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

                                   FORM 10-QSB

|x|   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934

      For the quarterly period ended June 30, 2001

                                       or

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

      For the transition period from N/A to N/A

                          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

Indicate by check mark if the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. |X| Yes  |_| No

                  APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. []Yes[]No

                  APPLICABLE ONLY TO CORPORATE ISSUERS

State number of shares outstanding of each of the issuer=s classes of common
equity, as of the latest practicable date:

      Class                                         Outstanding at June 30, 2001
Common Stock, $.001                                       22,325,000 shares
     par value                                            -----------------
                                                       Outstanding Securities

Transitional Small Business Disclosure Format (check one): Yes |_| No |X|
<PAGE>

UNIVERSAL SERVICES & ACQUISITIONS, INC.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Financial statements are unaudited and included herein beginning on page F1 and
are incorporated herein by this reference.

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Except for disclosures that report the Company's historical results, the
statements set forth in this section are forward-looking statements. Actual
results may differ materially from those projected in the forward-looking
statements. Additional information concerning factors that may cause actual
results to differ materially from those in the forward-looking statements are in
the Company's annual report on Form 10-K for the year ended March 31, 2001 and
in the Company's other filings with the Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company assumes no
obligation to update any forward-looking statements or comments on the reasons
why actual results may differ therefrom.

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 executed a letter of intent to acquire a
privately held operating company in a reverse acquisition. The proposed merger
never occurred and the $50,000 the Company had advanced under the proposed
agreement was never repaid and was subsequently written off by the Company.

There were no material changes in financial condition in the current quarter.
The Company has no working capital to meet the obligations of identifying and
evaluating prospective merger candidates.

Results of Operations

There were no material changes in the results of operations as compared with the
corresponding period of the previous year.

The Company had no revenues. The Company incurred general and administrative
expenses relating to its reporting requirements under federal securities law
during the current quarter.

The Company realized a net loss of ($6,537) from operations for the three month
period ended June 30, 2001 compared to a net loss of ($490) for the three month
period ended June 30, 2000. For the three month periods ended June 30, 2001 and
June 30, 2000, the Company had no revenue. The net loss per share for the three
month periods ended June 30, 2001 and 2000 was nil.

The Company had general and administrative expenses of $31,630 for the six month
period ended June 30, 2001 compared to general and administrative costs and
expenses of $29,768 for the six month period ended June 30, 2000. For the six
month periods ended June 30, 2001 and 2000 the Company had no revenues.
<PAGE>

The Company had no assets at June 30, 2001 and 2000. The Company's liabilities
at June 30, 2001 were approximately $40,000 compared to liabilities of
approximately $8,400 at June 30, 2000. The increase is attributable to the
Company's incurring legal and accounting fees to bring the Company current in
its reporting obligations.

Total shareholders' equity increased from a deficit of ($8,362) at June 30, 2000
to a ($39,992) at June 30, 2001.

Liquidity and Capital Resources

As of June 30, 2001 and 2000, the Company had no working capital. The Company
does not have adequate working capital for its operations and is seeking a
potential merger candidate.

Effect of Inflation

Inflation did not have any significant effect on the operations of the Company
during the three months ended June 30, 2001. Further, inflation is not expected
to have any significant effect on future operations of the Company.

PART II OTHER INFORMATION

Items 1, 2, 3, 4 and 5 are inapplicable.

Item 6. Exhibits and Reports on Form 8-K

No reports on Form 8-K were filed for the relevant period.

                                   SIGNATURES

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

                                        UNIVERSAL SERVICES & ACQUISITIONS, INC.


Date August 8, 2001                     /s/ Charles Smith
                                        ---------------------------------
                                        Charles Smith, CEO, CFO
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                              FINANCIAL STATEMENTS
                                  JUNE 30, 2001
<PAGE>

                                TABLE OF CONTENTS

                                                                        Page No.
                                                                        --------

INDEPENDENT ACCOUNTANTS' REVIEW REPORT................................      1

FINANCIAL STATEMENTS

       Balance Sheets.................................................      2

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

       Statement of Stockholders' (Deficit)...........................    4 - 6

       Statements of Cash Flows.......................................    7 - 8

       Notes to Financial Statements..................................   9 - 11
<PAGE>

                     INDEPENDENT ACCOUNTANTS' REVIEW REPORT

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

We have reviewed the accompanying balance sheet of Universal Services and
Acquisitions, Inc. as of June 30, 2001, and the related statements of
operations, stockholders' (deficit) and cash flows for the six months ended June
30, 2001 and 2000, and for the period from June 27, 1988 (date of inception) to
June 30, 2001 in accordance with Statements on Standards for Accounting and
Review Services issued by the American Institute of Certified Public
Accountants. All information included in these financial statements is the
representation of management of Universal Services and Acquisitions, Inc.

A review consists principally of inquiries of company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be 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 6 to the
financial statements, the Company incurred net losses of $141,597 from
inception, has no assets and has abandoned all development programs. These
factors raise doubt about its ability to continue as a going concern. The
accompanying financial statements do not include any adjustments to the
financial statements that might be necessary should the Company be unable to
continue as a going concern.

We have audited, in accordance with auditing standards generally accepted in the
United States of America, the balance sheet of Universal Services and
Acquisitions, Inc. as of December 31, 2000, and the related statements of
operations, stockholders' (deficit) and cash flows for the year then ended (not
presented herein); and in our report dated January 10, 2001 we expressed an
unqualified opinion on those financial statements, with an additional comment
that there were conditions which raised substantial doubt about the Company's
ability to continue as a going concern. In our opinion, the information set
forth in the accompanying balance sheet as of December 31, 2000 is fairly stated
in all material respects in relation to the balance sheet from which it has been
derived.


Moffitt & Company, P.C.
Scottsdale, Arizona

August 7, 2001

<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEETS
                       JUNE 30, 2001 AND DECEMBER 31, 2000

<TABLE>
<CAPTION>
                                     ASSETS

                                                                  June 30,        December 31,
                                                                    2001             2000
                                                                (Unaudited)        (Audited)
                                                               --------------    --------------
<S>                                                            <C>               <C>
CURRENT ASSETS
       Cash and cash equivalents                               $            0    $            0
                                                               ==============    ==============

<CAPTION>
                     LIABILITIES AND STOCKHOLDERS' (DEFICIT)

<S>                                                            <C>               <C>
CURRENT LIABILITIES
       Accounts payable                                        $       34,116    $        8,362
       Accounts payable, related entity                                 5,876                 0
                                                               --------------    --------------

              TOTAL CURRENT LIABILITIES                                39,992             8,362
                                                               --------------    --------------

STOCKHOLDERS' (DEFICIT)
       Preferred stock, par value $0.001 per share
          Authorized - 40,000,000 shares
          Issued and outstanding - 0 - shares                               0                 0
       Common stock, par value $0.001 per share
          Authorized 100,000,000 shares
          Issued and outstanding  - 22,325,000 shares                  22,325            22,325
       Paid in capital in excess of par value of stock                 79,280            79,280
       Deficit accumulated during the development
          stage                                                      (141,597)         (109,967)
                                                               --------------    --------------

            TOTAL STOCKHOLDERS' (DEFICIT)                             (39,992)           (8,362)
                                                               --------------    --------------

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

       See Accompanying Notes and Independent Accountants' Review Report.


                                       2
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF OPERATIONS
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000
                      AND FOR THE PERIOD FROM JUNE 27, 1988
                      (DATE OF INCEPTION) TO JUNE 30, 2001

<TABLE>
<CAPTION>
                                                                                                         June 27, 1988
                                                                                                           (Date of
                                                  Six Months Ended               Six Months Ended        Inception) to
                                                       June 30,                      June 30,               June 30,
                                             ---------------------------    ---------------------------    ---------
                                                 2001            2000           2001            2000          2001
                                             ------------    -----------    ------------    -----------    ---------
<S>                                          <C>             <C>            <C>             <C>            <C>
REVENUE - INTEREST INCOME                    $          0    $         0    $          0    $         0    $  14,737
                                             ------------    -----------    ------------    -----------    ---------

EXPENSES
       General and administrative expenses          6,537              0          31,630              0       33,839
       Development costs                                0            490               0         29,768      122,495
                                             ------------    -----------    ------------    -----------    ---------

                  TOTAL EXPENSES                    6,537            490          31,630         29,768      156,334
                                             ------------    -----------    ------------    -----------    ---------

NET (LOSS)                                   $     (6,537)   $      (490)   $    (31,630)   $   (29,768)   $(141,597)
                                             ============    ===========    ============    ===========    =========
NET (LOSS) PER COMMON SHARE

       Basic and diluted                     $       (.00)   $      (.00)   $       (.00)   $      (.02)
                                             ============    ===========    ============    ===========

WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES OUTSTANDING

         Basic and diluted                     22,325,000      2,232,500      22,325,000      2,232,500
                                             ============    ===========    ============    ===========
</TABLE>

       See Accompanying Notes and Independent Accountants' Review Report.


                                        3
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                      STATEMENT OF STOCKHOLDERS' (DEFICIT)
              FOR THE PERIOD FROM JUNE 27, 1988 (DATE OF INCEPTION)
                                TO JUNE 30, 2001

<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         68,373        (15,618)
</TABLE>

       See Accompanying Notes and Independent Accountants' Review Report.


                                       4
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                STATEMENT OF STOCKHOLDERS' (DEFICIT) (CONTINUED)
              FOR THE PERIOD FROM JUNE 27, 1988 (DATE OF INCEPTION)
                                TO JUNE 30, 2001

<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, 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)

NET (LOSS) FOR THE YEAR
    ENDED MARCH 31, 2000              0              0              0              0              0        (30,186)
                           ------------   ------------   ------------   ------------   ------------   ------------

BALANCE, MARCH 31, 2000               0              0      2,232,500          2,233         70,373       (107,758)
</TABLE>

       See Accompanying Notes and Independent Accountants' Review Report.


                                       5
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                STATEMENT OF STOCKHOLDERS' (DEFICIT) (CONTINUED)
              FOR THE PERIOD FROM JUNE 27, 1988 (DATE OF INCEPTION)
                                TO JUNE 30, 2001

<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>
COMMON STOCK ISSUED
   FOR SERVICES
   SEPTEMBER 30, 2000                0   $          0     20,092,500   $     20,092   $      8,907   $          0

NET (LOSS) FOR THE NINE
    MONTH PERIOD ENDED
    DECEMBER 31, 2000                0              0              0              0              0         (2,209)
                          ------------   ------------   ------------   ------------   ------------   ------------
BALANCE,
   DECEMBER 31, 2000                 0   $          0     22,325,000   $     22,325         79,280       (109,967)

NET (LOSS) FOR THE SIX
    MONTHS ENDED
    JUNE 30, 2001                    0              0              0              0              0        (31,630)
                          ------------   ------------   ------------   ------------   ------------   ------------

BALANCE,
   JUNE 30, 2001                     0   $          0     22,325,000   $     22,325   $     79,280   $   (141,597)
                          ============   ============   ============   ============   ============   ============
</TABLE>

       See Accompanying Notes and Independent Accountants' Review Report.


                                       6
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
                      AND FOR THE PERIOD FROM JUNE 27, 1988
                      (DATE OF INCEPTION) TO JUNE 30, 2001

<TABLE>
<CAPTION>
                                                                                     June 27, 1988
                                                            Six Months Ended           (Date of
                                                                June 30,             Inception) to
                                                      ----------------------------      June 30,
                                                          2001            2000            2001
                                                      ------------    ------------    ------------
<S>                                                   <C>             <C>             <C>
CASH FLOWS FROM OPERATING
   ACTIVITIES:
       Net (loss)                                     $    (31,630)   $    (29,768)   $   (141,597)
       Adjustments to reconcile net (loss) to net
          cash (used) by operating activities:
             Common stock issued for services                    0               0          29,000
             Allowance for doubtful accounts                     0               0          50,000
             Amortization                                        0               0             500
       Changes in operating assets and liabilities:
          Accounts payable                                  31,630         (29,709)         39,991
                                                      ------------    ------------    ------------
                  NET CASH (USED) BY
                     OPERATING ACTIVITIES                        0             (59)        (22,106)
                                                      ------------    ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
       Loan to merger candidate                                  0               0         (50,000)
       Acquisition of organization costs                         0               0            (500)
                                                      ------------    ------------    ------------
         NET CASH (USED) BY
                     INVESTING ACTIVITIES                        0               0         (50,500)
                                                      ------------    ------------    ------------

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

                  NET CASH PROVIDED BY
                     FINANCING ACTIVITIES                        0               0          72,606
                                                      ------------    ------------    ------------

NET (DECREASE) IN CASH AND
   CASH EQUIVALENTS                                              0             (59)              0

CASH AND CASH EQUIVALENTS AT
   BEGINNING OF PERIOD                                           0              92               0
                                                      ------------    ------------    ------------

CASH AND CASH EQUIVALENTS AT
   END OF PERIOD                                      $          0    $         33    $          0
                                                      ============    ============    ============
</TABLE>

       See Accompanying Notes and Independent Accountants' Review Report.


                                       7
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
                      AND FOR THE PERIOD FROM JUNE 27, 1988
                      (DATE OF INCEPTION) TO JUNE 30, 2001

<TABLE>
<CAPTION>
                                                                            June 27, 1988
                                                     Six Months Ended          (Date of
                                                         June 30,            Inception) to
                                               ------------   ------------      June 30,
                                                   2001           2000           2001
                                               ------------   ------------   ------------
<S>                                            <C>            <C>            <C>
SUPPLEMENTAL DISCLOSURE OF CASH
   FLOW INFORMATION

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

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

NON-CASH INVESTING AND
   FINANCING ACTIVITIES

       Issuance of common stock for services   $          0   $          0   $     29,000
                                               ============   ============   ============
</TABLE>

       See Accompanying Notes and Independent Accountants' Review Report.


                                       8
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                             JUNE 30, 2001 AND 2000

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.
            On September 30, 2000, the Company issued 20,092,500 shares of
            common stock to Stein's Holdings, Inc. and became a 90% owned
            subsidiary of Stein's. The Company then changed its year-end to
            December 31, 2000 to conform to the year-end of Stein's Holdings,
            Inc.

            Accounting Estimates

            Management uses estimates and assumptions in preparing financial
            statements in accordance with accounting principles generally
            accepted in the United States of America. 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 basis 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
            (loss) per share. Basic earnings (loss) per share is computed by
            dividing net income (loss) available to common stockholders 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.

            Disclosure About Fair Value of Financial Instruments

            The Company estimates that the fair value of all financial
            instruments at June 30, 2001 and 2000 as defined in FASB 107, does
            not differ materially from the aggregate carrying values of its

       See Accompanying Notes and Independent Accountants' Review Report.


                                       9
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                             JUNE 30, 2001 AND 2000

NOTE 1      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

            Disclosure About Fair Value of Financial Instruments (Continued)

            financial instruments recorded in the accompanying balance sheets.
            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 June 30, 2001, 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 principal
            activities have not commenced, or have commenced and have not yet
            produced significant revenue.

            The Company expensed development costs of $122,495 for the period
            from June 27, 1988 (date of inception) to June 30, 2001.

NOTE 3      INCOME TAXES

            Significant components of the Company's deferred tax assets are as
            follows as of June 30, 2001 and 2000:

                                                             June 30,  June 30,
                                                               2001      2000
                                                             -------   -------

Deferred tax assets
       Net operating losses carryforward                     $23,000   $16,850

       Less valuation allowance                               23,000    16,850
                                                             -------   -------

       Net deferred tax assets                               $     0   $     0
                                                             =======   =======

A reconciliation of the valuation allowance is as follows:

       Balance at beginning of period                        $17,250   $11,772

       Addition - net operating loss                           5,700     5,078
                                                             -------   -------

       Balance at end of period                              $22,950   $16,850
                                                             =======   =======


                                       10
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                             JUNE 30, 2001 AND 2000

NOTE 4      NET OPERATING LOSS CARRYFORWARD

            The Company has the following net operating loss carryforwards at
            June 30, 2001:

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

             March 31, 1994       $    2,770           March 31, 2009
             March 31, 1995            1,034           March 31, 2010
             March 31, 1996            1,072           March 31, 2011
             March 31, 1997           25,857           March 31, 2012
             March 31, 1998           31,567           March 31, 2018
             March 31, 1999            1,134           March 31, 2019
             March 31, 2000           30,186           March 31, 2020
            December 31, 2000          2,209          December 31, 2020

              June 30, 2001           31,630          December 31, 2021
                                   ---------

                                   $ 127,459
                                   =========

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

NOTE 5      PREFERRED STOCK

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

NOTE 6      GOING CONCERN

            These financial statements are presented on the basis that the
            Company is a going concern. Going concern contemplates the
            realization of assets and the satisfaction of liabilities in the
            normal course of business over a reasonable length of time. The
            Company has incurred net losses of $141,597 from inception. In
            addition, the Company has abandoned all development activities and
            has no assets. These factors raise doubt as to the Company's ability
            to continue as a going concern.

            Management's plans to eliminate the going concern situation include
            but are not limited to seeking a merger candidate.

NOTE 7      UNAUDITED FINANCIAL INFORMATION

            The accompanying financial information as of June 30, 2001 and 2000
            is unaudited. In managements opinion, such information includes all
            normal recurring entries necessary to make the financial information
            not misleading.


       See Accompanying Notes and Independent Accountants' Review Report.


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