[As adopted in Release No. 34-32231, April 28, 1993, 58 F.R. 26509]

                     U.S. Securities and Exchange Commission

                             Washington, D.C. 20549

                                   Form 10-QSB

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

             For the quarterly period ended:         December 31, 1998
                                            -----------------------------------

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

             For the transition period from             to
                    Commission file number            0-730

                            PENN-PACIFIC CORPORATION
                     (Exact name of small business issuer as
                            specified in its charter)

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

                    3539 Ocean View Blvd., Glendale, CA 91208
                    (Address of principal executive offices)

                                 (818) 957-1414
                            Issuer's telephone number


     (Former name,  former address and former fiscal year, if changed since last
report.)

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. Yes No X


<PAGE>




                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDING DURING THE PRECEDING FIVE YEARS

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


                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares  outstanding of each of the issuer's  classes of
common equity, as of the latest practical date: May 14, 1999 951,082

     Transitional Small Business Disclosure Format (check one). Yes ; No X



<PAGE>



                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

<TABLE>
<CAPTION>

                            PENN PACIFIC CORPORATION
                          (A Development Stage Company)
                                 BALANCE SHEETS
                                   (Unaudited)



                                                       December 31,    September 30,
                                                       ------------    ------------
                                                           1998            1998
                                                       ------------    ------------
<S>                                                    <C>             <C>
ASSETS .............................................   $       --      $       --


LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Accounts Payable .................................   $     12,050    $     11,523
  Accrued expenses .................................         12,238          11,757
                                                       ------------    ------------

          Total Liabilities ........................         24,288          23,280
                                                       ------------    ------------

Stockholders' Equity
Preferred stock (par value $1.00),
  50,000,000 shares authorized,
  no shares issued at December 31,
  1998 and September 30, 1998 ......................           --              --
Common stock to be issued ..........................          8,154           8,154
Common stock (par value $.10),
  100,000,000 shares authorized,
  951,082 shares issued and outstanding
  December 31, 1998 and September 30, 1998 .........         95,108          95,108
Capital in excess of par value .....................     35,686,105      35,686,105
Retained deficit ...................................    (35,735,361)    (35,735,361)
Deficit accumulated during development stage .......        (78,294)        (77,286)
                                                       ------------    ------------

          Total Stockholders' Equity ...............        (24,288)        (23,280)
                                                       ------------    ------------

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





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

                                        3

<PAGE>

<TABLE>
<CAPTION>


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




                                                                               Cumulative
                                                                                 Since
                                                 For the Three Months Ended   Inception of
                                                        December 31,           Development
                                                 --------------------------
                                                    1998           1997          Stage
                                                 -----------    -----------    -----------
<S>                                              <C>            <C>            <C>
Revenues .....................................   $      --      $      --      $      --
                                                                               -----------

Expenses
  Selling, general and administrative expenses          --              750         17,689
                                                 -----------    -----------    -----------

Operating Loss ...............................          --             (750)       (17,689)

Other income (expense):
   Interest expense ..........................        (1,008)           (92)       (52,419)

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

Loss before taxes ............................        (1,008)          (842)       (78,294)
Income taxes .................................          --             --             --
                                                 -----------    -----------    -----------

       Net Loss ..............................   $    (1,008)   $      (842)   $   (78,294)
                                                 ===========    ===========    ===========


Per Share Amounts
Net Loss .....................................   $      --      $      --
                                                 ===========    ===========

Weighted Average Shares Outstanding ..........     1,032,619      1,000,759

</TABLE>








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

                                        4

<PAGE>

<TABLE>
<CAPTION>


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


                                                                             Cumulative
                                                                                Since
                                                 For the Three Months Ended  Inception of
                                                          December 31,        Development
                                                     ----------------------
                                                        1998         1997        Stage
                                                     ---------    ---------    ---------
<S>         <C>                                      <C>          <C>          <C>
Cash Flows from Operating Activities:
 Reorganization Items:
    Chapter 11 administrative fees ...............   $    --      $    --      $  (7,000)
                                                     ---------    ---------    ---------
      Net cash used in operating activities ......        --           --         (7,000)
                                                     ---------    ---------    ---------

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

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

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

Cash and cash equivalents at end of year .........   $    --      $    --      $    --
                                                     =========    =========    =========

Reconciliation of Net Loss to Net Cash
 Used in Operating Activities:
Net loss .........................................   $  (1,008)        (842)   $ (78,294)
Adjustments used to reconcile net loss to Net
cash used in operating activities:
Common stock issued for expenses .................        --           --        114,226
Increase in accounts payable .....................         528        1,186       12,051
Increase (decrease) accrued expenses .............         480         (344)       8,055
Decrease in notes payable - stockholders .........        --           --         (5,000)
Decrease in liabilities not subject to compromise:
    Administrative fees ..........................        --           --        (52,181)
Decrease in liabilities subject to compromise:
    Priority claims ..............................        --           --         (4,277)
    Unsecured non-priority claims ................        --           --         (1,580)
                                                     ---------    ---------    ---------

Net cash used in operating activities ............   $    --      $    --      $  (7,000)
                                                     =========    =========    =========
</TABLE>

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

                                        5

<PAGE>



                            PENN PACIFIC CORPORATION
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
              FOR THE THREE MONTHS ENDED DECEMBER 31, 1998 AND 1997
                                   (Unaudited)

NOTE 1 - INTERIM REPORTING

     The  accompanying  unaudited  financial  statements  have been  prepared in
accordance with generally  accepted  accounting  principles and with Form 10-QSB
requirements.  Accordingly,  they  do not  include  all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements.  In the opinion of management,  all adjustments considered
necessary for a fair presentation have been included.  Operating results for the
three month period ended  December 31, 1998, are not  necessarily  indicative of
the results that may be expected for the year ended September 30, 1999.

NOTE 2 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES

Organization and Basis of Presentation

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

Nature of Business

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

Cash Equivalents

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

NOTE 3 - DEVELOPMENT STAGE

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

                                        6

<PAGE>



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

General  - This  discussion  should  be read in  conjunction  with  Management's
Discussion and Analysis of Financial  Condition and Results of Operations in the
Company's annual report for the year ended September 30, 1998.

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

Liquidity and Capital Resources

     The  Company  requires  working  capital  principally  to fund its  current
operations.  There are no formal commitments from banks or other lending sources
for lines of credit or similar  short-term  borrowing,  but the Company has been
able to borrow any additional working capital that has been required.  From time
to time in the past,  required  short-term  borrowing  have been obtained from a
principal shareholder or other related entities.

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















                                        7

<PAGE>



                           PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

       None.

Item 2.  Changes in Securities

       None.

Item 3.  Defaults Upon Senior Securities

       None.

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

       None.

Item 5.  Other Information

       None.

Item 6.  Exhibits and Reports on Form 8-K

     The Company did not file a report on Form 8-K during the three months ended
December 31, 1998.


                                        8

<PAGE>


                                   SIGNATURES



     In accordance  with the  requirements  of the Exchange Act, the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



                            PENN-PACIFIC CORPORATION
                                  (Registrant)





DATE:   May 26, 1999        By:  /s/
                             James O'Brien, President
                            (Principal Financial and
                             Accounting Officer)


                                        9