U. S. Securities and Exchange Commission

                             Washington, D.C. 20549

                                   FORM 10-QSB

 (Mark one)
   [X]      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934

         For the quarterly period ended  August 31, 1998


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

         For the transition period from ____________ to ____________

         Commission File No.        0-18686


                        PAK MAIL CENTERS OF AMERICA, INC.
                        ---------------------------------
        (Exact Name of Small Business Issuer as Specified in its Charter)


            Colorado                                    84-0934575
            --------                                    ----------
   (State or other Jurisdiction                     (I.R.S. Employer
of Incorporation or Organization)                   Identification No.)


             3033 S. Parker Road, Suite 1200, Aurora, Colorado 80014
             -------------------------------------------------------
               (Address of principal executive offices) (zip code)


                     Issuer's telephone number: 303-752-3500

--------------------------------------------------------------------------------
               Former name, former address and former fiscal year,
                        if changed since last report: N/A


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act  during the  preceding  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 [ ]

As of October 15, 1998, there were outstanding  2,989,483 shares of the issuer's
Common Stock, par value $.001 per share.

                  Transitional Small Business Disclosure Format
                                 Yes [ ] No [X]



<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.





                PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY
                           Consolidated Balance Sheets

                                                        AUGUST        NOVEMBER
                                                       31, 1998       30, 1997
                                                     (Unaudited)
--------------------------------------------------------------------------------
                                     Assets
Current assets
   Cash and cash equivalents                          $  105,428    $    87,405
                                                                        105,428
   Restricted cash                                        23,780
   Accounts receivable, net of allowance
         of $75,972 (1998) and  $101,039 (1997)          359,644        262,791
   Inventories                                            38,126         34,514
   Prepaid expenses and other current assets              48,113         31,805
   Deferred income tax benefit - current                 136,100        136,100
                                                     -----------    -----------
      Total current assets                               687,411        576,395
                                                     -----------    -----------

Property and equipment, at cost, net of
     accumulated depreciation                             97,066         61,892
                                                     -----------    -----------

Other assets:
   Notes receivable, net:                                674,119        722,478
   Deposits and other                                     69,678         90,130
   Deferred franchise costs, net of accumulated
        amortization of $40,094 (1998)
        and $36,360 (1997)                               200,442        175,943
   Capitalized software costs, net                       313,622        124,202
                                                     -----------    -----------
      Total other assets                               1,257,861      1,112,753
                                                     -----------    -----------

                                                     $ 2,042,338    $ 1,751,040
                                                     ===========    ===========

                      Liabilities and Stockholders' Equity
Current liabilities
   Current portion of long-term debt                 $         0    $   100,000
   Trade accounts payable                                291,716        284,355
   Accrued commissions                                    16,716         52,950
   Other accrued expenses                                 53,814         18,580
   Due to advertising fund                                11,320         23,780
                                                     -----------    -----------
      Total current liabilities                          373,566        479,665
                                                     -----------    -----------

Deferred revenue                                         638,564        533,518

Stockholders' equity:
   Series C redeemable  preferred stock,
      $1,000 par value; 6% cumulative; 2,500
      shares authorized; 2,216.668 shares issued
      and outstanding (liquidation
      preference $2,216,668)                           2,216,668      2,216,668
   Common stock, $.001 par value; 200,000,000
      shares authorized; 2,989,483 shares issued
      and outstanding                                      2,990          2,990
   Additional paid-in capital                          5,026,453      5,026,453
   Accumulated deficit                                (6,215,903)    (6,508,254)
                                                     -----------    -----------
      Total stockholders' equity                       1,030,208        737,857
                                                     -----------    -----------

                                                     $ 2,042,338    $ 1,751,040
                                                     ===========    ===========

                 See notes to consolidated financial statements.

<PAGE>
<TABLE>
<CAPTION>

                                    PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY

                                           Consolidated Statement of Operations


                                                                THREE MONTHS ENDED                    NINE MONTHS ENDED
                                                                    AUGUST 31,                           AUGUST 31,
                                                                   (Unaudited)                           (Unaudited)
                                                       --------------------------------------------------------------------------
                                                            1998               1997                  1998             1997
                                                       ---------------     --------------       ---------------  ----------------
Revenue
<S>                                                   <C>                 <C>                <C>                <C>             
    Royalties from franchisees                        $       520,671     $      453,533       $     1,712,435  $      1,479,977
    Sales of equipment, supplies, and services                168,479            247,899               438,137           560,467
    Individual franchise fees                                 270,640            429,050               497,550           840,870
    Area franchise fees, net                                   49,930             63,294               582,703            90,794
    Interest Income                                             4,722              3,867                16,645             8,139
    Other                                                      29,370             36,311                75,116            62,409
                                                      ---------------    ---------------       ---------------  ----------------
                                                            1,043,812          1,233,954             3,322,586         3,042,656
                                                      ---------------    ---------------       ---------------  ----------------

Costs and expenses
    Selling, general, and administrative                      463,538            400,108             1,415,601         1,360,871
    Cost of sales of equipment, supplies and                  154,935            222,975               389,942           502,192
services
    Commissions on franchise sales                            136,582            226,930               399,472           446,372
    Royalties paid to area franchises                         197,209            158,730               645,913           524,556
    Advertising                                                44,259             38,248               125,556           145,941
    Loss on investment in assets held for resale                    0              5,124                     0            15,575
    Depreciation and amortization                              19,040             12,489                52,875            37,005
    Interest                                                      876                108                   876             2,494
                                                      ---------------   ----------------       ---------------    --------------
                                                            1,016,439          1,064,712             3,030,235         3,035,006
                                                      ---------------   ----------------       ---------------    --------------

Net income                                            $        27,373*  $        169,242*      $       292,351*   $        7,650
                                                      ===============   ================       ===============    ==============


Basic income per common share                         $          0.01   $           0.06       $          0.10    $         0.00
                                                      ===============   ================       ===============    ==============


Weighted average number of common shares                    2,989,483          2,989,483             2,989,483         2,989,483
outstanding
                                                      ===============   ================       ===============    ==============

*  No provision for income tax expense is included as the Company has approximately $2,000,000 in net operating loss carryforwards
to offset future taxable income.



                                  See notes to consolidated financial statements.

</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                               PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY

                                      Consolidated Statement of Cash Flows

                                                                                         NINE MONTHS ENDED
                                                                                             AUGUST 31,
                                                                                             (Unaudited)
                                                                            ----------------------------------------------
                                                                                  1998                     1997
                                                                            -----------------        -----------------
Cash flows from operating activities
<S>                                                                        <C>                      <C>              
     Net income                                                            $         292,351        $           7,650
     Adjustments to reconcile net income to net cash
        from operating activities:
            Depreciation and amortization                                             52,875                   37,005
            Deferred revenue, net                                                    105,046                  130,950
            Change in operating assets and liabilities-
                 Accounts receivable                                                (96,853)                 (35,776)
                 Inventories                                                         (3,612)                   11,750
                 Prepaids and deferred franchise costs                              (44,541)                 (88,103)
                 Deposits and other                                                   20,452                 (24,177)
                 Trade accounts payable                                                7,361                 (31,179)
                 Accrued expenses                                                    (1,000)                  (8,224)
                 Due to Ad Fund                                                     (12,460)                 (44,674)
                                                                            ---------------         ----------------
                       Net cash provided by (used in) operating activities          319,619                  (44,778)
                                                                            ---------------         ----------------

Cash flows from investing activities
     Capital expenditures, net                                                      (84,315)                 (45,195)
     Capitalized software costs                                                    (189,420)                       0
     Proceeds from assets held for sale                                                   0                    15,300
     Payments (advances) on notes receivable                                          48,359                 (60,243)
                                                                            ----------------        ----------------
                       Net cash used in investing activities                        (225,376)                 (90,138)
                                                                            ----------------        -----------------

Cash flows from financing activities
     Payment of debt                                                               (100,000)                    1,494
     Decrease in restricted cash                                                      23,780                        0
                                                                            ----------------        -----------------
                       Net cash used in financing activities                         (76,220)                   1,494
                                                                            ----------------        -----------------

Net decrease increase in cash and cash equivalents                                    18,023                 (133,422)

Cash and cash equivalents, beginning of year                                          87,405                  152,472
                                                                            -----------------        ----------------

Cash and cash equivalents, end of period                                   $         105,428        $          19,050
                                                                            ================        =================

Supplemental disclosure of cash flow information -
   Cash paid during the period for interest                                $             876        $           2,494
                                                                            ================        =================


                             See notes to consolidated financial statements.


</TABLE>

<PAGE>

                        PAK MAIL CENTERS OF AMERICA, INC.
                   Notes to Consolidated Financial Statements


Note 1    ORGANIZATION AND BUSINESS
          -------------------------

     Pak Mail Centers of America,  Inc. was incorporated in Colorado in 1984 and
     is engaged in the business of marketing  and  franchising  Pak Mail service
     centers and retail stores which  specialize in custom packaging and crating
     of items to be mailed or  shipped.  For the period  from  December  1, 1997
     through October 15, 1998, the Company awarded 40 individual  franchises and
     6 area franchises and  as of October 15, 1998, the Company had 350 domestic
     and international  individual franchise agreements in existence and 31 area
     franchises in existence.

     The  consolidated  financial  statements  include the  accounts of Pak Mail
     Centers of America, Inc. and its wholly owned subsidiary,  Pak Mail Crating
     and Freight  Service,  Inc.  (together,  the  "Company").  All  significant
     intercompany   transactions   and   balances   have  been   eliminated   in
     consolidation.


Note 2    BASIS OF PRESENTATION
          ---------------------

     The accompanying  consolidated  financial  statements have been prepared by
     the Company. Certain information and footnote disclosures normally included
     in financial  statements  prepared in accordance  with  generally  accepted
     accounting principles have been condensed or omitted. In the opinion of the
     Company's   management,   the  interim  financial  statements  include  all
     adjustments necessary in order to make the interim financial statements not
     misleading.

     The results of operations for the nine months ended August 31, 1998 are not
     necessarily indicative of the results to be expected for the full year.

Note 3   RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
         -----------------------------------------

     In June 1997, the FASB issued Statement of Financial  Accounting  Standards
     No. 130,  "Reporting  Comprehensive  Income" (SFAS 130), which  established
     standards for reporting and display of comprehensive income, its components
     and accumulated  balances.  Comprehensive  income is defined to include all
     changes in equity except those  resulting  from  investments  by owners and
     distributions to owners.  Among other  disclosures,  SFAS 130 requires that
     all items that are  required  to be  recognized  under  current  accounting
     standards as components of comprehensive income, be reported in a financial
     statement  that is displayed  with the same  prominence as other  financial
     statements.  Currently the Company's  only  component  which would comprise
     comprehensive income is its results of operations.

     Also,  in June 1997,  the FASB issued  Statement  of  Financial  Accounting
     Standards No. 131, "Disclosures about Segments of an Enterprise and Related
     Information" (SFAS 131), which supersedes Statement of Financial Accounting
     Standards  No.  14,  "Financial   Reporting  for  Segments  of  a  Business
     Enterprise."  SFAS  131  establishes  standards  for  the way  that  public
     companies report  information about operating  segments in annual financial
     statements and requires  reporting of selected  information about operating
     segments in interim  financial  statements  issued to the  public.  It also


<PAGE>

     establishes  standards  for  disclosures  regarding  products and services,
     geographic areas and major customers.  SFAS 131 defines operating  segments
     as components of a company about which  separate  financial  information is
     available that is evaluated regularly by the chief operating decision maker
     in  deciding  how  to  allocate  resources  and in  assessing  performance.
     Management believes that SFAS 131 will not have a significant impact on the
     Company's disclosure of segment information in the future.

     SFAS  130  and 131 are  effective  for  financial  statements  for  periods
     beginning after December 15, 1997, and require comparative  information for
     earlier periods to be restated.



Item 2.   Management's Discussion and Analysis or Plan of Operation
          ---------------------------------------------------------

     The following  information should be read in conjunction with the unaudited
     consolidated financial statements included herein. See Item 1.


     LIQUIDITY AND CAPITAL RESOURCES
     -------------------------------

     The Company  increased  cash by $18,023  ($319,619  provided from operating
     activities offset by $225,376 used in investing activities and $76,220 used
     in  financing  activities)  during the nine months  ended  August 31, 1998.
     Included in the $76,220 used in financing activities,  $100,000 was used to
     pay in  full  the  note  payable  to D.  P.  Kelly  &  Associates  L.P.,  a
     shareholder and an affiliate of the Company's majority shareholder.

     Deferred  revenue  increased  $105,046 to $638,564 and  deferred  franchise
     costs increased  $24,499 to $200,442 at August 31, 1998. The increases were
     primarily  a  result  of  deferring   revenue   recognition  and  expensing
     commissions  on 11 of the 37 new individual  franchises  awarded during the
     nine months ended August 31, 1998.  Four of the  individual  franchise fees
     that were  deferred as of  November  30,  1997 were  recognized  as revenue
     during the nine months ended August 31, 1998.


     RESULTS OF OPERATIONS
     ---------------------

     Three months  ended August 31, 1998,  compared to three months ended
     August 31, 1997
     ---------------------------------------------------------------------------

     Total revenues  decreased  $190,142  (15.4%) from  $1,233,954 for the three
     months  ended  August 31, 1997,  to  $1,043,812  for the three months ended
     August 31, 1998.  The decrease is  primarily  attributable  to decreases in
     individual  franchise fees (down 36.9% from $429,050 to $270,640) and sales
     of equipment,  supplies and services (down 32.0% from $247,899 to $168,479)
     offset by an increase in royalties from franchisees (up 14.8% from $453,533
     to $520,671).

     The  $158,410   decrease  in  individual   franchise  fees  represents  the
     recognition  of revenue  from six less  franchises  during the three months
     ended  August 31,  1998 as  compared  to the same  prior year  period and a
     differing mix of per franchise revenue recognition.  The Company recognized
     revenue on 13 and 19  individual  franchises  during the three months ended
     August 31, 1998 and August 31, 1997, respectively.

<PAGE>


     The  $79,420  decrease  in sales of  equipment,  supplies  and  services is
     primarily due to the decreased  number of new  franchisees  that  purchased
     equipment  during the three months ended August 31, 1998 as compared to the
     same prior year period.

     The $67,138  increase in  royalties  for the three  months ended August 31,
     1998 as compared to the three months ended August 31, 1997 is due primarily
     to increases in the average store volumes and number of stores open.

     Total  expenses  decreased  $48,273  (4.5%) from  $1,064,712  for the three
     months  ended  August 31, 1997,  to  $1,016,439  for the three months ended
     August 31, 1998.  The decrease is  primarily  attributable  to decreases in
     commissions  on franchise  sales (down 39.8% from $226,930 to $136,582) and
     cost of sales of equipment, supplies and services (down 30.5% from $222,975
     to $154,935) offset by increases in selling,  general,  and  administrative
     (up 15.9% from $400,108 to $463,538) and royalties paid to area  franchises
     (up 24.2% from $158,730 to $197,209).

     The $90,348  decrease in commissions on franchise sales is primarily due to
     the decreased  number of individual  franchise  sales made during the first
     three months  ending August 31, 1998 compared to the same prior year period
     and the differing mix of commissions.

     The $68,040  decrease in cost of sales of equipment,  supplies and services
     is primarily due to the decreased  number of new franchisees that purchased
     equipment  during the three months  ended  August 31, 1998  compared to the
     same prior year period.

     The  $63,430  increase  in  selling,  general  and  administrative  relates
     primarily to increases in consulting fees, rent and payroll expenses.

     The $38,479  increase in royalties paid to area  franchises  relates to the
     increase in percentage of stores that operate within area marketer  regions
     and an increase in their average store volumes.



     Nine months ended August 31, 1998, compared to nine months ended
     August 31, 1997
     -----------------------------------------------------------------

     Total  revenues  increased  $279,930  (9.2%) from  $3,042,656  for the nine
     months  ended  August 31,  1997,  to  $3,322,586  for the nine months ended
     August 31, 1998.  The increase is  primarily  attributable  to increases in
     royalties from  franchisees  (up 15.7% from  $1,479,977 to $1,712,435)  and
     area  franchise  fees (up from $90,794 to $582,703)  offset by decreases in
     sales of  equipment,  supplies  and services  (down 21.8% from  $560,467 to
     $438,137)  and  individual  franchise  fees (down  40.8% from  $840,870  to
     $497,550).

     The  $232,458  increase in  royalties  for the nine months ended August 31,
     1998 as compared to the nine months ended August 31, 1997 is primarily  due
     to increases in the average store volumes and the number of stores open.

     The $491,909  increase in area  franchise fees was primarily due to selling
     an area  franchise  in the country of Japan.  There were no area  franchise
     sales during the nine months ended August 31, 1997. The $90,794 in 1997 was
     due to revenue  recognition  of area  franchise  sales made prior to fiscal
     1997.

<PAGE>


     The  $122,330  decrease in sales of  equipment,  supplies  and  services is
     primarily due to the decreased  number of new  franchisees  that  purchased
     equipment  during the nine months  ended August 31, 1998 as compared to the
     same prior year period.

     The  $343,320   decrease  in  individual   franchise  fees  represents  the
     recognition of revenue from 14 less franchises during the nine months ended
     August 31,  1998 as  compared to the same prior year period and a differing
     mix of franchise revenue recognition.  The Company recognized revenue on 24
     and 38 individual  franchises  during the nine months ended August 31, 1998
     and August 31, 1997, respectively.

     Total expenses  decreased $4,771 (0.2%) from $3,035,006 for the nine months
     ended August 31, 1997, to  $3,030,235  for the nine months ended August 31,
     1998. The increase is primarily attributable to increases in royalties paid
     to area  franchisees  (up 23.1% from  $524,556 to  $645,913)  and  selling,
     general,  and administrative (up 4.0% from $1,360,871 to $1,415,601) offset
     by decreases in commissions on franchise sales (down 10.5% from $446,372 to
     $399,472),  cost of sales of equipment,  supplies and services  (down 22.4%
     from  $502,192 to $389,942)  and  advertising  (down 14.0% from $145,941 to
     $125,556).

     The $121,357  increase in royalties paid to area franchises  relates to the
     increase in percentage of stores that operate within area marketer  regions
     and an increase in their average store volumes.

     The  $54,730  increase  in  selling,  general  and  administrative  relates
     primarily to increases in consulting  fees and payroll  expenses  offset by
     decreases in legal and convention expenses.

     The $46,900  decrease in commissions on franchise sales is primarily due to
     the decreased  number of individual  franchise  sales made during the first
     nine months  ending  August 31, 1998 compared to the same prior year period
     and the differing mix of commissions.

     The $112,250 decrease in cost of sales of equipment,  supplies and services
     is primarily due to the decreased  number of new franchisees that purchased
     equipment during the nine months ended August 31, 1998 compared to the same
     prior year period.

     The  $20,385  decrease  in  advertising  is  primarily  related  to reduced
     advertising  in national media during the nine months ended August 31, 1998
     compared to the same prior year period.


<PAGE>




PART II.                 OTHER INFORMATION

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

The Company's annual meeting of shareholders was held on June 19, 1998, at which
the following items were voted on.

(1)  The election of  directors.The  tally for the election of directors  was as
     follows:

   DIRECTOR                               FOR                    WITHHELD

   J. S. Corcoran                      2,599,377                  5,431
   John W. Grant                       2,599,477                  5,331
   F. Edward Gustafson                 2,599,377                  5,431
   John E. Kelly                       2,598,397                  6,411
   William F. White                    2,599,277                  5,531

(2)  The motion to approve an amendment to Article IX of the Company's  Articles
     of  Incorporation  to increase the number of votes necessary to establish a
     quorum at  shareholder  meetings to one-third  of the votes  entitled to be
     cast on a matter by a voting group. The tally for approval of the amendment
     was as follows:

             IN FAVOR                  AGAINST                    ABSTAINED

             2,134,804                  3,923                      186,871

(3)  The  motion  to  approve  an  amendment  to  the   Company's   Articles  of
     Incorporation to amend Article X to revise the votes necessary to amend the
     Company's  Articles  of  Incorporation  to a majority  of a quorum,  and to
     delete  Articles XI and XII. The tally for approval of the amendment was as
     follows:

              IN FAVOR                AGAINST                    ABSTAINED

             2,130,805                 6,715                      188,078




Item 5.   Other Information.

     Effective  June  29,  1998,  the  United  States  Securities  and  Exchange
Commission   adopted  new  rules   relating  to  shareholder   proposals   which
shareholders  do not request be included in the Company's  proxy statement to be
used in connection  with the Company's  Annual  Meeting of  Shareholders.  Under
these new rules, proxies that confer discretionary authority will not be able to
be voted on a  shareholder  proposal to be  presented  at the Annual  Meeting of
Shareholders if the shareholder provides the Company with advance written notice
of the  shareholders  proposal on a date in the current year that is at least 45
days  prior to the date the prior  year's  proxy  materials  were  mailed to the
Company's shareholders. If a shareholder fails to so notify the Company, proxies
that confer  discretionary  authority will be able to be voted when the proposal
is presented at the Annual Meeting of Shareholders.

<PAGE>


     In  accordance  with the new  rules,  proxies  which  confer  discretionary
authority  will  be  able  to  be  voted  on  shareholder   proposals  that  the
shareholders do no request be included in the Company's proxy statement but plan
to present at the  Company's  next  Annual  Meeting of  Shareholders  unless the
Company receives notice of the proposals by no later than March, 17 1999.










<PAGE>




                                   SIGNATURES






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



                                      PAK MAIL CENTERS OF AMERICA, INC.
                                                  (Registrant)
Date: October 15, 1998


                                      By: /s/  John E. Kelly
                                          --------------------------------------
                                          John E. Kelly
                                          President


                                      By: /s/  Raymond S. Goshorn
                                          --------------------------------------
                                          Raymond S. Goshorn
                                          Secretary and Treasurer