UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

For the fiscal year ended March 31, 1999

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________.

                          Commission File No. 33-29340

                     UNIVERSAL SERVICES & ACQUISITIONS, INC.
             (Exact name of registrant as specified in its charter)

     Colorado, USA                                         84-1100774
(State of Incorporation)                       (IRS Employer Identification No.)

           21800 Oxnard Street, #440, Woodland Hills, California 91367
                    (Address of principal executive offices)

                  Registrant's Telephone Number, (818) 598-6780

                       2643 17th Street, Denver, CO 80211
                       ----------------------------------
   (Former name, former address and fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None.

Name of each exchange on which registered: None.

Securities registered pursuant to Section 12(g) of the Act: None.

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

Check if there is no disclosure of delinquent filers to Item 405 of Regulation
S-B contained in this form, and if no disclosure will be contained, to the best
of the Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K. |X|

State Issuer's Revenues for its most recent fiscal year: $29

The number of shares outstanding of the Company's $.001 Par Value Common Stock,
as of March 31, 1999 were 2,232,500. The Company's common stock is not publicly
traded.

                   DOCUMENTS INCORPORATED BY REFERENCE: None.


                                       1
<PAGE>

PART I

ITEM 1. BUSINESS

Universal Services & Acquisitions, Inc. (the "Company") was incorporated under
the laws of the State of Colorado in June 27, 1988 for the purpose of completing
a public offering to raise funds to acquire or merge with an operating business.
Since inception, the Company's primary efforts have been directed to
organizational efforts, obtaining initial financing and the identification and
evaluation of merger/acquisition candidates.

On August 17, 1995, the Company lent $50,000 American Health Care International
Corp. The Note was for a term of one year at eight percent interest. The Note
was not paid when due and the Company's efforts to collect it have not been
successful. The Company subsequently wrote off the Note.

In May, 1999, the Company entered into an agreement with Stein's Holdings, Inc.
("Stein's") whereby Stein's agreed to pay all the costs and expenses of bringing
the Company current in its reporting obligations under the Securities Exchange
Act of 1934, as amended, in exchange for the issuance of 20,092,500 shares of
the Company's common stock. As part of this transaction, the Company's officers
and directors resigned and were replaced by directors selected by Stein's. As
part of this transaction, the Company changed its fiscal year end from March 31
to December 31 effective December 31, 2000.

The Company can be defined as a "shell" company whose sole purpose at this time
is to locate and consummate a merger or acquisition with a private entity.

The Company's office is located at 21800 Oxnard Street, Suite 440, Woodland
Hills, California 91367.

As of December 31, 2000, the Company had no employees.

Item 2. Properties.

The Company presently shares office space with its majority shareholder at no
cost. The Company anticipates that this space is sufficient for the near future.

Item 3 Legal Proceedings.

None.

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

None.

Item 5. Market for Registrant's Common Equity and Related Shareholder Matters.

The Company's common stock is not publicly traded.

As of March 31, 1999, the Company had 2,232,500 shares of its common stock
issued and outstanding, of which 1,533,865 were held by non-affiliates. As of
March 30, 2000, the Company had 22,325,000 shares of its common stock issued and
outstanding, of which 2,232,500 were held by non-affiliates.


                                       2
<PAGE>

The Company has authorized a total of 100,000,000 shares of common stock, par
value $.001. The Company has authorized a total of 40,000,000 shares of
preferred stock, par value $.001 and presently has no shares of preferred stock
issued and outstanding. As of March 31, 1999, the Company estimates there were
30 "holders of record" of its common stock and estimates that there are
approximately 35 beneficial shareholders of its common stock.

Item 6. Management's Discussion and Analysis or Plan of Operation.

FORWARD-LOOKING STATEMENTS MAY NOT PROVE ACCURATE

When used in this Form 10-KSB, the words "anticipated", "estimate", "expect",
and similar expressions are intended to identify forward-looking statements.
Such statements are subject to certain risks, uncertainties and assumptions
including the possibility that the Company's will fail to generate projected
revenues. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, estimated or projected.

LIQUIDITY AND CAPITAL RESOURCES

The Company has been inactive and dormant for the past several years and since
inception has experienced no significant change in liquidity or capital
resources or stockholders' equity other than the receipt of approximately
$50,000 from a public offering conducted in 1991. The Company's balance sheet as
of March 31, 1999 reflects limited assets and limited liabilities. Further,
there exists no agreements or understandings with regard to loan agreements by
or with the Officers, Directors, principals, affiliates or shareholders of the
Company. As of December 31, 2000, the Company had no working capital.

The Company will attempt to carry out its plan of business as discussed above.
The Company cannot predict to what extent its lack of liquidity and capital
resources will hinder its business plan prior to the consummation of a business
combination.

RESULTS OF OPERATIONS

During the period from June 27, 1988 (inception) through March 31, 1999, the
Company engaged in limited operations and sought out potential merger
candidates. The only revenues received by the Company during this period was
approximately $14,000 in interest income.

The Company anticipates that until a business combination is completed with an
acquisition candidate, it will not generate revenues and may operate at a loss
after completing a business combination, depending upon the performance of the
acquired business.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The following discussion of the financial condition, changes in financial
condition and results of operations of the Company for the fiscal years ended
March 31, 1999 and March 31, 1998 should be read in conjunction with the
financial statements of the Company and related notes included therein.


                                       3
<PAGE>

For the year ended March 31, 1999, the Company had revenues of $29 compared to
revenues of $88 for the year ended March 31, 1998. These amounts reflect
interest income. For the year ended March 31, 1999, the Company had expenses of
$1,163 compared to expenses of approximately $2,400 at March 31, 1998. The
Company's expenses consisted primarily of development costs and general and
administrative expenses. The net loss for the year ended March 31, 1999 was
($1,134) or nil per share of common stock compared to a net loss for the year
ended March 31, 1998 of ($2,324) or nil per share of common stock.

At March 31, 1998, shareholder equity (deficit) was ($3,832) compared to
shareholder equity (deficit) of ($4,966) at March 31, 1999.

Liquidity and Capital Resources

At March 31, 1999 and 1998, the Company had no working capital. The Company's
assets at March 31, 1998 consisted of approximately $3,500 in cash compared to
no assets at March 31, 1999. At March 31, 1999 and 1998, the Company had current
liabilities of approximately $5,000 and $7,300, respectively.

Effect of Inflation

Inflation did not have any significant effect on the operations of the Company
during the year ended March 31, 1999. Further, inflation is not expected to have
any significant effect on future operations of the Company.

NEED FOR ADDITIONAL FINANCING

The Company believes that its existing capital will not be sufficient to meet
the Company's cash needs, including the costs of compliance with the continuing
reporting requirements of the Securities Exchange Act of 1934, as amended. Once
a business combination is completed, the Company's needs for additional
financing are likely to increase substantially.

No commitments to provide additional funds have been made by management or other
stockholders. Accordingly, there can be no assurance that any funds will be
available to the Company to allow it to cover its expenses.

The Company might seek to compensate providers of services by issuances of stock
in lieu of cash.

Item 7. Financial Statements.

Financial statements are audited and included herein beginning on Exhibit 1,
page 1 and are incorporated herein by this reference.

Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

There were no disagreements with accountants on accounting and financial
disclosure during the relevant period.

Part III


                                       4
<PAGE>

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act.

Identification of Directors and Executive Officers of the Company

The following table sets forth the names and ages of all directors and executive
officers of the Company and all persons nominated or chosen to become a
director, indicating all positions and offices with the Company held by each
such person and the period during which he has served as a director:

The principal executive officers and directors of the Company are as follows:

Name                          Age               Positions Held and Tenure
-------------------------------------------------------------------------

Christopher Burnell           27                Director, Secretary since 5/99

Charles Smith                 50                Director since 5/15/00

Mehrdad Alborz                29                Director, CEO, CFO since 10/00

The Directors named above will serve until the next annual meeting of the
Company's stockholders. Thereafter, Directors will be elected for one-year terms
at the annual stockholders' meeting. Officers will hold their positions at the
pleasure of the Board of Directors, absent any employment agreement, of which
none currently exist or is contemplated. There is no arrangement or
understanding between the Directors and Officers of the Company and any other
person pursuant to which any Director or Officer was or is to be selected as a
Director or Officer of the Company.

There is no family relationship between or among any Officer and Director.

The Directors and Officers of the Company will devote their time to the
Company's affairs on an "as needed" basis. As a result, the actual amount of
time which each will devote to the Company's affairs is unknown and is likely to
vary substantially from month to month.

The Company has no audit or compensation committee.

Business Experience. The following is a brief account of the business experience
during at the least the last five years of the directors and executive officers,
indicating their principal occupations and employment during that period, and
the names and principal businesses of the organizations in which such
occupations and employment were carried out.

CHRISTOPHER BURNELL. Mr. Burnell joined the Company as a director in April,
1999. Mr. Burnell is presently chief operating officer and a director of Stein's
Holdings, Inc., a public company traded on the OTC Electronic Bulletin Board
under the symbol "SNHS" as well as serving as the chief operating officer and a
director of 20/20 Web Design, Inc., a company in which Stein's Holdings, Inc. is
the majority shareholder and which trades on the OTC Electronic Bulletin Board
under the symbol "TWEB." Mr. Burnell presently is co-owner of a Play It Again
Sports store in Escondido, California. Mr. Burnell previously held Series 7, 63


                                       5
<PAGE>

and 24 licenses from the National Association of Securities Dealers, Inc.
("NASD") and worked for several NASD member firms.

Mr. Burnell attended Southwestern College and Grossmont College.

CHARLES SMITH. Mr. Smith graduated from Boston University, Boston, Massachusetts
in 1979 and since that time has been a Certified Public Accountant involved in
all phases of business, including the audit of companies and tax matters. He is
a consultant to various companies ranging from an art distribution company to a
junior resource company which is developing a gold property in Sinaloa State,
Mexico. Mr. Smith has significant experience in accounting and securities
matters.

Mr. Smith's business affiliations during the last five years are as follow:
Chairman - Dynacap Group, Ltd. - a consulting and management firm - 1992 to the
present; Sole proprietor as a Certified Public Accountant - 1983 to the present;
Sole officer and Director - MC Cambridge, Inc. - a financial consulting firm -
1997 to present; Sole officer and director - Asset Servicing Corporation - a
leasing company - 1998 to present; Chief Financial Officer and Director -
Electrical Generation Technology Corporation - April 2000 to present; CEO and
CFO of Stein's Holdings, Inc. since May, 2000; CFO and CEO of 20/20 Web Design,
Inc. since May, 2000.

Mehrdad Alborz. Mr. Alborz has been an attorney in private practice for the last
four years. Prior to being an attorney, Mr. Alborz was chief financial officer
of Ravissant Corporation in Pasadena, California were he increased the company's
revenues from $500,000 to $1,000,000. Mr. Alborz had similar success while
employed at Micro Tree Systems.

Mr. Alborz received his Juris Doctor from West Los Angeles School of Law and his
Bachelor of Science in Computer Science and Automation Engineering, with a minor
in Math, from California State University at Northridge.

CONFLICTS OF INTEREST

The Officers and Directors of the Company will devote only a small portion of
their time to the affairs of the Company, estimated to be no more than
approximately 5 hours per month. There will be occasions when the time
requirements of the Company's business conflict with the demands of their other
business and investment activities. Such conflicts may require that the Company
attempt to employ additional personnel. There is no assurance that the services
of such persons will be available or that they can be obtained upon terms
favorable to the Company.

There is no procedure in place which would allow the Officers and Directors to
resolve potential conflicts in an arms-length fashion. Accordingly, they will be
required to use their discretion to resolve them in a manner which they consider
appropriate.

The Company's Officers and Directors may actively negotiate or otherwise consent
to the purchase of a portion of their common stock as a condition to, or in
connection with, a proposed merger or acquisition transaction. It is anticipated
that a substantial premium over the initial cost of such shares may be paid by
the purchaser in conjunction with any sale of shares by the Company's Officers


                                       6
<PAGE>

and Directors which is made as a condition to, or in connection with, a proposed
merger or acquisition transaction. The fact that a substantial premium may be
paid to the Company's Officers and Directors to acquire their shares creates a
potential conflict of interest for them in satisfying their fiduciary duties to
the Company and its other shareholders. Even though such a sale could result in
a substantial profit to them, they would be legally required to make the
decision based upon the best interests of the Company and the Company's other
shareholders, rather than their own personal pecuniary benefit.

Identification of Certain Significant Employees. The Company does not employ any
persons who make or are expected to make significant contributions to the
business of the Company.

Item 10. Executive Compensation.

During fiscal 2000, and as of the date of the filing of this report, none of the
Company's officers were paid any compensation by the Company.

Compensation of Directors

No director receives or accrues any compensation for his services as a Director,
including committee participation and or special assignments.

Directors are entitled to reimbursement for reasonable travel and other
out-of-pocket expenses incurred in connection with attendance at meeting of the
Board of Directors.

The Company has no material bonus or profit-sharing plans pursuant to which cash
or non-cash compensation is or may be paid to the Company's directors or
executive officers except as described above.

The Company has no compensatory plan or arrangements, including payments to be
received from the Company, with respect to any executive officer or director,
where such plan or arrangement would result in any compensation or remuneration
being paid resulting from the resignation, retirement or any other termination
of such executive officer's employment or from a change-in-control of the
Company or a change in such executive officer's responsibilities following a
change-in-control and the amount, including all periodic payments or
installments where the value of such compensation or remuneration exceeds
$100,000 per executive officer.

During the last completed fiscal year, no funds were set aside or accrued by the
Company to provide pension, retirement or similar benefits for Directors or
Executive Officers.

The Company has no written employment agreements.

Compensation Pursuant to Plans. Other than disclosed above, the Company has no
plan pursuant to which cash or non-cash compensation was paid or distributed
during the last fiscal year, or is proposed to be paid or distributed in the
future, to the individuals and group described in this item.


                                       7
<PAGE>

Compensation of Directors. Directors of the Company are entitled to reasonable
reimbursement for their travel expenses in attending meetings of the Board of
Directors.

Termination of Employment and Change of Control Arrangement. Except as noted
herein, the Company has no compensatory plan or arrangements, including payments
to be received from the Company, with respect to any individual names above from
the latest or next preceding fiscal year, if such plan or arrangement results or
will result from the resignation, retirement or any other termination of such
individual's employment with the Company, or from a change in control of the
Company or a change in the individual's responsibilities following a change in
control.

Section 16(a) Beneficial Ownership Reporting Compliance. During the year ended
March 31, 1999, the following persons were officers, directors and more than
ten-percent shareholders of the Company's common stock:

Name                        Position                               Filed Reports
----

Forrest Leever              Director, President                    No
Sally A. Johnson            Director                               No
Earle D. Quinnell           Director                               No

Item 11. Security Ownership of Certain Beneficial Owners and Management.

There were 2,232,500 shares of the Company's common stock issued and outstanding
on March 31, 1999. No preferred shares were issued and outstanding at March 31,
1999. As of March 30, 2001, the Company had issued and outstanding 22,325,000
shares of common stock. The following tabulates holdings of shares of the
Company by each person who, subject to the above, at the date of this Report,
holds or record or is known by Management to own beneficially more than five
percent (5%) of the Common Shares of the Company and, in addition, by all
directors and officers of the Company individually and as a group.

Name and Address of             Number of Common Shares
Beneficial Owner                Currently Owned                 Percent
----------------                ---------------                 -------

Christopher Burnell (1)(2)                    0                    0.00
21800 Oxnard Street #440
Woodland Hills CA 91367

Stein's Holdings, Inc. (2)           20,092,500                   90.00
21800 Oxnard Street #440
Woodland Hills CA 91367

Charles Smith (1)(2)                          0                    0.00
21800 Oxnard Street #440
Woodland Hills CA 91367

Mehrdad Alborz (1)(2)                         0                    0.00
21800 Oxnard Street #440
Woodland Hills CA 91367

All directors and officers
as a group (3)                                0                    0.00


                                       8
<PAGE>

----------
(1) Denotes officer or director. All officers and directors are also officers
and directors of Stein's Holdings, Inc. which is the majority shareholder of the
Company.

(2) The control persons of Stein's are the officers and directors of the
Company: Christopher Burnell, Mehrdad Alborz, and Charles Smith. These persons
have both investment and voting power for the 20,092,500 shares beneficially
owned by Stein's.

Changes in Control. There are no arrangements known to the Company, including
any pledge by any person of securities of the Company, the operation of which
may at a subsequent date result in a change of control of the Company.

Item 12. Certain Relationships and Related Transactions.

The Company shares office space with its president and is charged no rent for
this space.

Item 13. Exhibits and Reports on Form 8-K.

(a) Financial Statements and Schedules

The following financial statements and schedules are filed as part of this
report:

Independent Auditors' Report dated May 1, 2000
Balance Sheet
Statement of Operations
Statement of Changes in Stockholders' Equity (Deficit)
Statements of Cash Flows
Notes to Financial Statements

List of Exhibits

The following exhibits are filed with this report.

Financial Statements.

(b) There were no Reports filed on Form 8-K during the fourth quarter of the
Company's fiscal year ended March 31, 1999.

                                   Signatures

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

February 22, 2001                      UNIVERSAL SERVICES AND ACQUISITIONS, INC.


                                       /s/ Mehrdad Alborz
                                       -----------------------------------------
                                       Mehrdad Alborz, CEO, CFO, Director


                                       9
<PAGE>


                                       /s/ Charles Smith
                                       -----------------------------------------
                                       Charles Smith, Director


                                       /s/ Christopher Burnell
                                       -----------------------------------------
                                       Christopher Burnell, Director


                                       10
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                              FINANCIAL STATEMENTS
                                 MARCH 31, 1999

<PAGE>

                                TABLE OF CONTENTS

                                                                        Page No.
                                                                        --------

INDEPENDENT AUDITORS' REPORT......................................         1

FINANCIAL STATEMENTS

   Balance Sheet..................................................         2

   Statements of Operations.......................................         3

   Statement of Changes in Stockholders' Equity (Deficit).........       4 - 5

   Statements of Cash Flows.......................................       6 - 7

   Notes to Financial Statements..................................       8 - 11

<PAGE>

                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
Universal Services and Acquisitions, Inc.
(A Development Stage Company)
Woodland Hills, California

We have audited the accompanying balance sheet of Universal Services and
Acquisitions, Inc. (A Nevada Corporation) as of March 31, 1999, and the related
statements of operations, changes in stockholders' equity (deficit) and cash
flows for the year then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit 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 audit provides 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 Universal Services and
Acquisitions, Inc. as of March 31, 1999 and the results of its operations and
its cash flows for the year then ended, in conformity with generally accepted
accounting principles.


Moffitt & Company, P.C.
Scottsdale, Arizona

May 1, 2000

<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                  BALANCE SHEET
                                 MARCH 31, 1999

<TABLE>
<CAPTION>
<S>                                                                    <C>        <C>
                                     ASSETS

TOTAL ASSETS                                                                      $      0
                                                                                  ========

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
       Accounts payable                                                $  4,966
                                                                       --------

              TOTAL CURRENT LIABILITIES                                $  4,966

STOCKHOLDERS' EQUITY (DEFICIT)
       Preferred stock, par value $0.001 per share
          Authorized - 40,000,000 shares
          Issued and outstanding - 0 - shares                                 0
       Common stock, par value $0.001 per share
          Authorized 100,000,000 shares
          Issued and outstanding - 2,232,500 shares                       2,233
       Paid in capital in excess of par value of stock                   70,373
       Deficit accumulated during the development
          stage                                                         (77,572)
                                                                       --------

            TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                         (4,966)
                                                                       --------

            TOTAL LIABILITIES AND STOCKHOLDERS'
              EQUITY (DEFICIT)                                         $      0
                                                                       ========
</TABLE>

            See Accompanying Notes and Independent Auditors' Report.


                                       2
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF OPERATIONS
                        FOR THE YEAR ENDED MARCH 31, 1999
                      AND FOR THE PERIOD FROM JUNE 27, 1988
                      (DATE OF INCEPTION) TO MARCH 31, 1999

                                                                  June 27, 1988
                                                      Year           (Date of
                                                     Ended        Inception) to
                                                March 31, 1999    March 31, 1999
                                                --------------    --------------

REVENUE - INTEREST INCOME                        $        29         $ 14,737

DEVELOPMENT COST                                       1,163           92,309
                                                 -----------         --------

NET (LOSS)                                       $    (1,134)        $(77,572)
                                                 ===========         ========

NET (LOSS) PER COMMON SHARE                      $     (.000)
                                                 ===========

WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES OUTSTANDING

       Basic and diluted                           2,232,500
                                                 ===========

            See Accompanying Notes and Independent Auditors' Report.


                                       3
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
             STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
              FOR THE PERIOD FROM JUNE 27, 1988 (DATE OF INCEPTION)
                                TO MARCH 31, 1999

<TABLE>
<CAPTION>
                                                                               Paid in        Deficit
                                                                              Capital in    Accumulated
                              Preferred Stock           Common Stock           Excess of    During the
                              ---------------      ---------------------       Par Value    Development
                               Shares  Amount      Shares         Amount       of Stock        Stage
                              -------  ------      ------         ------      ----------    -----------
<S>                              <C>     <C>      <C>             <C>          <C>           <C>
AT DATE OF INCEPTION             0     $  0               0       $    0       $     0       $      0

ISSUANCE OF COMMON
   STOCK FOR CASH
   $.01 - JUNE 27, 1988          0        0       1,500,000        1,500        20,500              0

NET INCOME FOR THE
   PERIOD ENDED
   MARCH 31, 1989                0        0               0            0             0            538
                              ----     ----       ---------       ------       -------       --------

BALANCE, MARCH 31, 1989          0        0       1,500,000        1,500        20,500            538

NET (LOSS) FOR THE YEAR
   ENDED MARCH 31, 1990          0        0               0            0             0         (2,128)
                              ----     ----       ---------       ------       -------       --------

BALANCE, MARCH 31, 1990          0        0       1,500,000        1,500        20,500         (1,590)

ISSUANCE OF COMMON
   STOCK FOR CASH
   $.10 - MARCH 31, 1991,
   NET OF COSTS OF $24,646       0        0         732,500          733        47,873              0

NET (LOSS) FOR THE YEAR
   ENDED MARCH 31, 1991          0        0               0            0             0         (6,415)
                              ----     ----       ---------       ------       -------       --------

BALANCE, MARCH 31, 1991          0        0       2,232,500        2,233        68,373         (8,005)

NET (LOSS) FOR THE YEAR
   ENDED MARCH 31, 1992          0        0               0            0             0         (3,809)
                              ----     ----       ---------       ------       -------       --------

BALANCE, MARCH 31, 1992          0        0       2,232,500        2,233        68,373        (11,814)

NET (LOSS) FOR THE YEAR
   ENDED MARCH 31, 1993          0        0               0            0             0         (2,770)
                              ----     ----       ---------       ------       -------       --------

BALANCE, MARCH 31, 1993          0        0       2,232,500        2,233        68,373        (14,584)
</TABLE>

            See Accompanying Notes and Independent Auditors' Report.


                                       4
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
       STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
              FOR THE PERIOD FROM JUNE 27, 1988 (DATE OF INCEPTION)
                                TO MARCH 31, 1999

<TABLE>
<CAPTION>
                                                                               Paid in        Deficit
                                                                              Capital in    Accumulated
                              Preferred Stock           Common Stock           Excess of    During the
                              ---------------      ---------------------       Par Value    Development
                               Shares  Amount      Shares         Amount       of Stock        Stage
                              -------  ------      ------         ------      ----------    -----------
<S>                              <C>     <C>      <C>             <C>          <C>           <C>
NET (LOSS) FOR THE YEAR
   ENDED MARCH 31, 1994          0     $  0               0       $    0       $     0       $ (1,034)
                              ----     ----       ---------       ------       -------       --------

BALANCE, MARCH 31, 1994          0        0       2,232,500        2,233        68,373        (15,618)

NET (LOSS) FOR THE YEAR
   ENDED MARCH 31, 1995          0        0               0            0             0         (1,072)
                              ----     ----       ---------       ------       -------       --------

BALANCE, MARCH 31, 1995          0        0       2,232,500        2,233        68,373        (16,690)

NET (LOSS) FOR THE YEAR
   ENDED MARCH 31, 1996          0        0               0            0             0        (25,857)
                              ----     ----       ---------       ------       -------       --------

BALANCE, MARCH 31, 1996          0        0       2,232,500        2,233        68,373        (42,547)

CAPITAL CONTRIBUTION             0        0               0            0         2,000              0

NET (LOSS) FOR THE YEAR
   ENDED MARCH 31, 1997          0        0               0            0             0        (31,567)
                              ----     ----       ---------       ------       -------       --------

BALANCE, MARCH 31, 1997          0        0       2,232,500        2,233        70,373        (74,114)

NET (LOSS) FOR THE YEAR
   ENDED MARCH 31, 1998          0        0               0            0             0         (2,324)
                              ----     ----       ---------       ------       -------       --------

BALANCE, MARCH 31, 1998          0        0       2,232,500        2,233        70,373        (76,438)

NET (LOSS) FOR THE YEAR
   ENDED MARCH 31, 1999          0        0               0            0             0         (1,134)
                              ----     ----       ---------       ------       -------       --------

BALANCE, MARCH 31, 1999          0     $  0       2,232,500       $2,233       $70,373       $(77,572)
                              ====     ====       =========       ======       =======       ========
</TABLE>

            See Accompanying Notes and Independent Auditors' Report.


                                       5
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS
                        FOR THE YEAR ENDED MARCH 31, 1999
                      AND FOR THE PERIOD FROM JUNE 27, 1988
                      (DATE OF INCEPTION) TO MARCH 31, 1999

<TABLE>
<CAPTION>
                                                                       June 27, 1988
                                                            Year         (Date of
                                                           Ended      Inception) to
                                                      March 31, 1999  March 31, 1999
                                                      --------------  --------------
<S>                                                      <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
       Net (loss)                                        $(1,134)       $(77,572)
       Adjustments to reconcile net (loss) to
          net cash (used) by operating activities:
             Allowance for doubtful accounts                   0          50,000
             Amortization                                      0             500
       Changes in operating assets and liabilities
          Accounts payable                                (2,350)          4,966
                                                         -------        --------

               NET CASH (USED) BY
                  OPERATING ACTIVITIES                    (3,484)        (22,106)
                                                         -------        --------

CASH FLOWS FROM INVESTING ACTIVITIES
       Loan to merger candidate                                0         (50,000)
                                                         -------        --------

               NET CASH (USED) BY
                  INVESTING ACTIVITIES                         0         (50,000)
                                                         -------        --------

CASH FLOWS FROM FINANCING ACTIVITIES
       Proceeds from issuance of common stock                  0          97,250
       Offering costs incurred                                 0         (24,644)
       Acquisition of organization costs                       0            (500)
                                                         -------        --------

               NET CASH PROVIDED BY
                  FINANCING ACTIVITIES                         0          72,106
                                                         -------        --------

NET (DECREASE) IN CASH
   AND CASH EQUIVALENTS                                   (3,484)              0
CASH AND CASH EQUIVALENTS AT
   BEGINNING OF PERIOD                                     3,484               0
                                                         -------        --------

CASH AND CASH EQUIVALENTS AT
   END OF PERIOD                                         $     0        $      0
                                                         =======        ========
</TABLE>

            See Accompanying Notes and Independent Auditors' Report.


                                       6
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                        FOR THE YEAR ENDED MARCH 31, 1999
                      AND FOR THE PERIOD FROM JUNE 27, 1988
                      (DATE OF INCEPTION) TO MARCH 31, 1999

                                                                   June 27, 1988
                                                       Year          (Date of
                                                      Ended       Inception) to
                                                  March 31, 1999  March 31, 1999
                                                  --------------  --------------

SUPPLEMENTAL DISCLOSURE OF CASH
   FLOW INFORMATION

       Interest paid                                  $   0            $  0
                                                      =====            ====

       Taxes paid                                     $   0            $132
                                                      =====            ====

       See Accompanying Notes and Independent Accountants' Review Report.


                                       7
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Organization and Nature of Business

      The company was incorporated under the laws of the state of Colorado on
      June 27, 1988 for the purpose of acquiring subsidiary companies.

      Cash and Cash Equivalents

      For the purposes 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.

      Accounting Estimates

      Management uses estimates and assumptions in preparing financial
      statements in accordance with generally accepted accounting principles.
      Those estimates and assumptions affect the reported amounts of assets and
      liabilities, the disclosure of contingent assets and liabilities, and the
      reported revenues and expenses. Actual results could vary from the
      estimates that were used.

      Income Taxes

      Provisions for income taxes are based on taxes payable or refundable for
      the current year and deferred taxes on temporary differences between the
      amount of taxable income and pretax financial income and between the tax
      bases of assets and liabilities and their reported amounts in the
      financial statements. Deferred tax assets and liabilities are included in
      the financial statements at currently enacted income tax rates applicable
      to the period in which the deferred tax assets and liabilities are
      expected to be realized or settled as prescribed in FASB Statement No.
      109, Accounting for Income Taxes. As changes in tax laws or rates are
      enacted, deferred tax assets and liabilities are adjusted through the
      provision for income taxes.

      Net (Loss) Per Share

      The company adopted Statement of Financial Accounting Standards No. 128
      that requires the reporting of both basic and diluted earnings per share.
      Basic earnings per share is computed by dividing net income available to
      common shareowners by the weighted average number of common shares
      outstanding for the period. Diluted earnings per share reflects the
      potential dilution that could occur if securities or other contracts to
      issue common stock were exercised or converted into common stock. In
      accordance with FASB 128, any anti-dilutive effects on net loss per share
      are excluded.

       See Accompanying Notes and Independent Accountants' Review Report.


                                       8
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      Disclosure About Fair Value of Financial Instruments

      The company has financial instruments, none of which are held for trading
      purposes. The company estimates that the fair value of all financial
      instruments at March 31, 1999 as defined in FASB 107, does not differ
      materially from the aggregate carrying values of its financial instruments
      recorded in the accompanying balance sheet. The estimated fair value
      amounts have been determined by the company using available market
      information and appropriate valuation methodologies. Considerable
      judgement is required in interpreting market data to develop the estimates
      of fair value, and accordingly, the estimates are not necessarily
      indicative of the amounts that the company could realize in a current
      market exchange.

NOTE 2 DEVELOPMENT STAGE OPERATIONS

      As of March 31, 1999, the company was in the development stage of
      operations. According to the Financial Accounting Standards Board of the
      Financial Accounting Foundation, a development stage company is defined as
      a company that devotes most of its activities to establishing a new
      business activity. In addition, planned principle activities have not
      commenced, or have commenced and have not yet produced significant
      revenue.

      FAS-7 requires that all development costs be expensed during the
      development period. The company expensed $1,163 of development costs for
      the year ended March 31, 1999 and $92,309 for the period from June 27,
      1988 (date of development stage) to March 31, 1999.

NOTE 3 INCOME TAXES

(Loss) before income taxes                                              $(1,134)
                                                                        -------

The provision for income taxes is estimated as follows:
       Currently payable                                                $     0
                                                                        -------
       Deferred                                                         $     0
                                                                        -------

A reconciliation of the provision for income taxes
  compared with the amounts at the U.S. Federal
  Statutory rates is as follows:
       Tax at U.S. Federal Statutory income tax rates                   $     0
                                                                        -------

       See Accompanying Notes and Independent Accountants' Review Report.


                                       9
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999

NOTE 3 INCOME TAXES (CONTINUED)

Deferred income tax assets and liabilities reflect the impact
  of temporary differences between amounts of assets and
  liabilities for financial reporting purposes and the basis
  of such assets and liabilities as measured by tax laws
       The net deferred tax assets is:                                      $  0
                                                                            ----
       The net deferred tax liability is:                                   $  0
                                                                            ----

Temporary differences and carryforwards that gave rise to
  deferred tax assets and liabilities included the following:

                                                                Deferred Tax
                                                            --------------------
                                                             Assets  Liabilities
                                                            -------  -----------

      Net operating loss                                    $11,636    $     0

      Valuation allowance                                    11,636          0
                                                            -------    -------

      Total deferred taxes                                  $     0    $     0
                                                            =======    =======

A reconciliation of the valuation allowance is as follows:

      Balance, April 1, 1998                                           $11,466

      Addition for the year ended March 31, 1999                           170
                                                                       -------

      Balance, March 31, 1999                                          $11,636
                                                                       =======

NOTE 4 TAX CARRYFORWARD

      The company has the following tax carryforwards at March 31, 1999

  Year Ended                                  Amount             Expiration Date
--------------                                ------             ---------------

March 31, 1990                                $1,590             March 31, 2005
March 31, 1991                                 6,415             March 31, 2006
March 31, 1992                                 3,809             March 31, 2007
March 31, 1993                                 2,770             March 31, 2008
March 31, 1994                                 1,034             March 31, 2009
March 31, 1995                                 1,072             March 31, 2010

       See Accompanying Notes and Independent Accountants' Review Report.


                                       10
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999

NOTE 4 TAX CARRYFORWARD (CONTINUED)

  Year Ended                                   Amount            Expiration Date
--------------                                -------            ---------------

March 31, 1996                                $25,857            March 31, 2011
March 31, 1997                                 31,567            March 31, 2012
March 31, 1998                                  2,324            March 31, 2013
March 31, 1999                                  1,134            March 31, 2013
                                              -------

                                              $77,572
                                              =======

      Future changes in ownership may limit the ability of the company to
      utilize its net operating loss carryforwards prior to their expiration.

NOTE 5 STOCK WARRANTS

      The company has outstanding A warrants and B warrants in the amounts of
      10,465,000 and 3,732,500, respectively. The A warrants entitle holders to
      purchase one share of the company's $.001 par value common stock for $.25
      per share and expire on December 31, 1999. The B warrants entitle holders
      to purchase one share of the company's $.001 par value common stock for
      $.40 per share and expire on December 31, 2000.

NOTE 6 PREFERRED STOCK

      No rights or preferences have been assigned to the preferred stock.

       See Accompanying Notes and Independent Accountants' Review Report.


                                       11