U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB


(Mark One)

[x]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
     1934

     For The Fiscal Year Ended: September 30, 2000

                                       or

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





     For the transition period from                      to

                          Commission file number 0-730
                                                --------

                            PENN-PACIFIC CORPORATION
                 (Name of small business issuer in its charter)



       Delaware                                         95-3227748
State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization                        Identification No.)


             4525 W. Hacienda Ave, Ste 12H, Las Vegas, Nevada 89118
             ------------------------------------------------------
               (Address of principal executive offices)(Zip code)

                Issuer's telephone number (800) 868-7233 ext 225
                                          ----------------------


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

Securities registered under Section 12(g) of the Act:

                           Common Stock Par Value $.10
                           ---------------------------
                                (Title of Class)


                                        1

<PAGE>



     Check  whether  the issuer:  (1) 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 required for the past 90 days. Yes X No

     Check if there is no disclosure of delinquent  filers  pursuant 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: None


     To the best  knowledge and belief of management  there has been no trading,
therefore the aggregate market value is not known.


                         (ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDING DURING THE PRECEDING FIVE YEARS)

     Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court. Yes X No -----

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

     State the number of shares  outstanding of each of the issuer's  classes of
common  equity,  as of the  latest  practical  date:  March 20,  2001  1,168,698


                       DOCUMENTS INCORPORATED BY REFERENCE

     If the following documents are incorporated by reference,  briefly describe
them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) Into
which the document is incorporated:  (1) any annual report to security  holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"):

 None

     Transitional  Small  Business  Disclosure  Format  (check  one):  Yes  NO X





                                        2

<PAGE>



                                TABLE OF CONTENTS


Item Number and Caption                                                   Page

PART I

Item 1.  Description of Business...............................................4

Item 2.  Description of Property...............................................4

Item 3.  Legal Proceedings.....................................................4

Item 4.  Submission of Matters to a Vote of Security Holders...................5

PART II

Item 5.  Market for Common Equity and Related Stockholder Matters..............5

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

Item 7.  Financial Statements..................................................7

Item 8.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure..................................................7

PART III

Item  9. Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 16(a) of the Exchange Act.....................7

Item 10. Executive Compensation................................................8

Item 11. Security Ownership of Certain Beneficial Owners and Management........8

Item 12. Certain Relationships and Related Transactions........................9

Item 13. Exhibits and Reports on form 8-K.....................................10








                                        3

<PAGE>



                                     PART I



                         ITEM I DESCRIPTION OF BUSINESS


General

     The Company intends to acquire interests in various business opportunities,
which in the opinion of management will provide a profit to the Company.


History

     The Company was incorporated under the laws of the state of Delaware on May
18,  1971.  From  1979 to 1991 the  primary  business  of Penn  Pacific  and its
subsidiaries  was the  acquisition,  exploration,  development,  production  and
operation of oil and gas properties.  Penn Pacific has been inactive since 1991.
The Company filed a voluntary petition of reorganization under Chapter 11 of the
United  States  Bankruptcy  Code on January 27, 1994.  On January 13, 1997,  the
Company emerged from bankruptcy  pursuant to a final decree of the United States
Bankruptcy  Court for the Northern  District of Oklahoma.  The Company is in the
development stage since January 13, 1997 and has not commenced planned principal
operations.



                         ITEM 2 DESCRIPTION OF PROPERTY


     The Company at this time has no  properties.  As of September  30, 2000 and
1999 all  activities  of the Company have been  conducted by corporate  officers
from either their homes or business offices. Currently, there are no outstanding
debts  owed by the  company  for the use of these  facilities  and  there are no
commitments for future use of the facilities.



                            ITEM 3 LEGAL PROCEEDINGS


     The Company is not presently involved in any legal proceedings.






                                        4

<PAGE>




                        ITEM 4 SUBMISSION OF MATTERS TO A
                            VOTE OF SECURITY HOLDERS


     No Matters  were  submitted to a vote of security  holders  during the last
quarter of the fiscal year ended September 30, 2000



                                     PART II


                       ITEM 5 MARKET FOR COMMON EQUITY AND
                           RELATED STOCKHOLDER MATTERS



     The stock is traded on the Internet with the trading  symbol  "PENNC".  The
following high and low bid information was provided by NIPHIX  Investments  Inc.
The quotations  provided reflect  inter-dealer  prices,  without retail mark-up,
mark-down or commission and may not represent actual transactions.


          2000                                      HIGH BID            LOW BID
                                                    (To the best knowledge of
                                                    management, there was no
                                                    trading of shares for fiscal
                                                    2000 and 1999.)


     The number of  shareholders  of record of the Company's  common stock as of
March 20, 2001 was approximately 6473.

     The Company has not paid any cash dividends to date and does not anticipate
paying  dividends  in the  foreseeable  future.  It is the present  intention of
management to utilize all available  funds for the  development of the Company's
business.

Recent Sales of Unregistered Securities.

     The  Company  over the past three years has sold  217,165  shares of common
stock.  The stock was not sold through an underwriter and was not sold through a
public offer. A summary of the transactions follows:

                                        5

<PAGE>




                                                                 Common Stock
                                                               Shares   Amount
February 17, 2000 shares issued
   to an officer/director for services at
   $0.10 per share ............................................11,860  $ 1,186
February 17, 2000 shares issued
   to officers/directors for services at
   $0.10 per share ............................................205,305   20,351
Total .........................................................217,165  $21,717

     These sales are exempt under Regulation D Rule 506 of the Securities Act of
1933.



                       ITEM 6 MANAGEMENT'S DISCUSSION AND
                         ANALYSIS OR PLAN OF OPERATIONS


Plan of Operations

     The planned  operations of the company during the next twelve months are as
follows:

     The Company intends to seek an acquisition of a larger and potentially more
profitable  business.  The Company intends to focus on  opportunities to acquire
new products or technologies in development as well as those currently  planned,
including a complete operating  business that has demonstrated  long-term growth
potential,   strong   marketing   presence,   and  the  basis   for   continuing
profitability.  The Company has not identified  any specific  target or possible
acquisition. As the Company pursues its acquisition program, it will incur costs
for ongoing  general  and  administrative  expenses as well as for  identifying,
investigating, and negotiating a possible acquisition.

Results of Operations - The Company filed a voluntary petition of reorganization
under  Chapter 11 of the United States  Bankruptcy  Code on January 27, 1994. On
January 13, 1997, the Company emerged from bankruptcy pursuant to a final decree
of the United States Bankruptcy Court for the Northern District of Oklahoma. The
Company is in the development stage since January 13, 1997 and has not commenced
planned principal operations.

Liquidity  and  Capital   Resources  -  The  Company  requires  working  capital
principally  to fund its current  operating  expenses  for which the Company has
relied on short-term  borrowings  and the issuance of  restricted  common stock.
There are no formal commitments from banks or other lending sources for lines of
credit or similar short-term borrowings, but the Company has been able to borrow
any additional working capital that has been required.  From time to time in the
past,  required  short-term  borrowings  have  been  obtained  from a  principal
shareholder or other related entities.

     Cash  flows.  Operating  activities  used  cash of  $7,000  for 1997 to pay
Chapter 11

                                        6

<PAGE>



administrative  fees. Financing activities provided cash of $7,000 for 1997 from
the sale of the  Company's  restricted  stock and  issuance of notes  payable to
stockholders..

     In order to  complete  any  acquisition,  the  Company  may be  required to
supplement  its  available  cash and other  liquid  assets  with  proceeds  from
borrowings,  the sale of additional securities,  including the private placement
of restricted stock and/or a public offering, or other sources.  There can be no
assurance  that  any such  required  additional  funding  will be  available  or
favorable to the Company.

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

     The  Company may be required to  supplement  its  available  cash and other
liquid assets with proceeds from borrowing,  the sale of additional  securities,
or other sources.  There can be no assurance  that any such required  additional
funding will be  available  or, if  available,  that it can be obtained on terms
favorable to the Company.


                           ITEM 7 FINANCIAL STATEMENTS


     The financial statements of the Company and supplementary data are included
beginning  immediately  following the signature page to this report. See Item 13
for a  list  of the  financial  statements  and  financial  statement  schedules
included.


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


     There are not and have not been any  disagreements  between the Company and
its accountants on any matter of accounting  principles,  practices or financial
statements disclosure.


                                    PART III


               ITEM 9 DIRECTORS EXECUTIVE OFFICERS, PROMOTERS AND
                CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF
                                THE EXCHANGE ACT


Directors and Executive Officers.


                                        7

<PAGE>



Director's   Name    Age    Office                            Term of Office



James O'Brien        62     President and CEO/Director       February 23, 1998
Rose Fischer         46     Secretary/Treasurer/Director     February 23, 1998


Business Experience

     James O'Brien,  CEO/President,  founded Optimum Source  International Ltd.,
during the past five years Mr. O'Brien developed software, established trade and
countertrade exchanges for Optimum Source International, Ltd.

     Rose  Fischer,  Secretary/Treasurer/Director,  with an associate  degree in
accounting,  has been Director and  Operations  Facilitator  for Optimum  Source
International,  Ltd. ("OSI") for the past two years, which includes finalization
and  implementation  of all  electronic  commerce.  Prior to OSI, Ms.  Fischer's
experience was as a financial consultant with a privately held firm since 1985.

Compliance With Reporting Requirements.

     Based upon a review of Forms 3, 4, and 5 furnished to the Company during or
with  respect to the  preceding  fiscal  year and written  representations  from
certain  reporting  persons,  the  Company  is not aware of any  failure  by any
reporting  person to make  timely  filings of those forms as required by Section
16(a) of the Securities Exchange Act of 1934.



                         ITEM 10 EXECUTIVE COMPENSATION


There has been no executive compensation.



                 ITEM 11 SECURITY OWNERSHIP OF BENEFICIAL OWNERS
                                 AND MANAGEMENT


Principal Shareholders

     The table below sets forth  information  as to each person owning of record
or who  was  known  by the  Company  to own  beneficially  more  than  5% of the
1,168,698 shares of issued and outstanding  Common Stock,  including  options to
acquire stock of the Company as of March 20, 2001 and

                                        8

<PAGE>



information as to the ownership of the Company's  Stock by each of its directors
and executive  officers and by the directors and executive  officers as a group.
Except as otherwise  indicated,  all shares are owned directly,  and the persons
named in the table have sole voting and investment  power with respect to shares
shown as beneficially owned by them.

                                           # of
Name and Address             Nature of     Shares
of Beneficial Owners         Ownership     Owned            Percent
Directors

Principal Shareholders


John Allison                 Common        71,500            6.12
Alpha Beta LLC               Common        90,945            7.78
Celex-Nevada                 Common        97,750            8.36
Wayne H. Creasy              Common        66,063            5.65
Cede & Co.                   Common       179,085           15.32
Optima International         Common       205,305           17.58
George White                 Common        70,500            6.03



All Executive Officers and
Directors as a Group (2
persons)                     Direct        11,860           1.015%
                             Options         None           None %
                             Total         11,860           1.015%





             ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


     During 1999 an officer and director loaned the Company $3,000.  The note is
payable on demand plus interest.  During 2000, the note holder  accepted  11,860
shares  of  common  stock at par value in  exchange  for part of the  note.  The
balance due as of September 30, 2000 is $1,814.

     As of September  30, 2000 and 1999 all  activities of the Company have been
conducted by  corporate  officers  from either their homes or business  offices.
Currently, there are no outstanding

                                        9

<PAGE>



debts  owed by the  company  for the use of these  facilities  and  there are no
commitments for future use of the facilities.


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


     (a) The following documents are filed as part of this report.

1.     Financial Statements                                             Page
                                                                        ----

Report of Robison, Hill & Co., Independent Certified Public Accountants......F-1
Balance Sheets
 September 30, 2000 and 1999.................................................F-2
Statements of Operations
  For the Years Ended September 30, 2000 and 1999............................F-3
Statements of Changes in Stockholders' Equity
  For the Years Ended September 30, 2000 and 1999............................F-4
Statements of Cash Flows
  For the Years Ended September 30, 2000 and 1999............................F-5
Notes to Financial Statements
 September 30, 2000 and 1999.................................................F-7

2.     Financial Statement Schedules

     All schedules are omitted  because they are not  applicable or the required
information is shown in the financial statements or notes thereto.

3.     Exhibits

     The following exhibits are included as part of this report:


Exhibit
Number           Title of Document

3.01 Articles of Incorporation and Bylaws of the registrant(1)

3.02 Amendments  to Article IV and IX of the  Articles of  Incorporation  of the
     Registrant,  as filed with the  Delaware  Secretary  of State on October 5,
     1988(1)

4    Instruments  defining  the  rights  of  security  holders  (Certificate  of
     Designation of Preferences of Series C preferred  Stock), as filed with the
     Delaware Secretary of State on October 5, 1988(1)

Other

23.01 Consent of Accountants(1)


                                       10

<PAGE>



(1)  Incorporated by Reference

(b)  No reports on Form 8-K were filed.

                                   SIGNATURES


     Pursuant  to the  requirements  of  section  13 or 15(d) of the  Securities
Exchange Act of 1934, as amended,  the Registrant has duly caused this report to
be signed on it behalf by the undersigned, thereunto duly authorized.

                            PENN-PACIFIC CORPORATION

Dated: May 1, 2001                     By  /S/     James O'Brien
                                       -------------------------
                                       James O'Brien
                                       President and CEO

     Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities indicated on this 1st day of May 2001.

Signatures                                    Title

/S/     James O'Brien
James O'Brien                                 President, C.E.O., Director
                                              (Principal Executive, Financial
                                              and Accounting Officer)

/S/    Rose Fischer
Rose Fischer                                  Secretary, Treasurer and Director

















                                       11

<PAGE>



                            PENN PACIFIC CORPORATION

                          (A Development Stage Company)

                                      - : -

                              FINANCIAL STATEMENTS

                           SEPTEMBER 30, 2000 AND 1999




























<PAGE>






                                    CONTENTS


                                                                            Page

Independent Auditor's Report...............................................F - 1

Balance Sheets
  September 30, 2000 and 1999..............................................F - 2

Statements of Operations
  For the Years Ended September 30, 2000 and 1999..........................F - 3

Statements of Changes in Stockholders' Equity
  For the Years Ended September 30, 2000 and 1999..........................F - 4

Statements of Cash Flows
  For the Years Ended September 30, 2000 and 1999..........................F - 5

Notes to Financial Statements..............................................F - 7



<PAGE>









                          INDEPENDENT AUDITOR'S REPORT


Board of Directors
Penn Pacific Corporation
Las Vegas, Nevada

Board Members:

     We have audited the accompanying balance sheets of Penn Pacific Corporation
(a  development  Stage  Company),  as of  September  30, 2000 and 1999,  and the
related  statements of operations,  changes in  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 Penn Pacific Corporation (a
development Stage Company), as of September 30, 2000 and 1999 and the results of
its  operations,  and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

                                              Respectfully submitted,



                                              /s/ ROBISON, HILL & CO.
                                              Certified Public Accountants

Salt Lake City, Utah
December 29, 2000



                                      F - 1

<PAGE>



                            PENN PACIFIC CORPORATION
                          (A Development Stage Company)
                                 BALANCE SHEETS
<TABLE>
<CAPTION>



                                                                September 30,
                                                          ---------------------------
                                                              2000           1999
                                                          ------------   ------------
<S>                                                       <C>            <C>
ASSETS .................................................  $       --     $       --
                                                          ============   ============


LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Accounts payable .....................................  $     24,671   $     16,310
  Accrued expenses .....................................        22,341         16,775
  Notes payable - stockholders .........................         1,814          3,000
                                                          ------------   ------------

          Total Liabilities ............................        48,826         36,085
                                                          ------------   ------------

Stockholders' Equity
Preferred  stock (par value $1.00),
  50,000,000 shares authorized,
  no shares issued at
  September 30, 2000 and 1999 ..........................          --             --
Common stock to be issued ..............................         8,154          8,154
Common stock (par value $.10), 100,000,000 shares
  authorized, 1,168,698 shares issued and outstanding at
  September 30, 2000 and 951,533 at September 30, 1999 .       116,870         95,153
Capital in excess of par value .........................    35,686,059     35,686,059
Retained deficit .......................................   (35,735,361)   (35,735,361)
Deficit accumulated during development stage ...........      (124,548)       (90,090)
                                                          ------------   ------------

          Total Stockholders' Equity ...................       (48,826)       (36,085)
                                                          ------------   ------------

          Total Liabilities and Stockholders' Equity ...  $       --     $       --
                                                          ============   ============


</TABLE>




   The accompanying notes are an integral part of these financial statements.






                                      F - 2

<PAGE>



                            PENN PACIFIC CORPORATION
                          (A Development Stage Company)
                             STATEMENT OF OPERATIONS


                                                                   Cumulative
                                                                   Since
                                                                   January 13,
                                                                   1997
                                              For the Year Ended   Inception of
                                                 September 30,     Development
                                            -----------------------------------
                                                2000        1999       Stage
                                            -----------   ---------   ---------
Revenues .................................  $      --     $    --     $    --
                                            -----------   ---------   ---------

Expenses
  Selling, general and
  administrative expenses ................       29,155       8,835      55,679
                                            -----------   ---------   ---------

Operating Loss ...........................      (29,155)     (8,835)    (55,679)

Other income (expense):
   Interest expense ......................       (5,303)     (3,969)    (60,683)

Reorganization items:
   Administrative fees ...................         --          --         8,186
                                            -----------   ---------   ---------

Loss before taxes ........................      (34,458)    (12,804)   (124,548)
Income taxes .............................         --          --          --
                                            -----------   ---------   ---------

       Net Loss ..........................  $   (34,458)    (12,804)  $(124,548)
                                            ===========   =========   =========


Per Share Amounts
Net Income (Loss) ........................  $     (0.03)  $   (0.01)
                                            ===========   =========

Weighted Average Shares Outstanding ......    1,085,997     951,533











    The accompanying nots are an integral part of these financial statements.


                                      F - 3

<PAGE>



                            PENN PACIFIC CORPORATION
                          (A Development Stage Company)
                  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                                                          Deficit
                                                                                                                        Accumulated
                                                                                                                        Since
                                                                                                                        January 13,
                                                                                                                        1997
                                                   Common Stock                                                         Inception of
                                   Preferred       To be Issued             Common             Excess of    Accumulated Development
                                     Stock      Shares    Amount        Shares   Amount        Par value    Deficit       Stage
                                    --------   --------   ----------   -------  -----------   -----------   -----------   --------
<S>                                    <C>     <C>       <C>          <C>      <C>          <C>          <C>           <C>
Balance October 1, 1996 ......          --      163,158   $   16,316   774,033  $    77,403  $ 35,701,059 $ (35,735,361)$     --

Issuance of stock ............          --     (142,500)     (14,250)  142,500       14,250          --            --         --
Issuance of stock for cash ...          --         --           --      35,000        3,500       (18,000)         --         --

Stock to be issued in exchange
for debt (bankruptcy claims) .          --       29,019        2,901      --           --            --            --         --

Net Loss .....................          --         --           --        --           --            --            --      (61,855)
                                    --------   --------   ----------   -------  -----------   -----------   -----------   --------
Balance September 30, 1997 ...          --       49,677        4,967   951,533       95,153    35,683,059   (35,735,361)   (61,855)

Stock to be issued in exchange
for debt .....................                                                         --          31,860         3,187      3,000

Net Loss .....................          --         --           --        --           --            --            --      (15,431)
                                    --------   --------   ----------   -------  -----------   -----------   -----------   --------
Balance September 30, 1998 ...          --       81,537        8,154   951,533       95,153    35,686,059   (35,735,361)   (77,286)

Net Loss .....................          --         --           --        --           --            --            --      (12,804)
                                    --------   --------   ----------   -------  -----------   -----------   -----------   --------
Balance September 30, 1999 ...          --       81,537        8,154   951,533       95,153    35,686,059   (35,735,361)   (90,090)

Stock issued for services ....          --         --           --     205,305       20,531          --            --         --
Stock issued for note payable                                             --           --            --          11,860      1,186

Net Loss .....................          --         --           --        --           --            --            --      (34,458)
                                    --------   --------   ----------   -------  -----------   -----------   -----------   --------
Balance September 30, 2000 ...          --       81,537   $    8,154 1,168,698  $   116,870  $ 35,686,059 $ (35,735,361)$ (124,548)
                                    ========   ========   ==========   =======  ===========   ===========   ===========   ========

</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                      F - 4

<PAGE>



                            PENN PACIFIC CORPORATION
                          (A Development Stage Company)
                             STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                         Cumulative
                                                                         Since
                                                                         January 13,
                                                                         1997
                                                 For the Year Ended      Inception of
                                                      September 30,      Development
                                                    -------------------------------
                                                      2000       1999       Stage
                                                    --------   --------   ---------
Cash Flows from Operating Activities:
<S>                                                 <C>        <C>        <C>
  Cash paid to suppliers and employees ...........  $   --     $   --     $    --
                                                    --------   --------   ---------
      Net cash used by operating activities before
        reorganization items .....................      --         --          --
                                                    --------   --------   ---------
  Reorganization Items:
    Chapter 11 administrative fees ...............      --         --        (7,000)
                                                    --------   --------   ---------
      Net cash used in operating activities ......      --         --        (7,000)
                                                    --------   --------   ---------

Cash Flows from Investing Activities: ............      --         --          --
                                                    --------   --------   ---------

Cash Flows from Financing Activities:
  Proceeds from common stock .....................      --         --         2,000
  Issuance of notes payable-stockholders .........      --         --         5,000
                                                    --------   --------   ---------
      Net cash provided by financing activities ..      --         --         7,000
                                                    --------   --------   ---------

Net change in cash and cash equivalents ..........      --         --          --
Cash and cash equivalents at beginning of year ...      --         --          --
                                                    --------   --------   ---------
Cash and cash equivalents at end of year .........  $   --     $   --     $    --
                                                    ========   ========   =========

Reconciliation of Net Loss to Net Cash
 Used in Operating Activities:
Net loss .........................................  $(34,458) $ (12,804)  $(124,548)
Adjustments used to reconcile net loss to Net
cash used in operating activities:
Common stock issued for expenses .................    20,531       --       134,757
Increase in accounts payable .....................     8,361      4,787      24,671
Increase accrued expenses ........................     5,566      5,017      18,158
Common stock issued for notes payable ............     1,186       --         1,186
Increase (Decrease) in
   Notes payable - stockholders ..................    (1,186)     3,000      (3,186)
Decrease in liabilities not subject to
compromise:
    Administrative fees ..........................      --         --       (52,181)
Decrease in liabilities subject to compromise:
    Unsecured non-priority claims ................      --         --        (1,580)
    Priority claims ..............................      --         --        (4,277)
                                                    --------   --------   ---------
Net cash used in operating activities ............  $   --     $   --     $  (7,000)
                                                    ========   ========   =========
</TABLE>



                                      F - 5

<PAGE>



                            PENN PACIFIC CORPORATION
                          (A Development Stage Company)
                             STATEMENT OF CASH FLOWS
                                   (Continued)


                                                                    Cumulative
                                                                    Since
                                                                    January 13,
                                                                    1997
                                                For the Year Ended  Inception of
                                                     September 30,  Development
                                                   -------------------
                                                     2000       1999    Stage
                                                   --------  ---------  --------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
  Interest ......................................  $   --    $    --    $   --
  Franchise and income taxes ....................  $   --    $    --    $   --

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES: None























   The accompanying notes are an integral part of these financial statements.


                                      F - 6

<PAGE>



                            PENN PACIFIC CORPORATION
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2000 AND 1999


NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES

     This  summary  of  accounting  policies  for Penn  Pacific  Corporation  is
presented to assist in  understanding  the Company'  financial  statements.  The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.

Organization and Basis of Presentation

     The Company was incorporated under the laws of the state of Delaware on May
18,  1971.  From  1979 to 1991 the  primary  business  of Penn  Pacific  and its
subsidiaries  was the  acquisition,  exploration,  development,  production  and
operation of oil and gas properties.  Penn Pacific has been inactive since 1991.
The Company filed a voluntary petition of reorganization under Chapter 11 of the
United  States  Bankruptcy  Code on January 27, 1994.  On January 13, 1997,  the
Company emerged from bankruptcy  pursuant to a final decree of the United States
Bankruptcy  Court for the Northern  District of Oklahoma.  The Company is in the
development stage since January 13, 1997 and has not commenced planned principal
operations.

Nature of Business

     The Company intends to acquire interests in various business opportunities,
which in the opinion of management will provide a profit to the Company.

Cash Equivalents

     For the purpose of reporting cash flows,  the Company  considers all highly
liquid debt  instruments  purchased  with maturity of three months or less to be
cash  equivalents  to the  extent  the funds are not being  held for  investment
purposes.

Pervasiveness of Estimates

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  required  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.




                                      F - 7

<PAGE>



                            PENN PACIFIC CORPORATION
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2000 AND 1999
                                   (Continued)


NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES (continued)
--------------------------------------------------------------------

Net Loss per Common Share

     The effect of outstanding  common stock  equivalents are  antidilutive  for
2000 and 1999 and are thus not considered.

     The  reconciliations  of the numerators and  denominators  of the basic EPS
computations are as follows:

<TABLE>
<CAPTION>

                           2000                                      1999
                    ---------------------------------   ----------------------------
                                  Number       Loss                 Number    Loss
                                  of           Per                  of        Per
                     Loss         Shares       Share    Loss        Shares    Share
                    (numerator)  (denominator)         (numerator) (denominator)
                    ----------   -----------  -------   --------   ---------  ------
Loss to Common
<S>                 <C>          <C>          <C>       <C>        <C>        <C>
Shareholders .......$  (34,458)  1,085,997    $ (0.03)  $(12,804)  951,533    $(0.01)
                    ==========   ===========  =======   ========   =========  ======
</TABLE>

Concentration of Credit Risk

     The Company has no significant  off-balance-sheet  concentrations of credit
risk such as foreign  exchange  contracts,  options  contracts or other  foreign
hedging arrangements.

NOTE 2 - INCOME TAXES

     The Company has accumulated tax losses estimated at $14,000,000 expiring in
years 2001 through 2020.  Current tax laws limit the amount of loss available to
be offset against  future taxable income when a substantial  change in ownership
occurs.  Therefore,  the amount available to offset future taxable income may be
limited. No tax benefit has been reported in the financial  statements,  because
the Company  believes  there is a 50% or greater chance the  carryforwards  will
expire unused. Accordingly, the potential tax benefits of the loss carryforwards
are offset by a valuation allowance of the same amount

NOTE 3 - DEVELOPMENT STAGE

     The  Company  has not begun  principal  operations  and as is common with a
development  stage  company,  the Company has had  recurring  losses  during its
development stage.


                                      F - 8

<PAGE>


                            PENN PACIFIC CORPORATION
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2000 AND 1999
                                   (Continued)


NOTE 4 - COMMITMENTS

     As of September  30, 2000 and 1999 all  activities of the Company have been
conducted by  corporate  officers  from either their homes or business  offices.
Currently,  there are no  outstanding  debts owed by the  company for the use of
these facilities and there are no commitments for future use of the facilities.

NOTE 5 - 1 FOR 20 STOCK SPLIT

     On  February  23, 1998 the Board of  Directors  approved a 1 for 20 reverse
stock  split.  The  financial  statements  have been  retroactively  adjusted to
reflect the stock split as if it had happened  effective on the earliest  period
presented.


                                      F - 9