<PAGE>   1

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


                                   FORM 10-KSB

 Annual report under Section 13 or 15(d) of the Securities Exchange Act of 1934

                    For the fiscal year ended March 31, 1999

                         Commission File Number 0-25521



                                  SHANECY, INC.
                 (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)




<TABLE>
<CAPTION>
          DELAWARE                                   88-0407731
<S>                                                <C>
(STATE OR OTHER JURISDICTION OF                    (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)                     IDENTIFICATION NO.)

13640 WHITE ROCK STATION ROAD
POWAY, CA                                          92064
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)           (ZIP CODE)
</TABLE>



(619)699-1739
(ISSUER'S TELEPHONE NUMBER)




         SECURITIES REGISTERED UNDER SECTION 12(g) OF THE EXCHANGE ACT:

                          Common Stock - .001 Par Value
                          -----------------------------
                                (TITLE OF CLASS)



                                        1
<PAGE>   2

Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

                Yes     [X]                        No      [ ]

Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10 KSB
or any amendment to this Form 10-KSB.

                Yes     [X]                        No      [ ]

The corporation had no revenues for the year ended March 31, 1999.

The approximate aggregate market value of the voting stock held by
non-affiliates of the registrant as of March 31, 1999, based on the average
selling price of one share of the Common Stock of the Company, was $3,700.



                                     PART I

                                     ITEM 1
                           DESCRIPTION OF THE BUSINESS


Business Development

Shanecy, Inc. was incorporated in Delaware on May 31, 1994. The Company was
organized in order to develop and market a home health care analysis and
referral service. During 1995 the Company raised funds necessary to keep the
Company current in its state fees and taxes by the sale of stock to investors.
In January of 1999 the board of directors voted to seek additional capital and
implement the Company's business plan.

There have been no bankruptcy, receivership or similar proceedings.

There have been no material reclassifications, mergers, consolidations, or
purchase or sale of a significant amount of assets not in the ordinary course of
business.


Business of the Issuer

The Company intends to develop and market its home health care analysis and
referral service for families of elderly or homebound patients that integrates
such data as a patient's care needs, a rating system for care providers that
offer services in their community, coverage by insurance or



                                        2
<PAGE>   3

government agency, and financial constraints of the family. Management has
extensive experience with all facets of long term health care management and
information systems used by health care providers. Based upon Management's
extensive knowledge and experience in information systems, the Company estimates
that software programming costs will not exceed $50,000. The Company will also
use additional commercially available hardware and software for information
systems and Internet website service that the Company estimates will not exceed
$150,000. Management intends to market its service through direct marketing to
home care providers, hospitals and doctors, and to consumers through the use of
its Internet website. Management has begun informal discussions with Southern
California health care providers, but the Company has no market or distribution
agreements with any home care providers, doctors, hospitals, or Internet sales
sites. Management estimates the Company will require approximately twelve months
to raise sufficient funding in order to seek out marketing agreements with home
care providers and distribution agreements with hospitals and physicians.

The Company has no new product or service planned or announced to the public.

The size and financial strengths of the Company's competitors are substantially
greater than those of the Company. Although Management has limited access to
in-depth information regarding the operations of the Company's competitors,
Management believes that the Company can effectively compete because of the
unique nature of its analysis which specializes in providing assistance to the
increasing market of home care patients. Management intends to target those
consumers who require Home Care Aides (HCA's), homemakers or companions for
daily or occasional support. Management also considers it significant that their
analysis would provide families with information necessary to determine, with
the assistance of their physician, the level of home care required and the
services available in their community. Management is not aware of any
significant barriers to the Company's entry into the home care analysis and
referral market, however, the Company at this time cannot ascertain its exact
market share of this market.

Software and website design and programming are available through numerous
suppliers. While Management has already had several initial design meetings with
suppliers, the Company currently has no contracts with suppliers and will not
complete contracts with potential suppliers until such time as the Company has
sufficient funding. Over the next twelve months the Company intends to achieve
the following goals in order to market its services: raise capital needed to
fund its business plan through the sale of securities, complete and test all
custom software, purchase all furniture, fixtures, office equipment, and
off-the-shelf software, and secure office space. Based upon sufficient funding
from the Company's securities sales, Management will begin marketing in
approximately month nine of its business plan and Internet marketing in
approximately month twelve of its business plan.

The Company intends to offer its services for families of elderly or homebound
patients through direct marketing to home care providers, hospitals, and doctors
throughout Southern California. In addition, the Company will market to
consumers in Southern California and other Western states through the Internet
on its own proposed website and will not depend on any one or a few major
customers. Management has extensive experience in this market and a large
network of health care providers in the Western region of the United States.
Based upon sufficient funding from the Company's securities sales, Management
will begin direct marketing in approximately month nine of its business plan and
Internet marketing in approximately month twelve of its business plan.

When the Company has sufficient funding, management will seek legal council to
determine if



                                        3
<PAGE>   4

copyright or trademark protection is required. Management at this time cannot
accurately estimate what will constitute sufficient funding.

The Company does not need any governmental approval of its principal product or
service. The Company's business is not subject to material regulation by
federal, state, or local governmental agencies. The company currently has no
employees.

Year 2000 Disclosure

Computer programs used in business applications usually have time-sensitive
software that may recognize a date using "00" as the year 1900 rather than the
year 2000. This could result in system data failure that might cause disruption
of the user's business activities.

In assessing available software and software programming, the Company has
determined that its proposed software will be Year 2000 compatible and any other
purchased software will be off-the- shelf software that will be certified Year
2000 compatible for all of its computing requirements. Based upon this
assessment, management believes the Year 2000 issue will not pose significant
operational problems and will not materially affect future financial results.

The Company currently anticipates purchasing new off-the-shelf Year 2000
compatible software by September 30, 1999, which is prior to any anticipated
impact on its operating systems. The total cost of this new software is not
anticipated to be a material expense to the Company at this time. However, there
can be no guarantee that these new off-the-shelf software products will be
adequately modified, which could have a material adverse effect on the Company's
results of operations.


                                     ITEM 2
                             DESCRIPTION OF PROPERTY

The Company's principal executive office address and telephone number are
provided by a Director of the Company at no cost. Management considers the
Company's current principal office space arrangement adequate for current and
short-term estimated growth.


                                     ITEM 3
                                LEGAL PROCEEDINGS

The Company is not currently involved in any legal proceedings and is not aware
of any pending or potential legal actions.


                                     ITEM 4
               SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted during the fourth quarter of the fiscal year covered by
this report to a vote of the security holders, through the solicitation of
proxies or otherwise.



                                        4
<PAGE>   5

                                     PART II

                                     ITEM 5
         MARKET FOR COMMON EQUITY AND OTHER RELATED STOCKHOLDER MATTERS

The Company, upon approval of the SEC, will file for trading on the OTC
Electronic Bulletin Board which is sponsored by the National Association of
Securities Dealers (NASD). The OTC Electronic Bulletin Board is a network of
security dealers who buy and sell stock. The dealers are connected by a computer
network which provides information on current "bids" and "asks" as well as
volume information.

As of the date of this filing, there is no public market for the Company's
securities. As of March 31, 1999, the Company had 37 shareholders of record. The
Company has paid no cash dividends. The Company has no outstanding options. The
Company has no plans to register any of its securities under the Securities Act
for sale by security holders. There is no public offering of equity and there is
no proposed public offering of equity.

The Company has not sold any securities during the past three years.


                                     ITEM 6
            MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Plan of Operation

The Company's current cash balance is sufficient in Management's opinion until
additional capital can be raised to implement the Company's business plan.
Management intends to implement a business plan for the Company that includes
raising capital needed to fund its operations through the sale of securities,
completing and testing of all custom software, opening an Internet web site,
purchasing office furniture, equipment, and off-the-shelf software, and leasing
office space. Management anticipates that the funds needed to complete these
steps and pay for operating expenses to be approximately $250,000 to $350,000.
In order to remain a going concern the Company must first utilize private
placement funding in order to implement its business plan and maintain a
positive cash flow. There are considerable risks in the implementation of the
Company's business plan, including insufficient funding from private placement
securities sales, greater than anticipated costs for software and insufficient
revenues from sales. Without sufficient cash flow, the Company would rely on its
existing cash and loans from its officers until such time as the Company could
raise sufficient private placement funds to implement its plans.

There are no current plans for product research and development. There are no
current plans to purchase or sell any significant amount of fixed assets. There
are no current plans to increase the number of employees.

Results of Operations

There were no revenues from sales for the period ended March 31, 1999. The
Company sustained a net loss of $3,578 for the twelve months ended March 31,
1999. Losses were primarily attributable to expenditures for operating expenses
of the corporation.



                                        5
<PAGE>   6

Liquidity and Capital Resources

As of March 31, 1999, the Company had $122 cash on hand and in the bank. The
primary costs and operating expenses for the twelve months ended March 31, 1999
were $2,300 in professional fees, and $880 in licenses and fees.

Currently, the Company maintains a sufficient positive cash balance for working
capital. The losses through March 1999 were due to a lack of revenues and
operating expenses incurred.


                                     ITEM 7
                              FINANCIAL STATEMENTS

The audited financial statements of the Company and related notes which are
included in this offering have been examined by Barry L. Friedman, PC, and have
been so included in reliance upon the opinion of such accountants given upon
their authority as an expert in auditing and accounting.


                                     ITEM 8
       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING CONTROL
                            AND FINANCIAL DISCLOSURE

None.

                                    PART III

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

The Directors and Officers of the Company, all of those whose terms will expire
at the 1999 shareholder meeting, or at such a time as their successors shall be
elected and qualified, are as follows:

<TABLE>
<CAPTION>
Name & Address                      Age     Position             Date First Elected
--------------                      ---     --------             ------------------
<S>                                 <C>     <C>                  <C>
Ann Myers                           68      President,           6/14/94
1605 Mirage Court                           Secretary,
El Cajon, CA 92019                          Director

Jill Wright                         55      Director             6/14/94
13640 White Rock Station Road               Treasurer
Poway, Ca 92064
</TABLE>

Each of the foregoing persons may be deemed a "promoter" of the Company, as that
term is defined in the rules and regulations promulgated under the Securities
and Exchange Act of 1933.

Directors are elected to serve until the next annual meeting of stockholders and
until their



                                        6
<PAGE>   7

successors have been elected and qualified. Officers appointed to serve until
the meeting of the Board of Directors following the next annual meeting of
stockholders and until their successors have been elected and qualified.

Neither Ms. Myers or Ms. Wright hold directorships in any other reporting
company.

No Executive Officer or Director of the Corporation has been the subject of any
Order, Judgement, or Decree of any Court of competent jurisdiction, of any
regulatory agency enjoining him from acting as an investment advisor,
underwriter, broker or dealer in the securities industry, or as an affiliated
person, director or employee of an investment company, bank, savings and loan
association, or insurance company or from engaging in or continuing any conduct
or practice in connection with any such activity or in connection with the
purchase or sale of any securities nor has any such person been the subject of
any Order of a State authority barring or suspending for more than sixty (60)
days, the right of such a person to be engaged in such activities or to be
associated with such activities.

No Executive Officer or Director of the Corporation has been convicted in any
criminal proceeding (excluding traffic violations) or is the subject of a
criminal proceeding which is currently pending. No Executive Officer or Director
of the Corporation is the subject of any pending legal proceedings.

Resumes

<TABLE>
<CAPTION>
ANN MYERS, PRESIDENT, SECRETARY & DIRECTOR
<S>                   <C>
1991 - Current        Independent contractor providing Management Information Services
                      consulting for service and medical manufacturing businesses, responsibilities
                      include all data processing, billings, review and selection of applications
                      software.

1982 - 1991           Manager - Data Processing Services for manufacturing firms

1957 -1978            Manager - California Department of  Motor Vehicles

JILL WRIGHT, TREASURER & DIRECTOR

1996 -  Current       Independent consultant to long term health care
                      and assisted living facilities in San Diego. Current
                      California Administrator's License in Assisted Living.

1993 - 1996           Pacific Regent of La Jolla, Director of Marketing.

1990 - 1993           Mercy Rehabilitation and Care Center, Director of Social Services.

Prior                 Director of Recreation Therapy - clinical psychiatric
                      setting, administered and managed handicapped and special
                      population programs in various San Diego health care
                      facilities.

1973 - 1978           Assistant Professor of Recreational Therapy at San Diego State University
</TABLE>

BS and MS - Indiana University



                                        7
<PAGE>   8

                                     ITEM 10
                             EXECUTIVE COMPENSATION

The company's current officers receive no compensation. There are no current
employment agreements between the Company and its executive officers.

There are no annuity, pension or retirement benefits proposed to be paid to
officers, directors or employees of the Corporation in the event of retirement
at normal retirement date pursuant to any presently existing plan provided or
contributed to by the Corporation or any of its subsidiaries, if any.


                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                 Other       Restricted                                   All other
Name &                                                          (annual        stock                         LTIP          compen-
principle                           Salary         Bonus         compen-        awards       Options         Payouts        sation
position             Year            ($)            ($)          sation          ($)           SARs            ($)            ($)
---------------------------------------------------------------------------------------------------------------------------------
<S>                  <C>            <C>            <C>          <C>          <C>             <C>             <C>          <C>
A Myers              1996            -0-            -0            -0-            -0-            -0-            -0-            -0-
President            1997            -0-            -0            -0-            -0-            -0-            -0-            -0-
                     1998            -0-            -0            -0-             1             -0-            -0-            -0-

J Wright             1996            -0-            -0            -0-            -0-            -0-            -0-            -0-
Treasurer            1997            -0-            -0            -0-            -0-            -0-            -0-            -0-
                     1998            -0-            -0            -0-             1             -0-            -0-            -0-
</TABLE>


The Directors and Principal Officers have worked with no remuneration until such
time as the Company receives sufficient revenues necessary to provide proper
salaries to all Officers and compensation for Directors' participation. The
Officers and the Board of Directors have the responsibility to determine the
timing of remuneration based upon a positive cash flow to include stock sales,
product sales, estimated cash expenditures, accounts receivable, accounts
payable, notes payable, and a cash balance of not less than $10,000 at each
month end. At this time, management cannot accurately estimate when sufficient
revenues will occur to implement this compensation.



                                     ITEM 11
                 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                                 AND MANAGEMENT

The following table sets forth information on the ownership of the Company's
voting securities by Officers, Directors and major shareholders as well as those
who own beneficially more than five percent of the Company's common stock
through the most current date - March 31,1999:



                                        8
<PAGE>   9

<TABLE>
<CAPTION>
Title Of       Name &                              Amount &             Percent
Class          Address                             Nature of owner      Owned
-----          -------                             ---------------      -----
<S>            <C>                                 <C>                  <C>
Common         Ann Myers                           4,500,000 (a)        42%
               1605 Mirage Court
               El Cajon, CA 92019


Common         Jill Wright                         4,500,000 (b)        42%
               13640 White Rock Station Rd.
               Poway, Ca 92064
</TABLE>



(a)     Ms. Myers received 50,000 shares of the Company's common stock in 1994
        for services, another 50,000 shares were issued to her for services in
        February 1998. 4,400,000 shares of the Company's common stock were
        issued to her per a 45 for 1 stock split on February 28, 1998.

(b)     Ms. Wright received 50,000 shares of the Company's common stock in 1994
        for services, another 50,000 shares were issued to her for services in
        February 1998. 4,400,000 shares of the Company's common stock were
        issued to her per a 45 for 1 stock split on February 28, 1998.


                                     ITEM 12
                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Ms. Myers (Director, President & Secretary) received 50,000 shares of the
Company's common stock in 1994 for services, another 50,000 shares were issued
to her for services in February 1998. 4,400,000 shares of the Company's common
stock were issued to her per a 45 for 1 forward stock split on February 28,
1998.

Ms. Wright (Director & Treasurer) received 50,000 shares of the Company's common
stock in 1994 for services, another 50,000 shares were issued to her for
services in February 1998. 4,400,000 shares of the Company's common stock were
issued to her per a 45 for 1 forward stock split on February 28, 1998.



                                        9
<PAGE>   10

                                    PART III

                                    EXHIBITS

<TABLE>
<S>            <C>
Exhibit A      Financial Statements
               1  Audited financial statements for the years ended March 31, 1997, 1998, 1999

Exhibit 11     Statement re: computation of per share earnings          See Exhibit A
Exhibit 23     Consent of experts and counsel                           Included
Exhibit 27     Financial Data Schedule                                  Included
</TABLE>



                                   SIGNATURES

In accordance with Section 12 of the Securities and Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                            Shanecy, Inc.



Date  6/22/99                               By  /s/ ANN MYERS
    ------------------------------            ----------------------------------
                                              Ann Myers, President & Director



Date  6/22/99                               By /s/ JILL WRIGHT
    ------------------------------            ----------------------------------
                                              Jill Wright, Treasurer & Director



                                       10
<PAGE>   11

                                   EXHIBIT A


<PAGE>   12

                                  SHANECY, INC.
                          (A Development Stage Company)


                              FINANCIAL STATEMENTS

                                 MARCH 31, 1999
                                 MARCH 31, 1998
                                 MARCH 31, 1997



<PAGE>   13

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                        PAGE #
                                                                        ------
<S>                                                                     <C>
INDEPENDENT AUDITORS REPORT                                                1


ASSETS                                                                     2


LIABILITIES AND STOCKHOLDERS' EQUITY                                       3


STATEMENT OF OPERATIONS                                                    4


STATEMENT OF STOCKHOLDERS' EQUITY                                          5


STATEMENT OF CASH FLOWS                                                    6


NOTES TO FINANCIAL STATEMENTS                                           7-11
</TABLE>



<PAGE>   14

                             BARRY L. FRIEDMAN, P.C.
                           Certified Public Accountant

                     1582 TULITA DRIVE OFFICE (702) 361-8414
                 LAS VEGAS, NEVADA 89123 FAX NO. (702) 896-0278


                          INDEPENDENT AUDITORS' REPORT

Board of Directors                                                  May 28, 1999
Shanecy, Inc.
Poway, California

        I have audited the accompanying Balance Sheets of Shanecy, Inc. (A
Development Stage Company), as of March 31, 1999, March 31, 1998, and March 31,
1997, and the related statements of operations, stockholders' equity and cash
flows for the three years ended March 31, 1999, March 31, 1998, and March 31,
1997 and the period May 31, 1994 (inception) to March 31, 1999. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit.

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

        In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Shanecy, Inc. (A
Development Stage Company), as of March 31, 1999, March 31, 1998, and March 31,
1997, and the results of its operations and cash flows for the three years ended
March 31, 1999, March 31, 1998, and March 31, 1997 and the period May 31, 1994
(inception) to March 31, 1999, in conformity with generally accepted accounting
principles.

        The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note #5 to the
financial statements, the Company has suffered recurring losses from operations
and has no established source of revenue. This raises substantial doubt about
its ability to continue as a going concern. Management's plan in regard to these
matters is described in Note #5. These financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


/s/ BARRY L. FRIEDMAN
---------------------------
Barry L. Friedman
Certified Public Accountant



<PAGE>   15

                                  SHANECY, INC.
                          (A Development Stage Company)


                                  BALANCE SHEET


                                     ASSETS


<TABLE>
<CAPTION>
                                      MARCH             MARCH            MARCH
                                    31, 1999          31, 1998          31, 1997
                                     ------            ------            ------
<S>                                 <C>               <C>               <C>
CURRENT ASSETS:

    CASH                             $  122            $3,700            $3,700
                                     ------            ------            ------

    TOTAL CURRENT ASSETS:            $  122            $3,700            $3,700
                                     ------            ------            ------


OTHER ASSETS:                        $    0            $    0            $    0
                                     ------            ------            ------


    TOTAL OTHER ASSETS:              $    0            $    0            $    0
                                     ------            ------            ------



TOTAL ASSETS                         $  122            $3,700            $3,700
                                     ------            ------            ------
</TABLE>



                 See accompanying notes to financial statements

                                      - 2 -
<PAGE>   16

                                  SHANECY, INC.
                          (A Development Stage Company)

                                  BALANCE SHEET

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                             MARCH              MARCH              MARCH
                                            31, 1999           31, 1998           31, 1997
                                            -------            -------            -------
<S>                                         <C>                <C>                <C>
CURRENT LIABILITIES:                        $     0            $     0            $     0
                                            -------            -------            -------

    TOTAL CURRENT LIABILITIES:              $     0            $     0            $     0
                                            -------            -------            -------

STOCKHOLDERS' EQUITY: (Note #4)

    Common stock
    Par value $0.00001
    Authorized 20,000,000 shares
    Issued and outstanding at

    March 31, 1997 -
    137,000 shares                                                                $     1

    March 31, 1998 -
    10,665,000 shares                                          $   107

    Common stock
    Par value $0.001
    Authorized 20,000,000 shares
    Issued and outstanding at

    March 31, 1999 -
    10,665,000 shares                       $10,665

    Additional Paid-In Capital               -6,765             +3,793             +3,799

    Deficit accumulated during
    Development stage                        -3,778               -200               -100

TOTAL STOCKHOLDERS' EQUITY:                 $   122            $ 3,700            $ 3,700
                                            -------            -------            -------

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY:                       $   122            $ 3,700            $ 3,700
                                            -------            -------            -------
</TABLE>



                 See accompanying notes to financial statements

                                      - 3 -
<PAGE>   17

                                  SHANECY, INC.
                          (A Development Stage Company)


                             STATEMENT OF OPERATIONS


<TABLE>
<CAPTION>
                                   Year               Year               Year           May 31,1994
                                  Ended              Ended              Ended           (Inception)
                                 Mar. 31,           Mar. 31,           Mar. 31,         to Mar. 31,
                                  1999                1998               1997              1999
                               -----------        -----------        -----------        -----------
<S>                            <C>                <C>                <C>                <C>
INCOME:
Revenue                        $         0        $         0        $         0        $         0
                               -----------        -----------        -----------        -----------


EXPENSES:

General, Selling and
Administrative:                $     3,578        $       100        $         0        $     3,778
                               -----------        -----------        -----------        -----------


        TOTAL EXPENSES:        $     3,578        $       100        $         0        $     3,778
                               -----------        -----------        -----------        -----------


NET PROFIT/LOSS (-):           $    -3,578        $      -100        $         0        $    -3,778
                               -----------        -----------        -----------        -----------



Net Profit/Loss(-)
per weighted share
(Note 1):                      $    -.0004        $       NIL        $       NIL        $    -.0004
                               -----------        -----------        -----------        -----------


Weighted average
Number of common
shares outstanding:             10,665,000         10,665,000         10,665,000         10,665,000
                               -----------        -----------        -----------        -----------
</TABLE>



                 See accompanying notes to financial statements

                                      - 4 -
<PAGE>   18

                                  SHANECY, INC.
                          (A Development Stage Company)


                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                                   Additional        Accumu-
                               Common             Stock             paid-in           lated
                               Shares            Amount             Capital          Deficit
                             ----------        ----------          --------         --------
<S>                          <C>               <C>               <C>               <C>
Balance,
March 31, 1996                  137,000        $        1        $    3,799        $    -100

Net loss year ended
March 31, 1997:                                                                            0
                             ----------        ----------          --------         --------

Balance,
March 31, 1997:                 137,000        $        1        $    3,799        $    -100

February 28, 1998
Stock Issued
For Services                    100,000                +1               99

February 28, 1998
Forward Stock Split
45:1                         10,428,000              +105             -105

Net Loss Year Ended
March 31, 1998                                                                          -100
                             ----------        ----------          --------         --------

Balance,
March 31, 1998               10,665,000               107             3,793             -200

October 7, 1998
Change Par Value
From $.00001 to $.001                             +10,558           -10,558

Net Loss Year Ended
March 31, 1999                                                                        -3,578
                             ----------        ----------          --------         --------

Balance,
March 31, 1999               10,665,000        $   10,665          $ -6,765         $ -3,778
                             ----------        ----------          --------         --------
</TABLE>



                 See accompanying notes to financial statements

                                      - 5 -
<PAGE>   19

                                  SHANECY, INC.
                          (A Development Stage Company)

                             STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                  Year           Year          Year       May 31,1994
                                 Ended          Ended         Ended      (Inception)
                                 Mar. 31,       Mar. 31,      Mar. 31,    to Mar. 31,
                                  1999           1998          1997         1999
                                ---------     ---------     ---------     ---------
<S>                             <C>           <C>           <C>           <C>
CASH FLOWS FROM
OPERATING ACTIVITIES

    Net Loss                     $ -3,578        $ -100     $       0      $ -3,778

    Adjustment to
    Reconcile net loss
    To net cash provided
    by operating
    Activities:
    Issue Common Stock
    For Services                        0          +100             0          +200

Changes in assets and
Liabilities:                            0             0             0             0
                                ---------     ---------     ---------     ---------


NET CASH USED IN
OPERATING ACTIVITIES:            $ -3,578     $       0     $       0      $ -3,578

CASH FLOWS FROM
INVESTING ACTIVITIES:                   0             0             0             0

CASH FLOWS FROM
FINANCING ACTIVITIES:

    Issuance of Common
    Stock for Cash                      0             0             0        +3,700
                                ---------     ---------     ---------     ---------

Net Increase (decrease)          $ -3,578     $       0     $       0        $ +122

Cash,
Beginning of period:                3,700         3,700         3,700             0
                                ---------     ---------     ---------     ---------

Cash, End of Period:            $     122     $   3,700     $   3,700     $     122
                                ---------     ---------     ---------     ---------
</TABLE>



                 See accompanying notes to financial statements

                                      - 6 -
<PAGE>   20

                                  SHANECY, INC.
                          (A Development Stage Company)


                          NOTES TO FINANCIAL STATEMENTS

                      MARCH 31, 1999, MARCH 31, 1998, and MARCH 31, 1997



NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY

        The Company was organized MAY 31, 1994, under the laws of the State of
        Delaware as SHANECY, INC. The Company currently has no operations and in
        accordance with SFAS #7, is considered a development company.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        Accounting Method

               The Company records income and expenses on the accrual method.

        Estimates

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

        Cash and equivalents

               The Company maintains a cash balance in a non-interest-bearing
               bank that currently does not exceed federally insured limits. For
               the purpose of the statements of cash flows, all highly liquid
               investments with the maturity of three months or less are
               considered to be cash equivalents. There are no cash equivalents
               as of March 31, 1999.



                                      - 7 -
<PAGE>   21

                                  SHANECY, INC.
                          (A Development Stage Company)


                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

               MARCH 31, 1999, MARCH 31, 1998, and MARCH 31, 1997


                NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

        Income Taxes

               Income taxes are provided for using the liability method of
               accounting in accordance with Statement of Financial Accounting
               Standards No. 109 (SFAS #109) "Accounting for Income Taxes". A
               deferred tax asset or liability is recorded for all temporary
               difference between financial and tax reporting. Deferred tax
               expense (benefit) results from the net change during the year of
               deferred tax assets and liabilities.


        Loss Per Share

               Net loss per share is provided in accordance with Statement of
               Financial Accounting Standards No. 128 (SFAS #128) "Earnings Per
               Share". Basic loss per share is computed by dividing losses
               available to common stockholders by the weighted average number
               of common shares outstanding during the period. Diluted loss per
               share reflects per share amounts that would have resulted if
               dilative common stock equivalents had been converted to common
               stock. As of March 31, 1999, the Company had no dilative common
               stock equivalents such as stock options.

        Year End

              The Company has selected March 31st as its fiscal year-end.

        Policy in Regards to Issuance of Common Stock in a Non-Cash Transaction

               The company's accounting policy for issuing shares in a non-cash
               transaction is to issue the equivalent amount of stock equal to
               the fair market value of the assets or services received.



                                      - 8 -
<PAGE>   22

                                  SHANECY, INC.
                          (A Development Stage Company)


                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

               MARCH 31, 1999, MARCH 31, 1998, and MARCH 31, 1997


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


        Year 2000 Disclosure

               Computer programs that have time sensitive software may recognize
               a date using "00" as the year 1900 rather than the year 2000.
               This could result in a system failure or miscalculations causing
               disruption of normal business activities.

               The company's potential software suppliers have verified that
               they will provide only certified "Year 2000" compatible software
               for all of the company's computing requirements. Because the
               company's products and services are sold to the general public
               with no major customers, the company believes that the "Year
               2000" issue will not pose significant operational problems and
               will not materially affect future financial results.


NOTE 3 - INCOME TAXES

        There is no provision for income taxes for the period ended March 31,
        1999, due to the net loss and no state income tax in Nevada, the state
        of the Company's domicile and operations. The Company's total deferred
        tax asset as of March 31, 1999 is as follows:

<TABLE>
<S>                                                                <C>
              Net operation loss carry forward                     $       3,778
              Valuation allowance                                  $       3,778

              Net deferred tax asset                               $           0
</TABLE>


        The federal net operating loss carry forward will expire in 2017 to
2019.



                                      - 9 -
<PAGE>   23

                                  SHANECY, INC.
                          (A Development Stage Company)


                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

               MARCH 31, 1999, MARCH 31, 1998, and MARCH 31, 1997


NOTE 4 - STOCKHOLDERS' EQUITY


        Common Stock

        The authorized common stock of the corporation consists of 20,000,000
        shares with a par value $.001 per share.

        Preferred Stock

        Shanecy, Inc. has no preferred stock.


        On June 14, 1994, the Company issued 100,000 shares of its $0.00001 par
        value common stock in consideration of $100.00 to its directors.
        Fifty-Thousand (50,000) Shares to each of the two directors.

        On July 31, 1995, the Company issued 37,000 shares of its $0.00001 par
        value common stock for cash of $3,700.00.

        On February 28, 1998, the Company issued 100,000 shares of its $0.00001
        par value common stock for services of $100.00 to its directors.
        Fifty-Thousand (50,000) Shares to each of the two directors.

        On February 28, 1998, the Company approved a forward stock split on the
        basis of 45:1, thus increasing the common stock from 237,000 shares
        10,665,000 shares.

        On October 7, 1998, the State of Delaware approved the Company's
        restated Articles of Incorporation, which changed the par value from
        $0.00001 to $0.001.



                                     - 10 -
<PAGE>   24

                                  SHANECY, INC.
                          (A Development Stage Company)


                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

               MARCH 31, 1999, MARCH 31, 1998, and MARCH 31, 1997


NOTE 5 - GOING CONCERN

        The Company's financial statements are prepared using generally accepted
        accounting principles applicable to a going concern which contemplates
        the realization of assets and liquidation of liabilities in the normal
        course of business. However, the Company does not have significant cash
        or other material assets, nor does it have an established source of
        revenues sufficient to cover its operating costs and to allow it to
        continue as a going concern. The stockholders/officers and or directors
        have committed to advancing the operating costs of the Company interest
        free.


NOTE 6 - RELATED PARTY TRANSACTIONS

        The Company neither owns nor leases any real or personal property. An
        officer of the corporation provides office services without charge. Such
        costs are immaterial to the financial statements and accordingly, have
        not been reflected therein. The officers and directors of the Company
        are involved in other business activities and may in the future, become
        involved in other business opportunities. If a specific business
        opportunity becomes available, such persons may face a conflict in
        selecting between the Company and their other business interests. The
        Company has not formulated a policy for the resolution of such
        conflicts.


NOTE 7 - WARRANTS AND OPTIONS

        There are no warrants or options outstanding to acquire any additional
        share of common stock.



                                     - 11 -