U.S. SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

                                   FORM 10-KSB

[X]     ANNUAL REPORT UNDER SECTION 13 OR 15 OF THE SECURITIES EXCHANGE ACT 
        OF 1934

For the fiscal year ended June 30, 1998    Commission file number:  0-15992

[ ]     TRANSITION REPORT UNDER SECTION 13 OR 15 OF THE SECURITIES EXCHANGE
        ACT OF 1934

                                OTC AMERICA, INC.
                    (Name of small business issuer in its charter)

                                    COLORADO
           (State or Other Jurisdiction of Incorporation or Organization)

                                   84-1031311
                       (I.R.S. Employer Identification No.)

1582 South Parker Road, Suite 203 Denver, Colorado            80231
(Address of Principal Executive Office)                   (Zip Code)

Issuer's telephone number:  (303) 755-0165

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities 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  X    No      

Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment.  [   ]

State issuer's revenues for its most recent fiscal year:     $-0-

The aggregate market value of the voting stock held by non-affiliates
(41,784,157 shares of $.0001 par value Common Stock) was $104,460 as of June
30, 1998.  The stock price for computation purposes was $.0025, based on the
closing sale price for the Registrant's Common Stock on NASDAQ Bulletin Board
on June 30, 1998.  This value is not intended to be a representation as to the
value or worth of the Registrant's shares of Common Stock.   The number of
shares of non-affiliates of the Registrant has been calculated by subtracting
shares held by persons affiliated with the Registrant from outstanding shares. 
The number of shares outstanding of the Registrant's Common Stock as of the
latest practicable date, October 12, 1998, was 150,000,000 shares.

OTC AMERICA, INC.

INDEX TO ANNUAL REPORT
ON FORM 10-KSB

                                                                Page

PART I

     Item 1.     DESCRIPTION OF BUSINESS                           3

     Item 2.     DESCRIPTION OF PROPERTIES                         7

     Item 3.     LEGAL PROCEEDINGS                                 7

     Item 4.     SUBMISSION OF MATTERS TO A 
                 VOTE OF SECURITY HOLDER                           7

PART II

     Item 5.      MARKET FOR THE COMPANY'S 
                  COMMON EQUITY AND RELATED
                  STOCKHOLDER MATTERS                             7

     Item 6.      MANAGEMENT'S DISCUSSION AND 
                  ANALYSIS OR PLAN OF OPERATION                   8

     Item 7.      FINANCIAL STATEMENTS                            8

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

PART III

     Item 9.      DIRECTORS, EXECUTIVE OFFICERS, 
                  PROMOTERS AND CONTROL PERSONS 
                  - COMPLIANCE WITH SECTION 16(a) 
                  OF THE EXCHANGE ACT                             9

     Item 10.     EXECUTIVE COMPENSATION                         10

     Item 11.     SECURITY OWNERSHIP OF CERTAIN 
                  BENEFICIAL OWNERS AND
                  MANAGEMENT                                     10

     Item 12.     CERTAIN RELATIONSHIPS AND 
                  RELATED TRANSACTIONS                           11

     Item 13.     EXHIBITS AND REPORTS ON FORM 8-K               12



PART I

     The matters addressed in this report on Form 10-KSB, with the exception
of the historical information presented, contain forward-looking statements
involving risks and uncertainties.  The Company's actual results could differ
materially from those anticipated in these forward-looking statements as a
result of certain factors, including those set forth under the heading
"Certain Factors That May Affect Future Results" in the Business section (Item
1) and elsewhere in this report.

Item 1.  DESCRIPTION OF BUSINESS

     (a)     General Development of Business

     OTC America, Inc. (the "Company" or the "Registrant"), is a Colorado
corporation.  The principal business address is 1582 South Parker Road, Suite
203 Denver, Colorado 80231. Its phone number is (303) 755-0165.

     The Company was originally incorporated under the laws of the State of
Colorado on June 13, 1986 for the primary purpose of providing management and
business consulting services to start-up and development stage entities.  In
November, 1987, the Company acquired used printing equipment and started a
printing business under the name American Printing. In February 1989, the
Company discontinued all operations, recorded a net gain on disposal of those
operations totaling $18,371, and became an inactive shell company. The
Company has had no operations since 1989.

     On November 11, 1997, the Company's sole director acquired 6,705,137 of
the Company's common shares, approximately 13.8% of the Company's outstanding
shares from its former director.  In connection with the Letter Agreement, L.
Thomas Tarantelli ("Tarantelli") appointed Randy Phillips ("Phillips") as a
director and Chief Executive Officer of the Company and resigned as a director
and officer.  At present Phillips is the sole director and officer of the
registrant.


     (b)     Narrative Description of the Business

     General

     The Company's current operations consist solely of seeking merger
candidates.

     Present Business

     Registrant believes that the management of a suitable target company
entering a merger transaction with registrant will benefit by eliminating
certain costs and uncertainties which registrant believes are associated with
conducting an Initial Public Offering through an underwriter.

     Management believes the Registrant will offer owners of potential merger
or acquisition candidates the opportunity to acquire a controlling interest in
a public company at substantially less cost than is required to conduct an
initial public offering.  The target company may, however, incur significant
post merger registration costs in the event target company shareholders wish
to offer a portion of their shares for subsequent sale in a secondary public
offering.

     Registrant also believes target company shareholders may benefit in
obtaining a greater ownership percentage in the Registrant remaining after a
merger or acquisition than may be the case in the event a target company
offered its shares directly for sale to the public.  Nevertheless, Management
of the Registrant has not conducted market research and is not aware of
statistical data which would support the perceived benefits of a merger or
acquisition transaction for target company shareholders.

     Further, while target company shareholders will receive "restricted
securities" in any merger or acquisition transaction, those restricted
securities will represent, if a trading market again develops for the
Registrant's Common Stock, ownership in a "publicly traded" as opposed to a
"privately held" company.  Registrant believes that shares in a publicly
traded company can carry an increased value, are more liquid and are in some
instances may be accepted by sellers as payment for additional assets or
businesses that Registrant may wish to acquire.

     Plan of Operation

     Management contemplates that the Registrant will seek to merge with or
acquire a target company with either assets or earnings, or both, and that
preliminary evaluations undertaken by an affiliate of the Registrant may
assist in identifying possible target companies.  The Registrant has not
established a specific level of earnings or assets below which Registrant
would not consider a merger or acquisition with a target company.  Moreover,
management may identify a target company which has in the past, is now, or
which may in the future generate losses or experience balance sheet weakness. 
A material adverse effect on the price of the Registrant's Common Stock could
result from a merger transaction between the Registrant and a company that
possesses less than ideal financial characteristics; however, there is no
assurance that Registrant will not consummate a merger with a financially
challenged or troubled company.

     Plan of Acquisition

     Registrant plans to continue to follow a systematic approach to identify
its most suitable candidate.  First management plans to identify any number of
preliminary prospects which may be brought to the attention of management
through present associations.  Management will apply certain of its broad
criteria to the prospects to determine whether or not the prospects are in an
industry and/or geographic location that appears promising and whether or not
the prospects themselves have potential at their location within their own
industry.  During this initial screening process, management will ask and
receive answers to questions framed to provide appropriate threshold
information, depending upon the nature of the prospect's business.  Such
evaluation is not expected to be an in-depth analysis of the target company's
operations, although it will encompass a look at most, if not all, of the same
areas to be examined once one or more target companies are selected for in-
depth review.  For instance, at this stage, management may look at a
prospect's unaudited balance sheet.  Once a prospect is selected for an in-
depth review, management may review the prospect's audited financial
statements, if any.  Nevertheless, management anticipates this evaluation will
entail a broad overview of the business of the target company and should allow
a large percentage of preliminary prospects to be eliminated from further
consideration.

     Negotiations with target company management will be expected to focus on
the percentage of the Company, as computed following a merger or acquisition,
which target company shareholders would receive for their share holdings in
the target company.  Depending upon, among other things, the target company's
assets and liabilities, the Registrant's shareholders will in all likelihood
hold a substantially smaller ownership interest in the Registrant following
any merger or acquisition.  The percentage ownership of Registrant's existing
shareholders may be subject to very significant reduction in the event the
Registrant acquires a target company with substantial assets.  Any merger or
acquisition effected by the Registrant can be expected to have a large
dilutive effect on the percentage of shares held by the Registrant's
shareholders.

     Current management would clearly not control the surviving company
following such a dilution and would not be in a position to demand an active
participation and therefore would not participate unless invited to do so. 
Management of Registrant does not intend to force an active participation in
the affairs of the acquired company.  Management will evaluate any opportunity
offered such that the merger may be completed.  Management will, in all
likelihood, be requested to relinquish any voting control it may exercise
prior to a merger to the present management of the business which is acquired.

     Management cannot commit at this time as to whether a shareholder will
have the right to vote to complete the merger or acquisition as the nature of
the transaction, and the needs of the candidate will dictate the legal
requirement of the transaction.  If a shareholder vote is required, it will be
subject to Proxy Rules promulgated by the SEC.  Management has in the past
fully complied with SEC rules and it is the present intention of management to
do so in the future.  Management will make all reports, if any, filed with
federal and state authorities available to its shareholders upon reasonable
request.

     In connection with the acquisition by Registrant of a private business,
Registrant may not obtain an independent appraisal of the value of the
acquired business.  Such omission by Registrant could result in over valuation
or other related errors which then could adversely effect the quantity and
terms of any shares issued and/or other consideration paid by Registrant for
the private business.  It is possible that an existing shareholder's future
share value would be adversely effected by factors including but not limited
to excess dilution, and lack of market for shares. 

     Registrant is authorized to issue 20,000,000 Preferred Shares and
150,000,000 Common Shares.  On October 12, 1998 Registrant had outstanding no
Preferred Shares and 150,000,000 Common Shares.  Pursuant to majority
shareholder approval (anticipated October 27, 1998), the Registrant will
effect a 1 for 100 reverse split of the outstanding common shares, resulting
in total shares outstanding of 1,500,000.  After the reverse split, management
believes that the Registrant will have adequate authorized shares which the
directors may consider for issuance for services or to acquire a private
business.  At such time as the Company considers a proposal to acquire a
private business, it will be able to make available a large percentage of the
Company for control by the owners of the private company acquired.

     Management may use its shares as compensation for services rendered to it
by its management, directors, insiders, affiliates or others.

     Competition

     The Registrant is and will remain an insignificant participant among the
firms which engage in mergers with and acquisitions of privately financed
entities.  There are many established venture capital and financial concerns
which have significantly greater financial and personnel resources and
technical expertise than the Registrant.  The combined financial resources and
management availability of Registrant and Registrant's affiliate are limited
and therefore the Registrant may experience certain competitive disadvantages
compared to Registrant's competitors.  There is no assurance that such
disadvantages, if experienced, will not prevent or substantially delay
Registrant in achieving a merger or acquisition.

     Regulation and Taxation

     The Registrant could be subject to regulation under the Investment
Company Act of 1940 in the event the Registrant obtains and continues to hold
a minority interest in a number of entities.  However, management intends to
seek at most one or two mergers or acquisitions and management's plan of
operation is based upon the Registrant obtaining a controlling interest in any
merger or acquisition target company and, accordingly, the Registrant may be
required to discontinue any prospective merger or acquisition of any company
in-which a controlling interest will not be obtained.

     The Registrant could be required to register under the Investment Company
Act of 1940 in the event the Registrant comes within the definition of an
Investment Company contained in the Act due to its assets consisting
principally of share holdings held in a number of subsidiaries.  Management
intends to seek at most one or two mergers or acquisitions, which transactions
will result in Registrant holding only majority interest in subsidiaries.

     Any securities which Registrant acquires in exchange for its Common Stock
will be "restricted securities" within the meaning of the Securities Act of
1933 (the "l933 Act").  If the Registrant elected to resell such securities,
such sale could not proceed unless a registration statement had been declared
effective by the Securities and Exchange Commission or an exemption from
registration was available.  Section 4(2) of the 1933 Act, which exempts sales
of securities not involving any public offering, would in all likelihood be
available since it is likely that any such sale would be a block sale to a
private investor to raise additional capital.  Although management's plan of
operation does not contemplate resale of securities acquired, in the event
such a sale were necessary, the Registrant would be required to comply with
the provisions of the 1933 Act.

     The Registrant intends to structure a merger or acquisition in such a
manner as to minimize federal and state tax consequences to the Registrant and
the target company.  In the course of any merger or acquisition the Registrant
may undertake, a substantial amount of attention will be focused upon federal
and state tax consequences to both the Registrant and the "Target" company. 
Presently, under the provisions of federal and various state tax laws, a
qualified reorganization between business entities will generally result in
tax-free treatment to the parties of the reorganization.  This generally
requires the company to acquire at least 80% of the combined voting power of
shares of all classes of stock in exchange for voting stock.

     While the Registrant expects to undertake any merger or acquisition so as
to minimize federal and state tax consequences to both the Registrant and the
target company, there is no assurance that such business combination will meet
the statutory requirements of a reorganization or that the parties will obtain
the intended tax-free treatment upon a transfer of stock or assets.  A non
qualifying reorganization could result in the imposition of both federal and
state taxes which may have a substantial adverse effect on the Registrant. 
Further, there is no assurance of the minimization of federal and state taxes
which may have a substantial adverse effect on the Registrant.

     Further, there is no assurance federal and state tax laws may not be
amended in the foreseeable future to preclude the Registrant, as well as
others, from availing itself of the tax-free treatment presently afforded
business entities engaged in mergers and acquisitions.

     As of this date no arrangements for merger or acquisition have been made.

     (c)     Employees

     The Company does not have any employees.

     (d)     Proprietary Information

     The Company has no proprietary information.

     (e)     Government Regulation

     The Company is not subject to any material governmental regulation or
     approvals.

     (f)     Research and Development

     The Company has not spent any amount in research and development
     activities.

     (g)     Environmental Compliance

     At the present time, the Company is not subject to any material costs for
     compliance with any environmental laws.

     (h)     Subsequent Event

    On September 22, 1998, the board approved issuance of 101,310,706 common
shares to the sole officer and director, Randy Phillips, as payment for
expenses paid by Mr. Phillips on behalf of the Registrant totaling
approximately $50,000. The board also approved the sale of 200,000 common
shares to Wathne Pierce & Associates in exchange for $200.  These transactions
resulted in all 150,000,000 authorized common shares to be considered issued
and outstanding.

Item 2.  DESCRIPTION OF PROPERTY

The Company's business office is located at 1582 South Parker Road, Suite 203,
Denver, Colorado  80231, for which commencing January 1, 1998 it pays $600 per
month in rent. The offices are leased by the Company's sole officer and
director,
Randy Phillips.

Item 3.  LEGAL PROCEEDINGS

     No legal proceedings of a material nature to which the Company is a party
were pending during the reporting period, and the Company knows of no legal
proceedings of a material nature,  pending or threatened,  or judgments
entered against any director or officer of the Company in his capacity as
such.

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

     The Company did not submit any matter to a vote of security holders
through solicitation of proxies or otherwise during the fiscal year covered by
this report.

PART II

Item 5.  MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

     (a)     Principal Market or Markets.  The Company's stock is traded on
the over-the-counter market, and is presently quoted on the NASDAQ OTC
Bulletin Board.  The following table sets forth the high and low bid prices of
the Common Stock during the eighteen months ended June 30, 1998 on the NASDAQ
OTC Bulletin Board.  Management has not been able to determine prices prior to
March 31, 1997. The prices are believed to be representative interdealer
quotations, without detail mark-up, mark-down or commissions, and may not
represent prices at which actual transactions occurred.

<TABLE>
<CAPTION>

                                            Bid

Quarter Ended                        High         Low
<S>                                 <C>          <C>                        
September 30, 1996                   -            -
December 30, 1996                    -            -
March 31, 1997                      .03           .01
June 30, 1997                       .03           .01 
September 30, 1997                  .03           .01
December 31, 1997                   .0025         .0025
March 31, 1998                      .0025         .0025
June 30, 1998                       .0025         .0025

</TABLE>

     (b)     Approximate Number of Holders of Common Stock.  The number of
holders of record of the Company's Common Stock at June 30, 1998, was
approximately 498.

     (c)     Dividends.  Holders of common stock are entitled to receive such
dividends as may be declared by the Company's Board of Directors.  No
dividends on the common stock were paid by the Company during the periods
reported herein nor does the Company anticipate paying dividends in the
foreseeable future.


Item 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     The following summarizes the Company's results of operations and
financial conditions, and should be read in conjunction with the financial
statements:

     (a)     Liquidity and Capital Resources

     As of the end of the reporting period, the Company had no cash or cash
equivalents.  There was no significant change in working capital during this
fiscal year.  Management feels that the working capital position of the
Company may improve with the acquisition or merger with an operating company.
 
     (b)     Results of Operations

     No operations were conducted during the two years ended June 30, 1998 and
since 1989 the Company has been inactive.  Any expenses incurred since 1989
and through June 30, 1997 have been related to legal, accounting and stock
transfer agent fees in order to provide stock transfer services to current
shareholders and to comply with reporting as required by the Securities
Exchange Act of 1934.  

     The Company reentered the development stage on July 1, 1997,
commensurate with the change of control which occurred November 11, 1997.
There were no significant activities between July 1, 1997 and November 11,
1997 which would precipitate the effective date of reentering the development
stage as of November 11, 1997 versus July 1, 1997 the beginning of the
Registrant's fiscal year.   During the twelve months ended June 30, 1998,
expenses have been related to legal, accounting and stock transfer agent fees
in order to provide stock transfer services to current shareholders and to
comply with reporting as required by the Securities Exchange Act of 1934. 
Additional expenses include consulting fees, legal and administrative costs
related to the evaluation of opportunities for a merger with, or acquisition
of, a privately owned corporation. 
     
     (c)     Plan of Operation

     The plan of the Company's management, for the next twelve months, is to
focus on acquiring an operating entity.  The sole officer and director has
been seeking possible merger candidates and expects to consummate a
transaction in the foreseeable future.  Management anticipates utilizing
additional equity financing and short-term working capital advances in its
acquisition endeavors.

Item 7.  FINANCIAL STATEMENTS

     The report of the independent auditors on the financial statements
appears at Page F-2 and the financial statements and their accompanying
footnotes appear at Pages F-3 through F-11 hereof.  These financial statements
and related financial information required to be filed hereunder are
incorporated herein by reference.

Item 8.    DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
           DISCLOSURE

     The Company did not have any disagreements on accounting and financial
disclosures with its present accounting firm during the reporting period.


PART III

Item 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; 
            COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

     (a)     Directors and Executive Officers.  The names and ages of the
Directors and executive officers of the Company are as follows:

Name                   Age       Position                      Since

L. Thomas Tarantelli          President, CEO and 
                              sole officer and director  December 17, 1990 **

Randy Phillips                President, CEO and 
                              sole officer and director  November 11,  1997

  ** Tarantelli resigned concurrent with the appointment of Phillips.

     The Directors serve until the next annual meeting of shareholders, and
until their successors are elected and qualified.

     The following sets forth information concerning the principal occupations
and business experience of the current sole Officer and Director of the
Company:


Randy Phillips

From 1992 to 1994, Mr. Phillips served as Director of Trading for an offshore
hedge fund.  In 1994 Mr. Phillips started his own private investment firm,
specializing in mergers and acquisitions, which he is currently the sole owner
and manager.   


     (b)     Section 16(a) Beneficial Ownership Reporting Compliance.  L.
             Thomas Tarantelli, failed to timely file Forms 3 with the
             Securities Exchange Commission, as required by Section 16(a). 

             The Company is aware of no other delinquent filings.

Item 10.  EXECUTIVE COMPENSATION

     No officers or directors have been compensated during the fiscal year
ended June 30, 1998.  The Company has no retirement, pension, profit sharing, 
insurance or other similar programs.

     The Company has agreed to reimburse its president for his expenses and
intends to reward him on a performance basis at such time as the acquisition
of an operating company or business is completed. It is likely both the
reimbursement and performance award will be in the form of stock grants.

     No Directors fees were paid during the year ended June 30, 1998.

     Stock Option Plan

          Effective July 1, 1986, the Company adopted an Incentive Stock
Option Plan ("the Plan") and reserved a total of 5,000,000 common shares for
issuance pursuant to the Plan.  The Plan, designed as an incentive for key
employees, is administered by the Board of Directors, which, in its sole
discretion, selects optionees and determines the number of shares subject to
each option.  The Plan provides that no option may be granted at an exercise
price less than the fair market value of the common shares on the date of
grant.  Fair market value is determined by calculation of an average of the
highest and lowest sale prices of the common shares, as reported by a
reporting service the Board may select.  The Board is also empowered to
determine fair market value in such other manner as is deemed equitable for
purposes of the Plan.  Unless the Board determines otherwise, options granted
under the Plan will expire five years from the date of grant and may not be
exercised during the initial one-year period from date of grant.  Thereafter,
options may be exercised in whole or in part, depending on the terms of the
particular option.  To date, no options have been granted under the Plan.

Item 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The registrant's securities are recorded on the books of its transfer
agent in registered form.  A substantial portion of the shares are, however,
registered in the name of intermediaries such as brokerage houses and clearing
houses on behalf of their respective clients.  Management does not have
knowledge of the beneficial owners thereof.

     The following table sets forth information regarding beneficial ownership
as of June 30, 1998 of the Company's common stock by any person who is known
by the Company to be the beneficial owner of more than five (5%) percent of
the Company's voting securities,  and by each Director of the Registrant, and
by officers and Directors of the Registrant as a group.  Although authorized
for Preferred Shares, the Company has issued only Common Stock.  As of June
30, 1998 there were 48,489,294 common shares issued and outstanding.  On
November 11, 1997 L. Thomas Tarantelli, the company's former sole director
sold all of his shares to the Company's sole current officer and director,
Randy Phillips.

     All ownership is beneficial and on record and all beneficial owners
listed below have sole voting and investment power with respect to the shares
shown, unless otherwise indicated.

<TABLE>
<CAPTION>

Name and Address                   Number of Shares      Percentage of Class
<S>                               <C>                    <C>
Randy Phillips                     6,705,137              13.8%
1582 S. Parker Road, Ste. 203
Denver, CO 80231

All Officers and Directors 
as a Group (1 person)              6,705,137              13.8%

</TABLE>

Item 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Change in Management Control of Company

     On June 11, 1997, the Company's sole officer and director, L. Thomas
Tarantelli ("Tarantelli"), entered into an agreement ("option contract") with
Downeast SonRise, Inc. ("Downeast"), giving Downeast the option to purchase
Mr. Tarantelli's 6,705,137 shares of the registrant's common stock.   On
September 26, 1997 Downeast sold the option contract to Wathne Pierce &
Associates, Inc. ("Wathne"), for $1.  Once obtaining the option contract from
Downeast, Wathne sold  the option contract to Mr. Randy Phillips for $100,000.
On October 31, 1997 Tarantelli appointed Phillips as a director and Chief
Executive Officer of the Company and resigned as a director and officer.  On
November 11, 1997 Mr. Phillips acquired the 6,705,137  shares, representing
13.8% of the Registrant's outstanding common stock, from Mr. Tarantelli for
$50,000.  As of October 31, 1997,  Mr. Phillips is the sole director and
officer of the registrant.

     Until November 11, 1997, the Company's business office was located at
1 Vineyard Hill. Fairport, New York 14450, the office of L. Thomas Tarantelli,
its former President, for which it paid no rent. 
     
     After November 11, 1997, the offices were relocated to its present
location, which is a facility leased by the Company's current President, Randy
Phillips.  Commencing January 1, 1998, Mr. Phillips began charging the Company
$600 per month for rent and office expenses.  Since becoming President, Mr.
Phillips has paid approximately $19,134 in legal, accounting and transfer
agent fees on behalf of the Company.
     
     Mr. Phillips has provided certain consulting services totaling $7,568 as
of June 30, 1998.

     Other than those mentioned above, there have been no related party
transactions, or any other transactions or relationships required to be
disclosed pursuant to Item 404 of Regulation S-B.

Item 13.  EXHIBITS AND REPORTS ON FORM 8-K 

(a)     Exhibits

        The following financial information is filed as part of this report:

        1)  Financial Statements
        2)  Schedules
        3)  Exhibits.  The following exhibits required by Item 601 to be 
            filed herewith are incorporated by reference to previously filed
            documents:

Item 601
Exhibit NO.            Description

10.A*                  Articles of Incorporation (Incorporated herein 
                       by reference to the 6/30/97 10-KSB filed August 26,
                       1998 with the Securities and Exchange Commission)

* Previously filed with the Securities and Exchange Commission.

Reports on Form 8-K

     (b)     Reports on Form 8-K filed during the fourth quarter of 1997 
             -  None.

             Reference is made to the Company's current reports on Form
8-K:

                   Date             Item Disclosed

                   11/11/97         Changes in Control of Registrant.

                              OTC AMERICA, INC.
                          (A Development Stage Company)

                         Index to Financial Statements

                                                            Page

Independent auditors' report                                 F-2

Balance sheet, June 30, 1998                                 F-3

Statements of operations, for the years ended
    June 30, 1998 and 1997 and from July 1, 1997 
    (inception) through June 30, 1998                        F-4

Statement of shareholders' equity (deficit), 
    as of June 30, 1996 and from July 1, 1997 
    (inception) through June 30, 1998                        F-5

Statements of cash flows, for the years ended
   June 30, 1998 and 1997 and from July 1, 1997 
   (inception) through June 30, 1998                         F-6

Notes to financial statements                                F-7





                                      F-1
                              




To the Board of Directors and Shareholders 
OTC America, Inc.

                         Independent Auditors' Report

We have audited the balance sheet of OTC America, Inc. (a development stage
company) as of June 30, 1998 and the related statements of operations,
shareholders' equity and cash flows for the years ended June 30, 1998 and
1997 and for the period July 1, 1997 (inception) through 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 misstatements. 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 OTC America, Inc., as
of June 30, 1998, and the results of its operations and its cash flows for
the years ended June 30, 1998 and 1997 and for the period July 1, 1997
(inception) through June 30, 1998 in conformity with generally accepted
accounting principles.






Cordovano and Harvey, P.C. 
Denver, Colorado
October 9, 1998





                                     F-2


                             OTC AMERICA, INC.
                       (A Development Stage Company)

                               Balance Sheet
                               June 30, 1998
<TABLE>
<CAPTION>
                                  ASSETS
<S>                                                         <C>
                                        TOTAL ASSETS         $   -
                                                            ===========

                  LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
  Due to related party (Note B)                              $11,168
                                                            __________

TOTAL LIABILITIES                                            $11,168
                                                            ____________

SHAREHOLDERS' EQUITY (DEFICIT)
Preferred stock, no par value, 20,000,000 shares 
   authorized, -0- issued and outstanding                       -
Common stock, $.0001 par value, 150,000,000 
   shares authorized, 48,489,294 issued and outstanding        4,849
Additional paid-in capital                                   502,094

Accumulated deficit, ($25,798 accumulated 
   during development stage)                                (518,111)
                                                          _______________

TOTAL SHAREHOLDERS' EQUITY (DEFICIT)                         (11,168)
                                                          _______________
                                                
                                                             $   -
                                                          ===============
                 
</TABLE>




                See accompanying notes to financial statements.

                                      F-3

                              OTC AMERICA, INC.
                         (A Development Stage Company)

<TABLE>
<CAPTION>
                         Statements of Operations


                                                           July 1, 1997
                                                           (inception)
                                Years Ended June, 30       Through
                                 1998           1997       June 30, 1998
<S>                             <C>            <C>           <C>
COSTS AND EXPENSES
  Consulting, related party 
   (Note B)                      $7,568         $  -          $7,568
  Rent, related party 
   (Note B)                       3,600            -           3,600
  General and administrative     14,630          4,504        14,630
                              ___________     _________     ___________
     LOSS BEFORE INCOME TAXES   (25,798)        (4,504)      (25,798)


INCOME TAXES (Note C)              -               -            -
                              ___________     _________     ___________
NET LOSS                       $(25,798)       $(4,504)     $(25,798)
                              ===========     =========     ===========
BASIC LOSS PER SHARE         $    (*)         $   (*)      $    (*)
                            ============    ===========   =============

WEIGHTED AVERAGE SHARES     48,489,294      48,489,294     48,489,294
                            ============    ===========   =============
</TABLE>

* Less than $.01 per share.




                See accompanying notes to financial statements.
                                    F-4


                            OTC AMERICA, INC.
                     (A Development Stage Company)
<TABLE>
<CAPTION>
                   Statement of Shareholders' Equity
                        As of June 30, 1996 and 
            July 1, 1997 (Inception) through June 30, 1998

                       Common Stock    Additional 
                                       Paid-in       Retained
                   Shares     Amount   Capital       Deficit      Total
<S>             <C>          <C>       <C>        <C>          <C>
BALANCE,  
 June 30, 1996   48,489,294   $4,849    $481,946    $(487,809)  $(1,014)

Net loss for 
 the year ended 
 June 30, 1997        -          -          -          (4,504)   (4,504)
                 __________   ______    ________   ___________ __________

BALANCE,  
 June 30, 1997   48,489,294   $4,849    $481,946    $(492,313)  $(5,518)
                =========== =========   =========   ========== =========

BALANCE,  
 July 1, 1997
 inception of 
 development stage 
 activities      48,489,294   $4,849    $481,946   $(492,313)   $(5,518)

Third party 
 administrative
 costs paid by 
 shareholder
 Note (B)             -          -        20,148         -       20,148

Net loss for 
 the year ended 
 June 30, 1998        -          -           -       (25,798)   (25,798)
                  ________   _______     _______    __________ ___________

BALANCE, 
 June 30, 1998   48,489,294   $4,849    $502,094   $(518,111)  $(11,168)
                =========== ========== =========== =========== ===========

</TABLE>




                  See accompanying notes to financial statements.
                                       F-5

                             OTC AMERICA, INC.
                      (A Development Stage Company)
<TABLE>
<CAPTION>
                         Statements of Cash Flows

                                                          July 1, 1997
                                                           (inception)
                                Years Ended June, 30       Through
                                 1998           1997       June 30, 1998
<S>                           <C>             <C>         <C>
OPERATING ACTIVITIES
 Net loss                      $(25,798)       $(4,504)    $(25,798)
 Changes in current 
  liabilities                     5,650          4,504        5,650
                               __________      ________    ____________

           NET CASH USED IN
       OPERATING ACTIVITIES     (20,148)           -        (20,148)
                               __________      _________   ____________

       INVESTING ACTIVITIES
       NET CASH PROVIDED BY
       OPERATING ACTIVITIES         -              -             -
                               __________      _________    ___________

FINANCING ACTIVITIES
 Third party expenses paid 
  by shareholder on behalf of
  Company recorded as
  additional-paid-in capital 
  (Note B)                       20,148            -         20,148
                               __________      ________      __________
       NET CASH PROVIDED BY
       OPERATING ACTIVITIES     20,148             -         20,148
                              ___________       _________    __________

NET CHANGE IN CASH
 AND EQUIVALENTS                   -               -            -

Cash and equivalents at 
 beginning of period               -               -            -
                             ____________      __________    ___________

    CASH AND EQUIVALENTS AT
              END OF PERIOD    $   -           $   -         $   -
                             ============      ===========   ============


             SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION
                     CASH PAID DURING THE YEAR FOR:

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

</TABLE>

               See accompanying notes to financial statements.
                                   F-6

                              OTC AMERICA, INC.
                       (A Development Stage Company)

                        Notes to Financial Statements

                              June 30, 1998
Note A:  Summary of Significant Accounting Policies and Nature of
         Organization 

Summary of Significant Accounting Policies

Development stage company
OTC America, Inc. (the "Company") entered the development stage in
accordance with Statement of Financial Accounting Standard ("SFAS") No. 7
on July 1, 1997 and its purpose is to evaluate, structure and complete a
merger with, or acquisition of, a privately owned corporation.

Use of estimates
The preparation of the financial statements in conformity with generally
accepted accounting principals requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. 
Accordingly, actual results could differ from those estimates.

Cash equivalents
For the purpose of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents.

Income taxes
The Company reports income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes", which requires the liability method in
accounting for income taxes. Deferred tax assets and liabilities arise from
the difference between the tax basis of an asset or liability and its
reported amount on the financial statements.  Deferred tax amounts are
determined by using the tax rates expected to be in effect when the taxes
will actually be paid or refunds received, as provided under currently
enacted law. Valuation allowances are established when necessary to reduce
the deferred tax assets to the amounts expected to be realized.  Income tax
expense or benefit is the tax payable or refundable, respectively, for the
period plus or minus the change during the period in the deferred tax
assets and liabilities.



                                 F-7
                            


                            OTC AMERICA, INC.
                       (A Development Stage Company)

                         Notes to Financial Statements

                                 June 30, 1998


Summary of Significant Accounting Policies continued

Earnings/(loss) per share
The Company reports earnings per share using a dual presentation of basic
and diluted earnings per share. Basic earnings per share excludes the
effect of common stock equivalents.  Diluted earnings per share utilizes
the average market price per share when applying the treasury stock method
in determining common stock equivalents.  However, the Company has a simple
capital structure for the periods presented and, therefore, there is no
variance between the basic and diluted earnings per share.

New accounting pronouncements
In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income" and SFAS No. 131, "Financial Reporting for
Segments of a Business Enterprise".  The adoption of these new accounting
pronouncements will not have a material effect on the Company's financial
statements.   

Nature of Organization

Background
The Company was incorporated under the laws of the State of Colorado on
June 13, 1986.  During the year ended June 30, 1988, the Company commenced
operations in the financial services, public relations and printing
businesses.  During the year ended June 30, 1989, the Company discontinued
all operations and became an inactive shell company.  Effective July 1,
1997, the Company returned to the development stage in accordance with SFAS
No. 7.   Currently, the Company is a "shell corporation" and its principal
activities since July 1, 1997 have been organizational matters. 

Re-incorporation
On October 3, 1997, the Company filed amended articles of incorporation
with the State of Colorado, at which time the Company changed the par value
of its 20,000,000 shares of authorized preferred stock from $.01 to no par
value.

Change in control
On November 11, 1997, a shareholder after obtaining approximately 13.8% of
the Company's outstanding $.0001 par value common stock was appointed sole
board member and officer of the Company. 

                                    F-8

                            OTC AMERICA, INC.
                     (A Development Stage Company)

                         Notes to Financial Statements

                              June 30, 1998

Note B:  Related Party Transactions

During the year ended June 30, 1998, an individual who is the sole officer
and director of the Company, provided consulting and administrative
services to the Company valued at $7,568.  Additionally, the sole officer
and director provided office space to the Company commencing January 1,
1998 at $600 per month.  The $7,568 and $3,600 are included in the
statement of operations as consulting, related party and rent, related
party, respectively. The $11,168, unpaid at June 30, 1998, has been
reported in the financial statements as due to related party. See Note D  
Subsequent event.

The Company incurred certain legal, accounting, transfer agent fees and
general and administrative costs during the years ended June 30, 1996, 1997
and 1998 totaling $20,148 which were paid on behalf of the Company by an
individual, who is the Company's sole officer and director.  The $20,148
has been reported in the financial statements as additional paid in
capital.  See Note D Subsequent event.


Note C:  Income taxes 

A reconciliation of the U.S. statutory federal income tax rate to the
effective tax rate follows for the years ended June 30, 1998 and 1997 and
the period July 1, 1997 (inception) through June 30, 1998:

<TABLE>
   
    <S>                                                    <C>
     U.S. federal statutory rate                            15.0%
     State income tax rate, net of federal benefit          4.25%
     Net operating loss for which no tax benefit
     is currently available                               (19.25)
                                                        _____________
     Effective tax rate                                        -%
                                                       ==============

</TABLE>

At June 30, 1998 and 1997 deferred taxes consisted of:

<TABLE>
                                                    June 30,
                                               1998         1997
    <S>                                   <C>            <C>
     Deferred tax assets, net operating 
      loss carryforward                     $161,185      $156,219
     Valuation allowance                    (161,185)     (156,219)
                                           ___________    ___________
     Net deferred taxes                     $  -          $  -
                                           ===========    ===========
</TABLE>

                                   F-9


                          OTC AMERICA, INC.
                     (A Development Stage Company)

                     Notes to Financial Statements

                            June 30, 1998

Note C:  Income taxes continued

The valuation allowance offsets the net deferred tax asset for which there
is no assurance of recovery. The change in the valuation allowance for the
year ended June 30, 1998 totaled $4,966. Net operating loss carryforwards
expire beginning in 2002.

The valuation allowance will be evaluated at the end of each year,
considering positive and negative evidence about whether the asset will be
realized.  At that time, the allowance will either be increased or reduced;
reduction could result in the complete elimination of the allowance if
positive evidence indicates that the value of the deferred tax asset is no
longer impaired and the allowance is no longer required.

The utilization of the net operating loss carryforwards is dependent upon
the ability of the Company to generate sufficient taxable income during the
carryforward period.  In addition, utilization of these carryforwards is
limited due to ownership changes as defined in the Internal Revenue Code.

Note D:  Subsequent event

On September 22, 1998, with consent of the sole director, the Company was
authorized to enter into the following transactions:

1.   To issue 101,310,706 of the Company's restricted common shares to
     individual who is the sole officer and director of the Company. The
     shares were issued as compensation for expenses paid on behalf of the
     Company by the officer and for consulting services provided to the
     Company by the officer. The value of the services at June 30, 1998 was
     $11,168 and the value of the third party administrative expenses was
     $20,148. Subsequent to June 30, 1998, the Company will reclassify the
     $20,148 recorded as additional paid in capital to the appropriate
     common stock accounts. Additionally, the $11,168 recorded as due to
     related party at June 30, 1998 will be reclassified to the appropriate
     shareholders' equity accounts. The total consideration for the
     101,310,706 was approximately $50,000 (unaudited) of which $31,316 was
     incurred as of June 30, 1998.  This transaction gave the sole officer
     and director approximately 72% ownership of the outstanding common
     stock of the Company.

2.   To issue to Wathne Pierce and Associates 200,000 of the Company's 
     restricted common stock in exchange for $200. Accordingly, as of
     September 22, 1998 all 150,000,000 authorized common shares are
     considered to be issued and outstanding.


                                   F-10
                  

                            OTC AMERICA, INC.
                      (A Development Stage Company)

                     Notes to Financial Statements

                             June 30, 1998

Note D:  Subsequent event continued

3.   To seek shareholder approval for a one for one hundred share reverse
     stock split. The reverse stock split would result in the 150,000,000
     shares being converted to 1,500,000 shares. Management believes that
     the reverse stock split will make the Company more attractive as a
     merger candidate to a private company desiring to go public through a
     merger with the Company.




                                     F-11




                                SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

(Registrant):                             OTC AMERICA, INC.



By:   /s/ Randy Phillips                  Date: October 13, 1998
      Randy Phillips
      President

In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the Registrant and in the capacities and
on the date indicated.


By:   /s/ Randy Phillips                  Date: October 13, 1998
      Randy Phillips
      President