000 were up
substantially (281%) from $543,000 for the three months ended March 31, 1998.
This resulted in a net loss of $420,000 for the three months ended March 31,
1999, of which $220,000 is attributable to the municipal tree maintenance
operations which were sold on March 18, 1999. However, the Company expects
revenues to continue to increase in fiscal 1999 as the transportation division
revenues grow, both internally and as new contracts are phased in as the
Company expands its biomass operations. Overall, fiscal 1999 revenues are
expected to be considerably higher than fiscal 1998.

Cost of Revenues:

Cost of revenues of $1,679,000 for the three months ended March 31, 1999, were
up $1,108,000 (194%) from the comparable three month period ending March 31,
1998, mainly due to the implementation of the waste transport agreement, which
was not in effect the prior period, and from internal growth in biomass
activities.

General and Administrative Expenses:

For the three months ended March 31, 1999, total general and administrative
expenses of $584,000 were down $128,000 (18%) from the comparable three month
period ending March 31, 1998, mainly due to the phasing down of the Company's
discontinued agribusiness and land planning/development activities, and other
cost cutting by management pursuant to the Plan of Discontinued Operations.

Interest Expense, Net of Interest Income:

For the three months ended March 31, 1999, interest expense, net of interest
income of $212,000 increased $157,000 (285%) from the comparable three
month period ending March 31, 1998, mainly due to the interest expense related
to $5,025,000 in borrowings secured by the Company's $10 million note
receivable.

Loss from Continuing Operations:

For the three months ended March 31, 1999, the loss from continuing operations
of $420,000 was $291,000 less (41%) from the comparable three month period
ending March 31, 1998, mainly due to increased margins from transportation and
biomass, and reduced losses from TPE (although $220,000 of the loss was from
TPE's municipal three operations, which were sold in March, 1999).


Results of Discontinued Operations:
----------------------------------

For the three months ended March 31, 1999, results from discontinued operations
were zero, the same as the comparable three month period ending March 31, 1998,
mainly due to the accrual of all operating losses for discontinued operations
at August 31, 1998.
<PAGE>




Liquidity and Capital Resources:
-------------------------------

The Company's overall financial condition as of March 31, 1999, as compared
to December 31, 1998, has not improved, but management believes that with the
continued growth of waste transportation and biomass, financed by the
liquidation of assets from discontinued operations, the Company's condition is
likely to improve considerably during 1999.  Total assets have decreased 1.7%
to $27.4 million, due principally to the sale of TPE's tree maintenance
operations in March for $885,000, while total liabilities decreased 0.3% to
$19.9 million due mainly to the payment of equipment debt related to the TPE
sale.  The net effect, overall, resulted in shareholders' equity decreasing
5.3% to $7.5 million.

The Company's current ratio increased to 1.39 at March 31, 1999, from 1.33 at
December 31, 1998, primarily due to the borrowing of an additional $1,025,000
secured by the Company's $10 million note receivable.

Despite the loss in the period ending March 31, 1999, liquidity is improved
from December 31, 1998, and is expected to continue to improve as a result of
the following:  (i) management of cash flow; (ii) in October, 1998, the
Company obtained a $5.0 million equipment lease line from a national financial
institution.  About $4.0 million of this line was used to acquire 40 trucks
and 16 trailers, which are being used in the solid waste transportation
activities.  This equipment is expected to be sufficient to meet the require-
ments of these activities for fiscal 1999; and (iii) in March 1999, the Company
obtained an additional $1,025,000 loan collateralized by the $10 million note
receivable related to the sale of the Rancho California property which,
combined with an existing $4 million loan secured by the same $10 million note,
brings the total amount hypothecated to $5,025,000, the blended interest rate
being 13.8%.  The Company is in the process of negotiating a new commitment for
a $7.2 million loan to be secured by the $10 million note, which would retire
the existing $5,025,000 of financing.  The new loan, with a rate of 11.5%,
which would accrue to maturity in August, 2000, is expected to close by May 31,
1999.

The Company has an oral agreement with an equipment financing source to provide
equipment financing in addition to that obtained in October 1998 that may be
required for new solid waste transportation or biomass contracts.

The Company believes that the combination of the $7.2 million loan expected to
be funded by May 31, 1999, and the financing for equipment that may be needed
for additional growth, combined with expected asset sales, are sufficient to
meet its liquidity requirements for fiscal 1999.

Year 2000 Compliance:

Management of the Company believes that its computerized information systems
currently in use and expected to be in use prior to the year 2000 are
Year 2000 compliant.  It has formed a task force to assess the effect, if
any, the Company may encounter in dealing with vendors and outside service
entities who may have year 2000 exposure.  Management does not expect that the
financial impact of required modifications to its systems, if any, will be
material to the Company's financial position, cash flows or results of
operations in any given year.
<PAGE>




Part II - Other Information
---------------------------

Item 1.  Legal Proceedings

On January 22, 1999, Gus Franklin and Susan Franklin filed a Superior Court
lawsuit in Orange County, Central Justice Center, Case No. 804714, seeking
damages for breach of employment contract, breach of covenant of good faith
and fair dealing, fraud and wrongful termination of employment in violation
of public policy in connection with the termination by the Company of the
Franklins' employment agreements with the Company.  The plaintiffs are seeking
damages, according to proof, including lost salaries, cash and stock bonuses,
stock options and other wages and employment benefits, together with other
expenses and losses.  In addition, the plaintiffs are seeking punitive and
exemplary damages in connection with certain of the causes of action.  The
Company has filed an answer denying any wrongdoing.  However, no assurances
can be given with respect to the outcome of this proceeding.  The Company
believes that the allegations are without merit, and that the outcome of this
lawsuit will not have a material adverse effect on its earnings, cash flow,
or financial position.

The Company is not involved in any other pending legal proceedings other than
legal proceedings occurring in the ordinary course of business.  Such other
legal proceedings in the aggregate are believed by management to be immaterial.

Item 2.  Change in Securities

None.

Item 3.  Defaults Upon Senior Securities

As of the date of filing this report, the Company is in arrears as to quarterly
dividends on its Series A 9% Convertible Preferred Stock and on its Series B
Preferred Stock.  The total amount of dividend arrearages on the Series A 9%
Preferred Stock and on the Series B Preferred Stock was $504,563 and $390,193,
respectively.

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

Not Applicable.

Item 5.  Other Information

Not Applicable.

Item 6.  Exhibits and Reports on Form 8-K

     (a)  Exhibits.

          2      Plan of Discontinued Operations (1)

          3.1    Certificate of Incorporation of the Company filed with the
                 Secretary of State of Delaware on March 10, 1988 (2)

          3.2    Certificate of Amendment of Certificate of Incorporation of
                 the Company filed with the Secretary of State of Delaware on
                 December 21, 1988 (2)

          3.3    Certificate of Amendment of Certificate of Incorporation of
                 the Company filed with the Secretary of State of Delaware on
                 March 21, 1989 (2)
<PAGE>



          3.4    Certificate of Designations, Preferences and Relative
                 Rights, Qualifications and Restrictions of the Series A
                 Convertible Preferred Stock of the Company filed with the
                 Secretary of State of Delaware on May 13, 1994 (3)

          3.5    Certificate of Amendment of Certificate of Incorporation of
                 the Company filed with the Secretary of State of Delaware on
                 February 24, 1997 (4)

          3.6    Amended Certificate of Designations, Preferences and
                 Relative Rights, Qualifications and Restrictions of the
                 Series A 9% Convertible Preferred Stock of the Company filed
                 with the Secretary of State of Delaware on November 13, 1997
                 (5)

          3.7    Bylaws of the Company, as amended (4)

          4.1    Trust Indenture between the Company and First City Bank of
                 Dallas (2)

         10.6    Stock Option Agreement dated July 2, 1990 between the
                 Company and Fred H. Behrens (6)

         10.7    Stock Option Agreement dated July 2, 1990 between the
                 Company and Robert A. Wright (6)

         10.8    Stock Option Agreement dated July 2, 1990 between the
                 Company and Marlene A. Tapie (6)

         10.28   Stock Acquisition Agreement dated as of November 25, 1997 by
                 and among Gus Franklin and Susan K. Franklin, the Company
                 and TPE (1)

         10.29   Agreement Regarding Transportation Services dated as of June
                 8, 1998 by and between USA Waste of California, Inc., the
                 Company and AMCOR Biomass, Inc. (1)

         10.30   Commercial Lease dated effective as of November 1, 1998 by
                 and between Desert Mist Cooling and the Company

         21      Subsidiaries of the Company (7)

         27      Financial Data Schedule



-----------------
(1)  Filed as an exhibit to the Company's Form 10-KSB for the fiscal year ended
     August 31, 1998 and incorporated herein by reference. 
(2)  Filed as an exhibit to the Company's Form 10-K for the fiscal year ended
     November 30, 1988 and incorporated herein by reference.
(3)  Filed as Exhibit 4.2 to the Company's Form 10-QSB for the quarterly period
     ended May 31, 1994, and incorporated herein by reference.
(4)  Amended Bylaws filed as an exhibit to the Company's Form 10-KSB for the
     fiscal year ended August 31, 1997 as filed with the Commission on December
     5, 1997 and incorporated herein by reference. Additional amendment to
     Bylaws filed as an exhibit to the Company's Form 10-QSB for the quarterly
     period ended February 28, 1998 as filed with the Commission on April 15,
     1998 and incorporated herein by reference.
<PAGE>




(5)  Form of which was filed as an exhibit to Amendment No. 3 to the Company's
     Registration Statement on Form S-2 as filed with the Commission on
     September 22, 1997 (Registration No. 333-28373) and incorporated herein by
     reference.
(6)  Filed as an exhibit to the Company's Form 10-K for the fiscal years ended
     November 30, 1992, 1991, and 1990 as filed with the Commission on March
     15, 1991 and incorporated herein by reference.
(7)  Filed as an exhibit to the Company's Form 10-KSB for the fiscal year ended
     August 31, 1997 as filed with the Commission on December 5, 1997 and
     incorporated herein by reference.
------------------


      (b) Reports on Form 8-K
          Form 8-K, dated January 12, 1999, as filed with the Commission on
          January 27, 1999, reporting on Item 8, Change in Fiscal Year, in
          connection with the Company's Board of Directors' decision to change
          the Company's fiscal year from August 31 to December 31, commencing
          with the calendar year/fiscal year ended December 31, 1998.

<PAGE>






                                  SIGNATURES



Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


Date:  May 14, 1999                       USA Biomass Corporation
       ------------                       -----------------------

                                          /s/Eugene W. Tidgewell
                                          -----------------------
                                          Eugene W. Tidgewell
                                          Chief Financial Officer
                                          (Principal Financial and
                                          Accounting Officer)
<PAGE>





                                EXHIBIT INDEX



     Exhibit No.       Description
     -----------       -------------------------------------------------------

     10.30             Commercial Lease dated effective as of November 1,
                       1998 by and between Desert Mist Cooling and the Company

     27                Financial Data Schedule
<PAGE>