SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    Form 10-K
  Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
                of 1934 For the fiscal year ended June 30, 1998

                          Commission File No. 2-85845-D

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



                         SILVERTHORNE PRODUCTION COMPANY
             (Exact name of Registrant as specified in its charter)

           COLORADO                                       84-0189377
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)


16053 Via Viajera, Rancho Santa Fe, CA 92091               (619) 759-9123
(Current address of principal executive office)      (Registrant's telephone No.
                                                           with area code)



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

Securities pursuant to Section 12(g) of the Act:     None

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

     The  aggregate  market  value  of the  Registrant's  common  stock  held by
non-affiliates  of the  Registrant,  computed by reference to the average of the
closing bid and asked prices of such stock on June 30, 1998 was not determinable
because  there  was  no  significant  trading  even  though  there  were  listed
quotations of $.125 bid - $.125 ask on the OTC Bulletin Board as of that date or
60 days prior to the date of filing.

     The number of shares  outstanding of each class of Registrant's  classes of
Common Stock ($.001 par value) as of end of period  covered by report was:

                                                       June 30, 1998: 15,757,047

<PAGE>
                                     PART I
                                     ------


ITEM 1.  BUSINESS.
-------  ---------

     GENERAL  DEVELOPMENT OF BUSINESS.  Company was incorporated May 6, 1983, in
Colorado.  Company  made a public  offering  of its common  stock  pursuant to a
Registration  Statement  effective  November 23,  1983,  and closed that initial
public  offering with the sale of 10,000,000  Units (each Unit consisting of one
share of common stock and one common stock purchase  Warrant),  and received net
proceeds therefrom in the approximate amount of $175,000. Company was formed for
a specific purpose of engaging in the manufacture,  assembly, licensing and sale
of cellular radio and communications equipment and accessories, acquire real and
personal property and to engage in any business permitted by Colorado law.

     In 1984, Company acquired S & R Telecommunications,  Inc., a privately held
Colorado corporation engaged in  telecommunications  installations  services, in
exchange for shares restricted  common stock,  which shares were returned to the
treasury  in  the  third  fiscal  quarter  of  1985  when  the  business  proved
unprofitable  and was terminated.  Also, in 1984,  Company created a subsidiary,
CRS Broadcasting of Mississippi, Inc., a Mississippi corporation, which acquired
the business and assets of radio station.  The subsidiary  defaulted on its loan
obligations  and in the third fiscal quarter of 1985.  The lender  foreclosed on
its note and obtained  possession and ownership of the assets of said subsidiary
of Company.  Contingent  liability,  if any,  from the  subsidiary to Company is
barred  by  the   Statute  of   Limitations.   After  the   failure  of  S  &  R
Telecommunications,   Inc.,  and  of  CRS  Broadcasting  of  Mississippi,  Inc.,
Company's day to day business operations ceased until April, 1988.

     In May, 1988,  Company was  recapitalized.  Company  acquired oil producing
properties  located in Allan  County,  KS,  implemented a 1 for 20 reverse stock
split and commenced business operations.  Pursuant to that acquisition,  Company
executed  a  promissory   note  and  conducted   operations  for  eight  months,
terminating  on or about  March 15,  1989,  when  Company  disposed of its Allan
County,  KS, oil properties.  A loss of  substantially  all of Company's  assets
resulted.  In June,  1989,  Company  creditors  forgave  indebtedness of Company
totalling  approximately  $100,000,  which had resulted  from accrued  salaries,
plus,  promissory  notes  and  attorney  fees  owed to  Company's  officers  and
directors.  Since the failure and the loss  resulting  from  disposal of the oil
properties,  Company's  day to  day  business  operations  ceased.  Company  has
returned to a  developmental  stage company.  Company,  again,  has been without
revenue  and  operating  capital  and is in  arrears  on its  filings  with  the
Securities and Exchange Commission.

     FINANCIAL  CONDITIONS.  Company had not  generated  any revenues for fiscal
years ended June, 1984, 1985, 1986, 1987 and 1988. As of March 31, 1988, Company
was more  than two years in  arrears  on its  filings  with the  Securities  and
Exchange Commission,  had contingent  liabilities and had no assets. Company was
insolvent and  non-operational.  Company obtained capital to bring the financial
statements and SEC reports  current and enabled  Company to hold a shareholders'
meeting approving acquisition of assets and commencement of business activities.

                                      -2-
<PAGE>

     Commencing in July,  1988, and through the end of its fiscal year, June 30,
1989,  Company  generated gross revenues in the amount of $27,098 resulting from
sales of oil produced from its  properties,  which  properties were exchanged in
liquidation of Company's  related  contingent  liabilities and outstanding debt.
Prior to engaging in the oil  business  Company  had an  accumulated  deficit of
approximately  $243,000.  Company's oil business had an  additional  accumulated
deficit of approximately $386,000. Company president obtained funds from certain
shareholders to pay for professional services, from time to time, to prepare the
financial audits of Company,  including this report.  By fiscal year ending June
30, 1998, Company had a total accumulated deficit of approximately $767,000.

     DESCRIPTION  OF BUSINESS.  Company's  day to day business  operations  have
ceased.  Company has been seeking a business opportunity which it can acquire by
stock  exchange or merger.  Substantially  all of the expenses  paid during this
fiscal year have  occurred  maintaining  a transfer  agent or in pursuit of such
acquisition or merger  through the efforts of the Chief  Executive  Officer.  No
officer or director has been paid for the extensive  hours of services  rendered
on behalf of the Company.  As of June 30, 1998, such  acquisition or merger have
not been resulted.

ITEM 2.  PROPERTIES.  None.
-------  -----------

ITEM 3.  LEGAL PROCEEDINGS.
-------  ------------------

     Company is not presently a party to any legal proceeding and is not subject
to any known  administrative  or judicial  proceeding or  investigation  arising
under any federal, state or local provision.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.  None.
-------  ----------------------------------------------------

                                     PART II
                                     -------

Item 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
-------  --------------------------------------------------------------------
         MATTERS.
         --------

         Company's common stock has been publicly traded and the price quoted on
  the OTC Bulletin Board. Even though maintaining a current listing, no known
significant trading occurred during this fiscal year. As of June 30, 1998, there
were  approximately  1,240  shareholders  of record of Company's  common  stock.
Pursuant to The Insider Trading and Securities  Fraud  Enforcement Act of 1988,"
the Company's  securities fall within the definition of Designated  Security" as
of January 1, 1990.  Company  believes the Act has increased  its  difficulty in
attracting new market makers and has contributed to the increased  unwillingness
of market makers to maintain inventory of Company's shares, therefore, Company's
shareholders may experience  significant difficulty in disposing of or acquiring
shares.  Company  has never  paid any  dividends  and does not expect to pay any
dividends  during the next fiscal year.  Company has never generated  sufficient
profits to pay any dividends.  Company's common stock could be deemed no to have
a public trading market.

                                      -3-
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA.
-------  ------------------------

     Company has not engaged in any revenue  producing  operations during fiscal
year ended June 30, 1998.  Company's selected financial  information is included
in the  financial  statements  which  form a part of this  report  and which are
incorporated herein by reference.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-------  -----------------------------------------------------------------------
         OF OPERATION.
         -------------

     As of March  31,  1989,  Company  had  returned  to a  developmental  stage
company.  Company's  financial  condition did not change  materially  during the
fiscal year ended June 30, 1998,  except that accounts  payable and note payable
of $153,150 were  reclassified  to acquisition  of capital  stock.  Said holders
agreed to convert the subject  accounts  payable and note payable with  interest
thereon to Company stock at the rate of $.0125 instead of $.001 par value, which
benefitted  Company by $140,898 capital paid in excess of par resulting from the
debt reduction.  In addition the  reclassification  was made to assist Company's
pursuit of mergers by elimination of substantially all corporate indebtedness.

     LIQUIDITY.  Company's liquidity did not change during the fiscal year ended
June 30, 1998. Company had no material liquid assets at the beginning nor at the
ending.  Company  had one  account  payable to the stock  transfer  agent in the
amount of approximately $7,000 as of year ended June 30,1998.

     CAPITAL RESOURCES.  Company had no commitments for any capital expenditures
nor increases in capital  resources  during the fiscal year ended June 30, 1998,
except for the reclassification of said accounts payable and note payable stated
hereinabove.

     RESULTS OF OPERATION.  Company has not had any business  operations  during
the fiscal year ended June 30, 1998.  Company's  pursuit of business  operations
through  acquisition  by  stock  exchange  or  merger  continue,s  but  has  not
materialized. No mergers are pending.

     CHANGE IN CORPORATE OFFICERS,  MANAGEMENT AND DIRECTORS.  No change in this
fiscal year.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
-------  --------------------------------------------

         (see following pages)


                                      -4-
<PAGE>
                         SILVERTHORNE PRODUCTION COMPANY

                          INDEX TO FINANCIAL STATEMENTS

                                                                        PAGE

Independent Auditor's Report                                              6

Financial Statements

         Balance Sheet                                                    7

         Statement of Operations                                          8

         Statement of Cash Flow                                           9

         Statement of Stockholders' Equity                               10

         Notes to Financial Statements                                11-12





                                      -5-
<PAGE>

                          INDEPENDENT AUDITOR'S REPORT



To the Stockholders and Board of Directors,
SILVERTHORNE PRODUCTION COMPANY


     I have audited the  accompanying  balance sheet of SILVERTHORNE  PRODUCTION
COMPANY ( a Colorado  Corporation)  as of June 30, 1998 and 1997 and the related
statements of  operations,  stockholders,  equity and cash flows for each of the
two years in the period ended June 30, 1998 and 1997. These financial statements
are the  responsibility  of the Company's  management.  My  responsibility is to
express an opinion on these financial statements based on my audit.

     I  conducted  my audit  in  accordance  with  generally  accepted  auditing
standards.  Those standards  require that I 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 presentation.  I believe
that my audit provides a reasonable basis for my opinion.

     In my opinion,  the financial  statements referred to above present fairly,
in all material  respects,  the financial  position of  SILVERTHORNE  PRODUCTION
COMPANY as of June 30, 1998 and 1997,  and the results of its operations and its
cash flows for each of the two years in the period ended June 30, 1998 and 1997,
in conformity with generally accepted accounting principles.

/s/ Daniel Jankowski

Daniel Jankowski
Certified Public Accountant
332 S. Juniper St, Suite 203
Escondido, CA 92025

September 29, 1998

                                      -6-
<PAGE>
<TABLE>
<CAPTION>

                                SILVERTHORNE PRODUCTION COMPANY
                                (A Developmental Stage Company)
                                   COMPARATIVE BALANCE SHEET
                         For fiscal years ended June 30, 1998 and 1997

                                                                                                       Amended 1
                                                                                Year ended             Year ended
                                                           Notes               June 30, 1998         June 30, 1997
                                                           -----               -------------         -------------  
ASSETS
------
<S>                                                          <C>                 <C>                   <C>
CURRENT ASSETS:
     Cash                                                                        $       0             $      26
                                                                                 ---------             ---------
          TOTAL ASSETS:                                                          $       0             $      26
                                                                                 =========             =========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------

CURRENT LIABILITIES
     Notes Payable                                           3                   $       0             $  22,000
     Accrued interest                                        3                           0                10,828
     Accounts Payable                                        4                       7,018                33,364
                                                                                 ---------             ---------
          TOTAL CURRENT LIABILITIES:                                             $   7,018             $  66,192
                                                                                 ---------             ---------
SHAREHOLDERS' EQUITY
     Common Stock, par value $.001 per share;
       authorized 50,000,000 shares; of which
       15,757,047 shares are issued and outstanding8                             $  15,757             $   3,505
     Capital paid in excess of par                                                 748,230               607,332

RETAINED EARNINGS DEFICIT:
     From regular operations                                                      (617,286)             (617,286)
     Accumulated during developmental stage                  7                    (153,719)             ( 59,717)
                                                                                 ---------             ---------

TOTAL SHAREHOLDERS' EQUITY (DEFICIT)                                             $(  7,018)            $( 66,166)
                                                                                 ---------             ---------
          TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                             $       0             $      26
                                                                                 =========             =========










                     The accompanying notes are an integral part of these financial statements.
</TABLE>
                                                      -7-
<PAGE>
<TABLE>
<CAPTION>

                                 SILVERTHORNE PRODUCTION COMPANY
                                 (A Developmental Stage Company)
                                    STATEMENT OF OPERATIONS
                          For fiscal years ended June 30, 1998 and 1997

                                                                                                       Amended 1
                                                                                Year ended             Year ended
                                                           Notes               June 30, 1998         June 30, 1997
                                                           -----               -------------         -------------

<S>                                                          <C>                <C>                     <C>
MISCELLANEOUS INCOME:
     Reversal of accounts payable                            4                  $       0               $  44,127
                                                                                ---------               ---------
 EXPENSES:

     Administrative expenses:                                                   $  15,736               $  12,087

     Interest                                                3                      6,906                   2,583

     Legal Fees                                              5                     69,800                       0

     Auditing Fees                                                                  1,560                       0
                                                                                ---------               ---------

                  Total Expenses                             3                  $  94,002               $  14,670
                                                                                ---------               ---------

NET INCOME (LOSS)                                                               $ (94,002)              $  29,457
                                                                                =========               =========

EARNINGS PER SHARE:
     Net income from operations                              6                  $   .0098               $   .0084

Weighted average common
     shares outstanding                                                         9,631,047               3,505,047
                                                                                =========               =========













                     The accompanying notes are an integral part of these financial statements.
</TABLE>

                                                    -8-
<PAGE>
<TABLE>
<CAPTION>


                                  SILVERTHORNE PRODUCTION COMPANY
                                  (A Developmental Stage Company)
                                      STATEMENT OF CASH FLOW
                            For fiscal years ended June 30, 1998 and 1997
                                                                                                         Amended 1
                                                                                Year ended              Year ended
                                                                               June 30, 1998           June 30, 1997
                                                                               -------------           -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
                                                             <S>                 <C>                     <C>
   Net income (loss)                                                             $(94,002)               $ 29,457
   Increase (decrease) in accounts payable                   4                          0                  12,122
   Non-cash write-off notes/account payable                                                               (44,127)
   Increase in accrued interest                                                                             2,583
                                                                                 --------                --------
   Net cash flows from operation                                                 $(94,002)               $     35
                                                                                 --------                --------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Debt converted to common stock                            5                   $ 93,976                $      0
                                                                                 --------                --------

CASH FLOWS FOR INVESTMENT ACTIVITIES:                                            $      0                $      0
                                                                                 --------                --------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENT                              $(    26)               $     35
   Cash or bank overdraft at beginning of period                                       26                 (     9)
                                                                                 --------                --------
                                                                                 $      0                $     26
                                                                                 ========                ========



















                The accompanying notes are an integral part of these financial statements.
</TABLE>
                                                   -9-
<PAGE>
<TABLE>
<CAPTION>
      
                                         SILVERTHORNE PRODUCTION COMPANY
                                         (A Developmental Stage Company)
                                  STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
                                  For fiscal years ended June 30, 1998 and 1997




                                         Common Stock                                                 Total
                                    ----------------------       Additional      Accumulated       shareholders'
                                      Shares        Amount     Paid-in capital     deficit        equity (deficit)
                                    ----------     --------    ---------------   -----------      ----------------
<S>                                <C>             <C>            <C>             <C>                <C>
BALANCES, June 30, 1996             #3,580,047     $ 3,580        $ 907,257       $(706,460)         $ 204,377

NET INCOME (LOSS)
      from fiscal year ended
         June 30, 1997                                                              29,457             29,457
         June 30, 1998              12,252,000     $12,252         140,898        ( 94,002)            59,148
                                                                 ---------
Redemption/reversal                 (   75,000)     (   75)       (299,925)                          (300,000)
                                   -----------     -------       ---------        ---------         ---------
BALANCE June 30, 1998              #15,757,047     $15,757       $ 748,230        $(771,005)        $(  7,018)
                                   ===========     =======       =========        =========         =========

























                 The accompanying notes are an integral part of these financial statements.
</TABLE>


                                                   -10-
<PAGE>

                         SILVERTHORNE PRODUCTION COMPANY
                         (A Developmental Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                  For fiscal years ended June 30, 1998 and 1997


NOTE 1 - AMENDMENT TO NUMBERS ON THE AUDIT REPORT FOR JUNE 30, 1997
-------------------------------------------------------------------

     As a result  of an  unintentional  oversight,  the  auditor  failed to make
several  corrections to certain numbers  appearing on the final audit report for
year  ended  June 30,  1997.  The  corrections  are set forth in the  respective
columns of these financial statements.


NOTE 2 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------------

     ORGANIZATION:  Company  was  incorporated  in  May  1983  in the  State  of
Colorado,  to engage in the cellular radio and communications  business;  and to
engage in any other lawful  activity  permitted." In June 1988,  Company changed
its name to Silverthorne  Production Company and commenced operations in the oil
an gas  industry.  During  1993-96,  Company  attempted  to  locate  acquisition
prospects and negotiate acquisition or exchange of assets, including activity in
the  fuel  industry.   Company's  pursuit  of  business   opportunities  through
acquisition by stock exchange or merger has not materialized.

     BASIS OF FINANCIAL  STATEMENT  PRESENTATION:  Company  evaluated  its total
financial position in anticipation of returning to a publicly held shell so that
it is more attractive to potential business opportunities through acquisition by
stock exchange or mergers.  Company has no operations and is critically short of
cash.  Its ability to continue  development  stage  activities  is in  question,
except  for  the  efforts  of  the  current  officers/directors.  Company  is  a
development  stage company.  To benefit  Company's  pursuit of  acquisitions  or
mergers certain creditors of Company agreed to reclassify their subject accounts
payable by Company into capital  stock.  Prior  agreements  between  Company and
holders of the  accounts  payable  were  published  in prior  audited  financial
statements  indicating  the  indebtedness  or  claim  for  consideration  may be
converted to payment for  acquisition  of additional  shares of Company stock at
par value.  Said holders agreed to convert the subject  accounts  payable,  plus
note  payable  with  interest  thereon  to  Company  stock at the rate of $.0125
instead of $.001 par value, which benefitted Company by $140,898 capital paid in
excess of par.

NOTE 3 - NOTES PAYABLE
----------------------

     The $22,000 note, plus compound  interest  thereon was converted to payment
for  acquisition of shares of Company  stock.  Company's  liability  thereon was
satisfied.  This note had  accrued  interest in the amount of $16,974 as of year
ended June 30, 1998.

NOTE 4 - ACCOUNTS PAYABLE
-------------------------

     Accounts payable of Company increased by Company's  liability for legal and
other services  tendered by the current  President/CEO/Director  from April 1989
through  current  date,  which were  previously  agreed,  at his  option,  to be
converted to payment or acquisition of shares of Company stock at par value.  As
stated in preceding  footnotes,  certain  creditors  agreed  convert the subject
accounts  payable  to Company  stock at the rate of $.0125  instead of $.001 par
value which benefitted Company approximately twelve times par by capital paid in
excess  of par.  American  Securities  Transfer,  Inc.  (AST),  debt is the only
accounts payable of Company.

NOTE 5 - RELATED PARTY TRANSACTIONS
-----------------------------------

     Company officers from time to time obtained funds from  shareholders to pay
for  expenses,  including  this  audit,  as well as pursuit of Company  business
opportunities.  Company's current  President/CEO/Director acted as General Legal

                                      -11-
<PAGE>


                         SILVERTHORNE PRODUCTION COMPANY
                         (A Developmental Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                  For fiscal years ended June 30, 1998 and 1997


Counsel and provided  Company  corporate legal services without billing for such
services  from April 1989 to 1997 on the  condition  Company  shall pay for said
services  when billed,  payable at his option with any  combination  of funds or
issuance of Company stock. Said legal services and consultation  were, as stated
above,  converted  to Company  stock at the rate of $.0125  instead of $.001 par
value, which benefitted Company  approximately twelve times par value by capital
paid in excess of par.

NOTE 6 - EARNINGS PER SHARE
---------------------------

     Earnings per share is  calculated  by dividing  the net income  (loss) from
operations, by total weighted shares outstanding at June 30, 1998.

NOTE 7 - INCOME TAXES
---------------------

     In the cellular radio communications  business,  Company accumulated a loss
carry forward of about  $243,000.  Company's loss carry forward from the oil and
gas industry  increased by  approximately  $376,000.  From 1989 through June 30,
1997,  development  stage  activities  in  pursuit  of  acquisition  and  merger
opportunities,   Company   accumulated  an  additional  loss  carry  forward  of
approximately $148,000.  Therefore the total loss carry forward is approximately
$767,000 through June 30, 1998. Company may not be able to utilize part of these
loss carry forwards,  depending on the nature of future operations.  Company has
prepared  and is filing its  federal  income tax  returns for the years June 30,
1991 through June 30, 1998,  contemporaneously  with publication of this audited
report.

NOTE 8 - CHANGE IN CONTROL OF THE COMPANY
-----------------------------------------

     Issuance of Company shares for the reclassified  accounts payable and notes
payable  $153,150,  at the rate of $.0125  instead  of $.001 par value  $12,252,
total 12,252,000 shares issued. Company benefitted by approximately twelve times
par value by  capital  paid in  excess  of par.  Shares  issued  10,536,720  and
previously held by President/CEO/Director, plus spouse's and minor daughter held
which are attributable to him as beneficial owner total approximately 69% of the
outstanding stock of the Company.










                                      -12-
<PAGE>

ITEM 9.   CHANGE IN AND DISAGREEMENTS WITH ACCOUNTING AND FINANCIAL DISCLOSURES.
-------   ----------------------------------------------------------------------

     During  the  fiscal  year  ended  June 30,  1998,  Company  did not  change
accountants  or have any  disagreements  with its  accountant  on any  matter of
accounting principals or practices,  financial statement disclosure, or auditing
scope or procedure.  The  accountant's  reports on the financial  statements for
Company did not contain an adverse  opinion or disclaimer of opinion and was not
qualified as to uncertainty, audit scope or accounting principles.


                                    PART III
                                    --------

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
--------  ---------------------------------------------------

     Directors and executive  officers of Company  during fiscal year ended June
30, 1998:

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

     David L. Jackson             60        President/CEO/Director and Chairman
     P.A. Jackson                 50        Director
     Tiffany M. Jackson           31        Secretary/Director

     BUSINESS  EXPERIENCE.   The  following  is  a  brief  account  of  business
experience  during at least the past five years of each  director and  executive
officer,  indicating the principal  business or the  organizations in which such
occupation and employment were carried on:

     D.L.  JACKSON:  President/Director  and  Chairman of Board of  Directors of
Company from April,  1990, to January,  1992, but continued as corporate General
Legal  Counsel.  In  February  1995,  Mr Jackson was  re-appointed  as a Company
Director and elected as Vice-President.  He receive his BA degree from Northwest
Nazarene  College;  earned a Juris Doctor  degree at the  University  of Denver,
College of Law, 1971;  received the American  Jurisprudence Award for excellence
in  corporations;  and  practiced  law in the United  States Courts and Colorado
State  Courts  until 1997.  He was an officer and  director of Jackson  Brothers
Industries, Inc., a publicly held Nevada corporation,  until 1991. He has been a
licensed real estate  broker in California  since 1991. He has been from time to
time an adjunct college professor  teaching Real Estate Law, Business Law, Human
Resource Management and Strategic  Management,  Point Loma Nazarene  University,
San Diego, CA. He serves as an arbitrator  resolving  disputes in commercial law
and labor  law.  He served on the  national  panel of the  American  Arbitration
Association;  received  Certificate  of  Accomplishment  from the Federal  Labor
Relations  Authority;  and was admitted to the national roster of arbitrators of
the Federal Mediation and Conciliation Services, Washington, D.C.

     T.M.  JACKSON:  Secretary/Director  of Company  since April,  1990.  She is
experienced in sales management,  business consultant, and currently employed in
San Jose,  CA, as a  consultant  in the  telemarketing  industry.  She  earned a
Bachelor of Science  degree,  Business  Administration  from the  University  of
Denver. She studied law at the University of Denver, College of Law, 1988-89.

     Each director holds office until the next annual meeting of shareholders or
until a successor is elected and  qualified.  Currently  all  directorships  are

                                      -13-
<PAGE>

filled.  Each officer  holds office until a successor is elected by the Board of
Directors.

ITEM 11.  EXECUTIVE COMPENSATION.
--------  -----------------------

     During the fiscal  year ended June 30,  1998,  there were no  salaries,  no
bonuses and no other forms of compensation  paid it directors or officers,  even
though  heretofore  authorized.  The Board of  Directors  has  authority  to set
salaries  for officers  and/or pay  directors on a day to day basis for services
rendered  to  Company,  in amounts to be  determined  at the  discretion  of the
Directors.  Once business operations  commence,  compensation will be determined
retroactively.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
--------  ---------------------------------------------------------------

     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. The following  itemization
sets forth the number of shares of Company's voting securities, Common Stock, by
each  person  who was  known by  Company  to own  beneficially  more  than 5% of
Company's outstanding voting stock as of June 30, 1998.
<TABLE>
<CAPTION>

     Name & address:                     Amount & nature of beneficially owned:       % of Class:
     ---------------                     --------------------------------------       -----------
     <S>                                          <C>                                   <C>
     David L. & Patricia A. Jackson (1)           10,887,151 Common                     69.09%
     16053 Via Viajera
     Rancho Santa Fe, CA 92067

     Eric & Susan Sundsvold (2)                   2,149,480 Common                      13.64%
     5121 S. Ironton St
     Englewood, CO 80111
</TABLE>

     (1) DLJ was issued  10,536,720 shares of Company's Common Stock as a result
     of  reclassification  of accounts payable and note payable in the amount of
     $132,175,  June 1998. DLJ agreed to reclassify the subject accounts payable
     and note  payable  with  interest  thereon to Company  stock at the rate of
     $.0125  instead of $.001 par value,  which  benefitted  Company by $121,638
     capital  paid in  excess  of par  resulting  from  the debt  reduction.  In
     addition  the  reclassification  was made to assist  Company's  pursuit  of
     mergers by elimination of substantially all corporate indebtedness. PAJ has
     held  175,231  shares  of  Company's  Common  Stock  as  her  sole/separate
     property,  and minor  daughter has held  175,200  shares of Common Stock of
     Company as her  sole/separate  property.  Tiffany M. Jackson 175,200 shares
     (1.11%),  Kellie R.  Jackson  175,200  shares  (1.11%) and Traci L. Jackson
     175,100 shares (1.11%),  offspring of DLJ and PAJ, are holders of Company's
     Common Stock.  Their respective  shares are not attributable to DLJ and PAJ
     inasmuch as said  offspring have obtained  majority,  are not living in the
     home of, and are not under the direct or  indirect  control of, nor had any
     contract,  arrangement,  understanding  or  otherwise  had  any  voting  or
     disposition power with parents.

     (2) EJS was issued  1,715,280  shares of Company's Common Stock as a result
     of  reclassification  of accounts  payable in the amount of  $20,975,  June
     1998.  EJS agreed to  reclassify  the subject  accounts  payable to Company
     stock at the rate of $.0125  instead of $.001 par value,  which  benefitted
     Company by $19,260  capital paid in excess of par  resulting  from the debt
     reduction.  In addition the  reclassification  was made to assist Company's
     pursuit  of  mergers  by   elimination  of   substantially   all  corporate
     indebtedness.  EJS has held 206,000 shares of Company's Common Stock in his

                                      -14-
<PAGE>

     own name and holds  11,000  shares  (0.007%) of  Company's  Common Stock as
     UTMA/trustee for Shawn N. Sundsvold, offspring not having obtained majority
     and  living  in the home of EJS and SS.  Shawn N.  Sundsvold  holds  50,000
     shares (0.03%) of Company's  Common Stock in his own name.  Susan Sundsvold
     holds 167,200 shares (0.01%) of Company's Common Stock in her own name.

     SECURITY  OWNERSHIP OF CERTAIN BENEFICIAL  MANAGEMENT.  The following table
sets forth the number of shares of Company's voting securities, Common Stock, by
each director and by all officers and  directors of Company to own  beneficially
more than 5% of Company's outstanding voting stock and as of June 30, 1998.
<TABLE>
<CAPTION>

     Name & address:                 Amount & nature of beneficially owned:    % of Class:
     ---------------                 --------------------------------------    -----------
     <S>                                     <C>                                  <C>
     David L. Jackson (3)                    10,536,720 Common                    69.09%
     PO Box 180329,
     Coronado, CA 92178

     Patricia A. Jackson (3)                 175,231 Common                       1.11%
     16053 Via Viajera
     Rancho Santa Fe, CA 92067

     Tiffany M. Jackson (4)                  175,200 Common                       1.11%
     335 Elan Villager Dr #409
     San Jose, CA 92713
</TABLE>

     (3) DLJ including attribution percentage for spouse and minor daughter; PAJ
     holds 175,231 shares of Company's Common Stock (1.11%) as her sole/separate
     property,  and minor  daughter  holds  175,200  shares  of Common  Stock of
     Company (1.11% %) as her sole/separate property (see note 1, above).

     (4) TMJ is a holder of 175,200  shares of Company's  Common Stock  (1.11%),
     however said shares are not attributable to DLJ and PAJ inasmuch as she has
     obtained  majority,  is not living in the home, and is not under the direct
     or indirect control of, nor had any contract, arrangement, understanding or
     otherwise had any voting or disposition power with parents.

ITEM 13.  CERTAIN RELATIONS AND RELATED TRANSACTION.
--------  ------------------------------------------

     Company officers from time to time obtained funds from  shareholders to pay
for  expenses,  including  this  audit,  as well as pursuit of Company  business
opportunities.  Company  General  Legal Counsel has provided  Company  corporate
legal services  without billing for such services from April 1989 to date on the
condition Company shall pay for said services when billed, payable at his option
with any  combination  of funds or issuance of Company  stock at par value.  DLJ
agreed to reclassify the subject  accounts  payable,  which included billing for
legal and consulting  services rendered,  and note payable with interest thereon
to  Company  stock at the rate of  $.0125  instead  of $.001  par  value,  which
benefitted  Company by $121,638 capital paid in excess of par resulting from the
debt reduction.  In addition the  reclassification  was made to assist Company's
pursuit of mergers by elimination of substantially all corporate indebtedness.

                                      -15-
<PAGE>

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
--------  ----------------------------------------------------------------

          Exhibits.
          ---------

          Exhibit 23  Consent of Independent Certified Public Accountant,
                      Daniel Jankowski

          Exhibit 27  Financial Data Schedule

          Financial Statements and Supplementary Schedules.
          -------------------------------------------------

          See Index to Financial  Statement,  included above.

     Reports on Form 8-K.  Company's  Form 8-K  Report,  June 30,  1998,  issued
contemporaneously  herewith concerns the change of ownership  resulting from DLJ
agreed to reclassify the subject  accounts  payable,  which included billing for
legal and consulting  services rendered,  and note payable with interest thereon
to  Company  stock at the rate of  $.0125  instead  of $.001  par  value,  which
benefitted  Company by $121,638 capital paid in excess of par resulting from the
debt reduction. DLJ was issued 10,536,720 shares of Company's Common Stock. As a
result of the shares  issued to DLJ,  plus  shares  attributable  for spouse and
minor daughter,  DLJ's  beneficially  owned shares total 10,887,151 Common stock
which  is  approximately  69.09%  of  the  Company's  total  shares  issued  and
outstanding.


                                   SIGNATURES
                                   ----------

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

                                       SILVERTHORNE PRODUCTION COMPANY



Dated: September 29, 1998              By: /s/ David L. Jackson
       ------------------                  ------------------------------------
                                           David L. Jackson, President,
                                           Chief Executive Officer and
                                           Director



Dated: September 29, 1998              By: /s/ T.M. Jackson
       ------------------                  ------------------------------------
                                           T.M. Jackson, Secretary and Director

     No annual report or proxy  material has been sent to securities  holders in
Registrant's fiscal year ended June 30, 1989 through June 30, 1998.