SECURITIES & EXCHANGE COMMISSION
                        Washington, D.C., 20549

                               FORM 10-KSB
    
              ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
                 of the Securities Exchange Act of 1934
             For the Fiscal Year Ended December 31, 1998
                    Commission File Number: 33-17229-D

                            ART CARDS, INC.
        (Exact name of Registrant as specified in its Charter)

         Colorado                                  84-0978589
    (State or other jurisdiction of           (I.R.S. Employer
      incorporation or organization)             Ident. Number)
    
                933 Pearl Street, Denver, Colorado 80203
       (Address of principal executive offices)     (zip code)

                          (303) 831-9335
        (Registrant's telephone number, including area code)
    
Securities registered pursuant to Section 12(b) or Section 12(g)        
                        of the Act:

                                    None

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not 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-K or any amendments to this Form 10-K.

[X]


Indicate by check mark whether Registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that 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 [  ]
 
The aggregate market value of the Registrant's voting stock held as of 
February 28, 1999, by nonaffiliates of the Registrant was $0 as there 
was no bid on that day.

As of February 28, 1999, the Registrant had 976,602,000 shares of its 
$0.0001 par value common stock outstanding.











































                                  FORM 10-KSB
                                ART CARDS, INC.

                               TABLE OF CONTENTS
Item 
 No.             Description 
                                                       Page

                                                                       
PART I

1.  Business   
2.  Properties
3.  Legal Proceedings
4.  Submission of Matters to a Vote of Security Holders

                                    PART II

4.  Market for the Registrant's Common Equity and Related Stockholder 
    Matters
6.  Management's Discussion and Analysis or Plan of Operations
7.  Financial Statements and Supplementary Data
8.  Changes and Disagreements with Accountants on Accounting and Financial 
    Disclosure

                                  PART III

9.  Directors, Executive Officers, Promoters and Control Persons of the 
    Registrant
10. Management Remuneration and Transactions
11. Security Ownership of Certain Beneficial Owners
12. Management Transactions

                                                                        
 PART IV

14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
    Signatures


















                                       

FORM 10-KSB

                                     ART CARDS, INC.

December 31, 1998

PART I

ITEM 1.  BUSINESS


(a)  General Development of Business

Art Cards, Inc. ("Registrant" or the "Company") was incorporated under 
the laws of the state of Colorado on January 30, 1984, as World 
Greetings, Inc. And changed its name to Art Cards, Inc. on March 31,
1987. The Company designed, manufactured, produced and marketed greeting 
cards.

On November 7, 1993, the Company sold its remaining inventory of greeting 
cards, approximately 337,000, for $22,000 and is no longer in the business 
of designing, manufacturing, producing and marketing greeting cards 
although it still accepts special orders for greeting cards. The Company 
is currently looking for a suitable candidate to merge with or be acquired 
by. To date, the Company has not located a suitable candidate.

On June 28, 1991, the Company entered into a five-year license agreement 
with Recycled Paper Products, Inc. (Recycled Paper) and Rob Barber. 
Recycled Paper has the exclusive right to receive, sell and distribute 
greeting cards and related products created by Rob Barber in the United 
States, Canada and Australia. Recycled Paper has agreed to pay the Company 
and Rob Barber five percent (5%) of all net sales. In addition, Recycled 
Paper has agreed to pay the Company and Rob Barber fifty percent (50%) of 
all license fees, advances against royalties and royalties that Recycled 
Paper may receive from sublicenses granted by Recycled Paper. Such 
sublicenses may only be granted outside the United States, Canada and 
Australia. Recycled Paper has the option to extend the license agreement 
for an additional five years, provided certain minimum royalties and 
license fees are paid by Recycled Paper.

On March 23, 1992, the Company entered into an exclusive distribution 
agreement with The Noteworthy Marketing Group, Inc. (Noteworthy). 
Noteworthy was appointed the exclusive distributor (except for Recycled 
Paper, as described above) for sale of the Company's inventory of cards at 
wholesale and retail prices within the United States and its territories. 
Pursuant to the terms of the agreement, the Company was to receive a 
royalty of fifty-five percent (55%) of the gross revenues actually 
collected from customers (net of discounts and allowances actually allowed 
customers, not to exceed five percent (5%) from the sale of inventory by 
Noteworthy. The agreement was to expire on December 31, 1993, or when the 
Company's total inventory of cards existing as of the date of the 
agreement was depleted, whichever occurred first. However, by mutual 
consent, the Company and Noteworthy terminated the agreement on March 22, 
1993, due to Noteworthy's inability to obtain customers for the Company' s 
products. All inventory was returned to the Company by April 15, 1993.





(b)  Financial Information About Industry Segments

Since its inception, the Company's revenues, operating profit or loss and 
identifiable assets were attributable to only one industry segment and the 
Company has been engaged in only one line of business, which was the 
designing, manufacturing, producing and marketing of greeting cards, 
postcards, poster grams and similar products.

(c)  Narrative Description of Business
  
The Company was engaged in the business of designing, manufacturing, 
producing and marketing a proprietary line of greeting cards and related 
products. The Company published between 100 and 200 designated graphic 
images from several contemporary artists, including John Lennon, Yoko Ono, 
Yuri Dojc, Giancarlo Impiglia and David Gerstein.

On November 7, 1993, the Company sold its remaining inventory of greeting 
cards, approximately 337,000, for $22,000 and is no longer in the business 
of designing, manufacturing, producing and marketing greeting cards 
although it still accepts special orders for greeting cards. The Company 
is currently looking for a suitable candidate to merge with or be acquired 
by. To date, the Company has not located a suitable candidate.

The Company's greeting cards were marketed in the United States and Canada 
through independent distributors and were displayed in retail outlets 
throughout the United States. These distributors called on card shops, 
stationery stores, department stores, bookstores, drug stores and several 
other types of retail sales outlets. The Company's products were 
represented in numerous outlets in the United States.

(iv)  Patents, Trademarks and Licenses

On June 12, 1990, the Company's trademark, Art Cards, and design were 
registered with the United States Patent and Trademark Office on the 
Supplemental Register, Registration Number 1,601,644. The registration is 
in effect until June 12, 2000.

Licensing Agreements.  The Company's ability to design, manufacture, 
produce and market a proprietary line of greeting cards was dependent upon 
the acquisition of the rights to images of artists upon which the cards 
are based. To this end, the Company entered into a number of licensing 
agreements, including the following:

John Lennon--Marigold Enterprises, Ltd.  The Company, as more fully 
described below, entered into two license agreements with Marigold 
Enterprises, Ltd. (Marigold), of which Marilyn Goldberg, a director and 
shareholder of the Company, is an officer, director and 100 percent 
shareholder. Marigold is engaged in the business of publication and 
distribution of fine art graphics, limited edition prints and posters, as 
well as acting as a licensing and marketing agent with respect to contract 
rights by artists. (See Item 13, Certain Relationships and Related 
Transactions.) Pursuant to the license agreements, the Company had an 
exclusive, worldwide license to use certain graphic images of artists in 
the design and production of its greeting cards, posters and related 
products.
In July 1987, the Company entered into a License Agreement with Marigold 
which was consented to by the Estate of John Lennon and which granted to 
the Company the right to use drawings and lyrics of musical composition 
created and composed by John Lennon in a line of greeting cards to be 
produced by the Company. The extended term of the agreement terminates in 
September 1996. Written approval of each card was required prior to 
manufacture by the Company. The Company was required to create and 
manufacture specific minimums per year.

Also in June 1987, the Company entered into a License Agreement with 
Marigold which grants to the Company the exclusive right, until October 
1997, to use certain designated images by Giancarlo Impiglia, Yuri Dojc 
and David Gerstein in the manufacture, distribution and sale of greeting 
cards. In consideration of the exclusive license agreement, the Company 
has agreed to pay Marigold certain royalties for each artist covered by 
the agreement for use either as a postcard or a greeting card.

(v) Seasonal Business. The Company's business was not seasonal in nature.

(vi) Working Capital. Not Applicable.

(vii) Customer Dependence. Not Applicable.

(viii) Backlog of Orders. Not Applicable.

(ix) Government Contracts. Not Applicable.

(x) Competition. Not Applicable.

(xi) Research and Development. The Company did not engage in any material 
research and development activities during the last three years.

(xii) Environmental Regulations. Compliance with federal, state and local 
provisions regulating the discharge of materials into the environment does 
not have any material effect on the capital expenditures, earnings and 
competitive position of the Company.

(xiii) Employees. The Company presently has no employees.

(d) Financial Information About Foreign and Domestic Operations and Export 
Sales
          Not Applicable.

ITEM 2.  PROPERTIES

The Company's executive offices are located at 933 Pearl Street, Denver, 
Colorado.

ITEM 3.  LEGAL PROCEEDINGS

The Company is not a party to any legal proceedings.

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

During the Company's fourth quarter for the fiscal year ended December 31, 
1998, no matter was submitted to a vote of the Company's security holders, 
either by proxy solicitation or otherwise.
                                      PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER 
MATTERS

(a)  Market Information

There is no established public trading market for the Company's common 
stock.

(b)  Holders

As of February 28, 1999, the Company had approximately 993 shareholders of 
record of its common stock.

(c)  Dividends

The Company has not declared cash dividends on its common stock since its 
inception and the Company does not anticipate paying a cash dividend in 
the foreseeable future.

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

Liquidity and Capital Resources

During the fiscal year ended December 31, 1998, the Company's working 
capital deficit changed slightly from ($71,950) at December 31, 1997 to 
($62,355) at December 31, 1998. The decrease was the result of an 
unsuccessful merger transaction with Legacy Brands, Inc. The Company is no 
longer in the business of designing, manufacturing, producing and 
marketing greeting cards although it still accepts special orders for 
greeting cards. The Company's auditors have included modifications in 
their report as to the Company's ability to continue as a going concern 
due to the significant operating losses and working capital deficit. The 
Company is currently seeking a business combination. There are no 
assurances the Company will be successful in combining with any other 
entity.

Results of Operations

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997

The results of operations for the year ended December 31, 1998, reflect 
the cessation of operations for the Company. Since the Company has ceased 
operations the Company has minimal operating expenses, primaily 
representing legal and accounting fees. The Company no longer actively 
markets its greeting cards and has sold its entire inventory in 1993.

Inflation

The management of the Company does not believe that inflation has had any 
material effect on the Company during the fiscal year ended December 31, 
1998.




ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements are filed as part of this Annual report on Form 
10-KSB.

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

        Not Applicable.


                                 PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF 
THE REGISTRANT

(a)  Identification of Directors

The present term of office of each director will expire at the next annual 
meeting of shareholders. The name, position with the Company and the age 
of each director, and the period during which each director has served are 
as follows:

Name and position, if any,
in the Company                  Age               Director Since
Richard H. Miller
(President and Chairman
 of the Board)                   53                       1984

Marilyn R. Goldberg              53                       1984

John W. Rapparlie                55                       1987

There was no arrangement or understanding between any director and any 
other person pursuant to which any director was selected as a director.

(b)  Identification of Executive Officers

The executive officers of the Company are elected annually. Each executive 
officer shall hold office until his successor duly is elected and 
qualified or until his resignation or until he shall be removed in the 
manner provided by the Company's Bylaws. The Company's executive officers, 
their ages, positions with the Company and periods during which they have 
served as such are as follows:

Name of Executive Officer and
 Position in Company             Age               Officer Since
Richard H. Miller
(President and Chairman
 of the Board)                    53                    1984

There was no arrangement or understanding between any executive officer 
and any other person pursuant to which any executive officer was selected 
as a executive officer.

(c)   Identification of Certain Significant Employees. 
        Not Applicable.

(d)  Family Relationships.  There are no family relationships between any 
officers and directors of the Company.

(e)  Business Experience

   (1)  Background.  The following is a brief account of the business 
experience during the past five years of each director and executive 
officer:

Name of Director                     Principal Occupation During
or Officer                           The Last Five Years         

Richard H. Miller                    Chairman of the Board and President 
                                     of the Company.

Marilyn R. Goldberg                   President of Marigold Enterprises, 
                                      Ltd., a publisher and distributor of 
                                      fine art graphics, limited edition 
                                      prints and posters.

John W. Rapparlie                    Chief Executive Officer since July 
                                     1986 and President and Sales Director 
                                     for Paper Cargo, Inc., a greeting  
                                     card sales and marketing corporation, 
                                     since August, 1982.

     (2)  Directorships.  No director is a director of any company with a 
class of securities registered pursuant to Section 12 of the Securities 
Exchange Act of 1934 or subject to the requirements of Section 15(d) of 
such Act or any company registered as an investment company under the 
Investment Company Act of 1940.

(f)  Involvement in Certain Legal Proceedings.
     Not Applicable.

(g) Promoters and Control Persons.
    Not Applicable.

The Company does not have a class of equity securities registered pursuant 
to Section 12 of the Exchange Act.

ITEM 10.  MANAGEMENT REMUNERATION AND TRANSACTIONS

(a)(1)  Cash Compensation.

There was no cash compensation to any officers in 1998 or 1997.


(b)(1)  Compensation Pursuant to Plans.

The Company has no option, pension, benefit plans or similar types of 
compensation arrangements.


(b)(2)&(3)  Pension Table and Alternative Pension Plan Disclosure.
            Not Applicable.


(b)(4)  Stock Option and Stock Appreciation Right Plans.

The Company has no stock option or stock appreciation right plans for its 
executive officers.

(c)  Other Compensation.

The Company does not pay other compensation to executive officers. 
However, the Company may, from time to time, pay incidental compensation 
consisting primarily of reimbursement for business related activities on 
behalf of the Company. No such reimbursements were made in 1996 or 1995.

(d)  Compensation of Directors.

     (1)  Standard Arrangements.

There are no arrangements whereby directors are compensated for their 
services as directors.

     (2)  Other Arrangements.
          Not Applicable.

(e)  Termination of Employment and Change of Control Arrangement.
     Not Applicable.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

(a)  Security Ownership of Certain Beneficial Owners.
The following person is the only person known to the Company who on February 
28, 1999, owned beneficially more than 5% of the Company's $0.0001 par 
value common stock, its only class of outstanding voting securities:

Name and Address of       Amount and Nature of              Percent
Beneficial Owner          Beneficial Ownership (1)          Of Class
Richard H. Miller
933 Pearl Street, 
Denver, Colorado 80203        514,315,800                      52.6

(1)  Mr. Miller has the sole voting and investment power with respect to 
the shares.

(b)  Security Ownership of Management.

The following table shows as of March 31, 1998, the shares of the 
Company's $0.0001 par value common stock beneficially owned by each 
director of the Company and the shares beneficially owned by all the 
officers and directors of the Company as a group:

                              Amount of Shares and Nature   Percent
Name of Beneficial Owner     of Beneficial Ownership (1)    of Class

Richard H. Miller                514,315,800                  52.6%

Marilyn R. Goldberg               10,000,000                  1.20%

John W. Rapparlie                    100,000                  0.01%

All Officers and Directors
 as a Group (3 Persons)          525,415,800                  53.81%

  (1) The beneficial owners listed have sole voting and investment power 
with respect to the shares.

(c)  Changes in Control.

There are no arrangements which may result in a change in control of the 
Company.

ITEM 12.  MANAGEMENT TRANSACTIONS

  (a) and (b)  Transactions With Management and Others and Certain 
Business Relationships.

The Company has entered into two license agreements with Marigold 
Enterprises, Ltd. (Marigold), of which Marilyn Goldberg, a director and 
shareholder of the Company, is an officer, director and 100 percent 
shareholder. See item 1(c)(iv). No payments were required to be paid to 
Marigold during 1998 and 1997 pursuant to the two agreements.

  (c)  Indebtedness of Management.

No director or executive officer of the Company and no associate of any 
such director or executive officer was indebted to the Company at any time 
since the beginning of the Company's last fiscal year in an amount in 
excess of $100,000.

  (d)  Transactions with Promoters.
       Not Applicable.

























                               PART IV

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

Financial Statements included in this Report:

       Independent Auditor's Report

       Balance Sheets

       Statements of Operations

       Statements of Stockholders' Deficit

       Statements of Cash Flows

       Notes to Financial Statements








































                            Janet Loss, C.P.A., P.C.
                         3525 S. Tamarac Drive, Suite 120
                           Denver, Colorado 80237
                               (303) 220-0227


To the Board of Directors and Shareholders
Art Cards, Inc.
Denver, Colorado


I have audited the accompanying balance sheets of Art Cards, Inc. (the 
Company) as of December 31, 1998 and 1997, and the related statements of 
operations, shareholders' deficit and cash flows for the years ended 
December 31, 1998 and 1997. These financial statements are the 
responsibility of the Company's management. My responsibility is to 
express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally accepted auditing 
standards. These standards require that I plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are 
free of material misstatement. An audit includes examining, on a test 
basis, evidence supporting the amounts and disclosures in the financial 
statements. An audit also includes assessing the accounting principles 
used and significant estimates made by management, as well as evaluating 
the overall financial statement presentation. I believe that my audit 
provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, 
in all material respects, the financial position of the Company as of 
December 31, 1998 and 1997, and the results of its operations and its cash 
flows for the years ended December 31, 1998 and 1997 in conformity with 
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming the 
Company will continue as a going concern. As shown in the financial 
statements, the Company has incurred net loss of ($405) and ($2,157)for
the years ended December 31, 1998 and 1997, respectively. In addition,
the Company has incurred losses to date in the amount of $1,110,388.
The Company's significant operating losses raise substantial doubt
about its ability to continue as a going concern. The financial statements
do not include any adjustments that might result from the outcome of this 
uncertainty.



Janet Loss, C.P.A., P.C.

March 5, 1999








<TABLE>
<CAPTION>
                                  ART CARDS, INC.
                                  BALANCE SHEETS
</CAPTION>
                                            December 31,  December 31,
                                                1998        1997                            

ASSETS
<S>                                       <C>            <C>
CURRENT ASSETS:
Cash                                      $         5    $         10 
----------------------------------------------------------------------
TOTAL CURRENT ASSETS                                5              10 
----------------------------------------------------------------------
OTHER ASSETS:
Organization Costs, net of 
  accumulated amortization of
  $14,509                                          0               0 
----------------------------------------------------------------------
TOTAL OTHER ASSETS                                 0               0 
---------------------------------------------------------------------
TOTAL ASSETS                             $         5     $        10 
======================================================================

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT  LIABILITIES:
 Accounts Payable                        $         0     $         0 
 Accrued liabilities, officer                 62,360          71,960 
---------------------------------------------------------------------
  TOTAL CURRENT LIABILITIES                   62,360          71,960 
---------------------------------------------------------------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT:
 Common Stock, $.0001 par value,
  3,000,000,000 shares authorized,
   976,602,000 and876,602,000 shares
    issued and outstanding as of
     December 31, 1998 and 1997,
      Respectively                            97,660         87,660 

Additional paid-in capital                   950,373        950,373 

Accumulated deficit                       (1,110,388)    (1,109,983)
--------------------------------------------------------------------
TOTAL SHAREHOLDERS' DEFICIT                  (62,355)       (71,950)
--------------------------------------------------------------------
TOTAL LIABILITIES AND
 SHAREHOLDERS' DEFICIT                   $         5   $         10 
=====================================================================
<CAPTION>
See independent auditor's report and notes to financial statements.
</CAPTION>
</TABLE>

<TABLE>
<CAPTION>
                              ART CARDS, INC.
                          STATEMENTS OF OPERATIONS

                For the Years Ended December 31, 1998 and 1997
</CAPTION>


                                                  1998            1997  
<S>                                          <C>             <C>
Sales, net                                   $       -       $       - 
-----------------------------------------------------------------------
OPERATING EXPENSES:
 Bank charges                                      70              72
 Legal and accounting fees                      1,330             575 
 Filing fees                                        -           1,510 
 Shipping and handling                              -               - 
 Travel expenses                                3,985            
-----------------------------------------------------------------------
 TOTAL OPERATING EXPENSES                       5,405           2,157
----------------------------------------------------------------------

NET INCOME (LOSS) BEFORE 
 OTHER INCOME AND EXPENSES                     (5,405)         (2,157)
-----------------------------------------------------------------------
OTHER INCOME AND (EXPENSES):
 Income from proposed
  acquisition payments                          5,000               0  
---------------------------------------------------------------------
NET INCOME (LOSS)                           $   ( 405)      $  (2,157)
======================================================================
NET INCOME (LOSS)
PER SHARE OF COMMON STOCK BASIC AND DILUTED $         *     $        * 
======================================================================
AVERAGE NUMBER OF 
  COMMON SHARES OUTSTANDING                 943,268,666    876,602,000
======================================================================
* less than $.01 per share


<CAPTION>
See independent auditor's report and notes to financial statements.
</CAPTION>
</TABLE>











<TABLE>

                                   ART CARDS, INC.
                        STATEMENTS OF SHAREHOLDERS' DEFICIT

                  For the Years Ended December 31, 1998 and 1997


                     Number of
                     Shares      Par Value    Additional 
                                               Paid-In  
                                               Capital      Accumulated
                                                              Deficit   
<S>                  <C>          <C>         <C>          <C>
Balances,
January 1, 1997      876,602,000  $87,660     $950,373     $(1,107,826)

Net Loss for Year             --       --           --          (2,157)
----------------------------------------------------------------------

Balances,
December 31,1997    876,602,000   87,660      950,373      (1,109,983)

Common stock issued 
 For cash asdvances 100,000,000   10,000

Net Loss for Year            --       --           --            (405)
----------------------------------------------------------------------
Balances,
December 31,1998    976,602,000  $97,660     $950,373     $(1,100,388)
  ========================================================================

<CAPTION>
See independent auditor's report and notes to financial statements.
</CAPTION>
</TABLE>





















<TABLE>

                                 ART CARDS, INC.
                            STATEMENTS OF CASH FLOWS

                  For the Years Ended December 31, 1998 and 1997



                                                   1998           1997  
<S>                                           <C>           <C>
Operating Activities:
  Net Income (Loss)                           $     (405)  $    (2,157)

Adjustments to reconcile net loss
to net cash used in operating
activities:

Changes in operating assets
and liabilities:

  Increase (decrease) in accounts
    payable and other current
    liabilities                                    (9,600)       2,105
------------------------------------------------------------------------
NET CASH USED IN OPERATING ACTIVITIES             (10,005)         (52)
------------------------------------------------------------------------

Cash Flows From Financing Activities
   Proceeds from issuance of common stock          10,000
------------------------------------------------------------------------
Net Cash Provided By Financing Activities          10,000            0
------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                                 (5)         (52)

CASH, BEGINNING OF YEAR                         $      10   $       62
=======================================================================
CASH, END OF YEAR                               $       5    $      10 
=======================================================================

<CAPTION>
See independent auditor's report and notes to financial statements.
</CAPTION>
</TABLE>












                              ART CARDS, INC.
                      NOTES TO FINANCIAL STATEMENTS


NOTE A - ORGANIZATION

Art Cards, Inc. (the Company), formerly World Greetings, Inc., was 
incorporated in Colorado on January 30, 1984, for the purpose of 
manufacturing and marketing greeting cards and similar products. The 
Company disposed of all its inventory in 1993 and no longer markets 
greeting cards and similar products although it accepts special orders for 
greeting cards.

The Company's ability to continue as a going concern is dependent upon the 
Company's ability to obtain financing. The Company is currently looking 
for a suitable candidate to merge with or be acquired by. The financial 
statements do not include any adjustments that might result from the 
outcome of this uncertainty.


NOTE B - SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates
The preparation of the Company's financial statements in conformity with 
generally accepted accounting principles necessarily require management to 
make estimates and assumptions that affect the reported amounts of assets 
and liabilities at the balance sheet date and reported amounts of revenues 
and expenses during the reporting periods.

The Financial Standards Board has recently issued Statement of Financial 
Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of 
Long-Lived Assets" and SFAS No. 123, "Accounting for Stock-Based 
Compensation." SFAS No. 121 requires that long-lived assets and certain 
identifiable intangibles be reported at the lower of the carrying amounts 
or their estimated recoverable amount and the adoption of this statement 
by the Company is not expected to have an impact on the financial 
statements. SFAS No. 123 encourages the accounting for stock-based 
employee compensation programs to be reported within the financial 
statements on a fair-value based method. If the fair-value based method is 
not adopted, then the statement requires proforma disclosure of net income 
and earnings per share as if the fair value based method has been adopted. 
The Company has not yet determined how SFAS No. 123 will be adopted nor 
its impact on the financial statements. Both statements are effective for 
fiscal years beginning after December 15, 1995.

Cash and Cash Equivalents
The Company considers investments in Treasury Bills and certificates of 
deposits with maturities of less than three months of the balance sheet 
date to be cash equivalents.








                              ART CARDS, INC.
                      NOTES TO FINANCIAL STATEMENTS

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes
The Company adopted the provisions of Statement of Financial Accounting 
Standards No. 109, "Accounting for Income Taxes" (SFAS 109), which changed 
the criteria for measuring the provisions for income taxes and recognizing 
deferred tax assets and liabilities in the accompanying financial 
statements. SFAS 109 requires recognition of deferred tax assets and 
liabilities for the expected future tax consequences of events that have 
been included in the financial statements or tax returns. Under this 
method, deferred tax assets and liabilities are determined, based upon the 
difference between the financial statements and tax basis of assets and 
liabilities using enacted tax rates in effect for the year in which the 
differences are expected to reverse. The adoption of SFAS 109 did not have 
a material impact on the financial statements.

Net Loss Per Common Share
The net loss per share of common stock is determined using the weighted-
average number of shares issued and outstanding during the period, 
according to rules of the Securities and Exchange Commission. The 
Company's common stock equivalents were not included in the computation 
because their effect was antidilutive.

Recent Accounting Pronouncements:

Statement of Financial Accounting Standards No. 130, "Reporting 
Comprehensive Income" is effective for financial statements with 
fiscal years beginning after December 5, 1997. Earlier application is 
permitted.  SFAS No. 130 establishes standards for reporting and 
display of comprehensive income and its components in a full set of 
general-purpose financial statements.  The Company adopted SFAS No.
130 for 1998 and it did not have a material effect on its financial
position or result of operations.

Statement of Financial Accounting Standards No. 131, "Disclosure 
about Segments of an Enterprises and Related Information" is 
effective for financial statements with fiscal years beginning after 
December 15, 1997.  The new standard requires that public business 
enterprises report certain information about operating segments in 
complete sets of financial statements of interim and annual periods 
issued to shareholders.  It also requires that public business 
enterprises report certain information about their products and 
services, geographic areas in which they operate and their major 
customers.  The Company has adopted SFAS No. 131; but, it did 
not have a material effect on its results of operation for 1998 and 
1997.

Statement of Financial Accounting Standards No. 132, "Employers' 
Disclosures about Pension and Other Post retirement Benefits" is 
effective for financial statements with fiscal years beginning after 
December 31, 1997.  Earlier application is permitted.  The new 
standard revises employers' disclosures about pension and other post 
retirement benefit plans but does not change the measurement or 
recognition of those plans.  SFAS No. 132 standardizes the disclosure 
requirements for pensions and other post retirement benefits to the 
extent practicable, requires additional information on change in the 
benefit obligations and fair values of the plan assets that will 
facilitate financial analysis, and eliminates certain disclosure 
previously required when no longer useful.  The Company adopted SFAS
No. 132 in 1998 and it did not have a material effect on its results
of operation.

The FASB has recently issued Statement of Financial Accounting 
Standards No. 133, "Accounting for Derivative Instruments and 
Hedging Activities" ("SFAS No. 133").  SFAS No. 133 established 
standards for recognizing all derivative instruments including those 
for hedging activities as either assets or liabilities in the 
statement of financial position and measuring those instruments at 
fair value.  This Statement is effective for fiscal years beginning 
after June 30, 1999.  The Company has not yet determined the effect 
of SFAS No. 133 on its financial statement.

The FASB recently issued Statement of Financial Accounting Standards
No. 134 "Accounting for Mortgage Backed Securities Retained after the 
Securitization of Mortgage Loans Held by Mortgage Banking Enterprises"
And is effective for the quarter beginning after December 15, 1998.
SFAS No. 134 establishes new reporting standards for certain activities 
of mortgage banking enterprises that conduct operations that are 
substantially similar to the primary operations of mortgage banking
enterprises. Management believes that adoption of this statement will
have no impact on the Company's financial statements.

NOTE C - LICENSE AGREEMENTS

The Company has entered into several license agreements with various 
artists and publishers to use designated graphic images in its 
manufacture, distribution and sale of greeting cards, postcards and 
similar products. Generally, the license agreements are exclusive and 
require royalties on net sales of licensed products by the Company. 
Certain agreements can be terminated by the licensor, after specified 
periods of time, if minimum sales requirements are not met. Under some 
license agreements, the Company has made non-refundable advance royalty 
payments. The advance royalties are charged to expense as they are earned 
by the licensor.

On June 28, 1991, the Company entered into a five-year license agreement 
with Recycled Paper Products, Inc. (Recycled Paper) and Rob Barber. 
Recycled Paper has the exclusive right to receive, sell and distribute 
greeting cards and related products created by Rob Barber in the United 
States, Canada and Australia. Recycled Paper has agreed to pay the Company 
and Rob Barber five percent of all net sales. In addition, Recycled Paper 
has agreed to pay the Company and Rob Barber 50 percent of all license 
fees, advances against royalties and royalties that Recycled Paper may 
receive from sublicenses granted by Recycled Paper. Such sublicenses may 
only be granted outside the United States, Canada and Australia. Recycled 
Paper has the option to extend the license agreement for an additional 
five years provided certain minimum royalties and license fees are paid by 
Recycled Paper.


                              ART CARDS, INC.
                        NOTES TO FINANCIAL STATEMENTS


NOTE D - SHAREHOLDERS' DEFICIT


In connection with the Company's public offering, the Company issued ten 
callable Class A common stock purchase warrants. Each Class A warrant 
consists of one callable Class B common stock purchase warrant and also 
entitles the holder to purchase ten additional shares of common stock at 
an exercise price of $.0075 per share until February 9, 1996. Each Class 
B warrant entitles the holder to purchase ten shares of common stock at an 
exercise price of $.01 per share until February 9, 1996. All of the above-
referenced warrants expired on February 9, 1996.


NOTE E - RELATED PARTY TRANSACTIONS

The Company leased office space from its president on a month-to-month 
basis. As of December 31, 1998, $62,360 was owed to the president for 
expenses and accrued salaries.


NOTE F - INCOME TAXES

Effective January 1, 1993, the Company adopted SFAS 109, "Accounting for 
Income Taxes." As allowed by SFAS 109, prior years' financial statements 
have not been restated.

As of December 31, 1998, the Company had net operating loss carry forwards 
for income tax purposes of approximately $1,000,000 to offset future 
taxable income. The net operating loss carry forwards expire through 2008. 
However, the Company's ability to utilize such losses to offset future 
taxable income is subject to various limitations imposed by the rules and 
regulations on the Internal Revenue Service.

The tax effects of the temporary differences and operating loss carry 
forwards that give rise to significant portions of the deferred tax assets 
at December 31, 1998, are presented below. The entire valuation allowance 
was recorded during 1998.

  Net operating loss
    carry forwards                  $ 185,505
  Compensation expense not
    allowed for income tax
      reporting purposes                8,000
  Valuation allowance                (193,505)
----------------------------------------------

Balance, December 31, 1998          $       0 
=============================================

There is no provision for income taxes in 1998 and 1997 because the 
Company had net operating loss carryforwards of $185,505.



                              ART CARDS, INC.
                     NOTES TO FINANCIAL STATEMENTS

NOTE G - LETTER OF INTENT

The Company signed a letter of intent with Legacy Brands, Inc. to enter 
into a merger which may or may not be tax-free under Internal Revenue Code 
Section 368.  This acquisition transaction with Legacy Brands, Inc. was 
not successful.

                                 SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the Registrant has duly caused this report to be 
signed on its behalf by the under signed, thereunto duly authorized.

                             ART CARDS, INC.



Dated: 3/18/99                           By:/S/ Richard H. Miller 
                                         Richard H. Miller, President

     Pursuant to the requirements of the Securities Exchange Act of 1934, 
this report has been signed below by the following persons on behalf of 
the Registrant and in the capacities and on the dates indicated.

Dated: 3/18/99                            By:/S/ Richard H. Miller 
Richard H. Miller, Director

Dated: 3/18/99                            By:/S/John W. Rapparlie
                                          John W. Rapparlie, Director

Dated: 3/18/99                            By:/S/ Marilyn R. Goldberg 
                                          Marilyn R. Goldberg, Director

     Supplemental Information to be Furnished With Reports Filed Pursuant 
to Section 15(d) of the Act by Registrants Which Have Not Registered 
Securities Pursuant to Section 12 of the Act

     No annual report to security holders covering the Registrant's last 
fiscal year or proxy material was sent to security holders.