SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                  FORM 10-QSB

            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
                For the fiscal quarter ended September 30, 1998

                           Commission File No. 0-9297

                               CRONUS CORPORATION
                              a NEVADA corporation

                                    36-388074
                    (I.R.S. Employer Identification Number)


                 800 SEAGATE DRIVE #203, NAPLES, FLORIDA 34103

        Registrant's telephone number, including area code (520) 885-1220


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  receding  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.

                                 [X] Yes [ ] No

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

          Class               Outstanding as of October 1, 1998
      $.001 PAR VALUE                 30,674,285 SHARES
       COMMON STOCK

                      DOCUMENTS INCORPORATED BY REFERENCE:

1.   Audited  Financial  Statements  for the years ended  December  31, 1997 and
     1996, dated June 10, 1998. 1997 10- KSB filed June 15, 1998.

                                     PART 1

ITEM 1. Financial Statements

J. Dennis Bartlett, P.C.
Certified Public Accountant
2421 E. 6th Street
Tucson, Arizona  85716

Cronus Corporation
Tucson, Arizona

I have  compiled  the  accompanying  balance  sheet of Cronus  Corporation  (and
subsidiary  PetroSun) as of September 30, 1998,  December 31, 1997 and September
30, 1997 and the related consolidated statement of Profit and Loss for the three
and nine months ended  September 30, 1998 and 1997, in accordance with standards
established by the American Institute of Certified Public Accountants.

A  compilation  is limited to  presenting  in the form of  financial  statements
information  that is the  representation  of  management.  I have not audited or
reviewed the accompanying financial statements and, accordingly,  do not express
an opinion or any other form of assurance on them.

Management  has elected to omit  substantially  all of the  disclosures  and the
statement of cash flows required by generally accepted accounting principles. If
the omitted  disclosures  and  statement  of cash flows were  included  with the
financial  statements,  they might  influence the user's  conclusions  about the
Company's   financial   position,   results  of  operations,   and  cash  flows.
Accordingly,  these financial  statements are not designed for those who are not
informed about such matters.

/s/ J. Dennis Bartlett, P.C.
November 20, 1998


J. Dennis Bartlett, P.C.
Certified Public Accountant
2421 E. 6th Street
Tucson, Arizona  85716

We hereby consent to the inclusion of our report dated November 20, 1998, in the
quarter  report  of Cronus  Corporation  on Form  10-QSB  for the  period  ended
September 30, 1998.

/s/ J. Dennis Bartlett, P.C.
Tucson, Arizona
November 20, 1998

                               CRONUS CORPORATION
                                 Balance Sheet
                            As of September 30, 1998

                                             SEPTEMBER     SEPTEMBER    DECEMBER
                                               1998          1997         1997
                                               ----          ----         ----
                                     ASSETS
Current Assets
  Cash                                     $    17,752       1,869        1,195
  Other current assets                           2,807           0        3,356
  Stock Subscription receivable                127,500           0            0
  Accounts receivable                            3,054           0       10,338
  Prepaid expenses                                   0       2,000      125,000

 Total Current Assets                      $   151,113       3,869      139,889

Fixed Assets
  Computer equipment                             3,071       3,071        3,071
  Office equipment/furniture                     5,342       5,342        5,342
  Less: accumulated depreciation                (3,062)     (1,094)      (3,062)
  Proved property                              217,729     217,500      217,728
  Unproved properties                          132,924      93,752      121,390
  Wells and related eqiup                        5,200           0        5,200
   Less: accumulated depreciation               (1,543)          0       (1,543)

 Total Fixed Assets                            359,661     318,571      348,126

Other Assets
  Prepaid consulting                           160,600           0       31,250
  Deposits                                       1,802       1,802        1,802
  Receivable from related company                    0           0       19,212
  Investment in mining claims                  143,530     143,530      143,530
  Other investments                                  0       4,203            0
  Goodwill, net of accumulated amortization
   and valuation allowance                   1,045,215           0      516,829

Total Other Assets                           1,351,147     149,535      712,623

TOTAL ASSETS                                 1,861,921     471,975    1,200,638


                       LIABILITIES & SHAREHOLDERS' EQUITY

                                          SEPTEMBER      SEPTEMBER     DECEMBER
                                            1998           1997          1997
                                            ----           ----          ----
Current Liabilities
  Accounts Payable                      $   153,453        151,772      171,347
  Bank overdraft                                  0              0        4,518
  Drilling advance                           26,300              0       26,300
  Revenue distribution                        2,511              0        4,536
  Due to related party                            0              0      439,976
  Note payable-officers, shareholders
   And related entitles                      34,659         28,730       80,129
  Notes payable-other net of
   Current portion                          266,772         76,925      146,243
  Accrued expenses                           16,711        361,040      393,622
  Payroll taxes payable                       1,263          2,868        2,896
  Liability not discharged in bankruptcy          0             0            0

TOTAL CURRENT LIABILITIES                   501,669        621,335    1,269,567

LONG TERM LIABILITIES
  Notes payable-other                             0              0       16,000
  Investment in joint venture                     0              0       40,508

TOTAL LIABILITIES                           501,669        621,335    1,326,075

STOCKHOLDERS' EQUITY
  Common Stock                               29,354         16,888       15,284
  Additional paid in capital              3,459,983      1,034,827    1,801,826
  Subscribed stock                          127,500              0            0
  Receivable from sale of stock                   0              0     (175,981)
  Treasury stock                               (250)        (3,364)        (250)
  Retained Earnings                      (1,766,316)    (3,857,922)  (3,585,856)
  Net income year to date                  (490,019)     2,660,211    1,819,540

  TOTAL STOCKHOLDERS' EQUITY              1,360,252       (149,360)    (125,437)

TOTAL LIABILITIES &
  SHAREHOLDERS' EQUITY                  $ 1,861,921    $   471,975   $1,200,638

                               CRONUS CORPORATION
                                Profit and Loss
                           January through March 1998

                             JAN-SEPT.     JAN-SEPT.     JULY-SEPT.   JULY-SEPT.
                               1998          1997          1998         1997
                               ----          ----          ----         ----
INCOME
  Bayou Pierre - Gas       $  20,942              0        8,152             0
  Falco - Oil                  1,350              0            0             0
  Grawhawk Oil & Gas               0          2,000            0         2,000

 Total                        22,292          2,000        8,152         2,000

OPERATING EXPENSES
  Automobile expense             204             80            0            30
  Bank charges                   591            178           81            67
  Bonus                        7,400              0            0             0
  Commissions                      0          8,000            0             0
  Contributions                  200              0            0             0
  Dues & subscriptions         3,938            221          480           221
  Education                      300              0          200             0
  Equipment rental               548              0            0             0
  Fees                         2,901          4,026          106         1,580
  Insurance                      300          2,933            0         1,985
  Interest                    34,954              0        5,723             0
  Internet access                176            120           88            60
  Licenses & permits             650             10          235            10
  Maintenance expense          1,874              0            0             0
  Marketing                        0            942            0           360
  Office                       3,136          2,790          419         1,130
  Operating expense           88,263          5,000       16,563             0
  Payroll                    155,233        190,250        3,500        67,750
  Payroll taxes                4,694          5,104          268         1,885
  Postage & delivery           2,528          1,094          421           478
  Printing                         0          2,361            0             0
  Professional fees           53,870         34,389        6,326         7,332
  Proxy                           85              0            0             0
  Rent                         8,801          6,447        2,086         2,533
  Royalties                    6,450              0        2,511             0
  Supplies                     6,186              0          453             0
  Taxes                           50             50            0             0
  Telephone                    5,915          4,581        2,442         1,847
  Travel & entertainment       8,197          2,385           22           682
  Utilities                      764            962          239           572
  Web site hosting fee           775              0            0             0

TOTAL EXPENSE                391,583        271,923       42,163        88,473

NET OPERATING INCOME        (369,291)      (269,923)     (34,011)      (86,473)

OTHER INCOME
  Extraordinary gain               0      2,930,134            0     2,930,134
  Sales of assets           (144,100)             0     (144,100)            0
  Reversed interest           23,372              0       23,372             0

NET INCOME                 $(490,019)   $ 2,660,211    $(154,739)   $2,843,661

Please see Audited  Financial  Statements and Notes for the years ended December
31, 1997 and 1996,  dated June 10,  1998,  filed as an exhibit to the  Company's
1997 10-KSB on June 15, 1998.

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

Disclosure  Regarding  Forward-Looking  Statements.  This  report on Form 10-KSQ
includes  "forward-looking  statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended (the  "Securities  Act"),  and Section 21E of
the  Securities  Exchange Act of 1934,  as amended  (the  "Exchange  Act").  All
statements  other than  statements of historical  facts included in this report,
including,  without limitation,  statements under  "Management's  Discussion and
Analysis or Plan of  Operations"  regarding  the Company's  financial  position,
reserve  quantities  and  net  present  values,  business  strategy,  plans  and
objectives  of  management  of the  Company  for future  operations  and capital
expenditures, are forward-looking statements and the assumptions upon which such
forward-looking  statements are based are believed to be reasonable. The Company
can give no assurance that such  expectations and assumptions will prove to have
been  correct.  Reserve  estimates  of oil  and  gas  properties  are  generally
different  from the  quantities  of oil and  natural  gas  that  are  ultimately
recovered  or  found.  This  is  particularly  true  for  estimates  applied  to
exploratory  prospects.  Additionally,  any statements  contained in this report
regarding  forward-looking  statements  are subject to various known and unknown
risks, uncertainties and contingencies,  many of which are beyond the control of
the Company. Such things may cause actual results, performance,  achievements or
expectations to differ  materially from the  anticipated  results,  performance,
achievements  or  expectations.  Factors  that may affect  such  forward-looking
statements  include,  but are not limited to, the Company's  ability to generate
additional  capital,  risks inherent in oil and gas  acquisitions,  exploration,
drilling,   development  and  production,  price  volatility  of  oil  and  gas,
competition,   shortages  of  equipment,   services  and  supplies,   government
regulation,  environmental  matters,  financial condition of the other companies
participating  in the  exploration,  development  and  production of oil and gas
programs and other  matters.  All written and oral forward-  looking  statements
attributable  to the Company or persons  acting on its behalf  subsequent to the
date  of  this  report  are  expressly  qualified  in  their  entirety  by  this
disclosure.

As  described  more fully  below,  management  expects to  receive  income  from
PetroSun oil and gas leases in Louisiana  during 1998.  The Company has incurred
losses from operations and has deficits in working  capital.  The Company earned
minimal  income from its first three  quarters of  operations  do to the ongoing
rehabilitation of the shut-in wells in Louisiana, however, it expects to receive
income in the next quarter from those oil and gas leases.  The drilling projects
are further explained below.  There can be no assurance that a cash flow will be
generated  or  that  funding  will  be  raised.  The  Company  currently  has no
commitments for any type of funding,  and there is no assurance that the Company
will be able to obtain any such financing or that such financing, if obtainable,
will be on terms necessary to enable the Company to operate profitably.

Future Business Strategy and Operations.

The Company's ongoing business strategy is to create and expand its reserve base
and cash flow primarily through the following:

1.   Raising  significant  capital  to  conduct  assessments  of the  economical
     feasibility  of  extracting  minerals  from  its  properties,  and to  take
     advantage of leading edge technologies such as horizontal  drilling and 3-D
     seismic exploration projects.

2.   Position  itself with  strategic  sources of capital and partners  that can
     react  to  opportunities  in the oil and gas  industry  when  they  present
     themselves.

3.   Developing alliances with oil and gas industry partners.

4.   Participate in projects that have opportunities  involving relatively small
     amounts of capital that could  potentially  generate  significant  rates of
     return.  These  projects  include  areas with  large  field  potentials  in
     Northern Arizona, New Mexico, Louisiana and Queensland, Australia.

5.   Implementing  the  Company's  investment  strategy to  carefully  consider,
     analyze,  and exploit the potential value of the Company's  existing assets
     to increase the rate of return to its shareholders.

6.   Reinvesting  future  operating cash flows into  development of drilling and
     recompletion activities.

7.   Acquiring  properties  that build upon and enhance the  Company's  existing
     asset base.

8.   Developing a long term track record regarding stock price performance and a
     reasonable rate of return to the shareholder.

The Company recognizes that the ability to implement its business  strategies is
largely  dependent  on the ability to increase  operating  cash flows by raising
additional  debt or equity  capital to fund future  drilling  and  developmental
activities.  Management  believes that it will be necessary to raise  additional
equity or debt capital to overcome the Company's undercapitalization.

The steps the Company  intends to take to assess the  feasibility of its current
projects are described below. There can be no assurance that the Company will be
able to place such oil and gas into  production or to conclude such  feasibility
assessments,  or that if it is able to do so,  that it will be able to engage in
oil and gas operations profitably.


OIL AND GAS PLAN OF OPERATIONS

The  Company's  primary  objective  is to place  the oil and gas  assets  of its
subsidiary   into   production.   PetroSun   controls  oil  and  gas  leases  on
approximately  2,200  acres of land in  Louisiana  referred  to as Bayou  Pierre
Project.  The leases contain 17 proven developed oil and gas wells.  These wells
were shut-in  since the late 1980's due to the then low price of oil and gas and
due to the property then being  subject to litigation  unrelated to the Company.
Currently,  13 of the wells have been  rehabilitated and placed into production.
The Company estimates that the cost to complete the  rehabilitation of the wells
to be $150,000.  The leases also contain an  additional  105 proven  undeveloped
vertical or 60 horizontal locations, 4 Puluxy, 4 Glen Rose, and 2 Rodessa, which
the Company plans to drill if economically feasible.

Drilling Projects

Louisiana:
PetroSun has joint  ventured with Vector  Horizontal  Inc. to drill a horizontal
Nacatoch gas well (William  Prince #20) on the Bayou Pierre lease.  The drilling
commenced  in the second  week of  November  1998.  The  drilling  cost for this
project is estimated to be $80,000. Also, PetroSun has Joint Ventured with Tedan
to drill a Paluxy / Glen Rose test well (William Prince #21) on the Bayou Pierre
Lease.  The drilling is anticipated to begin in December 1998. The drilling cost
for this project is expected to be $45,000.

New Mexico:
On October 22, 1997,  PetroSun acquired the Red Dog Prospect located in McKinley
County, New Mexico, covering 1,921.18 acres. The Red Dog Prospect is situated on
a northeast - southwest  trending  anticlinal fold on the Chaco Slope of the San
Juan Basin.  Seismic data indicates a feature in the Entrada  formation that has
been  interpreted  as a reflection  from an oil-water  contact.  In a homogenous
sandstone such as the Entrada a 30 foot oil column is needed before an oil-water
contact can be detected.  Analysis of satellite  imagery confirmed that there is
micro-seepage to the surface.  The hydrocarbon  reflectance covers approximately
1420  acres.  The  Entrada  has  excellent  reservoir  quality,  with an average
porosity of 23.6% and an average  permeability of 315  millidarcies.  On 40 acre
spacing,  recoverable  reserves are estimated to be 456,800 barrels of oil for a
well  with  30 feet of pay and a water  drive  recovery  of 35%.  The  secondary
objectives  of the Red Dog  Prospect  include  the  Dakota at 3,300 feet and the
Mancos at 2,900 feet. PetroSun anticipates drilling the initial test well in the
Entrada by the end of 1998.

PetroSun has joint ventured with industry partners,  including Tiger Exploration
& Production,  Incorporated,  to raise the funds for this prospect. In the event
that Tiger  Exploration &  Production,  Incorporated  does not raise  sufficient
funds for this  project  in order to drill the  initial  test well by the end of
1998,  PetroSun will be required to  renegotiate  the terms of the lease of this
prospect or risk losing the lease.

PetroSun  acquired  the Cholla Tank  Prospect  located in McKinley  County,  New
Mexico on November  22, 1997.  The Cholla  Prospect is situated on a northeast -
southwest  trending  anticlinal  fold on the Chaco  Slope of the San Juan Basin.
Seismic  data  indicates  a  feature  in the  Entrada  formation  that  has been
interpreted as a reflection from an oil-water contact. In a homogenous sandstone
such as the Entrada a 30 foot oil column is needed  before an oil-water  contact
can  be  detected.  Analysis  of  satellite  imagery  confirmed  that  there  is
microseepage to the surface.  The Entrada has excellent reservoir quality,  with
an average porosity of 23.6% and an average permeability of 315 millidarcies. On
40 acre spacing, recoverable reserves are estimated to be 456,800 barrels of oil
for a well with 30 feet of pay and a water drive  recovery of 35%. The secondary
objectives  of the  Cholla  Prospect  include  the  Dakota at 3,300 feet and the
Mancos at 2,900 feet.  The Cholla Tank Prospect is a direct offset to PetroSun's
Red Dog Prospect and drilling is anticipated to commence by the end of 1998.

PetroSun has joint ventured with industry partners,  including Tiger Exploration
& Production,  Incorporated,  to raise the funds for this prospect. In the event
that Tiger  Exploration &  Production,  Incorporated  does not raise  sufficient
funds for this  project  in order to drill the  initial  test well by the end of
1998,  PetroSun will be required to  renegotiate  the terms of the lease of this
prospect or risk losing the lease.

Australia:
Triple JJJ Resources  Pty.,  Ltd. On February 14, 1998, the Company entered into
an agreement to acquire all the outstanding shares of Triple "J" Resources Pty.,
LTD.  ("JJJ").  JJJ is the  holder  of ATP  594P,  a  375,000  acre  oil and gas
concession  located in  Queensland,  Australia  within the oil and gas producing
region of the Eromanga basin.  JJJ has a farmout  agreement with Icon Oil, NL by
which Icon  agreed to drill the first test well on ATP 594P,  and to  thereafter
provide  50% of the  costs of any  additional  wells in  return  for half of the
Company's  interest in ATP 594P.  The Company has sold a half interest in JJJ to
Tiger Tool, Inc. and Tiger Exploration & Production,  Inc.,  effectively leaving
the  Company  with  approximately  a 23%  working  interest  and 16% net revenue
interest in ATP 594P.

On April 16, 1998, Cronus announced the completion of drilling on the first well
on ATP 594P, the Taylor Franks No. 1 well in the Eromanga Basin of  east-central
Australia.  The well  reached a total depth of 2,643  meters with gas shows from
2,520 to 2,643 meters.  Two drill stem tests were performed in the Toolachee and
Patchawarra   formations   in  the   Permian   section.   The  tests   indicated
non-commercial gas flow rates of approximately 10,000 cubic feet per day with no
water.

The results of this first well indicate  good  structure and the presence of gas
in this  province.  The flow  results  and  penetration  rate  confirmed a tight
reservoir and lack of sufficient  porosity at this  location,  thus the well was
plugged. While proving that there is gas on this concession, the next step is to
drill a  confirmation  well in the same  zone  that  has  greater  porosity  and
provides  commercially  viable flow rates to capitalize on this find. Cronus and
Icon Oil NL have determining a second location for the next well and anticipates
the well to be spudded in early 1999 on the concession.

Pursuant  to  its  acquisition  of an  interest  in  JJJ,  Tiger  Exploration  &
Production, Incorporated is obligated to carry Cronus for its share of the costs
of drilling  the next well on ATP 594P.  In the event that Tiger  Exploration  &
Production,  Incorporated  does not raise  sufficient  funds for this project in
order to drill the next well Cronus will be required to raise the funds of up to
$400,000 or risk losing its interest in that well.

Strategic Consulting and Administration, Inc.
On October 17,  1997,  the Company  entered into an agreement to acquire all the
outstanding shares of Strategic Consulting and Administration, Inc. ("SCI"). SCI
is the  designated  company  to  receive  ATP 636P,  a 640,000  acre oil and gas
concession  located in  Queensland,  Australia  within the oil and gas producing
region of the Eromanga basin. SCI cannot receive the Authority To Prospect until
the issues  surrounding  the Native Title  Claims Act have been  resolved by the
parliament of Queensland, Australia. The Company currently has no estimate as to
how much it would cost to develop this prospect.

With  the  establishment  of  commercial  production  on any  prospect,  further
development wells may be drilled during the balance of 1999.

Although the Company is currently  pursuing  prospects  within the project areas
described above, and has budgeted to drill the number of wells set forth,  there
can be no assurance  that these  prospects  will be drilled at all or within the
expected  time  frame.  In  particular,  budgeted  wells  that  are  based  upon
statistical results of drilling activities in other project areas are subject to
greater uncertainties than wells for which drillsites have been identified.  The
final determination with respect to the drilling of any identified drillsites or
budgeted  wells will be  dependent  on a number of  factors,  including  (i) the
results of exploration  efforts and the acquisition,  review and analysis of the
seismic  data,  (ii) the  availability  of sufficient  capital  resources by the
Company and the other participants for the drilling of The prospects,  (iii) the
approval of the prospects by other  participants  after additional data has been
compiled,  (iv) the economic and  industry  conditions  at the time of drilling,
including  prevailing  and  anticipated  prices for oil and  natural gas and the
availability of drilling rigs and crews, (v) the financial resources and results
of the  Company  and (vi) the  availability  of leases on  reasonable  terms and
permitting  for the prospect.  There can be no assurance that these projects can
be  successfully  developed or that the identified  drillsites or budgeted wells
discussed will, if drilled,  encounter reservoirs of commercially productive oil
or natural gas.
 
The success of the Company will be materially  dependent upon the success of its
exploratory and developmental  drilling program.  Exploratory  drilling involves
numerous  risks,  including  the risk  that no  commercially  productive  oil or
natural gas reservoirs will be encountered. The cost of drilling, completing and
operating wells is often  uncertain,  and drilling  operations may be curtailed,
delayed or canceled as a result of a variety of  factors,  including  unexpected
drilling  conditions,  pressure  or  irregularities  in  formations,   equipment
failures or accidents, adverse weather conditions,  compliance with governmental
requirements  and shortages or delays in the  availability  of drilling rigs and
the  delivery  of  equipment.  Although  the  Company  believes  that its use of
available data and other advanced  technologies  should increase the probability
of success of its  exploratory  wells and should reduce  average  finding costs,
exploratory  drilling remains a speculative  activity.  Even when fully utilized
and properly  interpreted,  seismic data and other  advanced  technologies  only
assist geoscientists in identifying  subsurface structures and do not enable the
interpreter to know whether hydrocarbons are in fact present in such structures.
In addition,  the use of seismic data and other advanced  technologies  requires
greater  predrilling  expenditures than traditional  drilling strategies and the
Company  could  incur  losses as a result of such  expenditures.  The  Company's
future  drilling  activities may not be successful,  and if  unsuccessful,  such
failure  will  have a  material  adverse  effect  on the  Company's  results  of
operations and financial condition. There can be no assurance that the Company's
overall drilling success rate or its drilling success rate for activity within a
particular project area will not decline.  The Company may choose not to acquire
option and lease rights prior to acquiring  seismic data and, in many cases, the
Company may identify a prospect or drilling  location  before  seeking option or
lease rights in the prospect or  location.  Although the Company has  identified
numerous drilling prospects,  there can be no assurance that such prospects will
ever be drilled (or drilled within the scheduled or budgeted time frame) or that
oil or  natural  gas  will be  produced  from any such  prospects  or any  other
prospects.  In addition,  prospects may initially be identified through a number
of methods,  some of which do not include  interpretation of seismic data. Wells
that are currently  included in the Company's  capital  budget may be based upon
statistical  results of  drilling  activities  in other  project  areas that the
Company believes are geologically similar, rather than on analysis of seismic or
other data. Actual drilling and results are likely to vary from such statistical
results and such variance may be material.  Similarly,  the  Company's  drilling
schedule  may vary from its  capital  budget  because  of future  uncertainties,
including those described elsewhere.

Financial Requirements and Source of Funds.

The Company is currently rehabilitating the shut-in oil and gas wells by setting
compressors and pumps which will allow it to put its revenue producing assets in
Louisiana into production. The Company will need to place its oil and gas leases
in Louisiana into production,  and then must raise  sufficient  capital to fully
develop its properties and acquire new prospects to develop revenues.
 
Thereafter,  the Company  believes it will need to raise at least  $2,000,000 in
order to fully conduct the drilling of its oil and gas  properties in Louisiana.
Such  funds may be sought  through  the  issuance  of  additional  shares of the
Company's Common Stock or other equity  securities,  through debt financing,  or
through various  arrangements,  including  joint ventures  and/or mergers,  with
third parties. However, the Company currently has no commitments for any type of
funding,  and there is no assurance  that the Company will be able to obtain any
such financing or that such financing, if obtainable, will be on terms necessary
to enable the Company to operate  profitably.  If the Company is unsuccessful in
completing a private type placement, or if additional funds are necessary either
before or after such a  transaction,  it is  uncertain at this time what actions
the Company will take.  Possibilities include other debt or equity financings or
the sale of existing assets.

Competition - Oil and Gas
The oil and gas industry is highly  competitive in all phases.  The Company will
encounter  strong  competition  from other  independent oil and gas companies in
acquiring  economically  desirable prospects as well as in marketing  production
therefrom and obtaining external  financing.  Substantially all of the Company's
competitors  have  financial  resources,  personnel  resources,  and  facilities
substantially greater than those of the Company.

In addition to the uncertainty  surrounding the eventual  development of oil and
gas on the Company's  properties,  the success of any  operation  which might be
conducted is  dependent  upon the price of oil and gas on the domestic and world
markets,  which is  subject to  fluctuations,  in part as a result of actions by
central banks and government policies.

                                    PART II

ITEM 1.  Legal Proceedings.

From time to time the Company is a party to various legal proceedings arising in
the  ordinary  course of business.  The Company is not  currently a party to any
litigation  that  it  believes  could  have a  material  adverse  effect  on the
financial position of the Company.

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

CHANGE IN CONTROL.

There has been a change in the  management of the Company.  On July 3, 1998, Mr.
Jonathan   Roberts   resigned  as   President   and  Director  of  the  Company.
Additionally,  Thomas J. Nieman,  J. Dennis  Bartlett,  Jim Karten and Gordon M.
LeBlanc, Jr., have since resigned their respective positions as directors of the
Company.  James W. McCabe was  appointed as the  President and a Director of the
Company.  Mr.  McCabe has over 20 years of executive  oil and gas  experience in
Texas, Oklahoma, Kansas and Ohio.

On August  6,  1998,  Douglas  Ohlman  was  appointed  chairman  of the Board of
Directors  and David  Naharin was  appointed  as a director.  Mr.  McCabe  holds
2,500,000  shares of the  company's  common stock.  Mr.  Ohlman holds  3,013,248
shares of the company's  common stock.  Mr.  Naharin holds 312,500 shares of the
company's   common  stock.   As  the  percentage   holdings  of  new  management
approximates that of the departing management, the Company does not believe that
a change in control has taken place.  There are no agreements or  understandings
with respect to the voting of the stock held any member of management.

ITEM 6.  Exhibits and Reports on Form 8-K.

During the third  quarter of 1998  ending on  September  30,  1998,  no form 8-K
reports were filed.

SIGNATURES

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

CRONUS CORPORATION
DATE: November 23, 1998 By:

__/s/_________________
James W. McCabe,
President and Director

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