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 FISCAL YEAR ENDED: SEPTEMBER 30, 2006

                                       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 Corp.
                 (Name of small business issuer in its charter)

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

                3325 Griffin Road, #200, Ft. Lauderdale, FL 33323
 -------------------------------------------------------------------------------
               (Address of principal executive offices) (Zip code)


                                (Former address)

Issuer's telephone number                      (866) 387-6583
                                              ---------------

Indicate by Check Mark Whether the  Registrant is a Shell Company (as Defined by
Rule 12B-2 of the Exchange Act). Yes X ; No

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

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

                         Common Stock, par value $.00001
                                (Title of class)


<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 requirements 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]

         At June 26,  2007 the  aggregate  market  value of all shares of voting
stock held by non- affiliates was $0. In determining this figure, the Registrant
has assumed that all  directors  and  executive  officers are  affiliates.  Such
assumption shall not be deemed  conclusive for any other purpose.  The number of
shares  outstanding of each class of the  Registrant's  common stock, as of June
26, 2007 was as follows: Common Stock $.00001 par value, 1,168,698 shares.

Total revenues for fiscal year ended September 30, 2006: $0

At June 26, 2007 the number of shares of common stock outstanding was 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



















<PAGE>



                                TABLE OF CONTENTS

Item Number and Caption                                                  Page

PART I

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

Item 2.   Description of Property...........................................6

Item 3.   Legal Proceedings.................................................7

Item 4.   Submission of Matters to a Vote of Security Holders...............7

PART II

Item 5.   Market for Common Equity and Related Stockholder Matters..........7

Item 6.   Management's Discussion and Analysis or Plan of Operations........8

Item 7.   Financial Statements.............................................11

Item 8.   Changes in and Disagreements With Accountants on Accounting and
          Financial Disclosure.............................................11

Item 8A.  Controls and Procedures..........................................12

Item 8B.  Other Information................................................12

PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16(a) of the Exchange Act................12

Item 10.  Executive Compensation...........................................14

Item 11.  Security Ownership of Certain Beneficial Owners and Management...15

Item 12.  Certain Relationships and Related Transactions...................16

Item 13.  Exhibits and Reports on Form 8-K.................................16

Item 14.  Principal Accountant Fees and Services...........................17




<PAGE>



                                     PART I

                         ITEM 1. DESCRIPTION OF BUSINESS


GENERAL

           The  Company is  currently  in the  process of looking  for  business
opportunities  to acquire or merge with.  In seeking a business  opportunity  to
merge  with  or  acquire,   management  is  reviewing  various  business  plans.
Management has not limited their review of plans or exploration of  acquisitions
to any particular industry or service sector. Though there appears to be a large
number of  companies  seeking  to merge with an  existing  public  company,  the
management has not yet identified a business to complete such a transaction with
and the Company has not entered into any binding  agreements  for an acquisition
or merger.  There is no guarantee that  management will be successful in finding
such an opportunity.

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.

         The  primary  activity of the Company  has  involved  and will  involve
seeking  merger  or  acquisition  candidates  with whom it can  either  merge or
acquire.  The Company has not selected any company for acquisition or merger and
does not intend to limit  potential  acquisitions  candidates to any  particular
field or  industry,  but does  retain the right to limit  acquisition  or merger
candidates,  if it so chooses, to a particular field or industry.  The Company's
plans are in the conceptual stage only.

         The proposed business activities  described herein classify the Company
as a "blank  check" or "shell  company"  whose  sole  purpose at this time is to
locate  and  consummate  a merger  or  acquisition.  Many  states  have  enacted
statutes, rules and regulations limiting the sale of securities of "blank check"
companies in their respective jurisdictions. Management does not believe it will
undertake  any  efforts to cause a trading  market to  develop in the  Company's
securities  until such time as the  Company  has  successfully  implemented  its
business plan described  herein.  However,  if the Company intends to facilitate
the eventual creation of a public trading market in its outstanding  securities,
it must consider that the Company's securities, when available for trading, will
be subject to a Securities  and Exchange  Commission  rule that imposes  special
sales practice requirements upon

                                       -4-

<PAGE>



broker-dealers  who sell such  securities  to  persons  other  than  established
customers  or  accredited  investors.  For  purposes  of the  rule,  the  phrase
"accredited  investors"  means,  in general terms,  institutions  with assets in
excess of $5,000,000,  or individuals having a net worth in excess of $1,000,000
or having an annual income that exceeds  $200,000 (or that, when combined with a
spouse's income,  exceeds $300,000).  For transactions  covered by the rule, the
broker-dealer  must make a special  suitability  determination for the purchaser
and receive the purchaser's  written  agreement to the transaction  prior to the
sale.  Consequently,  the rule may affect the ability of broker- dealers to sell
the Company's  securities  and also may affect the ability of purchasers to sell
their securities in any market that might develop therefore.

OPERATING LOSSES

         The Company has incurred net losses from  operations  of  approximately
$2,340  and  $12,525  for  the  years  ended   September   31,  2006  and  2005,
respectively.   Such   operating   losses   reflect   developmental   and  other
administrative  costs for 2006 and 2005. The Company  expects to incur losses in
the near future until  profitability is achieved.  The Company's  operations are
subject  to  numerous  risks  associated  with  establishing  any new  business,
including  unforeseen  expenses,  delays  and  complications.  There  can  be no
assurance that the Company will achieve or sustain profitable operations or that
it will be able to remain in business.

FUTURE CAPITAL NEEDS AND UNCERTAINTY OF ADDITIONAL FUNDING

          Revenues are not yet  sufficient  to support the  Company's  operating
expenses  and are not  expected to reach such levels  until it has  completed an
acquisition.  Since the Company's  formation,  it has funded its  operations and
capital  expenditures  primarily  through private  placements of debt and equity
securities.  The Company  expects  that it will be  required to seek  additional
financing in the future.  There can be no assurance  that such financing will be
available at all or available on terms acceptable to the Company.

GOVERNMENT REGULATION

         The Company is subject to all pertinent Federal,  State, and Local laws
governing its business.  The Company is subject to licensing and regulation by a
number of authorities in its State or  municipality.  These may include  health,
safety,  and fire  regulations.  The  Company's  operations  are also subject to
Federal  and  State  minimum  wage  laws   governing  such  matters  as  working
conditions, overtime and tip credits.

RISK OF LOW-PRICED STOCKS

         Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act
of 1934 (the "Exchange  Act") impose sales practice and disclosure  requirements
on certain brokers and dealers who engage in certain  transactions  involving "a
penny stock."


                                       -5-

<PAGE>



         Currently,  the Company's  Common Stock is considered a penny stock for
purposes of the  Exchange  Act. The  additional  sales  practice and  disclosure
requirements imposed on certain brokers and dealers could impede the sale of the
Company's  Common  Stock  in the  secondary  market.  In  addition,  the  market
liquidity for the Company's securities may be severely adversely affected,  with
concomitant adverse effects on the price of the Company's securities.

         Under the penny stock  regulations,  a broker or dealer  selling  penny
stock to anyone  other than an  established  customer or  "accredited  investor"
(generally,  an  individual  with net worth in excess  of  $1,000,000  or annual
incomes  exceeding  $200,000,  or $300,000 together with his or her spouse) must
make a special suitability  determination for the purchaser and must receive the
purchaser's  written consent to the transaction prior to sale, unless the broker
or dealer or the transaction is otherwise exempt.  In addition,  the penny stock
regulations  require the broker or dealer to deliver,  prior to any  transaction
involving a penny stock,  a disclosure  schedule  prepared by the Securities and
Exchange  Commission (the "SEC") relating to the penny stock market,  unless the
broker or dealer or the transaction is otherwise  exempt.  A broker or dealer is
also  required to disclose  commissions  payable to the broker or dealer and the
registered   representative  and  current  quotations  for  the  Securities.  In
addition,  a broker or dealer is required to send monthly statements  disclosing
recent  price  information  with respect to the penny stock held in a customer's
account and information with respect to the limited market in penny stocks.

COMPETITION

         The Company expects to encounter substantial competition in its efforts
to  locate  attractive   opportunities,   primarily  from  business  development
companies,  venture  capital  partnerships  and  corporations,  venture  capital
affiliates  of  large  industrial  and  financial  companies,  small  investment
companies,   and  wealthy   individuals.   Many  of  these  entities  will  have
significantly greater experience, resources and managerial capabilities than the
Company and will  therefore be in a better  position  than the Company to obtain
access to attractive business opportunities.

EMPLOYEES

         The Company's only employee at the present time is its sole officer and
director,  who will devote as much time as he  determines  is necessary to carry
out the affairs of the Company.


ITEM 2. DESCRIPTION OF PROPERTY


         The Company has a working agreement with the Company president to share
use of 600 square feet of office  space,  telephones  and  secretarial  services
supplied on a gratis basis.




                                       -6-

<PAGE>




ITEM 3. LEGAL PROCEEDINGS


         No material legal proceedings to which the Company (or its director and
officer in his capacity as such) is party or to which property of the Company is
subject is pending and no such material proceeding is known by management of the
Company to be contemplated.

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


         No matters were subject to a vote of security holders during the year.

PART II


ITEM 5. MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS


MARKET INFORMATION

         The quotations  provided reflect  inter-dealer  prices,  without retail
mark-up, mark-down or commission and may not represent actual transactions.

                               HIGH BID          LOW BID
                               (To the best knowledge of
                               management, there was no
                               trading of shares for fiscal
                               2006 and 2005)


         The number of shareholders  of record of the Company's  common stock as
of June 26, 2007 was approximately 6,473.

         The Company has never  declared or paid any cash  dividends.  It is the
present  policy of the  Company to retain  earnings  to  finance  the growth and
development  of the business  and,  therefore,  the Company does not  anticipate
paying dividends on its Common Stock in the foreseeable future.

Recent Sales of Unregistered Securities.  None



                                       -7-

<PAGE>




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


PLAN OF OPERATIONS - The following discussion should be read in conjunction with
the Financial Statements and notes thereto.

         The Company  intends to seek,  investigate  and, if such  investigation
warrants, acquire an interest in one or more business opportunities presented to
it by persons or firms who or which  desire to seek  perceived  advantages  of a
publicly  held  corporation.  At this time,  the Company has no plan,  proposal,
agreement,  understanding  or  arrangement to acquire or merge with any specific
business or company, and the Company has not identified any specific business or
company  for  investigation  and  evaluation.  No  person  has had any  material
discussions  with any other  company  with  respect to any  acquisition  of that
company.

         The Company  will not  restrict  its search to any  specific  business,
industry or geographical location, and the Company may participate in a business
venture of virtually any kind or nature. The discussion of the proposed business
under this caption and throughout is purposefully general and is not meant to be
restrictive of the Company's  virtually  unlimited  discretion to search for and
enter into potential business opportunities.

         The  Company  may obtain  funds in one or more  private  placements  to
finance the operation of any acquired business, if necessary. Persons purchasing
securities in these placements and other  shareholders  will likely not have the
opportunity  to  participate in the decision  relating to any  acquisition.  The
Company's  proposed business is sometimes  referred to as a "blind pool" because
any investors will entrust their investment  monies to the Company's  management
before they have a chance to analyze any  ultimate  use to which their money may
be put.  Consequently,  the Company's  potential success is heavily dependent on
the Company's management,  which will have unlimited discretion in searching for
and entering into a business  opportunity.  The sole officer and director of the
Company  likely has had no experience  in any proposed  business of the Company.
There can be no  assurance  that the Company  will be able to raise any funds in
private placement.

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.
During the period from January 13, 1997 through  September 30, 2006, the Company
has engaged in no significant  operations other than  organizational  activities
and preparation for registration of its securities under the Securities Exchange
Act of 1934. No revenues were received by the Company during this period.

         For the current fiscal year, the Company  anticipates  incurring a loss
as a result of organizational  expenses,  expenses  associated with registration
under the Securities Exchange Act

                                       -8-

<PAGE>



of 1934,  and  expenses  associated  with  locating and  evaluating  acquisition
candidates.  The  Company  anticipates  that  until a  business  combination  is
completed with an  acquisition  candidate,  it will not generate  revenues other
than interest  income,  and may continue to operate at a loss after completing a
business combination, depending upon the performance of the acquired business.

LIQUIDITY AND FINANCIAL RESOURCES

         The Company remains in the development stage and, since inception,  has
experienced  no  significant   change  in  liquidity  or  capital  resources  or
stockholder's  equity.  The  Company's  balance  sheet as of September 30, 2006,
reflects a current asset value of $0, and a total asset value of $0.

         The Company will carry out its plan of business as discussed above. The
Company cannot  predict to what extent its liquidity and capital  resources will
be diminished prior to the consummation of a business combination or whether its
capital  will be  further  depleted  by the  operating  losses  (if  any) of the
business entity which the Company may eventually acquire.

FEDERAL INCOME TAX ASPECTS OF INVESTMENT IN THE COMPANY

         The discussion contained herein has been prepared by the Company and is
based on existing law as contained in the Code,  amended United States  Treasury
Regulations ("Treasury Regulations"), administrative rulings and court decisions
as of the date of this  Annual  Report.  No  assurance  can be given that future
legislative  enactments,  administrative  rulings  or court  decisions  will not
modify the legal basis for  statements  contained in this  discussion.  Any such
development may be applied retroactively to transactions  completed prior to the
date thereof,  and could contain  provisions  having an adverse  affect upon the
Company and the holders of the Common Stock. In addition,  several of the issues
dealt with in this report are the  subjects of proposed and  temporary  Treasury
Regulations.  No assurance can be given that these  regulations  will be finally
adopted in their present form.

CRITICAL  ACCOUNTING  POLICIES  -The  preparation  of  financial  statements  in
conformity with accounting principles generally accepted in the United States of
America  requires  management to make estimates and assumptions  that affect the
reported  amounts of assets and  liabilities  and the  disclosure  of contingent
assets and liabilities of the date of the financial  statements and the reported
amounts of revenues  and expenses  during the  reporting  period.  Note 2 to the
Consolidated  Financial Statements describes the significant accounting policies
and methods used in the preparation of the  Consolidated  Financial  Statements.
Estimates  are used for,  but not limited to,  contingencies  and taxes.  Actual
results could differ  materially from those  estimates.  The following  critical
accounting policies are impacted  significantly by judgments,  assumptions,  and
estimates used in the preparation of the Consolidated Financial Statements.

We are subject to various loss  contingencies  arising in the ordinary course of
business.  We consider the  likelihood  of loss or impairment of an asset or the
incurrence  of a liability,  as well as our ability to  reasonably  estimate the
amount of loss in determining loss contingencies. An estimated loss

                                       -9-

<PAGE>



contingency  is accrued when  management  concludes  that it is probable that an
asset has been  impaired or a liability  has been incurred and the amount of the
loss can be reasonably  estimated.  We regularly  evaluate  current  information
available to us to determine whether such accruals should be adjusted.

We recognize  deferred tax assets (future tax benefits) and  liabilities for the
expected  future tax  consequences  of  temporary  differences  between the book
carrying amounts and the tax basis of assets and  liabilities.  The deferred tax
assets and liabilities  represent the expected future tax return consequences of
those  differences,  which are expected to be either  deductible or taxable when
the assets and  liabilities  are recovered or settled.  Future tax benefits have
been fully  offset by a 100%  valuation  allowance  as  management  is unable to
determine  that it is more likely than not that this  deferred tax asset will be
realized.

RECENTLY ENACTED AND PROPOSED REGULATORY CHANGES - Recently enacted and proposed
changes in the laws and regulations  affecting public  companies,  including the
provisions of the Sarbanes-  Oxley Act of 2002 and rules proposed by the SEC and
NASDAQ could cause us to incur increased  costs as we evaluate the  implications
of new rules and respond to new  requirements.  The new rules could make it more
difficult for us to obtain certain types of insurance,  including  directors and
officers  liability  insurance,  and we may be forced to accept  reduced  policy
limits and  coverage or incur  substantially  higher costs to obtain the same or
similar  coverage.  The impact of these events could also make it more difficult
for us to attract and retain  qualified  persons to serve on the Company's board
of  directors,  or as  executive  officers.  We  are  presently  evaluating  and
monitoring  developments  with respect to these new and proposed  rules,  and we
cannot  predict or estimate the amount of the  additional  costs we may incur or
the timing of such costs.

         In June,  2006 the FASB issued FIN 48,  "Accounting  for Uncertainty in
Income Taxes--an  interpretation of FASB Statement No. 109". This Interpretation
clarifies,  among other things,  the accounting for  uncertainty in income taxes
recognized in an  enterprise's  financial  statements  in  accordance  with FASB
Statement No. 109, Accounting for Income Taxes. This Interpretation prescribes a
recognition  threshold and  measurement  attribute  for the financial  statement
recognition and measurement of a tax position taken or expected to be taken in a
tax  return.  This  Interpretation  also  provides  guidance  on  derecognition,
classification,   interest  and  penalties,   accounting  in  interim   periods,
disclosure,  and  transition.  FIN 48,  Accounting  for  Uncertainty  in  Income
Taxes--an  interpretation  of FASB  Statement  No. 109, is effective  for fiscal
years  beginning after December 15, 2006.  Earlier  application is encouraged if
the  enterprise  has not yet  issued  financial  statements,  including  interim
financial statements, in the period the Interpretation is adopted. Management is
evaluating the financial impact of this pronouncement.

         In September  2006, the FASB issued SFAS No. 157,  "Accounting for Fair
Value  Measurements."  SFAS No.  157  defines  fair  value,  and  establishes  a
framework for measuring fair value in generally accepted  accounting  principles
and expands disclosure about fair value measurements.  SFAS No. 157 is effective
for the Company for financial statements issued subsequent to November 15, 2007.
The Company does not expect the new standard to have any

                                      -10-

<PAGE>



material impact on the financial position and results of operations.

         In September 2006, the staff of the Securities and Exchange  Commission
issued Staff Accounting Bulletin No. 108 ("SAB 108") which provides interpretive
guidance  on how  the  effects  of the  carryover  or  reversal  of  prior  year
misstatements  should be considered in quantifying a current year  misstatement.
SAB 108 becomes effective in fiscal 2007. Management is evaluating the financial
impact of this pronouncement.

FORWARD LOOKING STATEMENT

         This  Management's  Discussion and Analysis of Financial  Condition and
Results of  Operations  includes  a number of  forward-looking  statements  that
reflect  Management's  current views with respect to future events and financial
performance. Those statements include statements regarding the intent, belief or
current  expectations  of the Company and members of its management team as well
as the assumptions on which such statements are based. Prospective investors are
cautioned that any such forward-looking  statements are not guarantees of future
performance  and involve  risk and  uncertainties,  and that actual  results may
differ materially from those  contemplated by such  forward-looking  statements.
Readers are urged to carefully review and consider the various  disclosures made
by the Company in this report and in the Company's  other reports filed with the
Securities  and  Exchange  Commission.  Important  factors  currently  known  to
Management  could  cause  actual  results  to differ  materially  from  those in
forward-looking  statements.  The Company  undertakes no obligation to update or
revise forward-looking statements to reflect changed assumptions, the occurrence
of unanticipated  events or changes in the future  operating  results over time.
The Company believes that its assumptions are based upon reasonable data derived
from and known about its business and operations and the business and operations
of the Company.  No assurances are made that actual results of operations or the
results of the Company's future  activities will not differ  materially from its
assumptions.


ITEM 7. FINANCIAL STATEMENTS


         The  financial  statements  of the Company and  supplementary  data are
included beginning immediately preceeding 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.


                                      -11-

<PAGE>




ITEM 8A.  CONTROLS AND PROCEDURES


         We have established  disclosure  controls and procedures to ensure that
material  information  relating  to  the  Company,  including  its  consolidated
subsidiaries,  is made known to the officers who certify the Company's financial
reports and to other members of senior management and the Board of Directors.

         Based on their evaluation,  as of the end of the period covered by this
Annual  Report on Form 10-KSB,  the  principal  executive  officer and principal
financial officer of Penn-Pacific  Corp. have concluded that Penn-Pacific  Corp.
disclosure  controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the  Securities  Exchange Act of 1934) are  effective in ensuring that the
information  required to be disclosed by the Company in reports that it files or
submits  under  the  Securities  Exchange  Act of 1934 is  recorded,  processed,
summarized and reported within the time periods specified in the SEC's rules and
forms.

         There  were no  significant  changes  in  Penn-Pacific  Corp.  internal
control over financial reporting during the Company's fourth fiscal quarter that
has  materially  affected,  or is reasonably  likely to materially  affect,  the
Company's internal control over financial reporting

ITEM 8B.  OTHER INFORMATION


         None.


PART III

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


EXECUTIVE OFFICERS AND DIRECTORS

The members of the Board of Directors of the Company serve until the next annual
meeting of  stockholders,  or until  their  successors  have been  elected.  The
officers  serve at the pleasure of the Board of Directors.  The following  table
sets forth the name, age, and position of each executive officer and director of
the Company:


DIRECTOR'S   NAME  AGE            OFFICE               TERM EXPIRES
Rose Fischer       47     President and Director    next annual meeting

                                      -12-
<PAGE>

         Rose  Fischer,   President/Director,   with  an  associate   degree  in
accounting,  has been Director and  Operations  Facilitator  for Optimum  Source
International, Ltd. ("OSI") for the past five 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.

CONFLICTS OF INTEREST

         Certain  conflicts of interest  existed at  September  30, 2006 and may
continue to exist  between the Company and its sole  officer and director due to
the fact that she has other business  interests to which she devotes her primary
attention.  Each officer and director may continue to do so notwithstanding  the
fact that management time should be devoted to the business of the Company.

         Certain  conflicts  of interest  may exist  between the Company and its
management,  and  conflicts  may  develop in the  future.  The  Company  has not
established  policies or procedures  for the  resolution of current or potential
conflicts of  interests  between the  Company,  its  officers  and  directors or
affiliated entities.  There can be no assurance that management will resolve all
conflicts  of interest in favor of the  Company,  and failure by  management  to
conduct the  Company's  business in the  Company's  best  interest may result in
liability to the  management.  The officers and directors are accountable to the
Company as  fiduciaries,  which means that they are  required  to exercise  good
faith and integrity in handling the Company's affairs.  Shareholders who believe
that the  Company  has been  harmed by  failure of an  officer  or  director  to
appropriately  resolve any conflict of interest may,  subject to applicable rule
of  civil  procedure,  be able to bring a class  action  or  derivative  suit to
enforce their rights and the Company's rights.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         Based solely upon a review of forms 3, 4, and 5 and amendments thereto,
furnished to the Company during or respecting its last fiscal year, no director,
officer,  beneficial owner of more than 10% of any class of equity securities of
the  Company  or any other  person  known to be  subject  to  Section  16 of the
Exchange  Act of 1934,  as  amended,  failed to file on a timely  basis  reports
required by Section 16(a) of the Exchange Act for the last fiscal year.

AUDIT COMMITTEE FINANCIAL EXPERT

         The  Company's  board of  directors  does not have an "audit  committee
financial   expert,"  within  the  meaning  of  such  phrase  under   applicable
regulations  of the  Securities  and Exchange  Commission,  serving on its audit
committee.  The  board of  directors  believes  that all  members  of its  audit
committee are financially literate and experienced in business matters, and that
one or more  members of the audit  committee  are  capable of (i)  understanding
generally accepted accounting principles ("GAAP") and financial statements, (ii)
assessing the general  application  of GAAP  principles  in connection  with our
accounting for estimates,  accruals and reserves, (iii) analyzing and evaluating
our  financial   statements,   (iv)  understanding  our  internal  controls  and
procedures for financial

                                      -13-

<PAGE>



reporting;  and (v) understanding  audit committee  functions,  all of which are
attributes  of an  audit  committee  financial  expert.  However,  the  board of
directors  believes  that  there  is not any  audit  committee  members  who has
obtained  these  attributes  through  the  experience  specified  in  the  SEC's
definition  of "audit  committee  financial  expert."  Further,  like many small
companies,  it is difficult  for the Company to attract and retain board members
who qualify as "audit committee  financial  experts, " and competition for these
individuals is significant.  The board believes that its current audit committee
is able to  fulfill  its  role  under  SEC  regulations  despite  not  having  a
designated "audit committee financial expert."


ITEM 10. EXECUTIVE COMPENSATION


         None of the  executive  officer's  annual  salary  and  bonus  exceeded
$60,000 during any of the Company's last two fiscal years.

         There are  currently no  agreements  with members of  management  as to
employment or compensation.

         There is currently no compensation paid to non-employment directors.
























                                      -14-

<PAGE>




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 September 30, 2006 and  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(1 PERSON)

          DIRECT                                   11,860          1.015%
          OPTIONS                                  NONE            NONE
          TOTAL                                    11,860          1.015%





                                      -15-

<PAGE>





ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



         As of September  30, 2006 and 2005 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 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 Independent Registered Public Accountants                      F - 1

Balance Sheets
  September 30, 2006 and 2005                                            F - 2

Statements of Operations for the
  Years Ended September 30, 2006 and 2005                                F - 3

Statement of Stockholders' Equity
 Since January 13, 1997 (inception) to September 30, 2006                F - 4

Statements of Cash Flows for the
  Years Ended September 30, 2006 and 2005                                F - 5

Notes to Financial Statements                                            F - 6

2.       FINANCIAL STATEMENT SCHEDULES

         The following  financial statement schedules required by Regulation S-X
are included herein.

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

3.       (A) EXHIBITS

         The  following  documents  are filed  herewith or have been included as
exhibits to previous filings with the Commission and are incorporated  herein by
this reference:

         Exhibit No.       Exhibit

           3               Articles of Incorporation (1)


                                      -16-

<PAGE>



           3.2             Bylaws (1)

           3.1             Amended Articles of Incorporation (1)

         31       Certification  of Principal  Executive  Officer and  Principal
                  Financial Officer Pursuant to 18 U.S.C Section 1350 as Adopted
                  Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

         32       Certification  of Principal  Financial  Officer and  Principal
                  Financial Officer Pursuant to 18 U.S.C Section 1350 as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b)      Reports  on Form 8-K.  No  reports  on Form 8-K were  filed  during the
         period covered by this Form 10-KSB.

(1)      Incorporated herein by reference.


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES


         The following is a summary of the fees billed to us by Robison,  Hill &
Company for  professional  services  rendered for the years ended  September 30,
2006 and 2005:


            Service                2006                      2005
 ------------------------ ----------------------     ---------------------
 Audit Fees               $                4,100     $              10,365
 Audit-Related Fees                            -                         -
 Tax Fees                                      -                         -
 All Other Fees                                -                         -
                          ----------------------     ---------------------
 Total                    $                4,100     $              10,365
                          ======================     =====================

AUDIT FEES - Consists of fees billed for professional  services rendered for the
audits of our financial statements,  reviews of our interim financial statements
included in quarterly  reports,  services  performed in connection  with filings
with the Securities & Exchange  Commission and related comfort letters and other
services  that are normally  provided by Robison,  Hill & Company in  connection
with statutory and regulatory filings or engagements.

TAX FEES - Consists of fees billed for professional services for tax compliance,
tax  advice  and tax  planning.  These  services  include  assistance  regarding
federal,  state and local tax compliance  and  consultation  in connection  with
various transactions and acquisitions.

Audit  Committee  Pre-Approval of Audit and  Permissible  Non-Audit  Services of
Independent Auditors

         The Audit Committee, is to pre-approve all audit and non-audit services
provided by the independent auditors. These services may include audit services,
audit  related  services,  tax services and other  services as allowed by law or
regulation.  Pre-approval  is  generally  provided  for up to one  year  and any
pre-approval  is detailed as to the  particular  service or category of services
and is generally  subject to a specifically  approved  amount.  The  independent
auditors  and  management  are  required  to  periodically  report  to the Audit
Committee regarding the extent of services provided by the independent  auditors
in accordance  with this  pre-approval  and the fees incurred to date. The Audit
Committee may also pre-approve particular services on a case-by-case basis.

                                      -17-
<PAGE>









                               PENN-PACIFIC CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                                       -:-

                INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS' REPORT

                           SEPTEMBER 30, 2006 AND 2005






<PAGE>






                                    CONTENTS


                                                                        Page

Report of Independent Registered  Public Accountants.....................F - 1

Balance Sheets
  September 30, 2006 and 2005............................................F - 2

Statements of Operations for the
  Years Ended September 30, 2006 and 2005................................F - 3

Statement of Stockholders' Equity
 Since January 13, 1997 (inception) to September 30, 2006................F - 4

Statements of Cash Flows for the
  Years Ended September 30, 2006 and 2005................................F - 5

Notes to Financial Statements............................................F - 6



<PAGE>



               REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS


Penn-Pacific Corp.
(A Development Stage Company)


         We have audited the accompanying  balance sheets of Penn-Pacific  Corp.
(a development stage company) as of September 30, 2006 and 2005, and the related
statements of operations,  and cash flows for the two years ended  September 30,
2006and the  cumulative  since January 13, 1997  (inception  of the  development
stage) to September  30, 2006,  and the statement of  stockholders'  equity from
January 13, 1997  (inception  of the  development  stage) to September 30, 2006.
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 audit in  accordance  with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  The  Company is not
required  to have,  nor were we engaged  to  perform,  an audit of its  internal
control over financial reporting.  Our audit included  consideration of internal
control over financial  reporting as a basis for designing audit procedures that
are appropriate in the  circumstances,  but not for the purpose of expressing an
opinion on the  effectiveness  of the company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   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 Corp.
(a development stage company) as of September 30, 2006 and 2005, and the results
of its operations and its cash flows for the two years ended  September 30, 2006
in conformity with accounting principles generally accepted in the United States
of America.

         The accompanying  financial statements have been prepared assuming that
the Company  will  continue as a going  concern.  As  discussed in Note 1 to the
financial statements,  the Company has suffered recurring losses from operations
and has a net capital  deficiency that raise substantial doubt about its ability
to continue as a going  concern.  Management's  plans in regard to these matters
are also  described  in Note 1. The  financial  statements  do not  include  any
adjustments that might result from the outcome of this uncertainty.

                                     Respectfully submitted


                                     /s/ Robison, Hill $ Co
                                     Certified Public Accountants

Salt Lake City, Utah
June 26, 2007

                                      F - 1

<PAGE>




                               PENN-PACIFIC CORP.
                          (A Development Stage Company)
                                 BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                       September 30,
                                                                  2006                2005
                                                           ------------------  ------------------
<S>                                                        <C>                 <C>
Assets:                                                    $                -  $                -
                                                           ==================  ==================

Liabilities:
   Accounts Payable                                                         -              12,525
   Advances from shareholder                                           47,913              33,048
                                                           ------------------  ------------------

     Total Liabilities                                                 47,913              45,573
                                                           ------------------  ------------------

Stockholders' Equity:
  Preferred Stock, Par value $.0001
     Series A, Authorized 10,000,000 shares, None issued                    -                   -
     Series B, authorized 9,990,000 shares, None issued                     -                   -
     Series C, Authorized 10,000 shares, None issued                        -                   -
  Common Stock, Par value $.00001
    Authorized 500,000,000 shares,
    Issued 1,168,698 Shares at September 30, 2006 and 2005                 12                  12
  Paid-In Capital                                                  35,811,071          35,811,071
  Retained Deficit                                                (35,735,362)        (35,735,362)
  Deficit Accumulated During the
    Development Stage                                                (123,634)           (121,294)
                                                           ------------------  ------------------

     Total Stockholders' Equity                                       (47,913)            (45,573)
                                                           ------------------  ------------------

     Total Liabilities and
       Stockholders' Equity                                $                -  $                -
                                                           ==================  ==================
</TABLE>









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

                                      F - 2

<PAGE>



                               PENN-PACIFIC CORP.
                          (A Development Stage Company)
                            STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                                   Cumulative
                                                                                      since
                                                                                   January 13,
                                                                                      1997
                                                 For the year ended               inception of
                                                    September 30,                  development
                                        -------------------------------------
                                               2006               2005                stage
                                        ------------------  -----------------   -----------------
<S>                                     <C>                 <C>                 <C>
Revenues:                               $                -  $               -   $               -

Expenses:                                            2,340             12,525             123,634
                                        ------------------  -----------------   -----------------

     Net Loss                           $           (2,340) $         (12,525)  $        (123,634)
                                        ==================  =================   =================

Basic & Diluted loss per share          $                -  $          (0.01)
                                        ==================  =================

Weighted Average
   Shares Outstanding                              1,168,698        1,168,698
                                        ==================  =================
</TABLE>


















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


                                      F - 3

<PAGE>



                               PENN-PACIFIC CORP.
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
           SINCE JANUARY 13, 1997 (INCEPTION OF DEVELOPMENT STAGE) TO
                               SEPTEMBER 30, 2006

<TABLE>
<CAPTION>
                                                                                                              Deficit
                                                                                                            Accumulated
                                                                                                               Since
                                                                                                            January 13,
                                                                                                                1997
                                                                                                            inception of
                                                  Common Stock            Paid-In           Retained        Development
                                                Shares         Par        Capital           Deficit            Stage
                                                              Value
                                           ---------------- --------- ---------------- ------------------ ----------------
<S>                                        <C>              <C>       <C>              <C>                <C>
Balance at October 1, 1996                          951,533 $      10 $     35,789,356 $      (35,735,362)$              -
Net Loss                                                  -         -                -                  -          (61,855)
                                           ---------------- --------- ---------------- ------------------ ----------------
Balance at September 30, 1997                       951,533        10       35,789,356        (35,735,362)         (61,855)
November 4, 1997 Issuance of
Stock for Services and payment
 of Accounts Payable                                      -         -                -                  -                -
Net Loss                                                  -         -                -                  -          (15,431)
                                           ---------------- --------- ---------------- ------------------ ----------------
Balance at September 30, 1998                       951,533        10       35,789,356        (35,735,362)         (77,286)
Capital contributed by shareholder                        -         -                                   -                -
Net Loss                                                  -         -                -                  -          (12,804)
                                           ---------------- --------- ---------------- ------------------ ----------------
Balance at September 30, 1999                       951,533        10       35,789,356        (35,735,362)         (90,090)
Stock Issued for services                           205,305         2           20,529
Stock Issued for expenses                            11,860         -            1,186                  -                -
Net Loss                                                  -         -                0                  -          (10,457)
                                           ---------------- --------- ---------------- ------------------ ----------------
Balance at September 30, 2000                     1,168,698        12       35,811,071        (35,735,362)        (100,547)
Net Loss                                                  -         -                -                  -           (5,300)
                                           ---------------- --------- ---------------- ------------------ ----------------
Balance at September 30, 2001                     1,168,698        12       35,811,071        (35,735,362)        (105,847)
Net Loss                                                  -         -                -                  -             (950)
                                           ---------------- --------- ---------------- ------------------ ----------------
Balance at September 30, 2002                     1,168,698        12       35,811,071        (35,735,362)        (106,797)
Net Loss                                                  -         -                -                  -                -
                                           ---------------- --------- ---------------- ------------------ ----------------
Balance at September 30, 2003                     1,168,698        12       35,811,071        (35,735,362)        (106,797)
Net Loss                                                  -         -                -                  -           (1,972)
                                           ---------------- --------- ---------------- ------------------ ----------------
Balance at September 30, 2004                     1,168,698        12       35,811,071        (35,735,362)        (108,769)
Net Loss                                                  -         -                -                  -          (12,525)
                                           ---------------- --------- ---------------- ------------------ ----------------
Balance at September 30, 2005                     1,168,698        12       35,811,071        (35,735,362)        (121,294)
Net Loss                                                  -         -                -                  -           (2,340)
                                           ---------------- --------- ---------------- ------------------ ----------------
Balance at September 30, 2005                     1,168,698 $      12 $     35,811,071 $      (35,735,362)$       (123,634)
                                           ================ ========= ================ ================== ================
</TABLE>

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

                                      F - 4

<PAGE>



                               PENN-PACIFIC CORP.
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                     Cumulative
                                                                                                   since January
                                                                                                      13, 1997
                                                                   For the year ended               Inception of
                                                                      September 30,                 Development
                                                          -------------------------------------
                                                                2006                2005               Stage
                                                          -----------------  ------------------  ------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
<S>                                                       <C>                <C>                 <C>
Net Loss                                                  $          (2,340) $          (12,525) $         (123,634)
Common Stock issued for expenses                                          -                   -              21,717
Increase (Decrease) in Accounts Payable                             (12,525)             12,525                   -
Increase (Decrease) in Advances
  from shareholder                                                   14,865                   -              47,913
Increase (Decrease) in Accrued Expenses                                   -                   -              54,004
                                                          -----------------  ------------------  ------------------
  Net Cash Used in operating activities                                   -                   -                   -
                                                          -----------------  ------------------  ------------------

CASH FLOWS FROM INVESTING
ACTIVITIES:
Net cash provided by investing activities                                 -                   -                   -
                                                          -----------------  ------------------  ------------------

CASH FLOWS FROM FINANCING
ACTIVITIES:
Net Cash Provided by
  Financing Activities                                                    -                   -                   -
                                                          -----------------  ------------------  ------------------

Net (Decrease) Increase in
  Cash and Cash Equivalents                                               -                   -                   -
Cash and Cash Equivalents
  at Beginning of Period                                                  -                   -                   -
                                                          -----------------  ------------------  ------------------
Cash and Cash Equivalents
  at End of Period                                        $               -  $                -  $                -
                                                          =================  ==================  ==================

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

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

The accompanying notes are an integral part of these f6inancial statements.

                                      F - 5

<PAGE>



                               PENN -PACIFIC CORP.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED SEPTEMBER 30, 2006 and 2005

NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN

         The accompanying  financial  statements have been prepared on the basis
of accounting principles applicable to a "going concern",  which assume that the
Company  will  continue in  operation  for at least one year and will be able to
realize  its assets  and  discharge  its  liabilities  in the  normal  course of
operations.

         Several conditions and events cast doubt about the Company's ability to
continue  as  a  "going  concern."  The  Company  has  incurred  net  losses  of
approximately  $2,340 and $12,525 for the year ended September 30, 2006 and 2005
respectively,  has a liquidity  problem,  and requires  additional  financing in
order to finance its business  activities  on an ongoing  basis.  The Company is
actively  pursuing  alternative  financing and has had discussions  with various
third parties,  although no firm commitments  have been obtained.  The Company's
future capital  requirements will depend on numerous factors including,  but not
limited to, continued  progress in finding a merger candidate and the pursuit of
business opportunities.

         These  financial  statements do not reflect  adjustments  that would be
necessary  if the Company  were unable to continue as a "going  concern".  While
management believes that the actions already taken or planned, will mitigate the
adverse conditions and events which raise doubt about the validity of the "going
concern" assumption used in preparing these financial  statements,  there can be
no assurance that these actions will be  successful.  If the Company were unable
to  continue  as a  "going  concern,"  then  substantial  adjustments  would  be
necessary  to the  carrying  values  of  assets,  the  reported  amounts  of its
liabilities,   the  reported  revenues  and  expenses,  and  the  balance  sheet
classifications used.

Organization and Basis of Presentation

         The Company was incorporated under the laws of the state of Delaware on
May  18,  1971.  On  April  8,  2006 a  Plan  and  Articles  of  Merger  between
Penn-Pacific Corp.  (Delaware) and Penn- Pacific Corp. (Nevada) was filed in the
State of Nevada whereby the Company was redomiciled in the State of Nevada. 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.



                                      F - 6

<PAGE>



                               PENN -PACIFIC CORP.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED SEPTEMBER 30, 2006 and 2005
                                   (Continued)

NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN (continued)

Nature of Business

         The Company has no products or services as of September  30, 2006.  The
Company intends to acquire interests in various business opportunities, which in
the opinion of management will provide a profit to the Company.

NOTE 2 - SUMMARY OF ACCOUNTING POLICIES

         This  summary  of  accounting   policies  for  Penn-Pacific   Corp.  (a
development stage company) is presented to assist in understanding the Company's
financial  statements.  The accounting  policies  conform to generally  accepted
accounting  principles and have been consistently  applied in the preparation of
the financial statements.

Cash and Cash Equivalents

         For purposes of the statement of cash flows, the Company  considers all
highly liquid debt instruments purchased with a 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.

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.





                                      F - 7

<PAGE>




                               PENN -PACIFIC CORP.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED SEPTEMBER 30, 2006 and 2005
                                   (Continued)

NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (Continued)

Recent Accounting Standards

         In June,  2006 the FASB issued FIN 48,  "Accounting  for Uncertainty in
Income Taxes--an  interpretation of FASB Statement No. 109". This Interpretation
clarifies,  among other things,  the accounting for  uncertainty in income taxes
recognized in an  enterprise's  financial  statements  in  accordance  with FASB
Statement No. 109, Accounting for Income Taxes. This Interpretation prescribes a
recognition  threshold and  measurement  attribute  for the financial  statement
recognition and measurement of a tax position taken or expected to be taken in a
tax  return.  This  Interpretation  also  provides  guidance  on  derecognition,
classification,   interest  and  penalties,   accounting  in  interim   periods,
disclosure,  and  transition.  FIN 48,  Accounting  for  Uncertainty  in  Income
Taxes--an  interpretation  of FASB  Statement  No. 109, is effective  for fiscal
years  beginning after December 15, 2006.  Earlier  application is encouraged if
the  enterprise  has not yet  issued  financial  statements,  including  interim
financial statements, in the period the Interpretation is adopted. Management is
evaluating the financial impact of this pronouncement.

         In September  2006, the FASB issued SFAS No. 157,  "Accounting for Fair
Value  Measurements."  SFAS No.  157  defines  fair  value,  and  establishes  a
framework for measuring fair value in generally accepted  accounting  principles
and expandsdisclosure  about fair value measurements.  SFAS No. 157 is effective
for the Company for financial statements issued subsequent to November 15, 2007.
The Company does not expect the new standard to have any material  impact on the
financial position and results of operations.

         In September 2006, the staff of the Securities and Exchange  Commission
issued Staff Accounting Bulletin No. 108 ("SAB 108") which provides interpretive
guidance  on how  the  effects  of the  carryover  or  reversal  of  prior  year
misstatements  should be considered in quantifying a current year  misstatement.
SAB 108 becomes effective in fiscal 2007. Management is evaluating the financial
impact of this pronouncement.









                                      F - 8

<PAGE>



                               PENN -PACIFIC CORP.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED SEPTEMBER 30, 2006 and 2005
                                   (Continued)

NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (Continued)

Loss per Share

         The  reconciliations  of the numerators and  denominators  of the basic
loss per share computations are as follows:

                                   Income              Shares          Per-Share
                                   ------              ------
                                (Numerator)
(Denominator) Amount

                                   For the year ended September 30, 2006
BASIC LOSS PER SHARE
Loss to common shareholders  $      (2,340)           1,168,698  $           -
                             =============  ===================  =============

                                   For the year ended September 30, 2005
BASIC LOSS PER SHARE
Loss to common shareholders  $     (12,525)           1,168,698  $      (0.01)
                             =============  ===================  =============

         The  effect  of   outstanding   common  stock   equivalents   would  be
anti-dilutive for September 30, 2006 and 2005 and are thus not considered. There
are no common stock equivalents outstanding at September 30, 2006 and 2005.

NOTE 3 - INCOME TAXES

         As of  September  30,  2006,  the  Company  had a  net  operating  loss
carryforward for income tax reporting  purposes of  approximately  $123,000 that
may be offset against future taxable income through 2026. 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 4 - DEVELOPMENT STAGE COMPANY

         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.  The  Company's  financial  statements  are  prepared  using
generally  accepted  accounting  principles  applicable to a going concern which
contemplates  the  realization  of assets and  liquidation of liabilities in the
normal


                                      F - 9

<PAGE>


                               PENN -PACIFIC CORP.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED SEPTEMBER 30, 2006 and 2005
                                   (Continued)

NOTE 4 - DEVELOPMENT STAGE COMPANY (continued)

course of business. However, the Company does not have significant cash or other
material assets, nor does it have an established  source of revenues  sufficient
to cover its operating costs and to allow it to continue as a going concern.  In
the interim,  shareholders  of the Company have committed to meeting its minimal
operating expenses.


NOTE 5 - CHANGES IN COMMON AND PREFERRED STOCK

         On April 8, 2005 a Plan and  Articles  of Merger  between  Penn-Pacific
Corp.  (Delaware)  and  Penn-Pacific  Corp.  (Nevada)  was filed in the State of
Nevada whereby the Company was  redomiciled  in the State of Nevada.  As part of
the merger,  the Company  changed the  authorized  stock to  500,000,000  Common
shares, par value $.00001 and 20,000,000 Preferred shares, par value $.0001. The
common  and the  preferred  stock  are  entitled  to all  the  same  rights  and
privileges  except for the voting  restrictions  for Series C  Preferred  shares
which are entitled to 50% of the  stockholders'  voting  rights.  Changes in par
value have been retroactively restated.

                                     F - 10

<PAGE>



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 CORP.
Dated: June 26, 2007
                                                     By  /S/     Rose Fischer
                                                     Rose Fischer
                                                     President

         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 26th day of June 2007.

Signatures & Title

/S/     Rose Fischer
Rose Fischer
President, Director
(Principal Executive Officer)

























                                      -18-