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, 1998

|_|   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: $88

The number of shares outstanding of the Company's $.001 Par Value Common Stock,
as of March 31, 1998 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, 1998, 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, 1998, 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, 1998 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, 1998, 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, 1998 and March 31, 1997 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, 1998, the Company had revenues of $88 compared to
revenues of $118 for the year ended March 31, 1997. These amounts reflect
interest income. For the year ended March 31, 1998, the Company had expenses of
$2,412 compared to expenses of approximately $31,685 at March 31, 1997. The
Company's expenses consisted primarily of development costs and general and
administrative expenses. In addition, for the year ended March 31, 1997, the
Company recorded an allowance of $26,250 for doubtful accounts. This doubtful
account related to ad advance made to a merger candidate which was in default as
of March 31, 1997. The net loss for the year ended March 31, 1998 was ($2,324)
or nil per share of common stock compared to a net loss for the year ended March
31, 1997 of ($31,567) or nil per share of common stock.

At March 31, 1998, shareholder equity (deficit) was ($3,800) compared to
shareholder equity (deficit) of ($3,832) at March 31, 1997.

Liquidity and Capital Resources

At March 31, 1998 and 1997, the Company had no working capital. The Company's at
March 31, 1998 and 1997 consisted of approximately $3,500 in cash. At March 31,
1998 and 1997, the Company had current liabilities of approximately $7,300.

Effect of Inflation

Inflation did not have any significant effect on the operations of the Company
during the year ended March 31, 1998. 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, 1998, 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, 1998. No preferred shares were issued and outstanding at March 31,
1998. 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 January 15, 1999
Balance Sheet for the Fiscal Years Ended March 31, 1998 and 1997
Statement of Operations for the Fiscal Years Ended March 31, 1998 and 1997
Statement of Changes in Shareholders' Equity
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, 1998.

                                   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, 1998

<PAGE>

                                TABLE OF CONTENTS

                                                                        Page No.
                                                                        --------

INDEPENDENT AUDITORS' REPORT............................................   F-2

FINANCIAL STATEMENTS

      Balance Sheets as of December 31, 1998 (unaudited) and
         March 31, 1998 ................................................   F-3

      Statements of Operations for the nine months ended December 31,
         1998 and 1997 (unaudited) and for the years ended March 31, 1998
         and 1997 and for the period from June 27, 1988 (inception)
         through December 31, 1998 (unaudited)..........................   F-4

      Statement of Shareholders' Equity, June 27, 1988 (inception)
         through December 31, 1998 (unaudited)..........................   F-5

      Statements of cash flows, for the nine months ended December 31,
         1998 and 1997 (unaudited) and for the years ended March 31, 1998
         and 1997 and for the period from June 27, 1988 (inception)
         through December 31, 1998......................................   F-7

      Notes to Financial Statements.....................................   F-9


                                   11
<PAGE>

To the Board of Directors
Universal Services and Acquisitions, Inc.

                       INDEPENDENT AUDITORS' REPORT

We have audited the accompanying balance sheets of Universal Services and
Acquisitions, Inc. as of March 31, 1998, and the related statements of
operations, shareholders' equity and cash flows for the years March 31,
1998 and 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Universal
Services and Acquisitions, Inc. as of March 31, 1998 and 1997 and the
related statements of operations and cash flows the years ended March 31,
1998 and 1997, in conformity with generally accepted accounting
principles.

The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note A to
the financial statements, the Company has a history of operating losses
and a working capital deficit at March 31, 1998. These facts raise
substantial doubt about the Company's ability to continue as a going
concern. Management's plans concerning these matters also are described
in Note A. The financial statements do not include any adjustments that
might result from the outcome of these uncertainties.

The information for the nine months ended December 31, 1998 and 1997, has
been included on an unaudited basis. Accordingly, we do not express any
opinion or any other form of assurance on it.

Cordovano & Company, P.C.
Denver, Colorado
January 15, 1999


                                   12
<PAGE>

                UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                      (A DEVELOPMENT STAGE COMPANY)
                              BALANCE SHEETS

                                  ASSETS

<TABLE>
<CAPTION>
                                                                December 31,     March 31
                                                              1998 (unaudited)     1998
                                                              ----------------     ----
<S>                                                               <C>            <C>
CURRENT ASSETS
Cash ..........................................................   $  3,516       $  3,484

                  LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES
       Accounts payable .......................................   $  4,316       $  4,316
       Indebtedness to related party (Note B) .................      3,000          3,000
                 TOTAL LIABILITIES ............................      7,316          7,316

SHAREHOLDERS' 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          2,233
       Paid in capital in excess of par value of stock ........     70,373         70,373
       Deficit accumulated during the development
          stage ...............................................    (76,406)       (76,438)
                                                                  --------       --------

            TOTAL SHAREHOLDERS' DEFICIT .......................     (3,800)        (3,832)
                                                                  --------       --------

            TOTAL LIABILITIES AND STOCKHOLDERS'
              EQUITY (DEFICIT) ................................   $  3,516       $  3,484
                                                                  ========       ========
</TABLE>

         See Accompanying Notes and Independent Auditors' Report.


                                   13
<PAGE>

                UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                      (A DEVELOPMENT STAGE COMPANY)
                         STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                                  June 27, 1988
                                                 Nine Months ended    For the Years ended     Date of Inception
                                                 December 31                     March 31   Through December 31
                                                 1998       1997       1998          1997                  1998
                                                 ----       ----       ----          ----                  ----
                                                   (unaudited)
<S>                                            <C>                   <C>         <C>                   <C>
Costs and expenses
       General and administrative ..........   $     --         --   $  2,292    $  2,435              $ 32,338
       Consulting expense-related party ....         --         --         --       3,000                 3,000
       Provision for bad debts .............         --         --         --      26,250                52,500
       Other expenses ......................         --         --        120          --                 3,153
                                               --------   --------   --------    --------              --------
       Income(loss) from Operations ........         --         --     (2,412)    (31,685)              (90,991)

Other Income (expense)
       Interest Income .....................         32         52         88         118                14,708
Income (loss) before taxes .................         32         52     (2,324)    (31,567)              (76,283)

Provision for income taxes, benefit
       (Note D) ............................         --         --         --          --                  (123)

Net income (loss) ..........................   $     32   $     52   $ (2,324)   $(31,567)             $(76,406)
                                               ========   ========   ========    ========              ========
</TABLE>

         See Accompanying Notes and Independent Auditors' Report.


                                   14
<PAGE>

                UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                      (A DEVELOPMENT STAGE COMPANY)
                    STATEMENT OF SHAREHOLDERS' EQUITY
             JUNE 27, 1988 (INCEPTION) through MARCH 31, 1998

<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)

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
</TABLE>

         See Accompanying Notes and Independent Auditors' Report.


                                   15
<PAGE>

                UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                      (A DEVELOPMENT STAGE COMPANY)
                    STATEMENT OF SHAREHOLDERS' EQUITY
             JUNE 27, 1988 (INCEPTION) through MARCH 31, 1998

<TABLE>
<CAPTION>
                                                                                Paid in       Deficit
                                                                              Capital in    Accumulated
                                                                               Excess of    During the
                                                                               Par Value    Development
                                                                               of Stock        Stage
                                                                               --------        -----
<S>                                <C>          <C>          <C>          <C>        <C>     <C>
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)
</TABLE>

         See Accompanying Notes and Independent Auditors' Report.


                                   16
<PAGE>

                UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                      (A DEVELOPMENT STAGE COMPANY)
                         STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                      For the                                           June 27, 1988
                                                      Nine Months Ended       Year Ended March 31,      (Date of Inception) to
                                                      1998        1997        1998         1997         Through Dec. 31, 1998
                                                      ----        ----        ----         ----         ---------------------
                                                      (unaudited)
<S>                                                   <C>         <C>         <C>          <C>          <C>
Operating activities
       Net income (loss) .........................    $     32    $     52    $ (2,324)    $(31,567)    $(76,406)
       Adjustments to reconcile net
       loss to net cash used in
       operating activities:
       Allowance for doubtful accounts ...........          --          --          --       26,250       52,500
       Amortization of organization costs ........          --          --          --          500          500
Changes in current assets and current liabilities:
       Accrued interest receivable ...............          --          --          --           --       (2,500)
       Accounts payable and accrued expenses .....          --          --       2,292           --         4316
       Indebtedness to related party .............          --          --          --        3,000        3,000
Net cash provided by (used in)
       operating activities ......................          32          52         (32)      (1,817)     (18,590)
Investing activities (Note B)
       Organization costs incurred ...............          --          --          --           --         (500)
       Advance to merger candidate
       (Note C) ..................................          --          --          --           --      (50,000)
Net cash (used in) Investing Activities ..........          --          --          --           --      (50,500)
Financing activities
       Proceeds from issuance of
       common stock ..............................          --          --          --           --       95,250
       Capital contributed .......................          --          --          --        2,000        2,000
       Offering costs ............................          --          --          --           --      (24,644)
Net cash provided by (used in)
financing activities .............................          --          --          --        2,000       72,606

Net change in cash ...............................          32          52         (32)         183        3,516

Cash at
beginning of period ..............................       3,484       3,516       3,516        3,333           --

Cash at end of period ............................       3,516       3,568       3,484        3,516        3,516

Supplementary disclosure of cash flow information:

Cash paid during the year for:

Interest .........................................          --          --          --           --           --
Income taxes .....................................          --          --          --           --          123
</TABLE>

         See Accompanying Notes and Independent Auditors' Report.


                                   17
<PAGE>

                UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                      (A DEVELOPMENT STAGE COMPANY)

                      Notes to Financial Statements

                              March 31, 1998

Note A: Organization and summary of significant accounting policies

Description of operations and liquidity

The Company was incorporated under the laws of Colorado on June 27, 1988.
In addition, on June 27, 1988, the Company issued 1.5 million hares to
its founding shareholders for $22,000. During the year ended March 31,
1991, the Company sold 732,500 units, at $.10 each, in a "blind pool"
public offering. Each unit consisted of one share of the Company's $.001
par value common stock, two class "A" warrants and one class "B" warrant.
The Company closed the offering in March 1991, after realizing $48,606
net of related expenses totaling $24,644. Each class "A" warrant
(expiration date, December 31, 1999) entitles a holder to purchase one
share of $.001 par value common stock for $.25. Each class "B" warrant
(expiration date, December 31, 2000) entitles a holder to purchase one
share of $.001 par value common stock for $.40.

The Company is in the development stage and its financial statements are
prepared in accordance with Statement of Financial Accounting Standards
No. 7, "accounting for Development Stage Enterprises.

The Company conducts no operations, has no regular employees and had
$3,516 (unaudited) cash on hand at December 31, 1998. In addition, the
Company has a history of operating losses and a deficit in working
capital at March 31, 1988 which raises substantial doubt about the
Company's ability to continue as a going concern. In December, 1998, the
Directors approved a plan to sell shares of the Company's $.001 par value
common stock to a new group of investors whose strategy is to merge the
Company with a profitable operating entity. The approved plan provides,
among other things, for the issuance of 20,092,500 shares of the
Company's $.001 par value common stock to the investors. There is no
assurance, however, to indicate that a suitable merger candidate can be
found or that a merger will necessarily result in profitable operations.

If the approved plan is consummated, the majority of the control of the
Company will rest with the new investors and significant changes may be
made to the present slate of officers and directors of the Company.

Unaudited financial information

The accompanying financial information as of December 31, 1998, for the
periods from June 27, 1988 (inception) through December 31, 1998 and for
the nine months ended December 31, 1998 is unaudited. In management's
opinion, such information contains all normal recurring entries to make
the financial information not misleading.

Financial instruments and cash equivalents

The Company's financial instruments consist of a savings account,
accounts payable and accrued liabilities. The carrying value of these
financial instruments approximates fair market value because of their
short-term nature or because their bear interest at rates which
approximate market rates. For financial accounting purposes and the
statement of cash flows, cash equivalents include all highly liquid debt
instruments original maturities of three months or less.

         See Accompanying Notes and Independent Auditors' Report.


                                   18
<PAGE>

                UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                      (A DEVELOPMENT STAGE COMPANY)

                      NOTES TO FINANCIAL STATEMENTS

                              MARCH 31, 1998

Use of estimates

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures;
disclosure of contingent assets and liabilities at the date of the
financial statements; and the reported amounts of revenues and expenses
during the reporting period. Accordingly, actual results could differ
from those estimates.

Income taxes

The Company reports income taxes in accordance with Statement of
Financial Accounting Standard (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 in
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 deferred
tax amounts to the amount 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 deferred tax assets and
liabilities.

Loss per common share

The Company reports loss per share using a dual presentation of basic and
diluted loss per share. Basic loss per share excludes the impact of
common stock equivalents and preferred stock dividends. Diluted loss per
share used the average market price per share when applying the treasury
stock method in determining common stock equivalents.

Note B: Related party transactions

During the year ended March 31, 1997, the Company recorded a compensation
expense of $3,000 pursuant to an employment agreement with the president
of the Company. As of December 31, 1998, the $3,000 remains outstanding
(unaudited).

Note C: Accrued loss contingencies

On August 17, 1995, the Company advanced $50,000 to a merger candidate.
The advance was evidenced by a promissory note. The $50,000 had
previously been held in escrow, pending a merger with an operating
company, in accordance with applicable state law. The merger was
subsequently abandoned and the $50,000 note is in default. Management has
established an allowance for the full amount of the principal due on the
note and accrued interest totaling $2,500. The Company continues
collection efforts on the note receivable.

         See Accompanying Notes and Independent Auditors' Report.


                                   19
<PAGE>

                UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                      (A DEVELOPMENT STAGE COMPANY)

                      NOTES TO FINANCIAL STATEMENTS

                              MARCH 31, 1998

Note D: Income Taxes

A reconciliation of U.S. statutory federal income tax rate to the
effective rate follows for the years ended March 31, 1998 and 1997:

                                                            For the years ended
                                                                 March 31
                                                              1997       1998

       U.S. Statutory federal rate                           15.00%     15.00%
       State Income tax rate                                  4.75%      4.75%
       Net operating loss for which no tax
       benefit is currently available                       -19.75%    -19.75%
                                                              0.00%      0.00%

The benefit of income taxes from operations consisted of the following
components at March 31, 1998: current tax benefit of $447 resulting from
a net loss before income taxes, and deferred tax expense of $447
resulting from the valuation allowance recorded against the deferred tax
assets resulting from net operating losses. The change in the valuation
allowance for the years ended March 31, 1998 and 1997 was $447 and
$6,077, respectively. Net operating loss carryforwards at March 31, 1998
will begin to expire in 2005. 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. Should the Company undergo an ownership change, as
defined in Section 382 of the Internal Revenue Code, the Company's tax
net operating loss carryforwards generated prior to the ownership change
will be subject to an annual limitation which could reduce or defer the
utilization of those losses.

Note E: Shareholders' equity

Preferred Stock

The preferred stock is non-voting and may be issued in series as
determined by the Board of Directors. As required by law, each series
must designate the number of shares in the series and each share of a
series must have identical rights of (1) dividend, (2) redemption, (3)
rights in liquidation, (4) sinking fund provisions for the redemption of
the shares, and (5) terms of conversion.

         See Accompanying Notes and Independent Auditors' Report.


                                   20
<PAGE>

                UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                      (A DEVELOPMENT STAGE COMPANY)
                 NOTES TO FINANCIAL STATEMENTS, Concluded
                              MARCH 31, 1996

Common stock purchase warrants

Six class "A" and two class "B" common stock purchase warrants were
issued with each share of common stock issued to the Company's founders.
In connection with the "blind pool" public offering, two class "A" and one
class "B" common stock purchase warrants were offered with each unit. As
of March 31, 1998, the Company had 10,465,000 Class "A" and 3,732,500 B
common stock purchase warrants outstanding, respectively. The Company
adopted Statement of Financial Accounting Standard No. 123 "Accounting
for Stock-Based Compensation" in 1995, however the adoption of the
standard has no effect on the Company's warrants outstanding at March 31,
1998.

Note F: The Year 2000 Issue

The Y2K issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the
Company's computer and telecommunications programs that have date
sensitive software may recognize a date using "00" as the year 1900
instead of 2000. This could result in system failure or miscalculations
causing disruptions of operations, including, among other things an
inability to process transactions, send invoices, or engage in similar
normal business activities. The Company had no equipment at March 31,
1998.

The Company cannot determine the extent to which the Company is
vulnerable to third parties' failure to remediate their own Y2K problems.
As a result, there can be no guarantee that the systems of other parties
on which the Company's business relies will be timely converted or that a
failure to convert by another company, or a conversion that is
incompatible with the Company's systems, would have a material adverse
effect on the Company. In view of the foregoing, there can be no
assurance that the Y2K issue will not have a material adverse effect on
the Company's business.

         See Accompanying Notes and Independent Auditors' Report.