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                              UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                           Washington, DC  20549

                                FORM 10-KSB

               Annual Report Under Section 13 or 15 (d) of
                    the Securities Exchange Act of 1934


               For the fiscal year ended September 30, 1998

                      Commission file number: 0-12809

                       GOLDEN CHIEF RESOURCES, INC.
              (Name of small business issuer in its charter)

     State of Kansas                                        48-0846635
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                           Identification #)

106 S. Parkdale, Wichita, KS                                67209
(Address of principal executive offices)                  (Zip code)

Issuer's telephone number:   (316) 722-3442

Securities registered under Section 12 (g) of the Exchange Act:    Common
stock, no par value

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

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

State issuer's revenues for its most recent fiscal year  - $0.

The aggregate market value of the voting stock  held by non-affiliates of
the registrant on September 30, 1998, was zero ($0) since the stock was not
trading. The number of shares outstanding of the registrant's common stock
on September 30, 1998, was 48,158,050 shares. On August 3, 1999, the
Company had 64,465,890 shares outstanding.

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                                  PART I


Item 1.   Description of Business

(a)  Business Development

Golden Chief Resources, Inc. (the "Company") was incorporated in the State
of Kansas on November 16, 1976, under the name of Art's Antique Autos, Ltd.
The Company remained dormant for several years and had no appreciable
assets or revenues until 1981.  On August 14, 1981, the name of the
corporation was changed to Golden Chief Resources, Inc.  During September,
1981, the Company entered into concurrent transactions wherein the Company
issued stock to two groups in exchange for assets including cash, notes
receivable,  and working interests in oil and gas leases.  The Company also
acquired interests in several mining leases and acquired commercial real
estate which was used for the Company's offices with extra space leased out
to related parties.

Management abandoned the mining project since it did not result in the
production of sufficient quantities of minerals and sold fifty percent of
the investment in 1982.  With the downturn of the real estate and oil and
gas economies during the mid 1980's, the Company was forced to sell, close
or abandon all of its oil and gas leases.  The related companies which
operated oil and gas leases also failed during this period and discontinued
operations.  The mortgagor on the Company's commercial real estate
foreclosed on the property to satisfy the outstanding mortgage.

This series of transactions resulted in substantial losses of income and
operating assets.  Management decided to discontinue any further business
operations and completed the liquidation of the few remaining assets during
1986.  The Company has not operated since that time.

Currently the Company is initiating a new phase.  Management has recently
filed the necessary documents with the State of Kansas to reinstate its
existence.  Effective August 25, 1998, the Company's status with the State
of Kansas was reinstated and the Company is currently in good standing and
authorized to engage in business as a Kansas corporation.

The Company is re-emerging as a development stage enterprise.  The Company
will continue to be in a development stage until it has begun significant
operations and is generating significant revenues.  The process of
reinitializing the Company will include identifying, evaluating,
structuring and completing a merger with or acquisition of a privately
owned entity.

During its fiscal year ended September 30, 1998, the Company was not
involved in any bankruptcy, receivership, or similar proceeding and
underwent no material reclassification, merger, or consolidation. The
Company does not anticipate involvement or participation in any of the
above proceedings, excepting a possible merger or consolidation.

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(b)  Business of Issuer

As previously discussed, the Company currently has no business.  Management
is actively searching for possible merger or acquisition partners.
Meetings have been held with some interested parties, but no deals have
been consummated as of the date of this report.  Management plans to
continue to pursue these opportunities.

The past business of the Company was carried on by Arthur Sykes, Jr.,
Donald D. Roehrman, and Jereta Sykes, and this management team is currently
in place to search for possible merger or acquisition partners as mentioned
above.  The Company had no employees as of September 30, 1998.

Item 2.  Description of Property

As of September 30, 1998, the Company had no assets.

Item 3.  Legal Proceedings

As of August 3, 1999, there were no legal proceedings to which the Company
was a party, and no legal litigation is known to be pending.

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

A special meeting of shareholders was held on September 19, 1998 where a
proposal to approve an increase in authorized shares to 500,000,000 was
approved by a majority vote.  No other business came before the meeting.

                                  PART II

Item 5.  Market for Common Equity and Related Stockholder  Matters

(a)  Market Information

Currently there is no market for the common stock.  There are no
outstanding warrants or options to purchase any of the Company's
securities.

(b)  Holders

As of August 3, 1999, there were approximately 152 stockholders of record
of the Company's common stock.  Additional stockholders hold stock in
street name; the number of street name holders is not available to the
Company.

(c)  Dividends

The Company has not declared or paid dividends in the past, and does not
anticipate doing so in the immediate future.

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

With the downturn of the real estate and oil and gas economies during the
mid 1980's, the Company was forced to sell, close or abandon all of its oil
and gas leases.  The related companies which operated oil and gas leases
also failed during this period and discontinued operations.  The mortgagor
on the Company's commercial real estate foreclosed on the property to
satisfy the outstanding mortgage.   This series of transactions resulted in
substantial losses of income and operating assets.  Management decided to
discontinue any further business operations and completed the liquidation
of the few remaining assets during 1986.  The Company has not operated
since that time.

Currently the Company is initiating a new phase.  Management has recently
filed the necessary documents with the State of Kansas to reinstate its
existence.  Effective August 25, 1998, the Company's status with the State
of Kansas was reinstated and the Company is currently in good standing and
authorized to engage in business as a Kansas corporation.

While bringing the Company into compliance with the state, management
incurred expenses which were reimbursed with the issuance of Company stock.
In addition, officers of the Company were paid for past services with
stock.  A total of 15,941,000 shares of restricted common stock were issued
to Arthur Sykes, Jr. and Donald D. Roehrman for past services provided to
the Company valued at $1,000 and reimbursement of expenses totaling $594.

Subsequent to the end of the fiscal year, 1,869,600 additional restricted
common shares were issued to Arthur Sykes, Jr. and 100,000 were issued to
Donald D. Roehrman for additional expenses incurred on behalf of the
Company.  On November 19, 1998, LSCO Securities, Inc., a company of which
Arthur Sykes, Jr. is president and director, purchased 1,819,320 restricted
shares for $1,800.  These funds were used by the Company to pay for
accounting services from a non-related party.

Currently, management is actively searching for possible merger or
acquisition partners.  This process will include identifying, evaluating,
structuring and completing a merger with or acquisition of a privately
owned entity.  Meetings have been held with some interested parties, but no
deals have been consummated as of the date of this report.  Management
plans to continue to actively pursue these opportunities, and has entered
into an agreement with a consultant who is to assist in identifying merger
candidates and contract negotiations.  While seeking a merger or
acquisition candidate, the Company may continue in its non-operating mode
for an extended period of time.  However, the Company is not in significant
danger of dissolution since Management is willing to pay the nominal costs

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of keeping it in good standing.  There is no assurance that the Company
will find a suitable merger or acquisition candidate, and if found, there
is no assurance that the resulting new company will be successful.

Income Taxes

See Note 3 to the Financial Statements.

Disclosure Regarding Forward-Looking Statements

This Form 10-KSB includes "forward-looking" statements within the meaning
of Section 27A of the Securities Act and the Company desires to take
advantage of the "safe harbor" provisions thereof.  Therefore, the Company
is including this statement for the express purpose of availing itself of
the protections of such safe harbor provisions with respect to all of such
forward-looking statements.  The forward-looking statements in this Form
10-KSB reflect the Company's current views with respect to future events
and financial performance. These forward-looking statements are subject
to certain risks and uncertainties that could cause actual results to
differ from those anticipated.  In the Form 10-KSB, the words "anticipates,"
"believes, "expects," "intends," "future" and similar expressions identify
forward-looking statements.  The Company undertakes no obligation to
publicly revise these forward-looking statements to reflect events or
circumstances that may arise after the date hereof.  All subsequent written
and oral forward-looking statements attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by this
section.

Item 7.  Financial Statements

The financial statement information for the Company is set forth
immediately following the signature page of this Form 10-KSB.  See the
Index to Financial Statements on page F-1.

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

The Company changed auditors from A. Leon Prior, CPA, to Robert Early &
Company, P.C.  The Company had no disagreements on accounting and financial
disclosure with the former auditor and has none with the present auditor.

                                 PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons

Each of the officers and directors hold office for one year terms.  None of
the officers or directors have been involved in any material legal
proceedings.  The following are the officers and directors of the Company
as of August 3, 1999:

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                                                              Served as
      Name            Age               Position            Director Since
Arthur Sykes, Jr.      71          President and Director         1976
Jereta Sykes           74          Secretary and Director         1998
Donald D. Roehrman     62          Vice President and Director    1981

*Arthur Sykes, Jr.  and Jereta Sykes  are husband and wife. There are no
other family relationships between the officers and directors.

Arthur Sykes, Jr. has been a director of the Company since 1976 and its
president since October 1998.  He was a securities broker-dealer with LSCO
Securities, Inc. (formerly The Larmer-Sykes Co., Inc.) from 1963 through
1989 and served as its president.   He has also served as an officer and/or
director of several other companies over the years including three oil and
gas companies - Kit Karson Corporation, Q-West Resources, Inc., Conquest
Gas Corporation, a modular housing company - Classic Design, Inc. and an
engine rebuilding company - Merge Tech, Inc..  He is currently the
president of Five Star Resources, Inc.

Jereta Sykes was elected as secretary/treasurer and a director of the
Company in 1998.  She has been involved in both public and private
companies since 1988.   She served in the capacity of secretary/treasurer
of Kit Karson Corporation, a publicly traded company on the Electronic
Bulletin Board, from 1988 through 1997.  She began serving as
secretary/treasurer of LSCO Securities, Inc. in 1989 and continues to hold
this position.  In 1998 she became secretary/treasurer for Five Star
Resources, Inc.  She has also been a homemaker since 1948.

Donald D. Roehrman was president of the Company for fifteen years and
currently serves as its vice president and a director.  He spent eighteen
years as head of the engineering department of Watkins Inc., and ten years
as vice president, director, and securities broker-dealer for  LSCO
Securities, Inc.   For the past ten years he has served as the manager of
the architectural products division for Rayer's Bearden Stained Glass Inc.
He also holds real estate and insurance licenses in the State of Kansas.

Item 10.  Executive Compensation

In September 1998, the Board approved the issuance of 15,941,000 shares of
common stock to its president and secretary for past services provided to
the Company valued at $1,000 and reimbursement of expenses totaling $594.
No other compensation was paid to officers and directors for the past two
fiscal years.

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Item 11.  Security Ownership of Certain Beneficial Owners and Management

The following is certain information regarding the Company's common stock
as of August 3, 1999 with respect to (a) security ownership of each person
known by the Company to own beneficially more than 5% of the Company's
common stock, and (b) security ownership of management.

                   Name and Address       Number of               Percent
Title of Class   of Beneficial Owner     Shares Owned             of Class
Common Stock     Arthur Sykes, Jr.        13,755,100               21.34%
No Par Value     106 S. Parkdale
                 Wichita, KS   67209

Common Stock     Jereta Sykes               3,020,000               4.68%
No Par Value     106 S. Parkdale
                 Wichita, KS   67209

Common Stock     LSCO Securities, Inc.*     9,138,640              14.18%
No Par Value     106 S. Parkdale
                 Wichita, KS   67209

Common Stock     Donald D. Roehrman         9,106,500              14.13%
No Par Value     801 N. Covington
                 Wichita, KS   67212

All directors and officers
 as a group (3 persons)                    35,020,240              54.33%

*LSCO is controlled by Arthur Sykes, Jr.

Common Stock     Osage Hills Energy Corp.   3,922,714               6.08%
No Par Value     7 Village Circle
                 Westlake, TX   76262

Common Stock     Sierra Leonne Diamond      5,467,186               8.48%
No Par Value     Export Corp.
                 7 Village Circle
                 Westlake, TX   76262

Arthur Sykes, Jr. and Jereta Sykes are husband and wife.  There are no
other family relationships between the officers and directors.

(c) Changes in Control

No changes in control occurred during 1998, and management is not aware of
any present arrangements that would cause a change in control.  If a merger
or acquisition candidate is found in the future, a change in control would
likely take place upon consummation of such transaction.

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Item 12. Certain Relationships and Related Transactions

There were no transactions with related parties during the dormant years
until 1998.  On September 1, 1998, the Company caused the issuance of
3,076,000 restricted common shares to Arthur Sykes, Jr. for expenses
incurred in bringing the Company current with its state filings and also
issued 2,865,000 shares to Donald D. Roehrman in conjunction with these
same expenses.  On September 19, 1998, 5,000,000 shares were issued to
Arthur Sykes, Jr. and 5,000,000 shares were issued to Donald D. Roehrman
for past services.  The value of the services was placed at $1,000 and the
expenses were $594.

Subsequent to the end of the fiscal year, on October 26, 1998, the Company
caused the issuance of 1,869,600 restricted common shares to Arthur Sykes,
Jr. for additional expenses incurred on behalf of the Company.  Also, on
the same date, 100,000 shares were issued to Donald D. Roehrman for
expenses he incurred.

On November 19, 1998, LSCO Securities, Inc., a company of which Arthur
Sykes, Jr. is president and director, purchased 1,819,320 restricted common
shares for $1,800.  These funds were used by the Company to pay for
accounting services from a non-related party.

Item 13.  Exhibits and Reports on Form 8-K

No reports were filed on Form 8-K.

                                SIGNATURES

In accordance with Section 13 or 15 (d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

                                        GOLDEN CHIEF RESOURCES, INC.



Date:  August 12, 1999                  /s/   ARTHUR SYKES, JR.
                                        By: Arthur Sykes, Jr., President,
                                            Chief Executive Officer,
                                            Principal Accounting Officer, &
                                            Principal Financial Officer

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<PAGE>

In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and
on the dates indicated:

       Signature                    Title                   Date


/s/ ARTHUR SYKES, JR.              Director            August 12, 1999
Arthur Sykes, Jr.


/s/ JERETA SYKES                   Director            August 12, 1999
Jereta Sykes


/s/ DONALD D. ROEHRMAN             Director            August 12, 1999
Donald D. Roehrman

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                       GOLDEN CHIEF RESOURCES, INC.
                       INDEX TO FINANCIAL STATEMENTS

                                                            Page

     Independent Auditor's Report                           F-2

     Balance Sheets for the years ended
     September 30, 1998 and 1997                            F-3

     Statements of Operations for the years ended
     September 30, 1998 and 1997                            F-4

     Statements of Changes in Stockholders' Equity
     for the years ended September 30, 1998 and 1997        F-5

     Statements of Cash Flows for the years ended
     September 30, 1998  and 1997                           F-6

     Notes to Financial Statements                          F-7



                                     F-1

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        REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Golden Chief Resources, Inc.
Wichita, Kansas

We have audited the accompanying balance sheets of Golden Chief
Resources, Inc. (a development stage enterprise) (the "Company") as
of September 30, 1998 and 1997, and the related statements of
operations, stockholders' equity, and cash flows for the years then
ended. These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion
on these financial statements based on our audits.

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
financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Golden
Chief Resources, Inc. at September 30, 1998 and 1997, and the
results of its operations and its cash flows for the years then
ended, in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern.  As discussed in
Note 5 to the financial statements, the Company discontinued
previous operations in 1986 and is in the process of re-emerging
from dormancy.  At the date of these financial statements, the
Company had no assets or liabilities and is reliant on the infusion
of capital or the completion of a merger.  These facts raise
substantial doubt about the Company's ability to continue as a
going concern.  Management's plans in regard to these matters are
also discussed in Note 5.  The financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.




/s/ Robert Early & Company, P.C.
ROBERT EARLY & COMPANY, P.C.
Abilene, Texas

May 27, 1999




                                     F-2

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PAGE
                         Golden Chief Resources, Inc.
                       (A Development Stage Enterprise)

                                Balance Sheets

                                                          September 30,
                                                       1998         1997
                                                    ----------   ----------


ASSETS


Assets:

TOTAL ASSETS                                        $       -    $       -
                                                    ==========   ==========


LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
           Total Liabilities                        $       -    $       -



Stockholders' Equity:
   Common stock, no par value (500,000,000
   shares authorized, 48,158,050 and
   32,217,050 outstanding)                             996,234      994,640
Accumulated deficit                                   (996,234)    (994,640)
                                                    ----------   ----------
            Total Stockholders' Equity                      -            -
                                                    ----------   ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $       -    $       -
                                                    ==========   ==========


See accompanying notes to consolidated financial statements.
                                     F-3

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PAGE
                         Golden Chief Resources, Inc.
                       (A Development Stage Enterprise)

                           Statement of Operations


                                                     Years Ended September 30,
                                                     1998            1997
                                                  -----------    -----------
Revenues                                          $        -     $        -

Operating Expenses:
  Directors and officers compensation                   1,000             -
  Transfer fees                                           239             -
  Filing fee                                              355             -
                                                  -----------    -----------
     Total Operating Expenses                           1,594             -
                                                  -----------    -----------

Income from Operations                                 (1,594)            -

  Income taxes                                             -              -
                                                  -----------    -----------

Net Income                                        $    (1,594)   $        -
                                                  ===========    ===========

Earnings per Share                                $     (0.00)   $        -
                                                  ===========    ===========

Weighted Average Shares Outstanding                32,990,445     32,217,050
                                                  ===========    ===========


See accompanying notes to consolidated financial statements.
                                     F-4

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PAGE
<TABLE>
                         Golden Chief Resources, Inc.
                       (A Development Stage Enterprise)

                      Statement of Stockholders' Equity
               For the Years Ended September 30, 1998 and 1997
<S>                            <C>      <C>           <C>         <C>          <C>
                                                                                Deficit
                                                                               Accumulated
                                                                                During the
                                             Common Stock         Accumulated  Development
                                Date      Shares       Amount       Deficit      Stage
                               ------   -----------   ---------   ---------    -----------
Balances, 10/1/97                        32,217,050   $ 994,640   $(994,640)   $        -

Net income/(loss)                                -           -           -              -
                                        -----------   ---------   ---------    -----------
Balances, 9/30/97                        32,217,050     994,640    (994,640)            -

Shares authorized for
 issuance for services
 and expenses                   09/98    15,941,000       1,594          -              -

Net income/(loss)                                -           -           -          (1,594)
                                        -----------   ---------   ---------    -----------
Balances, 9/30/98                        48,158,050   $ 996,234   $(994,640)   $    (1,594)
                                        ===========   =========   =========    ===========

</TABLE>
See accompanying notes to consolidated financial statements.
                                     F-5

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PAGE
                   Golden Chief Resources, Inc.
                 (A Development Stage Enterprise)

                     Statement of Cash Flows
                   Increase/(Decrease) in Cash

                                                 Years Ended September 30,
                                                  1998             1997
                                                ----------     ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net (loss)                                   $   (1,594)    $       -
   Adjustments to reconcile net income/
     (loss) to net cash provided by
     operations:

     Services and expenses purchased
     with stock                                      1,594             -
                                                ----------     ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES               -              -

CASH FLOWS FROM INVESTING ACTIVITIES:
      None


CASH FLOWS FROM FINANCING ACTIVITIES:
      None

                                                ----------     ----------
 Increase/(decrease) in cash for period                 -              -

      Cash, Beginning of period                         -              -
                                                ----------     ----------
      Cash, End of period                       $       -      $       -
                                                ==========     ==========


Supplemental Disclosures:

Cash payments for:
  Interest                                      $       -      $       -
  Income taxes                                          -              -



See accompanying notes to consolidated financial statements.
                                     F-6

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PAGE
                   Golden Chief Resources, Inc.
                 (A Development Stage Enterprise)

                  Notes to Financial Statements
              Years Ended September 30, 1998 and 1997


GENERAL INFORMATION

The Company was incorporated as Arts Antique Autos, Ltd. in
November 1976 in the Kansas.  Prior to September 1981 the Company
was engaged only in minor investment activities.  In 1981 the
Company entered into transactions which resulted in the acquisition
of oil and gas leases.  The Company also made substantial
investments in two companies, as a major stockholder, which
operated oil and gas leases.  Also during 1981 the Company acquired
interests in several mining leases in Arizona and acquired
commercial real estate which was used for the Company's offices
with extra space leased out to related parties.

In 1982, the Company sold back fifty percent of the investment in
the mining operating pursuant to a previous agreement of the
parties.  Efforts on the mining project did not result in
production of sufficient quantities of minerals to allow the
project to continue and management determined that it was in the
best interest of the Company to abandon the project.

During the mid 1980's the real estate and oil and gas economies
experienced sever economic downturns due to various economic and
political factors.  These factors forced the Company to sell, close
or abandon all of it's oil and gas leases.  The related companies
which operated oil and gas leases also failed during this period
and discontinued operations.  The mortgagor on the Company's
commercial real estate foreclosed on the property to satisfy the
outstanding mortgage.

This series of transactions resulted in substantial losses of
income and operating assets.  Management decided to discontinue any
further business operations and completed the liquidation of the
few remaining assets during 1986.  The Company has not operated
since that time.

Management allowed the Company's existence and authority to engage
in business to be forfeited with the State of Kansas when
operations ceased.  Management has recently filed the necessary
documents with the Kansas Secretary of State's office to reinstate
its existence and authority with the State of Kansas.  Effective
August 25, 1998 the Company's status with the State of Kansas was
reinstated and is currently in good standing and is authorized to
engage in business as a Kansas corporation.

                                     F-7

<PAGE>
PAGE

DEVELOPMENT STAGE ENTERPRISE.  Due to the loss of assets and
operations in 1986, the Company's current activity is the
initiation of a new phase.  As a result, the Company is re-emerging
as a development stage enterprise.  The Company will continue to be
a development stage until it has begun significant operations and
is generating significant revenues.

Generally accepted accounting principles require financial
statements to include separate columns presenting cumulative
financial statement information.  These columns have been omitted
in these financial statements where they would contain no data
different from that already presented.


NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INCOME TAXES.  Deferred tax liabilities and assets result from
temporary differences between the financial statement and income
tax bases of assets and liabilities.  The Company records and
adjusts any deferred tax asset valuation based on judgments as to
future realization of the deferred tax benefits supported by
demonstrated trends in the Company's operating results.

EARNINGS PER SHARE.  Accounting rules provide for the calculation
of "Basic" and "Diluted" earnings per share.  Basic earnings per
common share excludes dilutive securities and is computed by
dividing net income available to common stockholders by the
weighted average number of common shares outstanding for the
period.  Diluted earnings per common share reflects the potential
dilution of securities that could share in the earnings of the
entity on an as if converted basis.  This is done by dividing net
income available to common shareholders, as adjusted if necessary,
by the weighted average number of common shares outstanding plus
potential dilutive securities.  The Company had no dilutive
securities during 1998 or 1997.

CASH AND CASH EQUIVALENTS.  The Company considers all highly liquid
investments with an original maturity of three months or less to be
cash equivalents for purposes of preparing its Statement of Cash
Flows.  The Company had no cash equivalents at September 30, 1998
or 1997.

USE OF ESTIMATES.  The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect reported
amounts of assets and liabilities, the 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.


                                     F-8

<PAGE>
PAGE
NOTE 2:   STOCK TRANSACTIONS

In September 1998, the Board of Directors (the Board) increased the
number of authorized shares of no par common stock of the Company
from 50,000,000 to 500,000,000.  This action was taken with regard
to recent merger or acquisition inquiries as discussed at Note 4.

During September 1998, the Board approved the issuance of
15,941,000 shares of common stock to its President and Secretary
for past services provided to the Company valued at $1,000 and
reimbursement of expenses totaling $594.


NOTE 3:   INCOME TAXES

During its operations and the liquidation of its assets in 1986,
the Company incurred net operating losses and generated investment
tax credits which might provide benefits in reducing future tax
liabilities.  The losses were available to offset taxable income
and the credits were available to offset regular income tax
liability for a period of fifteen years after they were incurred.
Although the amount of net operating losses and tax credits which
have not expired has not been determined by management, it is
believed that substantial losses may still be available to offset
taxable income and income taxes generated through the fiscal year
ending September 30, 2001.  However, any significant change in
ownership of the Company due to merger or other capital infusion
would function to limit the Company's ability to utilize these
deferred tax assets.  Management has determined that any future
utilization of these losses would, in all likelihood, be immaterial
and that the cost of determining actual amounts at this time would
be cost prohibitive.  Additionally, since utilization of these
deferred tax assets is not foreseeable, any value which might be
attributable to them would be offset by a valuation allowance.


NOTE 4:   SUBSEQUENT EVENTS AND CURRENT ACTIVITIES

The Company has received inquires from several privately held
companies regarding a possible merger or acquisition.  Management
has held meetings and discussions with some of these companies, but
no proposals or deals have been consummated as of the date of this
report.  Management plans to continue to pursue these opportunities
vigorously and has entered into an agreement with a consultant who
is to assist in identifying merger candidates and contract
negotiations.

Subsequent to September 30, 1998, the Company has issued 5,538,920
shares of common stock in payment of cash expenses incurred by its
officers.  These expenses include accounting fees, transfer agent
fees, filing  fees, etc.  In addition, the Company has issued
300,000 shares to a mergers and management consultant for services
to be provided, 8,113,920 shares were exchanged for the stock of
another publicly traded entity, and 530,000 shares have been issued
for cash.

                                     F-9

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NOTE 5:   GOING CONCERN

As discussed in the General Information regarding the Development
Stage Enterprise, the Company has not had operations since 1986 and
had no assets at the financial statement date.  Subsequent
activities since the financial statement date have not included
revenue generating operations or acquisition of operating assets.
While the Company could continue in this non-operating mode for an
extended period of time, Management anticipates that the Company
will be acquired in a reverse merger by an entity seeking to go
public.  In the alternative, a third party or group may be
interested in providing capital for a new business.  As stated in
Note 4, Management has received inquiries and seen interest in one
or both of these possibilities.  Should neither of these occur, the
Company is not in significant danger of dissolution as long as the
officers and directors are willing to pay the nominal costs of
keeping it in good standing.  However, without a merger partner or
some significant capital infusion, the Company is not currently in
a position to be considered an operating unit.







                                     F-10