Westland Development Co., Inc.
401 Coors Blvd., N.W.
Albuquerque, New Mexico 87121
Telephone: 505-831-9600
Fax: 505-831-4865

United States Securities and Exchange Commission         
Washington, D.C. 

By Edgar Transmission

Re:  Westland  Development  Co., Inc.,  Commission  File No. 7775,  amendment to
Annual Report to Shareholders as incorporated into the referenced  corporation's
Form 10-KSB for the fiscal year ended June 30, 1998.

Ladies and Gentlemen:

Enclosed for filing on behalf of the above referenced registrant is an amendment
to the financial  statements included in its Annual Report to shareholders which
was  incorporated  by  reference  into its Form 10-KSB for the fiscal year ended
June 30, 1998, and filed as Exhibit 13 to that Form at the time of filing.

This  amendment  is made to add a  footnote  to the  financial  statements  that
discusses  the purchase by the  registrant  of a piece of property  from sellers
that included the registrant's president and her sister.

This additional information will be furnished to each shareholder who previously
was furnished a copy of the registrant's Annual Report to Shareholders.

If  you  have  any  question  regarding  this  amendment,   please  call  me  at
505-831-9600.

Thad H. Turk, Counsel


                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                 FORM 10K-SB/A

ITEM 7: FINANCIAL STATEMENTS

The  financial  statements  were included in the  registrant's  Annual Report to
Shareholders  and  incorporated by reference into this item of the  registrant's
Form 10KSB for the year ended June 30,  1998.  Those  financial  statements  are
being amended by this filing to include the following adition to note M.


ADDITION TO NOTE M - RELATED PARTY TRANSACTIONS

During the year ended June 30, 1998, the Company acquired land from an ownership
group  which  included  a member of the Board of  Directors  and a member of the
Director's  immediate  family.  Under the  sales  agreement,  the  Board  member
received  approximately  $81,000 and the family  member  received  approximately
$49,000.

  
EXHIBIT 13: Annual Report to Shareholders

     
                            FINANCIAL STATEMENTS AND
                             REPORT OF INDEPENDENT
                          CERTIFIED PUBLIC ACCOUNTANTS

                         WESTLAND DEVELOPMENT CO., INC.

                             June 30, 1998 and 1997



               Report of Independent Certified Public Accountants


Stockholders
Westland Development Co., Inc.

We have audited the  accompanying  balance  sheet of Westland  Development  Co.,
Inc., as of June 30, 1998, and the related statements of earnings, stockholders'
equity,  and cash flows for each of the two years in the  period  ended June 30,
1998.  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 audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
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 Westland Development Co., Inc.,
as of June 30, 1998,  and the results of its  operations  and its cash flows for
each of the two years in the  period  ended  June 30,  1998 in  conformity  with
generally accepted accounting principles.



GRANT THORNTON LLP

Oklahoma City, Oklahoma
August 28, 1998



                         Westland Development Co., Inc.

                                 BALANCE SHEET

                                 June 30, 1998


                          ASSETS

Cash and cash equivalents ..........................                 $ 3,209,893

Receivables
   Real estate contracts (note B) ..................   $    59,774
      Less related deferred profit .................        30,306
                                                       -----------
                                                            29,468
   Note receivable - related party (note M) ........        65,601
   Other receivables ...............................        44,080       139,149
                                                       -----------
Land and improvements held for future development
   (notes C and E) .................................                   6,457,473

Income-producing properties, net (notes D and E) ...                   7,058,640

Property and equipment, net of accumulated
   depreciation of $447,768 (note E) ...............                     379,685

Investments in partnerships and joint ventures .....                     229,908

Other assets .......................................                      82,345
                                                                     -----------

                                                                     $17,557,093
                                                                     ===========


      LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable, accrued expenses,
   and other liabilities ...........................                 $   627,274
Deferred income taxes (note F) .....................                   4,527,000
Notes, mortgages, and assessments payable
   (note E) ........................................                   6,196,579
                                                                     -----------

               Total liabilities ...................                  11,350,853

Commitments and contingencies (notes E, K, and L) ..                        --

Stockholders' equity (note G)
   Common stock - no par value; authorized,
      736,668 shares; issued and outstanding,
      716,608 shares ...............................   $     8,500
   Class A common stock - $1 par value; authorized,
      736,668 shares; issued, none .................          --
   Class B common stock - $1 par value; authorized,
      491,112 shares; issued and outstanding,
      86,100 shares ................................        86,100
   Additional paid-in capital ......................       581,527
   Retained earnings ...............................     5,530,113     6,206,240
                                                       -----------   -----------

                                                                     $17,557,093
                                                                     ===========

        The accompanying notes are an integral part of these statements.


                         Westland Development Co., Inc.

                             STATEMENTS OF EARNINGS

                              Year ended June 30,


                                                         1998           1997
                                                     -----------    -----------

Revenues
   Land ..........................................   $ 4,630,523    $ 3,613,620
   Deferred profit recognized on installment sales        20,701         45,560
   Rentals .......................................       697,385        621,171
                                                     -----------    -----------
                                                       5,348,609      4,280,351

Costs and expenses
   Cost of land revenues .........................       449,791        385,553
   Cost of rentals ...............................       169,907        170,589
   Other general, administrative, and operating ..     2,101,493      1,775,739
   Legal .........................................         4,902         11,384
                                                     -----------    -----------
                                                       2,726,093      2,343,265
                                                     -----------    -----------

               Operating income ..................     2,622,516      1,937,086

Other (income) expense
   Interest income ...............................       (99,672)       (71,415)
   Gain on sale of property and equipment ........          (779)        (1,752)
   Other, net ....................................        11,451         36,774
   Interest expense ..............................       631,356        572,508
                                                     -----------    -----------
                                                         542,356        536,115
                                                     -----------    -----------

               Earnings before income taxes ......     2,080,160      1,400,971

Income tax expense (note F) ......................       826,000        605,690
                                                     -----------    -----------

               NET EARNINGS ......................   $ 1,254,160    $   795,281
                                                     ===========    ===========

Weighted average common shares outstanding .......       807,755        802,184
                                                     ===========    ===========

Earnings per common share ........................   $      1.55    $       .99
                                                     ===========    ===========

        The accompanying notes are an integral part of these statements.


                         Westland Development Co., Inc.

                       STATEMENT OF STOCKHOLDERS' EQUITY

                       Years ended June 30, 1998 and 1997

<TABLE>
<CAPTION>
                                                    Class A             Class B
                              Common stock        Common stock        Common stock       Additional
                              no par value        $1 par value        $1 par value        paid-in     Retained
                            -----------------   -----------------   ------------------   
                            Shares     Amount    Shares   Amount     Shares    Amount     capital     earnings         Total
                            -------   -------   -------   -------   -------   --------   ---------   -----------    -----------
<S>                         <C>       <C>       <C>       <C>       <C>       <C>        <C>         <C>            <C>        
Balances at July 1, 1996    716,608   $ 8,500      --     $  --      78,600   $ 78,600   $ 547,702   $ 4,562,828    $ 5,197,630

Net earnings ............      --        --        --        --        --         --          --         795,281        795,281

Options exercised .......      --        --        --        --       7,500      7,500      33,825          --           41,325

Cash dividends paid -
   $.60 per share .......      --        --        --        --        --         --          --        (480,125)      (480,125)

Cash dividends declared
   - $.75 per share .....      --        --        --        --        --         --          --        (602,031)      (602,031)
                            -------   -------   -------   -------   -------   --------   ---------   -----------    -----------

Balances at June 30, 1997   716,608     8,500      --        --      86,100     86,100     581,527     4,275,953      4,952,080

Net earnings ............      --        --        --        --        --         --          --       1,254,160      1,254,160     
                            -------   -------   -------   -------   -------   --------   ---------   -----------    -----------

Balances at June 30, 1998   716,608   $ 8,500      --     $  --      86,100   $ 86,100   $ 581,527   $ 5,530,113    $ 6,206,240
                            =======   =======   =======   =======   =======   ========   =========   ===========    ===========
<FN>
        The accompanying notes are an integral part of these statements.
</FN>
</TABLE>


                         Westland Development Co., Inc.

                            STATEMENTS OF CASH FLOWS

                              Year ended June 30,


                                                        1998           1997
                                                     -----------    -----------

Increase (Decrease) in Cash and Cash Equivalents

Cash flows from operating activities
   Cash received from land sales and collections
      on real estate contracts receivable ........   $ 4,647,316    $ 3,873,634
   Development and closing costs paid ............      (874,634)    (1,226,110)
   Cash received from rental operations ..........       732,254        533,289
   Cash paid for rental operations ...............          (816)       (87,509)
   Cash paid for property taxes ..................       (58,150)       (96,349)
   Interest received .............................       100,866         71,369
   Interest paid .................................      (667,609)      (597,443)
   Income taxes (paid) refunded, net .............        18,274       (262,000)
   Legal and other general and administrative
      costs paid .................................    (1,536,439)    (1,699,509)
   Other .........................................        21,839          1,512
                                                     -----------    -----------
              Net cash provided by
                 operating activities ............     2,382,901        510,884

Cash flows from investing activities
   Capital expenditures ..........................       (60,958)      (938,403)
   (Investments in) distributions from
      partnerships and joint ventures ............         8,588        (18,680)
   Proceeds from sale of assets ..................         3,150          2,173
   Proceeds from sinking fund ....................          --          410,024
   Proceeds from note receivable - related party .         2,402          2,173
                                                     -----------    -----------
              Net cash used in
                 investing activities ............       (46,818)      (542,713)

Cash flows from financing activities
        Borrowings on notes, mortgages,
           and assessments payable ...............       132,063      2,538,056
        Repayments of notes, mortgages,
           and assessments payable ...............      (987,372)    (1,920,035)
        Stock options exercised ..................          --           41,325
        Payment of dividends .....................      (602,031)      (480,125)
                                                     -----------    -----------
              Net cash provided by (used in)
                 financing activities ............    (1,457,340)       179,221
                                                     -----------    -----------
              NET INCREASE IN CASH AND
                 CASH EQUIVALENTS ................       878,743        147,392

Cash and cash equivalents at beginning of year ...     2,331,150      2,183,758
                                                     -----------    -----------

Cash and cash equivalents at end of year .........   $ 3,209,893    $ 2,331,150
                                                     ===========    ===========


Reconciliation of Net Earnings to Net Cash Provided by Operating Activities

Net earnings .....................................   $ 1,254,160    $   795,281
Adjustments to reconcile net earnings to
   net cash provided by
   operating activities
      Depreciation ...............................       221,879        215,433
      Loss on partnerships and joint ventures ....        33,289         36,534
      Gain on sale of property and equipment .....          (779)        (1,752)
      Collections on real estate
         contracts receivable ....................         9,259        294,627
      Profit recognized on installment sales .....       (20,701)       (45,560)
      Deferred income taxes ......................       517,000        777,000
      Change in
          Income taxes recoverable/payable .......       327,274       (433,310)
          Other receivables ......................       105,163        (98,693)
          Land and improvements held
             for future development ..............      (424,843)      (840,557)
          Other assets ...........................       130,632        (67,191)
          Accounts payable, accrued expenses,
             and other liabilities ...............       266,821        (95,993)
          Accrued interest payable ...............       (36,253)       (24,935)
                                                     -----------    -----------
              Net cash provided by
                 operating activities ............   $ 2,382,901    $   510,884
                                                     ===========    ===========

Noncash investing and financing activities:
-------------------------------------------

At June 30, 1997, declared but unpaid dividends totaled $602,031.

       The accompanying notes are an integral part of these statements.


                         Westland Development Co., Inc.

                         NOTES TO FINANCIAL STATEMENTS

                             June 30, 1998 and 1997


NOTE A - NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES

   1.   History of Company and Beginning Basis of Financial Reporting
        -------------------------------------------------------------

   In 1892, the  descendants of the owners of a land grant deeded in 1692 by the
   Kingdom of Spain became  incorporators of a land grant corporation named Town
   of  Atrisco.  Ownership  of the Town of  Atrisco  was based on  proportionate
   ownership of the land grant. In 1967, the Town of Atrisco was reorganized and
   became Westland Development Co., Inc. (the Company), with the heirs receiving
   shares in the Company in proportion to their ancestors' interests in the Town
   of  Atrisco  corporation.   The  net  assets  of  $232,582  at  the  date  of
   reorganization were assigned as follows:

      Value of no par common stock as stated
         in the Articles of Incorporation               $   8,500
      Additional paid-in capital                          224,082
                                                        ---------
                                                        $ 232,582
                                                        =========

   The Company estimated that it owned approximately 49,000 acres of land at the
   date of incorporation as Westland Development Co., Inc. Such acreage was used
   as the beginning cost basis for financial  reporting  purposes and was valued
   at $127,400  ($2.60 per acre) based on an appraisal in 1973 which  determined
   the approximate  value of the land in 1907. This date  approximates  the date
   that the Patent of Confirmation covering the land comprising the Atrisco Land
   Grant was given to the Town of Atrisco by the United States of America. Since
   the date of the Patent of Confirmation,  the Company's  acreage has increased
   in market value, but a full determination of such value has not been made.

   2.   Nature of Operations
        --------------------

   The Company  develops,  sells, or leases its land holdings,  all of which are
   located near Albuquerque,  New Mexico.  The Company may use joint ventures or
   participation in limited partnerships to accomplish these activities. Revenue
   sources  for the years  ended June 30,  1998 and 1997  consist  primarily  of
   proceeds  from land sales and  rentals  from  developed  properties,  such as
   single-tenant  retail  stores and office  space.  Land sales are primarily to
   commercial  developers  and  others  in  the  Albuquerque  area  and  certain
   governmental  agencies,  and the terms of sale include both cash and internal
   financing  by the Company.  Such sales are  collateralized  by the land.  The
   Company has relied primarily upon cash land sales over the past several years
   due to the collection risk associated with real estate contracts.

   3.   Cash and Cash Equivalents
        -------------------------

   Cash and cash equivalents are considered to include highly liquid investments
   with  maturities of three months or less and money market funds.  At June 30,
   1998,  United States Treasury Bills of approximately  $2,248,000 are included
   in cash and cash equivalents.

   The Company  maintains its cash in bank deposit accounts which, at times, may
   exceed  federally  insured  limits and in certain  other  funds which are not
   federally  insured.  The  Company  has not  experienced  any  losses  in such
   accounts  and  believes it is not exposed to any  significant  credit risk on
   cash and cash equivalents.

   4.   Land and Improvements Held for Future Development
        -------------------------------------------------

   Land and improvements held for future development are recorded at cost not to
   exceed net  realizable  value.  Improvements  consist of abstracts,  surveys,
   legal fees, master and sector plans, infrastructure  improvements,  and other
   costs  related to land held by the Company  which are allocated to respective
   tracts primarily by specific identification of costs.

   5.   Income-Producing Properties and Property and Equipment
        ------------------------------------------------------

   Income-producing  properties  and property and  equipment are stated at cost,
   less accumulated  depreciation,  computed on a straight-line basis over their
   estimated  lives of three to thirty years.  The cost of the building in which
   the Company has its offices, a portion of which is rented to others, has been
   allocated to property and equipment  and  income-producing  properties  based
   upon square footage.

   6.   Recognition of Income on Real Estate Transactions
        -------------------------------------------------

   The  Company  recognizes  the  entire  gross  profit on sales  where the down
   payment is sufficient to meet the requirements  for the full-accrual  method.
   Transactions   where  the  down  payment  is  not   sufficient  to  meet  the
   requirements  for the  full-accrual  method are recorded using the deposit or
   installment method.  Under the deposit method, cash received is recorded as a
   deposit on land sale. Under the installment  method,  the Company records the
   entire  contract  price and the related costs at the time the  transaction is
   recognized as a sale. Concurrently,  the gross profit on the sale is deferred
   and is  subsequently  recognized as revenue in the  statements of earnings as
   payments of principal are received on the related contract receivable.

   7.   Income Taxes
        ------------

   Deferred  income  tax  assets  or  liabilities  are  determined  based on the
   difference  between  financial  statement and tax bases of certain assets and
   liabilities  as  measured  by the  enacted  tax  rates in  effect  using  the
   liability method.

   8.   Earnings Per Common Share
        -------------------------

   Earnings  per common  share are based  upon the  weighted  average  number of
   common  shares  outstanding  during the year,  including the number of no par
   value  common  shares  which  may be issued in  connection  with  eliminating
   fractional shares (which resulted from the determination made by the Court in
   the heirship case) and the number of no par value common shares for which the
   Court  ruled  that no  incorporator  or heirs  existed.  The  Company  has no
   potential common stock items.

   9.   Investments in Partnerships and Joint Ventures
        ----------------------------------------------

   Investments  in  partnerships  and joint  ventures are  accounted  for on the
   equity method.

   10.  Use of Estimates
        ----------------

   In preparing  financial  statements in  conformity  with  generally  accepted
   accounting   principles,   management  is  required  to  make  estimates  and
   assumptions   that  affect   certain   reported   amounts  and   disclosures;
   accordingly, actual results could differ from those estimates.

   11.  Long-Lived Assets
        -----------------

   Long-lived assets to be held and used are reviewed for impairment,  generally
   on a property-by-property  basis, whenever events or changes in circumstances
   indicate  that the  related  carrying  amount  may not be  recoverable.  When
   required,  impairment  losses are  recognized  based upon the estimated  fair
   value of the asset.

NOTE B - REAL ESTATE CONTRACTS RECEIVABLE

   Real estate contracts receivable are summarized as follows at June 30, 1998:

        Contracts, due in varying monthly installments, with 
        interest rates ranging from 10% to 12%; 
        collateralized by land                                   $  59,774
                                                                 =========

   Principal collections due on the real estate contracts receivable 
      for the years ending June 30 are as follows:

                    1999                        $  35,774
                    2000                            4,393
                    2001                            4,829
                    2002                            5,308
                    2003                            9,470
                                                ---------
                                                $  59,774
                                                =========

NOTE C - LAND AND IMPROVEMENTS HELD FOR FUTURE DEVELOPMENT

   The Company  estimates  that it  presently  owns in excess of 59,000 acres of
   land,  primarily  including land located within the boundaries of the Town of
   Atrisco Land Grant and land located  elsewhere which the Company has acquired
   since  incorporation.  Plans for ultimate  development of the properties have
   not been finalized.

   Land and improvements consist of the following at June 30, 1998:

      Land                                        $1,060,226
      Improvements                                 5,397,247
                                                  ----------

                                                  $6,457,473
                                                  ==========

NOTE D - INCOME-PRODUCING PROPERTIES

   Income-producing  properties  consist  of three  single-tenant  retail  store
   buildings and one-half of the Company's office building and are summarized as
   follows at June 30, 1998:

       Buildings and equipment                         $5,082,882
          Less accumulated depreciation                   523,275
                                                       ----------
                                                        4,559,607
       Land                                             2,499,033
                                                       ----------

                                                       $7,058,640
                                                       ==========

   The  Company's  rentals  from  income-producing  properties  are  principally
   obtained  from  tenants   through  rental  payments  as  provided  for  under
   noncancelable  operating  leases.  The lease  terms  range from one to twenty
   years and typically provide for guaranteed minimum rent, percentage rent, and
   other charges to cover certain operating costs.

   Minimum  future  rentals from  income-producing  properties on  noncancelable
   tenant operating leases as of June 30, 1998 are as follows:

             Year ending June 30
                1999                      $   757,190
                2000                          670,740
                2001                          664,353
                2002                          665,669
                2003                          669,379
                Thereafter                  7,247,183
                                          -----------

                                          $10,674,514
                                          ===========

NOTE E - NOTES, MORTGAGES, AND ASSESSMENTS PAYABLE

   Notes,  mortgages,  and assessments payable are summarized as follows at June
   30, 1998:

        Promissory  note,  due in  monthly  installments  of
        $17,970  through  May 2015,  including  interest  at
        9.37%; collateralized by income-producing properties        $1,826,831

        Note payable,  due in monthly installments of $6,893
        through September 2015, including interest at 8.75%;
        collateralized   by   income-producing    properties           733,676

        Note  payable  to  bank;  due on  demand,  but if no
        demand  is  made,  then on  August  29,  1998,  with
        interest at 9.5%;  collateralized  primarily by real
        estate                                                         506,484

        Note payable to bank; due in monthly installments of
        $6,701  with any unpaid  amounts  due May 14,  1999,
        interest at 9.5%;  collateralized  primarily by real
        estate                                                         326,657

        Mortgage  note,  due  in  monthly   installments  of
        $24,682,  including  interest at 8.52%, due November
        1,   2016;    collateralized   by   income-producing
        properties                                                   2,748,443

        Other notes, mortgages, and assessments payable                 54,488
                                                                    ----------

                                                                    $6,196,579
                                                                    ==========

   The  Company  maintains  a line of credit  with a bank due in June 1999 which
   provides  a maximum of  $2,000,000  at the  bank's  prime  rate of  interest,
   payable quarterly,  and is collateralized by specific tracts of land. At June
   30, 1998, no amounts were outstanding on this line of credit.

   Also, at June 30, 1998, the Company had approximately  $19,000 of outstanding
   letters of credit to the City of Albuquerque in connection  with  subdivision
   improvements done for the Company.

   Aggregate  required  principal   payments  of  the  notes,   mortgages,   and
   assessments payable as of June 30, 1998 are as follows:

             Year ending June 30
                1999                                    $   994,693
                2000                                        157,212
                2001                                        160,767
                2002                                        172,391
                2003                                        185,340
                Thereafter                                4,526,176
                                                        -----------

                                                        $ 6,196,579
                                                        ===========
NOTE F - INCOME TAXES

   An analysis of the deferred  income tax assets and liabilities as of June 30,
   1998 is as follows:

Deferred tax assets
   Contribution carryforwards ..............................        $    89,004
   Property, equipment, and land ...........................            291,555
   Investments .............................................             35,888
   Other ...................................................            100,913
   Valuation allowance .....................................            (89,000)
                                                                    -----------
                                                                        428,360

Deferred tax liabilities
   Deferred tax gain on involuntary
      conversion of land ...................................          4,955,360
                                                                    -----------
                Net deferred tax liability .................        $ 4,527,000
                                                                    ===========

   Income tax expense (benefit) consists of the following:

                                                      Year ended June 30,
                                                  1998                  1997
                                                ---------             ---------

      Current
         Federal ...................            $ 289,242             $(156,043)
         State .....................               19,758               (15,267)
                                                ---------             ---------
                                                  309,000              (171,310)

      Deferred
         Federal ...................              439,000               660,450
         State .....................               78,000               116,550
                                                ---------             ---------
                                                  517,000               777,000
                                                ---------             ---------

                                                $ 826,000             $ 605,690
                                                =========             =========

   The income tax provision is reconciled to the tax computed at statutory rates
   as follows:

                                                             June 30,
                                                       1998            1997

      Tax expense at statutory rates .............     $ 707,000      $ 476,330
      State income taxes at statutory rates ......        97,000         84,058
      Change in valuation allowance ..............      (151,000)        19,382
      Nondeductible expenses .....................        23,000         36,904
      Expiration of contribution carryforwards ...       104,000           --
      Other ......................................        46,000        (10,984)
                                                       ---------      ---------

         Total expense ...........................     $ 826,000      $ 605,690
                                                       =========      =========

   A valuation  allowance of  approximately  $89,000 has been recognized at June
   30, 1998 based on estimates of tax assets which are not likely to be realized
   in the future.  Significant changes in assumptions  concerning future taxable
   income and deductions may cause changes in the valuation allowance.

NOTE G - COMMON STOCK

   Under its  Articles  of  Incorporation,  the Company is  authorized  to issue
   1,964,448 shares of common stock classified as follows:

   (a)736,668 shares of no par value common stock to represent  $8,500 estimated
      value of land held by the Town of Atrisco;

   (b)736,668  shares  to be sold for $1.45 a share,  designated  as Class A, $1
      par  value  common  stock.  Class  A  stock  is to be  sold  only  to  the
      stockholders of record as of the date of incorporation as follows:

          At the first sale of such stock, each stockholder shall have the right
          to purchase up to the number of shares  obtained by dividing the total
          number of  stockholders  of record on the date of  incorporation  into
          736,668 shares.

          Any  stock  remaining   unpurchased  shall  be  offered  for  sale  at
          subsequent sales, and only subsequent sale, each one being entitled to
          purchase  up to the  number of shares  obtained  by  stockholders  who
          purchased  stock at a preceding  sale shall have the right to purchase
          stock at a dividing  the total  number of  stockholders  of record who
          purchased at the preceding  sale into the total number of  unpurchased
          shares remaining after the preceding sale.

   (c)491,112  shares  to be sold for a price to be  determined  by the Board of
      Directors,  designated  as  Class  B, $1 par  value  common  stock.  Those
      acquiring no par value common stock and Class A, $1 par value common stock
      have no preemptive rights to purchase Class B, $1 par value common st ock.

   The following  summarizes,  at June 30, 1998,  the number of shares of common
   stock which,  upon judicial  determination,  can be  distributed  (no par) or
   offered  for sale  (Class  A) to  stockholders  of  record  as of the date of
   incorporation:

                                                                  Price
                                                 Number     -------------------
                                                  of         Per
                                                 shares     share       Total
                                               ----------   ------   ----------

      Shares issuable
         No par value common ........               5,047   $  --    $     --
         Class A, $1 par value common             736,668     1.45    1,068,169
                                               ----------   ------   ----------

                                                  741,715      --    $1,068,169
                                               ==========   ======   ==========

   There is no established  market value for the Company's common stock. At June
   30,  1998,  716,608  shares of the  Company's  no par value common stock were
   issued and  outstanding.  Of the 5,047  shares of no par value  common  stock
   issuable,   1,872  shares  may  be  issued  in  connection  with  eliminating
   fractional shares which resulted from the determinations made by the Court in
   the heirship  case and 3,175 shares  represent  shares for which the Court in
   the heirship case ruled that no  incorporator  or heirs existed.  The Company
   also has reacquired  and canceled  15,013 shares of no par value common stock
   which have been constructively  retired.  These shares have not been formally
   retired  and, as such,  may be issuable to  stockholders  of record as of the
   date of incorporation.

   The Company had a stock option plan for certain directors and employees which
   was  terminated in 1987.  Options under this plan for 7,500 shares of Class B
   common stock were exercised during 1997 and all remaining unexercised options
   expired in December 1996.

NOTE H - SEGMENT INFORMATION

   The Company operates primarily in two industry segments. They are as follows:

      Land  -   Operations involve  the  development  and sale of  tracts,  both
                residential and commercial. In addition, included are incidental
                revenues from leasing of grazing rights.

      Rentals - Operations involve rentals from three single-tenant retail store
                buildings and one-half of the Company's office building.
  
   Financial information for each industry segment is summarized as follows:

                                                        General
                             Land         Rentals      corporate        Total
                          -----------   -----------   ------------   -----------
   1998
   Revenues ...........   $ 4,651,224   $   697,385   $      --      $ 5,348,609
   Operating income
      (expense) .......     3,547,773       433,945    (1,359,202)     2,622,516
   Identifiable assets      6,552,542     7,277,962     3,726,589     17,557,093
   Capital expenditures          --             972        59,986         60,958
   Depreciation .......          --         169,091        52,788        221,879

   1997
   Revenues ...........   $ 3,659,180   $   621,171   $      --      $ 4,280,351
   Operating income
      (expense) .......     2,697,194       355,852    (1,115,960)     1,937,086
   Identifiable assets      6,151,103     7,555,231     3,134,098     16,840,432
   Capital expenditures          --         907,158        31,245        938,403
   Depreciation .......          --         163,369        52,064        215,433

   General corporate assets consist primarily of cash, furniture, equipment, and
   one-half of an office building,  of which the remaining  one-half is included
   in income-producing properties.

NOTE I - BENEFIT PLANS

   The  Company has  certain  defined  benefit  employee  retirement  plans that
   provide for employee and employer  contributions.  The Company's contribution
   expense  for  these  plans  was  $89,000  and  $74,000  for  1998  and  1997,
   respectively.

NOTE J - SALES TO MAJOR CUSTOMERS

   Sales to major customers are summarized as follows:

      During the year ended June 30, 1998,  sales to two customers  individually
      accounted for 28% and 13% of total revenues.

      During the year ended June 30, 1997,  sales to two customers  individually
      accounted for 47% and 21% of total revenues.

NOTE K - SALE OF LAND FOR NATIONAL PARK

   On June 28, 1990, the Petroglyph  National Monument  (National  Monument) was
   established  by an act of the United States  Congress  (Congress).  Under the
   bill passed by Congress,  the National  Park Service is authorized to acquire
   acreage within the National  Monument using funds  specifically app ropriated
   by Congress each year. In 1998,  approximately  85 acres were  transferred to
   the National Park Service for cash of  $1,500,000.  The  Company's  remaining
   land within the  National  Monument  boundary of  approximately  362 acres is
   expected to be sold in a series of transactions over the next several years.

NOTE L - LITIGATION

   The Company is engaged in various  lawsuits  either as plaintiff or defendant
   which have arisen in the  conduct of its  business  which,  in the opinion of
   management, based upon advice of counsel, would not have a material effect on
   the Company's financial position.

NOTE M - RELATED PARTY TRANSACTIONS

   The Company  purchases  its  directors'  and  officers'  liability  insurance
   through a corporation controlled by a member of the Board of Directors. Total
   premiums for these policies paid in 1998 and 1997 were $50,000 each year.

   The note  receivable  - related  party is from a joint  venture  partner,  is
   payable in monthly  installments  of $758  including  interest at 10%, and is
   collateralized by developed property. The note matures April 2006.

   During  the year ended  June 30,  1998,  the  Company  acquired  land from an
   ownership  group  which  included  a member of the Board of  Directors  and a
   member of the Director's  immediate  family.  Under the sales agreement,  the
   Board member  received  approximately  $81,000 and the family member received
   approximately $49,000.

NOTE N - FINANCIAL INSTRUMENTS

   The following  table includes  various  estimated  fair value  information as
   required by  Statement  of  Financial  Accounting  Standards  (SFAS) No. 107,
   Disclosures  about Fair Value of  Financial  Instruments.  Such  information,
   which  pertains to the  Company's  financial  instruments,  is based on the r
   equirements  set forth in SFAS No. 107 and does not purport to represent  the
   aggregate  net fair value of the Company.  The carrying  amounts in the table
   are the  amounts  at which the  financial  instruments  are  reported  in the
   financial statements.

   All of the Company's  financial  instruments are held for purposes other than
   trading.

   The following methods and assumptions were used to estimate the fair value of
   each class of financial instruments:

   1.   Cash and Cash Equivalents
        -------------------------

   The carrying  amount  approximates  fair value because either the Company has
   the  contractual  right to  receive  immediate  payment  or  because of short
   maturities.

   2.   Real Estate Contracts Receivable
        --------------------------------

   These notes receivable are generally collateralized by real estate and accrue
   interest at rates from 10% to 12%.  Because the  ultimate  collectibility  of
   these notes is not reasonably assured, it is not practicable to estimate fair
   value.

   3.   Other Notes Receivable
        ----------------------

   Other notes  receivable  are valued at the present value of future cash flows
   based on the current  rates at which similar loans would be made to borrowers
   with similar credit ratings.

   4.   Notes, Mortgages, and Assessments Payable
        -----------------------------------------

   The  discounted  amount of future  cash  flows  using the  Company's  current
   incremental  rate of borrowing  for similar  liabilities  is used to estimate
   fair value.

   The carrying  amounts and estimated  fair values of the  Company's  financial
   instruments at June 30, 1998 are as follows:

          Carrying       Estimated
           amount         fair value

      Financial assets
         Cash and cash equivalents ...........       $3,209,893       $3,209,893
         Real estate contracts receivable
            (not practicable to estimate
            fair value) ......................           29,468             --
         Other notes receivable ..............           65,601           65,601
      Financial liabilities
         Notes, mortgages, and assessments
            payable ..........................        6,196,579        6,642,000

NOTE O - SUBSEQUENT EVENT

   On July 31,  1998,  the  Company  declared  a  dividend  of $1 per  share for
   stockholders  of record as of August 10,  1998.  The  dividend  is payable on
   September 1, 1998.