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 September 30, 2000

                                       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

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

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. |_| Yes |X| 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 September 30, 2000
Common Stock, $.001                        11,162,500 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, 1999 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 September 30, 2000, the Company converted $29,000 of accounts payable into
8,930,000 shares of common stock. The stock was issued to Stein's Holdings, Inc.
("Stein's") and the Company became a majority owned subsidiary of Stein's at
September 30, 2000.

Results of Operations

The Company had no operating revenues, however, it earned interest on its cash
accounts.

The Company realized a net loss of ($30) from operations for the three month
period ended September 30, 2000 compared to a net loss of ($36) for the three
month period ended September 30, 1999. For the three month periods ended
September 30, 2000 and September 30, 1999, the Company had no revenue. The net
loss per share for the three month periods ended September 30, 2000 and
September 30, 1999 was nil.

The Company realized a net loss of ($40) from operations for the six month
period ended September 30, 2000 compared to a net loss of ($526) for the six
month period ended September 30, 1999. For the six month period ended September
30, 2000 and September 30, 1999, the Company had no revenues. The net loss per
share for the six month periods ended September 30, 2000 and September 30, 1999
was nil.

The Company had development costs of $30 for the three month period ended
September 30, 2000 compared to costs and expenses of $36 for the three month
period ended September 30, 1999.

The Company's assets at September 30, 2000 were $3 compared to assets of

<PAGE>

approximately $474 at September 30, 1999. The Company's liabilities at September
30, 2000 were approximately $6,195 compared to liabilities of approximately
$5,966 at September 30, 1999.

Total shareholder equity decreased from a deficit of ($5,492) at September 30,
1999 to a deficit of ($6,192) at September 30, 2000.

Liquidity and Capital Resources

As of September 30, 2000 and September 30, 1999, the Company had no working
capital. The Company did not have adequate working capital for its operations.
Presently, the Company has no working capital and is seeking a merger candidate.

Effect of Inflation

Inflation did not have any significant effect on the operations of the Company
during the three months ended September 30, 2000. 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 January 31, 2001                    /s/ Mehrdad Alborz
                                         ---------------------------------------
                                         Mehrdad Alborz, CEO, CFO

<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                              FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2000 AND 1999

<PAGE>

                                TABLE OF CONTENTS

                                                                        Page No.
                                                                        --------

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

FINANCIAL STATEMENTS

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

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

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

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

       Notes to Financial Statements..............................       8 - 12

<PAGE>

                     INDEPENDENT ACCOUNTANTS' REVIEW REPORT

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

We have reviewed the accompanying balance sheets of Universal Services and
Acquisitions, Inc. as of September 30, 2000 and 1999, and the related statements
of operations, changes in stockholders' equity (deficit) and cash flows for the
six months then ended and for the period from June 27, 1988 (Date of Inception)
to September 30, 2000 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 the 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.

As discussed in Note 8, certain conditions indicate that the company may be
unable 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.


Moffitt & Company, P.C.
Scottsdale, Arizona

October 16, 2000

<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEETS
                           SEPTEMBER 30, 2000 AND 1999
                                   (UNAUDITED)

                                     ASSETS

<TABLE>
<CAPTION>
                                                                     2000        1999
                                                                  ---------    ---------
<S>                                                               <C>          <C>
CURRENT ASSETS
       Cash and cash equivalents                                  $       3    $     474
                                                                  ---------    ---------

            TOTAL ASSETS                                          $       3    $     474
                                                                  =========    =========

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
       Accounts payable                                           $   1,195    $   4,966
       Accounts payable, related entity                               5,000        1,000
                                                                  ---------    ---------

              TOTAL CURRENT LIABILITIES                               6,195        5,966
                                                                  ---------    ---------

STOCKHOLDERS' EQUITY (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
            1999 - 2,232,500 shares                                       0        2,233
            2000 - 11,162,500 shares                                 11,163            0
       Paid in capital in excess of par value of stock               90,443       70,373
       Deficit accumulated during the development
          stage                                                    (107,798)     (78,098)
                                                                  ---------    ---------

            TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                     (6,192)      (5,492)
                                                                  ---------    ---------

            TOTAL LIABILITIES AND STOCKHOLDERS'
              EQUITY (DEFICIT)                                    $       3    $     474
                                                                  =========    =========
</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 SIX MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                      AND FOR THE PERIOD FROM JUNE 27, 1988
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2000
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                     June 27, 1988
                                 Three Months     Six Months      Three Months      Six Months          (Date of
                                     Ended           Ended            Ended           Ended          Inception) to
                                 September 30,    September 30,   September 30,    September 30,     September 30,
                                     2000             2000             1999            1999              2000
                                 -------------    -------------   -------------    -------------     -------------
<S>                              <C>              <C>              <C>              <C>              <C>
REVENUE - INTEREST INCOME        $         0      $         0      $         0      $         0      $    14,737

DEVELOPMENT COST                          30               40               36              526          122,535
                                 -----------      -----------      -----------      -----------      -----------

NET (LOSS)                       $       (30)     $       (40)     $       (36)     $      (526)     $  (107,798)
                                 ===========      ===========      ===========      ===========      ===========

NET (LOSS) PER COMMON SHARE      $      (.00)     $      (.00)     $      (.00)     $      (.00)
                                 ===========      ===========      ===========      ===========

WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES OUTSTANDING

        Basic and diluted          2,232,500        2,232,500        2,232,500        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 CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
              FOR THE PERIOD FROM JUNE 27, 1988 (DATE OF INCEPTION)
                              TO SEPTEMBER 30, 2000
                                   (UNAUDITED)

<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 CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
              FOR THE PERIOD FROM JUNE 27, 1988 (DATE OF INCEPTION)
                              TO SEPTEMBER 30, 2000
                                   (UNAUDITED)

<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)

CONVERSION OF ACCOUNTS
    PAYABLE FOR COMMON
    STOCK                             0              0      8,930,000          8,930         20,070              0

NET (LOSS) FOR THE SIX
    MONTHS ENDED
    SEPTEMBER 30, 2000                0              0              0              0              0            (40)
                             ----------     ----------     ----------     ----------     ----------     ----------

BALANCE,
    SEPTEMBER 30, 2000                0     $        0     11,162,500     $   11,163     $   90,443     $ (107,798)
                             ==========     ==========     ==========     ==========     ==========     ==========
</TABLE>

       See Accompanying Notes and Independent Accountants' Review Report.


                                       5
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS
              FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                      AND FOR THE PERIOD FROM JUNE 27, 1988
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2000
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                            Six Months Ended         June 27, 1988
                                                              September 30,            (Date of
                                                        -------------------------    Inception) to
                                                          2000             1999    September 30, 2000
                                                        --------         --------  ------------------
<S>                                                     <C>              <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
       Net (loss)                                       $    (40)        $   (526)     $(78,480)
       Adjustments to reconcile net (loss) to
          net cash (used) by operating activities:
             Allowance for doubtful accounts                   0                0        50,000
             Amortization                                      0                0           500
       Changes in operating assets and liabilities:
          Accounts payable                                     0            1,000         5,966
                                                        --------         --------      --------
               NET CASH (USED) BY
                  OPERATING ACTIVITIES                       (40)             474       (22,014)
                                                        --------         --------      --------

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

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

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

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

NET INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                                      (40)             474            92

CASH AND CASH EQUIVALENTS AT
   BEGINNING OF PERIOD                                        43                0             0
                                                        --------         --------      --------

CASH AND CASH EQUIVALENTS AT
   END OF PERIOD                                        $      3         $    474      $     92
                                                        ========         ========      ========
</TABLE>

       See Accompanying Notes and Independent Accountants' Review Report.


                                       6
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                      STATEMENTS OF CASH FLOWS (CONTINUED)
              FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                      AND FOR THE PERIOD FROM JUNE 27, 1988
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2000
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                 Six Months Ended        June 27, 1988
                                                   September 30,           (Date of
                                             -----------------------     Inception) to
                                                2000          1999    September 30, 2000
                                             ---------     ---------  ------------------
<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 by
          conversion of accounts payable     $  29,000     $       0      $  29,000
                                             =========     =========      =========
</TABLE>

       See Accompanying Notes and Independent Accountants' Review Report.


                                       7
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2000 AND 1999
                                   (UNAUDITED)

NOTE 1      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

            Organization and Nature of Business

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

            Cash and Cash Equivalents

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

            Accounting Estimates

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

            Income Taxes

            Provisions for income taxes are based on taxes payable or refundable
            for the current year and deferred taxes on temporary differences
            between the amount of taxable income and pretax financial income and
            between the tax 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 shareowners by the
            weighted average number of common shares outstanding for the period.
            Diluted earnings per share reflects the potential dilution that
            could occur if securities or other contracts to issue common stock
            were exercised or converted into common stock. In accordance with
            FASB 128, any anti-dilutive effects on net loss per share are
            excluded.

       See Accompanying Notes and Independent Accountants' Review Report.


                                       8
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2000 AND 1999
                                   (UNAUDITED)

NOTE 1      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

            Disclosure About Fair Value of Financial Instruments

            The company has financial instruments, none of which are held for
            trading purposes. The company estimates that the fair value of all
            financial instruments at September 30, 2000 and 1999 as defined in
            FASB 107, does not differ materially from the aggregate carrying
            values of its financial instruments recorded in the accompanying
            balance sheet. The estimated fair value amounts have been determined
            by the company using available market information and appropriate
            valuation methodologies. Considerable judgement is required in
            interpreting market data to develop the estimates of fair value, and
            accordingly, the estimates are not necessarily indicative of the
            amounts that the company could realize in a current market exchange.

NOTE 2      DEVELOPMENT STAGE OPERATIONS

            As of September 30, 2000, the company was in the development stage
            of operations. According to the Financial Accounting Standards Board
            of the Financial Accounting Foundation, a development stage company
            is defined as a company that devotes most of its activities to
            establishing a new business activity. In addition, planned principle
            activities have not commenced, or have commenced and have not yet
            produced significant revenue.

            The company expensed $40 and $526 of development costs for the six
            months ended September 30, 2000 and 1999, respectively, and $107,798
            for the period from June 27, 1988 (date of development stage) to
            September 30, 2000.

NOTE 3      INCOME TAXES

<TABLE>
<CAPTION>
                                                                                2000          1999
                                                                             ---------      ---------
            <S>                                                              <C>            <C>
            (Loss) before income taxes                                       $     (40)     $    (526)
                                                                             ---------      ---------

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

            A reconciliation of the provision for income taxes
              compared with the amounts at the Federal
              Statutory income tax rates is as follows:
                   Tax at Federal Statutory income tax rates                 $       0      $       0
                                                                             ---------      ---------
</TABLE>

       See Accompanying Notes and Independent Accountants' Review Report.


                                       9
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2000 AND 1999
                                   (UNAUDITED)

NOTE 3      INCOME TAXES (CONTINUED)

<TABLE>
<CAPTION>


            <S>
            Deferred income tax assets and liabilities reflect the
              impact of temporary differences between amounts of
              assets and liabilities for financial reporting                     2000           1999
              purposes and the basis of such assets and liabilities           ----------     ----------
              as measured by tax laws                                         <C>            <C>
                  The net deferred tax assets is:                             $        0     $        0
                                                                              ----------     ----------
                  The net deferred tax liability is:                          $        0     $        0
                                                                              ----------     ----------
</TABLE>

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

<TABLE>
<CAPTION>
                                                                                   Deferred Tax
                                                                           -----------------------------
                                                                              Assets        Liabilities
                                                                           ------------     ------------
           <S>                                                             <C>              <C>
                  Net operating loss                                       $     16,850     $          0

                  Valuation allowance                                            16,850                0
                                                                           ------------     ------------

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

            A reconciliation of the valuation allowance is as follows:

                                                                                   2000             1999
                                                                           ------------     ------------

                  Balance, beginning of year                               $     16,850     $     11,636

                  Addition for the six months                                         0               74
                                                                           ------------     ------------

                  Balance, end of year                                     $     16,850     $     11,710
                                                                           ============     ============
</TABLE>

NOTE 4      NET OPERATING LOSS CARRYFORWARD

            The company has the following net operating loss carryforwards at
            September 30, 2000:

       See Accompanying Notes and Independent Accountants' Review Report.


                                       10
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2000 AND 1999

NOTE 4      NET OPERATING LOSS CARRYFORWARD (CONTINUED)

                    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
                  March 31, 2001                       40        March 31, 2021
                                               ----------

                                               $   93,660
                                               ==========

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

NOTE 5      STOCK WARRANTS

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

NOTE 6      PREFERRED STOCK

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

NOTE 7      DEVELOPMENT STAGE OPERATIONS

            As of September 30, 2000, the company was in the development stage
            of operations. According to the Financial Accounting Standards Board
            of the Financial Accounting Foundation, a development stage company
            is defined as a company that devotes most of its activities to
            establishing a new business activity. In addition, planned principle
            activities have not commenced, or have commenced and have not yet
            produced significant revenue.

            The company has expensed $107,798 of development costs for the
            period from June 27, 1888 (date of inception) to September 30, 2000
            and has no subsidiaries to generate income.

       See Accompanying Notes and Independent Accountants' Review Report.


                                       11
<PAGE>

                    UNIVERSAL SERVICES AND ACQUISITIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2000 AND 1999

NOTE 8      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 development losses of $107,798 from inception
            and has no subsidiaries to generate income. These factors raise
            doubt as to the company's ability to continue as a going concern.

       See Accompanying Notes and Independent Accountants' Review Report.


                                       12