SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C.  20549

                           FORM 10-KSB

[X]    Annual Report Pursuant To Section 13 or 15(d) of the Securities
Exchange Act of 1934

[  ]   Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

             For The Fiscal year Ended June 30, 1998
                  Commission File No. 33-18143-D

                         CORVALLIS, INC.
                         ----------------
      (Exact name of Registrant as specified in its Charter)

            Nevada                                  87-0449399
            ------                                  ----------
State or other jurisdiction of                   (I.R.S. Employer
incorporation or organization)                  Identification No.)

 1486 South l100 East
 Salt Lake City, Utah                                   84105
---------------------                                   -----
(Address of principal executive offices)              (Zip Code)

        Registrant's Telephone Number including Area Code:
                          (801) 487-3893
                          --------------

Securities Registered Pursuant to Section 12(b) of the Act:

                                                 Name of Each Exchange
Title of Each Class                               on which Registered
-------------------                               -------------------
      None                                                None

Securities Registered Pursuant to Section 12(g) of the Act:

                               None
                               ----
                                 
     Indicate by check mark whether the 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 [ ]

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
KSB or any amendment to this Form 10-KSB [X]

     State issuer's revenues for its most recent fiscal year.      None

     The aggregate market value of the Registrant's voting stock held by non-
affiliates computed with reference to the average bid and asked prices in the
over-the-counter market on August 26, 1998, was approximately $399,984. 

     As of the date of the filing of this report, the Registrant had
outstanding a total of 1,505,000 shares of its common stock, par value $0.001.

               DOCUMENTS INCORPORATED BY REFERENCE

     List hereunder the following documents if incorporated by reference and
the Part of the Form 10-K (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) under the Securities Act of 1933.

None.


                        TABLE OF CONTENTS


Item Number and Caption                                         Page No.

PART 1

1.  Business                                                    4

2.  Properties                                                  7
    
3.  Legal Proceedings                                           7

4.  Submission of Matters to a Vote of Security Holders         8

PART II

5.  Market for Registrant's Common Equity and Related
    Stockholder Matters                                         8

6.  Plan of Operations                                          9

7.  Financial Statements and Supplementary Data                 10

8.  Changes in and Disagreements on Accounting and Financial
    Disclosure                                                  10


PART III

9. Directors and Executive Officers of the Registrant           10

10. Executive Compensation                                      12

11. Security Ownership of Certain Beneficial Owners
    and Management                                              12

12. Certain Relationships and Related Transactions              14

PART IV                                                         Page No.

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

14.  Signatures                                                 16

                              PART I

                        ITEM 1.  BUSINESS

BUSINESS DEVELOPMENT

     Corvallis, Inc. (the "Company" or the "Registrant"), was organized under
the laws of the state of Nevada on September 28, 1987, for the purpose of
creating a capital resource fund to seek, investigate, and, if warranted, to
acquire or enter into any suitable business opportunity which management
believed had good business potential.  At the time of its organization, no
specific business or business area was contemplated by management.  

     Since January, 1990, the Company has not had any business operations. 
Beginning in the last quarter of 1993, the Registrant began efforts to bring
current all of its filings with state and federal agencies, including the U.
S. Securities and Exchange Commission, in order that the Company could proceed
to look for a business opportunity for acquisition or in which the Company
could become engaged.  These activities were completed in 1995.

     Since the end of 1995, the Company has been seeking a business
opportunity which it could acquire or in which it could become engaged.  The
Company has reviewed a number of business opportunities, but has not entered
into any transactions to date.   

     The Company has very limited assets, however, and any such transaction
may require the Company to raise capital or undertake some form of financing. 
Because of the Company's extremely limited resources, there can be no
assurance the Company will be able to locate a suitable enterprise for an
acquisition, reorganization or merger transaction on terms which can be
achieved by the Company. 

BUSINESS

     The Registrant has not been in business since the end of 1989, and has
only recently undertaken necessary activities to enable it to become engaged
in business operations.  The Company plans to seek out, investigate and
acquire, or become engaged in, any business opportunity management believes
has good business potential.  No specific business or industry is presently
contemplated.  

     Management anticipates that it will only acquire businesses which have,
or can generate or provide, audited financial statements.  However, management
reserves the right to become engaged in a new business venture or a venture in
its infancy, if management determines such venture holds good business
potential.    

     The Registrant recognizes that because of its extremely limited
financial, management and other resources, the number and quality of suitable
potential business ventures available to it may be extremely limited.  

     The Company's principal business objective will be to seek long-term
growth potential in the business venture in which it participates, rather than
to seek immediate, short-term earnings.  In seeking to attain the Company's
business objective, it will not restrict its search to any particular business
or industry, but may participate in business ventures of essentially any kind
or nature, including, but not limited to, finance, high technology,
manufacturing, natural resources, service, research and development,
communications, insurance, transportation and others.  Management's discretion
will be unrestricted and it may participate in any business venture
whatsoever, which meets the business objectives discussed herein.  It is
emphasized that the business objectives of the Registrant are extremely
general and are not intended to be restrictive upon the discretion of
management.

     The Company plans to seek one or more potential business ventures from
its known sources, but will rely heavily on personal contacts of its officers
and directors, as well as indirect associations or contacts between them and
other business and professional people.  It is not presently anticipated that
the Company will engage professional firms or individuals specializing in
business acquisitions or reorganizations.  However, any individual or firm,
exclusive of the officers, directors and principals of the Company who find a
venture in which the Company becomes engaged, may be properly compensated for
their efforts.  In some instances, the Company may publish notices or
advertisements seeking a potential business venture in financial or trade
publications.

     The Company will not restrict its search to a venture in any particular
stage of development, but may acquire or become engaged in a venture in its
preliminary or development stage, may participate in a business which is
already in operation, or in a business in various stages of it corporate
existence.  It is impossible to predict at this stage the status of any
venture in which the Company may participate, in that the venture may need
additional capital, may desire to have its shares publicly traded, or may seek
other perceived advantages which the Company, as a public company, may offer. 
In some instances, the business endeavors may involve the acquisition of or
merger or reorganization with a corporation which does not need substantial
additional capital but which desires to establish a public trading market for
it securities.

     Firms which seek the Company's participation in their operations through
a reorganization, asset acquisition, or some other means may desire to do so
to avoid what such firms may deem to be adverse factors related to undertaking
a public offering.  Such factors include substantial time requirements and
legal and other costs, along with other conditions or requirements imposed by
various state and federal regulatory agencies.

     To a large extent, a decision to participate in a specific business
endeavor may be made upon management's analysis of the quality of the other
firm's management and personnel, the anticipated acceptability of new
products, marketing concepts or services, the merit of technological changes,
and numerous factors which may not be reflected on a balance sheet or
operating statement and are difficult, if not impossible, to analyze through
the application of objective criteria.  In many instances, it is anticipated
that the results of operation of a specific venture may not be indicative of
the potential for the future because of the requirement to substantially shift
marketing approaches, expand significantly, change product emphasis, change or
augment management, and other factors.  Because the Company may participate in
business endeavors with newly organized firms or with firms which are entering
a new phase of growth, it should be emphasized that the Company will incur
further risks since management in many instances will not have proved its
abilities or effectiveness, the eventual market of such firm's product or
services will likely not be established, and the profitability of the firm
will be unproved and cannot be accurately predicted.

     The analysis and review of new business ventures will be undertaken by or
under the supervision of the officers and directors, none of whom is a
professional business analyst.  No member of management has any significant
business experience or expertise in any type of business which is likely to be
investigated by the Company.  Therefore, management will have to rely on their
common sense and business judgment as well as upon the advice of consultants
to analyze the factors described above.  In reviewing prospective business
opportunities, management will consider such matters as the available
technical, financial and managerial resources, the working capital and other
financial requirements, the history of operations, if any; prospects for the
future; the nature of present and expected competition; the quality and
experience of management services available and the depth of management; the
potential for growth and expansion; risk factors; the perceived public
recognition or acceptance of products, services; and other factors.

     Generally, management will attempt to analyze all available factors in
the circumstances and make a determination based upon a composite of available
facts, without reliance upon any single factor as controlling.

     The Company is unable to predict the timing as to when it may participate
in any specific business endeavor.  It expects, however, that the review of
business opportunities will commence immediately, and that the analysis and
selection of any given venture may take several months or more.

     It is anticipated that business opportunities will be available to the
Company from various sources, including its officers and directors and
shareholders and their business associates, professional advisors, securities
broker-dealers, venture capitalists, members of the financial community, and
others who may present unsolicited proposals.  In certain circumstances, the
Company may agree to pay a finder's fee or to otherwise compensate investment
banking or other services provided by persons who are unaffiliated with the
Company but who submit a potential business opportunity in which the Company
elects to participate.  No such finder's fee or other fees will be paid to any
person who is an officer, director or principal of the Company.

     The Company may acquire a business venture by conducting a reorganization
or merger involving the issuance of securities of the Company.  Due to the
requirements of certain provisions of the Internal Revenue Code, as amended,
in order to obtain certain beneficial tax consequences in such transactions,
the number of shares held by all of the present shareholders of the Company
prior to such transaction, may be substantially less than the total
outstanding shares held by such shareholders in any reorganized entity.  The
result of any such reorganization or merger transaction could be additional
substantial dilution to the shareholders of the Company prior to the
transaction.

     It is anticipated that the investigation of specific business endeavors
and the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and
attention and substantial costs for accountants, attorneys, and others.  If a
decision is made not to participate in a specific business opportunity under
review, the costs theretofore incurred would not be recoverable.  Further,
even if an agreement is reached for the participation in a specific business
venture, the failure to consummate that transaction may result in the loss to
the Company of the related costs incurred.

     The Company presently has essentially no assets, and does not currently
have any specific assets, properties or businesses in mind for potential
acquisition or involvement by the Company.  Further, the Company does not
presently have any particular areas of business or industry in which it
intends to look for business opportunities.

     In connection with a business acquisition or transaction, the Company may
need to raise equity or debt to fund such transaction, or to provide the
business opportunity with necessary operating capital.  There is no assurance
the Company will be able to raise capital when needed, or on terms which are
favorable to the Company.

Offices and Employees

     The Company presently uses the offices of its Secretary/Treasurer and
Vice President, at no charge.  At such time as business operations commence,
the Company may be charged a reasonable fee for its office facilities.  The
Company has no employees.

                       ITEM 2.  PROPERTIES
                                                                               
     The Company does not hold any properties.

                    ITEM 3.  LEGAL PROCEEDINGS

     The Company is not a party to any pending legal proceedings, and no such
proceedings by or, to the best of its knowledge, against the Company have been
threatened.

                                                    ITEM 4.

                SUBMISSION OF MATTERS TO A VOTE OF
                         SECURITY HOLDERS

     No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year covered by this report. 

                             PART II

                             ITEM 5.

              MARKET FOR REGISTRANT'S COMMON EQUITY
                 AND RELATED STOCKHOLDER MATTERS

     There is currently only a very limited trading market for the Company's
shares of common stock; however, the Company's shares of common stock are
eligible for quotation on the NASD Electronic Board under the symbol "CVLO." 
The following sets forth, for the respective periods indicated, the high and
low bid prices of the Company's common stock in the over-the-counter market. 
Such over-the-counter market quotations reflect inter-dealer prices, without
retail mark-up, mark-downs or commission and may not necessarily represent
actual transactions.

Fiscal Quarter Ended           High Bid        Low Bid
--------------------           --------        -------
September 30, 1996             $.50            $.25

December 31, 1996              $.50            $.50

March 31, 1997                 $.50            $.50

June 30, 1997                  $1.25           $.50

September 30, 1997             $1.50           $1.50

December 31, 1997              $3.00           $2.50

March 31, 1998                 $2.75           $2.50

June 30, 1998                  $3.00           $3.00

     As of September 16, 1998, the stock was quoted at $2.75 bid, $3.75 offer. 

     Since inception, no dividends have been paid on the Company's common
stock, and the Company does not anticipate paying dividends in the foreseeable
future.

     As of the date of filing this report, there were approximately 166
holders of record of the Company's common stock.

     The Company has not sold any unregistered securities within the fourth
fiscal quarter.

                             ITEM 6.

                        PLAN OF OPERATIONS

     On June 30, 1998, the Company had $0 in cash, $5,222 in liabilities, and
no other liquid assets or resources.  The Company did not post any revenues
for the fiscal year and essentially had no operations during the fiscal year
ended June 30, 1998.  The Company incurred expenses during the year of $4,698
in accounting, legal and other fees in connection with the Company's
continuing efforts to file necessary periodic reports and to reactivate its
business operations, and in reviewing a number of possible business
opportunities during the fiscal year.

     The Company anticipates that until a business opportunity is found it
will rely on the commitment of its principal shareholders to cover all
operation and other costs until sufficient revenues are generated.  There is
no assurance that the shareholders' commitment will ultimately prove to be
adequate to allow the Company to enter into a business opportunity. 
Currently, the Company has no plans to raise additional capital, however, the
Company may elect to do so at some future date.

     At present, the Company does not have adequate capital to conduct any
significant operations.  The Company is engaged in the search for potential
business opportunities for acquisition or involvement by the Company, which
activities are severely limited by the Company's lack of resources. 
Management believes that any business venture in which the Company may become
involved will be made by issuing shares of the Company's authorized but
unissued common stock.  It is anticipated that the Company's liquidity,
capital resources and financial statements will be significantly different
subsequent to the consummation of any such transaction.

                             ITEM 7.

           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The financial statements are included beginning at page F-1.

                             ITEM 8.

            CHANGES IN AND DISAGREEMENTS ON ACCOUNTING
                     AND FINANCIAL DISCLOSURE

     In July, 1997, the Registrant changed its accountants to the firm of
Crouch, Bierwolf and Chisholm, a Salt Lake City, Utah certified public
accounting firm.  The former accounting firm, Jones, Jensen & Company, was
dismissed by the Registrant in July, 1997.  The decision to change accountants
was approved by the Registrant's board of directors.

     The report of the former accounting firm for the past two years did not
contain an adverse opinion or disclaimer of opinion, nor was it qualified or
modified as to uncertainty, audit scope or accounting principles.  During the
Registrant's two most recent fiscal years, there were not any disagreements
with the former accounting firm on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedure.  In
addition, the Registrant has not experienced any other events pertaining to
the change of accountants, which require disclosure under this Item 8 or under
Rule 304 of Regulation S-B, of the Securities Exchange Act of 1934, as
amended.

                             PART III

                             ITEM 9.

        DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

NAMES AND TERMS OF OFFICE

     The table below sets forth the name, age, and position of each executive
officer and director of the Company.


Name                 Age      Position                     Since*
----                 ---      --------                     -----
Whitney O. Cluff     48       President and Chairman       September, 1989

John Papanikolas     48       Secretary/Treasurer and 
                              Director                     September, 1987

Thomas Mulcock       48       Vice President and Director  September, 1994

     * Mr. Papanikolas has been an officer and director since inception. 
Messrs. Cluff and Papanikolas were elected as officers and directors in
connection with the acquisition by the Company of the operating assets of
Southwest Awning Systems, which business was terminated by the Company in
1990.  Mr. Mulcock was elected an officer and director in January, 1994 in
connection with the Company's effort to reactivate its business.

      The term of office of each executive officer and director is one year
and until his successor is elected and qualified.

     Set forth below is biographical information for each of the Company's
officers and directors.

     Whitney O. Cluff has been privately engaged in a number of ventures
during the past several years, primarily in the real estate area.  For the
past several years, until 1994, he was a part-time employee of Delta Airlines. 
From 1990 to 1993, he was an employee of WAM Enterprises.  From 1987 to 1989,
he was engaged as an account executive at Hughes Securities, Inc., a Salt Lake
City broker-dealer firm.  For a period of approximately two years prior to
that position, he was employed as a registered representative with R.A.
Johnson & Company, Inc., a Salt Lake City broker-dealer firm.  For a period of
approximately three years prior to that position, he was employed by Matthew
R. White Investment Company, a broker-dealer.  Mr. Cluff is a licensed real
estate broker in the state of Utah.  From the middle of 1994 to the middle of
1995, Mr. Cluff was a director of Digital Scientific, Inc., a closely held
corporation engaged in the development of electronics products.

      John G. Papanikolas has been, since 1993, the President and owner of
Emissions Xpress, a Salt Lake City based owner and operator of an automobile
emissions testing and safety inspection centers, since 1993.  From 1989 to the
present, he has served as a member of the board of directors of Magna
Investment, Ltd., a developer of shopping centers and real estate in Arizona
and Utah.  Since 1986, he has been a director of Foothill Oriental Rugs, Inc.,
an importer, wholesaler and retailer of oriental rugs and handmade carpets,
located in Salt Lake City, Utah.  From 1985 to 1988, he was editor and
publisher of Guide Publications 7, Inc., a publishing firm.  From 1979 through
1985, he was owner and operator of Clayton Oriental Rugs and in 1985 became
advertising manager for Zions Oriental Rugs.  Mr. Papanikolas has worked as a
writer and editor for the Salt Lake Tribune, a major daily newspaper in Salt
Lake City.  In 1983, Mr. Papanikolas earned a bachelor's degree in business
administration from the University of Utah and a bachelor's degree in
behavioral science from Westminster College.

     Thomas Mulcock has been, since 1972, the owner and operator of Thomas E.
Mulcock Real Estate Appraising Company, a real estate appraisal firm in Salt
Lake City, Utah.  Mr. Mulcock is a member of the National Association of
Independent Fee Appraisers, the National Association of Real Estate Boards,
and the Salt Lake Board of Realtors.  Mr. Mulcock attended the University of
Utah from 1967 to 1971, but did not receive a degree.

                 ITEM 10.  EXECUTIVE COMPENSATION

     During the fiscal year ended June 30, 1998, no officer or director
received a salary or bonus, however, Whitney O. Cluff, received restricted
common stock in consideration of services rendered on behalf of the Company,
as described below.  Set forth below is a summary of the compensation received
by officers and directors during the fiscal year:
                                 
                  Summary of Compensation Table
                  -----------------------------

                                                        Long Term Compensation
                                                        ----------------------
                            Annual Compensation          Awards        Payouts
                            -------------------          ------        -------
<TABLE>

<S>                 <C>    <C>     <C>   <C>       <C>       <C>         <C>    <C>
                                         Other                                         
                                         Annual             Restricted         Other
Name & Principal    Fiscal               Compen-  Stock     Options     LTIP   Compen-
Position            Year   Salary  Bonus sation   Award(s)  SAR's       Payout sation
--------            ----   ------  ----- -------  --------  ------      ------ ------
Whitney O. Cluff(1) 1998   $0      $0    $0       $3,000(1) $0          $0     $0
President and       1997   $0      $0    $0       $0        $0          $0     $0
Director            1996   $0      $0    $0       $0        $0          $0     $0

John Papanikolas    1998   $0      $0    $0       $0        $0          $0     $0
Secretary/Treasurer 1997   $0      $0    $0       $0        $0          $0     $0
and Director        1996   $0      $0    $0       $0        $0          $0     $0

Thomas Mulcosk      1998   $0      $0    $0       $0        $0          $0     $0
Vice President and  1997   $0      $0    $0       $0        $0          $0     $0
Director            1996   $0      $0    $0       $0        $0          $0     $0

</TABLE>

1)  Mr. Cluff was issued a total of 50,000 shares of restricted common stock
of the Company, valued at $.06 per share, in consideration of his efforts on
behalf of the Company.

                             ITEM 11.

             SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                      OWNERS AND MANAGEMENT

     The following table sets forth the name and address, as of the date of
the filing of this report, the approximate number of shares of common stock
owned of record or beneficially by each person who owned of record, or was
known by the Company to own beneficially, more than 5% of the common stock,
and the name and shareholdings of each officer and director, and all officers
and directors as a group:

                    CERTAIN BENEFICIAL OWNERS
                    -------------------------

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

Mitchell T. Godfrey        191,340  (2)                                14.4 
230 North Fork Ray Creek
Townsend, Montana  59644

James C. Lewis              225,359  (2)                               15
West 100 South, Suite 600
Salt Lake City, Utah  84101  

M. Don Nelson               157,999  (2)                               11.9
5122 South Holladay Blvd.
Holladay, Utah  84117              

Principal Holdings, Inc.    833,331                                    5.5
215 South State Street 
Suite 1100
Salt Lake City, Utah 84111








                     OWNERSHIP OF MANAGEMENT
                     -----------------------
   
Officers and Directors:
-----------------------

                                 Amount and
Name and Address of              Nature of                     Percent of
Beneficial Owner                 Beneficial Owner              Class
----------------                 ----------------              -----
Whitney O. Cluff                 375,126                       25
Ichabod Street
Salt Lake City, Utah 84117   

John Papanikolas                 213,248                       16.0
1486 South 1100 East
Salt Lake City, Utah  84105           

Thomas Mulcock                   113,148                       8.5
1486 South 1100 East
Salt Lake City, Utah 84105              

All Officers and
Directors as a
Group (3 persons):               701,522                       46.6  

(1)Unless otherwise indicated, all shares are owned directly and of record.

(2) During the fiscal year, these individuals each received 83,281 shares
distributed from the "CPM Group", a partnership consisting of these
individuals.   CPM Group held a total of 499,687 shares, representing 33.2% of
the total outstanding shares, all of which was distributed to the partners. 
Thus CPM Group and these individuals may be considered to be in control of the
Company.

                             ITEM 12.

          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     During the fiscal year ended June 30, 1998 the Company issued an
aggregate of 174,991 shares to an officer and director and principal
shareholders.  The Company issued 50,000 restricted shares to Whitney O.
Cluff, an officer and director, for services rendered to the Company; 41,660
shares were issued to James C. Lewis, a principal shareholder, for services
rendered on behalf of the Company; and an additional 83,331 shares to
Principal Holdings, Inc., for services rendered on behalf of the Company,
which made it a principal shareholder.

     None of the transactions described above can be considered to be the
result of arms' length negotiations.

                             PART IV

            ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

     The following financial statements and schedules are included immediately
following the signature page to this report.

(a)(1) FINANCIAL STATEMENTS 

TITLE                                                              PAGE NO.
-----                                                              --------
Independent Accountants' Report of Jones, Jensen
& Company                                                          F-3

Balance Sheets as of June 30, 1998 and 1997                        F-4

Statement of Operations for the three 
years ended June 30, 1998, 1997 and 1996                           F-5
and from inception through June 30, 1998

Statement of Stockholders' Equity for the
three years ended June 30, 1998, and the 
period from inception through June 30, 1998                        F-6
    
Statement of Cash Flows for the three 
years ended June 30, 1998, and 
from inception through June 30, 1998                               F-9  

Notes to Financial Statement                                       F-10
(a)(2).  FINANCIAL STATEMENT SCHEDULES

None. 

(a)(3).  EXHIBITS:
         EXHIBIT NO.      SEC Reference No.   Title of Document   Location
         -----------      -----------------   -----------------   --------
         1                (3)                 *Articles of        Form 10-K
                                              Incorporation       for fiscal
                                                                  year ended
                                                                  June, 1989

         2                (3)                 *Bylaws             same


*  These documents are incorporated herein by reference.

(b)     REPORTS ON FORM 8-K

None
                            SIGNATURES

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


                           REGISTRANT:

                                 CORVALLIS, INC.

Dated:  September 28, 1998       By:/s/ Whitney O. Cluff
                                 -----------------------
                                 Whitney O. Cluff (Principal Executive
                                 Officer)

Dated:  September 28, 1998       By:/s/ John Papanikolas
                                 -----------------------
                                 John Papanikolas (Principal Financial and
                                 Accounting Officer)

<PAGE>



                         Corvallis, Inc.
                  (a Development Stage Company)
                       Financial Statements
                      June 30, 1998 and 1997
<PAGE>

                         C O N T E N T S


Independent Auditors' Report . . . . . . . . . . . . . . .  3

Balance Sheets . . . . . . . . . . . . . . . . . . . . . .  4

Statements of Operations . . . . . . . . . . . . . . . . .  5

Statements of Stockholders' Equity . . . . . . . . . . . .  6

Statements of Cash Flows  . . . . . . . . . . . . . . . .   9

Notes to the Financial Statements . . . . . . . . . . . .   10

<PAGE>
                          <Letterhead >
                  Crouch, Biierwolf & Chisholm 
                   Certified Public Accountants
                   50 West Broadway, Suite 1130
                    Salt Lake City, Utah 84101
               (801) 363-1175 (FAX) (801) 363-0615


                   INDEPENDENT AUDITOR'S REPORT



To the Board of Directors and Stockholders of
Corvallis, Inc.


We have audited the accompanying balance sheets of Corvallis, Inc.  (a
Development Stage Company) for the year ended June 30, 1998 and 1997 and the
related statements of operations, stockholders' equity and cash flows for the
years then ended.  These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion on these
financial statements based on our audits. 

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Corvallis, Inc. (a
Development Stage Company) as of June 30 1998 and 1997 and the results of its
operations and cash flows for the years then ended  in conformity with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.  As discussed in Note 5 to the
financial statements, the Company is a development stage company with no
significant operating results to date.  These conditions raise substantial
doubt about its ability to continue as a going concern.  Management's plan in
regard to these matters are also described in Note 5.  The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.


/s/Crouch, Bierwolf & Chisholm

Salt Lake City, Utah
August 20, 1998
                         Corvallis, Inc.
                  (a Development Stage Company)
                          Balance Sheets

                              Assets
                                                           June 30
                                                 -------------------------- 
                                                 1998                 1997
                                               --------------  --------------
Current assets
 Cash                                          $         -     $          44
                                               --------------  --------------
      Total Assets                             $         -     $          44
                                               ==============  ==============

               Liabilities and Stockholders' Equity

Liabilities
 Accounts payable                              $       4,698   $       2,205
 Accounts Payable-related party (Note 6)                 524             524
                                               --------------  --------------
Total liabilities                                      5,222           2,729
                                               --------------  --------------
Stockholders' Equity

   Common Stock, authorized
    200,000,000 shares of $.001 par value,
     issued and outstanding 1,505,000 shares
     and 1,330,009 shares issued and outstanding       1,505           1,330 
                   
   Additional Paid-in Capital                        200,070         189,745 

   Deficit Accumulated During the
     Development Stage                              (206,797)       (193,760)
                                               --------------  --------------
Total Stockholders' Equity                            (5,222)         (2,685)

Total Liabilities and Stockholders' Equity     $          -    $          44
                                               ==============  ==============

The accompanying notes are an integral part of these financial statements
                                4

<PAGE>
                         Corvallis, Inc.
                  (a Development Stage Company)
                     Statements of Operations

<TABLE>
<CAPTION>
                    
                                                                            Cumulative 
                                                                              Total
                                  For the years ended June 30,                Since
                              1998            1997           1996           Inception 
                            ------------- ------------- -------------  ---------------
<S>                         <C>           <C>           <C>            <C> 
Revenues                    $     -       $     -       $     -        $         -

Expenses:

  Consulting fees                  3,493         2,000         1,395           12,540
  Legal                            1,500         2,200         3,200           11,127
  Accounting                       1,515         2,015         1,983           11,463
  General & Administrative         6,529         3,625           957           14,913
                            ------------- ------------- -------------  ---------------
    
      Total Expenses              13,037         9,840         7,535           50,043
                            ------------- ------------- -------------  ---------------
Net loss before discontinued
   operations               $    (13,037) $     (9,840) $     (7,535)  $      (50,043)
                            ------------- ------------- ------------- ----------------
Loss on disposed of operations    -              -            -              (156,754)
                            ------------- ------------- -------------  ---------------
Net Loss                    $    (13,037) $     (9,840) $     (7,535)  $     (206,797)
                            ============= ============= =============  ===============
Net Loss Per Share          $      (.007) $      (.007) $      (.006)  $        (.228)
                            ============= ============= =============  ===============
Weighted average shares 
   outstanding                 1,454,660     1,306,994     1,104,301          904,338
                            ============= ============= =============  ===============

The accompanying notes are an integral part of these financial statements.
                                 5
</TABLE>
<PAGE>

                          Corvallis, Inc.
                   (a Development Stage Company)
                 Statement of Stockholders' Equity
<TABLE>
<CAPTION>                                                                             
                                                                         Deficit
                                                                         Accumulated
                                                         Additional      During the
                                     Common Stock        paid-in         Development
                                Shares          Amount   Capital         Stage       
                               -------------  ---------- --------------  --------------
<S>                            <C>            <C>        <C>             <C>
Balance, June 30,1995             1,020,002   $    1,020 $     174,635   $    (176,385)

Capital contributed by
  extinguishment of
  stockholders' payable               -               -          1,150              - 

Issuance of common stock for
  extinguishment of stockholders'
  payable at $0.05 per share in
  September, 1995                    20,000           20           980              -

Issuance of common stock for
  extinguishment of stockholders'
  payable at $0.025 per share in
  March, 1996                       130,000          130         3,120              -




      
Issuance of common stock for
  services rendered at $0.025
  per share in March, 1996           80,000           80         1,920              -   
     
Fractional shares from reverse
  stock split                             7            -            -               -

Net loss for the year ended
  June 30, 1996                          -             -            -           (7,535)
                               -------------  -----------  ------------  -------------- 
Balance, June 30, 1996            1,250,009        1,250       181,805        (183,920)

Shares issued for cash in
  October 1996                       60,000           60         5,940              - 

Issuance of common stock for
  services rendered at $0.025 per
  share in October 1996              20,000           20         2,000              -

Net Loss for the year ended
 June 30,1997                            -            -             -           (9,840)
                               -------------  ----------  -------------  --------------
Balance June 30, 1997             1,330,009        1,330       189,745        (193,760)

Shares issued for services and
 expenses paid at $.06 per share    174,991          175        10,325           -
   
Net Loss for the year ended
 June 30,1998                            -            -             -          (13,037)
                               -------------  ----------  -------------  --------------
Balance June 30, 1998             1,505,000   $    1,505  $    200,070   $    (206,797)
                               =============  ==========  =============  ==============


The accompanying notes are an integral part of these financial statements.
                                 6

</TABLE>

<PAGE>
                          Corvallis, Inc.
                   (a Development Stage Company)
                 Statement of Stockholders' Equity
<TABLE>
<CAPTION>
                                                                         Deficit
                                                                         Accumulated
                                                         Additional      During the
                                     Common Stock        paid-in         Development
                                Shares          Amount   Capital         Stage       
                               -------------  ---------- --------------  --------------
<S>                            <C>            <C>        <C>             <C>
Balance, June 30, 1992               745,066  $      745 $     151,298   $    (152,943)
         
Net loss for the year ended
  June 30, 1993                           -           -             -           (1,335)
                               -------------  ---------- --------------  --------------
Balance, June 30, 1993               745,066         745       151,298        (154,278)

Issuance of common stock for
  extinguishment of stockholders'
  payable at $0.2587 per share        54,936          55        14,157               -
       
Net loss for the year ended
  June 30, 1994                           -           -             -          (14,252)
                               -------------  ---------- --------------  --------------
Balance, June 30, 1994               800,002         800       165,455        (168,530)

Issuance of common stock for 
  extinguishment of stockholders'
  payable at $0.04 per share in
  March, 1995                         85,000          85         3,315               -
       
Issuance of common stock for
  extinguishment of stockholders'
  payable at $0.05 per share in
  March, 1995                         60,000          60         2,940               -
     
Issuances of common stock for
  services rendered at $.04 per
  share in March, 1995                75,000          75         2,925               -
      
Net loss for the year ended
  June 30, 1995                           -            -            -            (7,855)
                               --------------  --------- --------------  ---------------
Balance, June 30, 1995             1,020,002   $   1,020 $     174,635   $     (176,385)
                               --------------  --------- --------------  ---------------

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

<PAGE>

                          Corvallis, Inc.
                   (a Development Stage Company)
                 Statement of Stockholders' Equity
<TABLE>
<CAPTION>
                                                                         Deficit
                                                                         Accumulated
                                                         Additional      During the
                                     Common Stock        paid-in         Development
                                Shares          Amount   Capital         Stage       
                               -------------  ---------- --------------  --------------
<S>                            <C>            <C>        <C>             <C>
Balance at inception                     -    $       -  $           -   $          -
     
Issuance of common stock
  at inception at $0.1875 
    per share                       112,000          112        20,888              - 
     
Issuance of common stock in
  July, 1988 at $1.25 per share,
  less deferred offering costs
  offset against paid-in capital    105,120          105        91,630              - 
     
Net loss from inception to 
  June 30, 1989                          -            -             -           (19,673)
                               -------------  ---------- --------------  ---------------
Balance, June 30, 1989              217,120          217       112,518          (19,673)

Issuance of common stock for
  fixed assets and services in
  August, 1989                      506,613          507        18,801              -
     
Issuance of common stock
  in private placement at $0.9375
  per share in November, 1989        21,333           21        19,979              -
     
Net loss for the year ended
  June 30, 1990                          -            -             -          (132,670)
                               -------------  ---------- --------------  ---------------
Balance, June 30, 1990              745,066          745       151,298         (152,343)

Net loss for the year ended
   June 30, 1990                         -            -             -              (300)
                               -------------  ---------- --------------  ---------------
Balance, June 30, 1991              745,066          745       151,298         (152,643)

Net loss for the year ended
  June 30, 1992                          -            -             -              (300)
                               -------------  ---------- --------------  ---------------
Balance, June 30, 1992              745,066   $      745 $     151,298   $     (152,943)
                               -------------  ---------- --------------  ---------------
                                  
The accompanying notes are an integral part of these financials statements,
                                 8
</TABLE>

<PAGE>



                          Corvallis, Inc.
                   (a Development Stage Company)
                      Statement of Cash Flows

<TABLE>
<CAPTION>
                                                                       September
                                                                       28, 1987  
                                                                       (inception)
                                  For the years ended June 30,         to June 30,
                              1998            1997           1996      1998
                            ------------- ------------- -------------  ---------------
<S>                         <C>           <C>           <C>            <C> 
Cash Flows form Operating
  Activities:

     Net loss               $    (13,037) $     (9,840) $     (7,535)  $     (206,797)
     Discontinued operations          -             -             -            19,308 
     Non-cash services rendered
       and expenses paid by 
       stockholders'              10,500         2,020         6,250           39,357 
     Increase (decrease) in
       current liabilities         2,493         1,529         1,200            5,222 
                            ------------- ------------- -------------  ----------------  
     Net Cash Provided (Used)
       by Operating Activities       (44)       (6,291)          (85)        (142,910)
                            ------------- ------------- -------------  ----------------
Cash Flows from Investment
  Activities:                         -            -              -                - 
                            ------------- ------------- -------------  ----------------
Cash Flows from Financing
  Activities:     

     Issuance of common stock         -          6,000            -           142,910
                            ------------- ------------- -------------  ----------------
     Net Cash Provided by
       Financing Activities           -          6,000            -           142,910
                            ------------- ------------- -------------  ----------------
Net increase (decrease) in cash      (44)         (291)          (85)              - 
    
Cash, beginning of year               44           335           420               - 
                            ------------- ------------- -------------  ----------------
Cash, end of year           $          -  $         44  $        335               -
                            ============= ============= =============  ================
                      
Cash, paid during 
  the year for:

     Interest               $          -  $         -   $         -    $           - 
     Income taxes           $          -  $         -   $         -    $           -


The accompanying notes are an integral part of these financial statements.
                                 9
</TABLE>

<PAGE>

                          Corvallis, Inc.
                   (a Development Stage Company)
                 Notes to the Financial Statements
                       June 30, 1997 and 1996

NOTE 1 - Summary of Significant Accounting Policies

     a.  Organization

         The financial statements presented are those of Corvallis, Inc., a
development stage  stage company.  The Company was incorporated for the purpose
of providing a vehicle which could be used to raise capital and seek business
opportunities believed to hold a potential for profit.  The Company has not
presently identified a specific business area or direction that it will follow. 
Therefore, no principal operations have yet begun.

     b.  Accounting Method

          The Company's financial statements are prepared using the accrual
method of accounting.  The Company elected a June 30th fiscal year end.

     c.  Net Loss Per Share

         The computation of net loss per share of common stock is based on the
weighted  average number of shares outstanding at the date of the financial
statements.

     d. Deferred  Stock Offering Costs

         In connection with the public offering of the Company's common stock
(see Note 2), all costs were accumulated as deferred charges.  The deferred
charges were offset against proceeds received from the stock offering.

     e.  Provision for Income Taxes

          The Company accounts for income taxes using Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes."  Under Statement
109, the liability method is used in accounting for income taxes.

          At June 30, 1998 the Company had net operating loss carryforwards of
approximately $206,000 that may be offset against future taxable income through
2013.  No provision for income taxes has been made due to these net operating
loss carryforwards.  The tax benefit of the net operating loss carryforwards is
offset by a valuation allowance of the same amount due to the uncertainty that
the carryforwards will be used before they expire.

          Utilization of the net operating losses may be subject to a
substantial annual limitation due to the "change in ownership" provisions of
the Internal Revenue Code of 1986 and similar state provisions.  The annual
limitation may result in the expiration of net operating losses before
utilization.

     f.   Statement of Cash Flows

          For purposes of the Statement of Cash Flows, the Company considers
all highly liquid investments with an original maturity of three months or less
to be cash equivalents.
                                 10
<PAGE> 

                          Corvallis, Inc.
                   (A Development Stage Company)
                 Notes to the Financial Statements
                       June 30, 1997 and 1996


NOTE 1 - Summary Of Significant Accounting Policies (Continued)

     g.  Office Space

          A director of the Company provides office space in his home for the
Company.  The  space is used primarily by the director for his personal
affairs.  The value to the Company is considered immaterial.  Accordingly, no
benefit has been recorded.

     h.   Estimates

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


NOTE 2 - Public Offering

          In 1988 the Company completed a public offering which was registered
on Forms S-18 in accordance with the Securities Act of 1933.  A total of
105,120 units were sold having a gross subscription price of $131,400. 
Deferred offering costs totaling $39,665 were offset against additional paid-in
capital.

NOTE 3 - Asset Purchase Agreement

          In September 1989, the Company completed the terms of an Asset
Purchase Agreement with DLB Enterprises, Inc.  (DLB"), a closely-held Nevada
corporation, providing for the acquisition by the Company of all of the
operating assets of Southwest, a Las Vegas- based enterprise which had been
engaged in the manufacture and installation of awnings for commercial,
industrial and residential use for approximately the past fourteen (14) months. 
Southwest was previously a joint enterprise owned and operated in Las Vegas by
DLB and WAM Industries, Inc.  ("WAM"), a Salt Lake City-based corporation which
has been engaged in the awning business for several years. Under the terms of
the Asset Purchase Agreement, the Company acquired all of the operating assets
of Southwest, including equipment, inventory, customer accounts, tradenames and
trademarks and other assets in exchange for the issuance to DLB of a total of
253,306 shares of the Company's restricted common stock. Concurrently, the
company also entered into a separate agreement with WAM under the terms of      
which  WAM agreed to act as contractor on all large commercial jobs of the
Company at a price of cost plus 10% and generally agreed to contribute its
expertise in the development of the Company's business, in consideration of
which the Company issued to WAM a total of 108,560 shares of its restricted
common stock. In connection with these transactions, the Company issued a total
of 144,747 shares of restricted common stock to Whitney O. Cluff and certain of
his business associates who were instrumental in facilitating the negotiation
and consummation of the transactions. The assets were subsequently written off
(see Note 4).

                                 11
<PAGE>

                          Corvallis, Inc.
                   (A Development Stage Company)
                 Notes to the Financial Statements
                       June 30, 1997 and 1996

NOTE 4 -Discontinued Operations

     The Company, on January 1, 1990, decided to discontinue its operations. 
Therefore, the Company entered into an agreement with WAM industries in which
WAM took over the operations of the Company and paid its outstanding debts, and
in consideration, WAM industries was given all of its assets.  The assets
consisted of all cash, receivables and fixed assets.   The Company has not had
any operations since that date except for some incidental expenditures to keep
the Company on active status with the State and stock exchanges.

NOTE 5 - Going Concern

     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 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. 
It is the intent of the Company to seek a merger with an existing, operating
company.  Currently, the stockholders are committed to cover all operating and
other costs until sufficient revenues are generated.

NOTE 6 - Stockholders'  Payable

     Whitney Cluff an officer and shareholder of the Company has paid all
expenses on behalf of the Company.  The amount un-reimbursed of $524 is non-
interest bearing and will be repaid to the stockholder when monies are
available or will be converted to equity.

NOTE 7 - Reverse Stock Split

     On July 21, 1994 during a special meeting of shareholders, a motion was
approved authorizing a reverse split of the issued and outstanding common stock
of the Company with one new share being issued for every twenty-five (25)
shares previously held.

     On August 22, 1995 the shareholders of the Company approved a motion
authorizing an additional reverse split of the issued and outstanding common
stock of the company on a 1-for-5 basis.  All references to shares outstanding
and net loss per share have been adjusted to reflect the effects of these stock
splits on a retroactive basis.

                                 12
<PAGE>