SECURITIES EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-KSB
                            Annual Report Pursuant to
                       the Securities Exchange Act of 1934


                   For the fiscal year ended December 31, 1999
                        Commission file number 0-114873

                   ROCKY MOUNTAIN FINANCIAL ENTERPRISES, INC.
             (Exact name of registrant as specified in its charter)

   Colorado                                       84-1384961
------------------------                          --------------------
(State of incorporation)                          (I.R.S. Employer
                                                  Identification No.)

               c/o 10200 W. 44th Ave., #400, Wheat Ridge, CO 80033
            --------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

            Registrant's telephone number, including area code: 303-422-8127

           Securities registered pursuant to Section 12(b) of the Act:

                            Title of each class: None

                 Name of each exchange on which registered: N/A

           Securities registered pursuant to Section 12(g) of the Act:

                    Title of each class: Common No Par Value

Indicate by check mark whether 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 for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2)  has  been  subject  to the  filing
requirements for at least the past 90 days.

                      Yes  X           No
                         -----           ------

Check if 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.        X
                       -----

State issuer's revenues for its most recent fiscal year. $0




<PAGE>


Transitional Small Business Disclosure Format:

                    ______ Yes                ___X____ No


Aggregate  market  value  of the  voting  stock  held by  non-affiliates  of the
registrant as of December 31, 1999: $.02 per share

Number of outstanding  shares of the  registrant's no par value common stock, as
of December 31, 1999: 1,442,028.


<PAGE>


                                TABLE OF CONTENTS

                                     PART I

                                                                     Page

Item 1.      Business ..................................                1

Item 2.      Properties ................................                20

Item 3.      Legal Proceedings..........................                20

Item 4.      Submission of Matters to a Vote of
             Security Holders..........................                 20

                                     PART II

Item 5.      Market for Registrant's Common Stock and
             Security Holder Matters ..................                 20

Item 6.      Management's Discussion and Analysis of
             Financial Condition and Results of
             Operations ...............................                 21

Item 7.      Financial Statements and Supplementary Data..              22

Item 8.      Changes in and Disagreements with Accountants
             on Accounting and Financial Disclosure.....                22

                                    PART III

Item 9.      Directors and Executive Officers of the
             Registrant.................................                23

Item 10.     Executive Compensation......................               25

Item 11.     Security Ownership of Certain Beneficial
             Owners and Management......................                26

Item 12.     Certain Relationships and Related
             Transactions...............................                27

                                     PART IV

Item 13.     Exhibits, Financial Statement Schedule
             and Reports on Form 8-K....................                28

             Index......................................                29

             Signature Page ..........................                  30

<PAGE>


                                     PART I


Item 1.  Description of Business.
         ------------------------

General
-------

     The  Company  was  incorporated  under the laws of the State of Colorado on
December 2, 1993, and is in the early  developmental and promotional  stages. To
date the  Company's  activities  have  been  organizational  ones,  directed  at
developing its business plan and raising its initial capital. From the period of
1994 through 1996, the company had minimal revenues from consulting  services as
to methods of obtaining  financing debt and equity for client  businesses in the
start-up stage. It prepared a Registration Statement for a public offering under
the  Securities  Act of 1933 but never made it effective and it was withdrawn in
1995. The company has ceased,  in 1997, all consulting  activities.  The company
has no  commercial  operations  as of date hereof.  The company has no full-time
employees and owns no real estate.

        The Company is a "shell"  company and its only current  business plan is
to seek,  investigate,  and, if  warranted,  acquire one or more  properties  or
businesses,   and  to  pursue  other  related  activities  intended  to  enhance
shareholder  value.  The  acquisition of a business  opportunity  may be made by
purchase, merger, exchange of stock, or otherwise, and may encompass assets or a
business  entity,  such as a corporation,  joint venture,  or  partnership.  The
Company has no capital, and it is unlikely that the Company will be able to take
advantage of more than one such  business  opportunity.  The Company  intends to
seek opportunities demonstrating the potential of long-term growth as opposed to
short-term earnings.

        At the  present  time  the  Company  has  not  identified  any  business
opportunity  that it plans to pursue,  nor has the Company reached any agreement
or  definitive  understanding  with any person  concerning an  acquisition.  The
Company  is filing  Form 10-SB on a  voluntary  basis in order to become a 12(g)
registered  company under the  Securities  Exchange Act of 1934. As a "reporting
company,"  the Company may be more  attractive to a private  acquisition  target
because it may be listed to trade its shares on the OTCBB.

        It is anticipated that the Company's officers and directors will contact
broker-dealers  and other persons with whom they are acquainted who are involved

                                       1

<PAGE>
in corporate  finance  matters to advise them of the Company's  existence and to
determine if any  companies or  businesses  they  represent  have an interest in
considering a merger or acquisition with the Company.  No assurance can be given
that the Company will be successful in finding or acquiring a desirable business
opportunity,  given that no funds that are available for  acquisitions,  or that
any  acquisition  that occurs will be on terms that are favorable to the Company
or its stockholders.

        The  Company's  search will be directed  toward  small and  medium-sized
enterprises which have a desire to become public corporations and which are able
to satisfy,  or anticipate in the reasonably  near future being able to satisfy,
the minimum asset  requirements in order to qualify shares for trading on NASDAQ
or  a  stock   exchange   (See   "Investigation   and   Selection   of  Business
Opportunities").   The  Company  anticipates  that  the  business  opportunities
presented to it will (i) be recently organized with no operating  history,  or a
history of losses attributable to under-capitalization or other factors; (ii) be
experiencing financial or operating  difficulties;  (iii) be in need of funds to
develop a new product or service or to expand into a new market; (iv) be relying
upon an untested product or marketing concept;  or (v) have a combination of the
characteristics   mentioned  in  (i)  through  (iv).  The  Company   intends  to
concentrate its acquisition efforts on properties or businesses that it believes
to be  undervalued.  Given the above factors,  investors  should expect that any
acquisition candidate may have a history of losses or low profitability.

        The  Company  does not  propose to  restrict  its search for  investment
opportunities  to  any  particular  geographical  area  or  industry,  and  may,
therefore,  engage in  essentially  any  business,  to the extent of its limited
resources. This includes industries such as service, finance, natural resources,
manufacturing, high technology, product development, medical, communications and
others. The Company's  discretion in the selection of business  opportunities is
unrestricted,  subject  to the  availability  of  such  opportunities,  economic
conditions, and other factors.

     As a consequence of this  registration of its securities,  any entity which
has an interest in being  acquired by, or merging into the Company,  is expected
to be an entity that desires to become a public  company and  establish a public
trading  market  for  its  securities.  In  connection  with  such a  merger  or
acquisition, it is highly likely that an amount of stock constituting control of
the  Company  would be issued  by the  Company  or  purchased  from the  current
principal shareholders of the Company by the acquiring entity or its affiliates.
If stock is purchased  from the current  shareholders,  the  transaction is very
likely to result in  substantial  gains to them relative to their purchase price
for such stock.  In the Company's  judgment,  none of its officers and directors
would thereby become an "underwriter" within the meaning of the Section 2(11) of
the  Securities Act of 1933, as amended.  The sale of a controlling  interest by
certain  principal  shareholders  of the Company  could occur at a time when the
other shareholders of the Company remain subject to restrictions on the transfer
of their shares.
                                       2
<PAGE>

        Depending upon the nature of the  transaction,  the current officers and
directors  of the Company may resign  management  positions  with the Company in
connection with the Company's acquisition of a business  opportunity.  See "Form
of Acquisition,"  below, and "Risk Factors - The Company - Lack of Continuity in
Management."  In  the  event  of  such  a  resignation,  the  Company's  current
management would not have any control over the conduct of the Company's business
following the Company's combination with a business opportunity.

        It is anticipated that business opportunities will come to the Company's
attention from various  sources,  including its officer and director,  its other
stockholders,   professional   advisors  such  as  attorneys  and   accountants,
securities  broker-dealers,   venture  capitalists,  members  of  the  financial
community,  and others who may present unsolicited proposals. The Company has no
plans,  understandings,  agreements, or commitments with any individual for such
person to act as a finder of opportunities for the Company.

        The  Company  does not  foresee  that it would  enter  into a merger  or
acquisition  transaction  with any business with which its officers or directors
are currently affiliated.  Should the Company determine in the future,  contrary
to foregoing expectations,  that a transaction with an affiliate would be in the
best  interests of the Company and its  stockholders,  the Company is in general
permitted by Colorado law to enter into such a transaction if:

1. The material facts as to the relationship or interest of the affiliate and as
to the  contract  or  transaction  are  disclosed  or are  known to the Board of
Directors, and the Board in good faith authorizes the contract or transaction by
the affirmative vote of a majority of the disinterested  directors,  even though
the disinterested directors constitute less than a quorum; or

                                       3
<PAGE>

2. The material facts as to the relationship or interest of the affiliate and as
to the contract or  transaction  are disclosed or are known to the  stockholders
entitled to vote  thereon,  and the  contract  or  transaction  is  specifically
approved in good faith by vote of the stockholders; or

3. The  contract or  transaction  is fair as to the Company as of the time it is
authorized, approved or ratified, by the Board of Directors or the stockholders.

Investigation and Selection of Business Opportunities
-----------------------------------------------------

To a large extent, a decision to participate in a specific business  opportunity
may be made upon  management's  analysis of the  quality of the other  company's
management  and  personnel,  the  anticipated  acceptability  of new products or
marketing concepts,  the merit of technological  changes,  the perceived benefit
the company will derive from becoming a publicly held entity, and numerous other
factors  which  are  difficult,  if  not  impossible,  to  analyze  through  the
application of any objective criteria. In many instances, it is anticipated that
the historical operations of a specific business opportunity may not necessarily
be indicative  of the  potential for the future  because of the possible need to
shift marketing approaches substantially,  expand significantly,  change product
emphasis, change or substantially augment management, or make other changes. The
Company will be dependent upon the owners of a business  opportunity to identify
any such problems which may exist and to implement,  or be primarily responsible
for the implementation of, required changes. Because the Company may participate
in a business  opportunity  with a newly  organized firm or with a firm which is
entering a new phase of growth,  it should be  emphasized  that the Company will
incur further risks,  because  management in many instances will not have proved
its abilities or effectiveness,  the eventual market for such company's products
or  services  will  likely  not be  established,  and  such  company  may not be
profitable when acquired.

It is  anticipated  that the  Company  will not be able to  diversify,  but will
essentially  be limited to one such  venture  because of the  Company's  limited
financing.  This lack of  diversification  will not permit the Company to offset
potential losses from one business opportunity against profits from another, and
should be  considered an adverse  factor  affecting any decision to purchase the
Company's securities.

                                       4
<PAGE>

It is emphasized that management of the Company may effect transactions having a
potentially  adverse  impact  upon the  Company's  shareholders  pursuant to the
authority and  discretion of the Company's  management to complete  acquisitions
without  submitting any proposal to the  stockholders  for their  consideration.
Holders of the  Company's  securities  should not  anticipate  that the  Company
necessarily will furnish such holders, prior to any merger or acquisition,  with
financial statements, or any other documentation, concerning a target company or
its  business.  In some  instances,  however,  the proposed  participation  in a
business   opportunity   may  be  submitted  to  the   stockholders   for  their
consideration,  either  voluntarily by such directors to seek the  stockholders'
advice and consent or because state law so requires.

The  analysis  of  business  opportunities  will be  undertaken  by or under the
supervision  of the  Company's  President,  who is not a  professional  business
analyst. See "Management." Although there are no current plans to do so, Company
management might hire an outside  consultant to assist in the  investigation and
selection of business opportunities, and might pay a finder's fee. Since Company
management  has no current plans to use any outside  consultants  or advisors to
assist in the investigation and selection of business opportunities, no policies
have been adopted regarding use of such consultants or advisors, the criteria to
be used in selecting such consultants or advisors,  the services to be provided,
the term of service,  or  regarding  the total  amount of fees that may be paid.
However,  because of the limited resources of the Company, it is likely that any
such fee the  Company  agrees  to pay  would  be paid in stock  and not in cash.
Otherwise,  the Company  anticipates that it will consider,  among other things,
the following factors:

1. Potential for growth and  profitability,  indicated by new  technology,
anticipated market expansion, or new products;

2. The Company's  perception of how any particular business  opportunity will be
received by the investment community and by the Company's stockholders;

3. Whether,  following  the business  combination,  the  financial  condition of
the business opportunity  would be, or would have a significant  prospect in the
foreseeable  future of  becoming  sufficient  to enable  the  securities  of the
Company  to  qualify  for  listing on an  exchange  or on a  national  automated
securities quotation system, such as NASDAQ, so as to permit the trading of such
securities to be exempt from the requirements of Rule 15c2-6 recently adopted by
the  Securities  and  Exchange  Commission.  See "Risk  Factors - The  Company -
Regulation of Penny Stocks."

                                       5
<PAGE>

4. Capital  requirements  and anticipated  availability of required funds, to be
provided  by the  Company or from  operations,  through  the sale of  additional
securities,  through  joint  ventures  or  similar  arrangements,  or from other
sources;

5. The extent to which the business opportunity can be advanced;

6.  Competitive  position  as compared to other  companies  of similar  size and
experience  within the  industry  segment as well as within  the  industry  as a
whole;

7. Strength and diversity of existing  management,  or management prospects that
are scheduled for recruitment;

8. The  cost of  participation  by the  Company  as  compared  to the  perceived
tangible and intangible values and potential; and

9. The accessibility of required management expertise, personnel, raw materials,
services, professional assistance, and other required items.

    In regard to the  possibility  that the shares of the Company  would qualify
for listing on NASDAQ,  the current  standards include the requirements that the
issuer of the  securities  that are sought to be listed have total  assets of at
least $4,000,000 and total capital and surplus of at least $2,000,000. Many, and
perhaps most, of the business  opportunities that might be potential  candidates
for a  combination  with the  Company  would  not  satisfy  the  NASDAQ  listing
criteria.

     No one of the factors  described above will be controlling in the selection
of a business  opportunity,  and management  will attempt to analyze all factors
appropriate to each  opportunity and make a determination  based upon reasonable
investigative  measures  and  available  data.  Potentially  available  business
opportunities  may occur in many  different  industries and at various stages of
development,  all of which will make the task of comparative  investigation  and
analysis  of  such  business  opportunities  extremely  difficult  and  complex.
Potential  investors  must  recognize  that,  because of the  Company's  limited
capital  available for  investigation  and  management's  limited  experience in
business analysis,  the Company may not discover or adequately  evaluate adverse
facts about the opportunity to be acquired.

                                       6
<PAGE>

      The  Company is unable to predict  when it may  participate  in a business
opportunity.  It expects,  however,  that the analysis of specific proposals and
the selection of a business opportunity may take several months or more.

       Prior to making a decision to participate in a business opportunity,  the
Company  will  generally  request  that it be provided  with  written  materials
regarding the business  opportunity  containing  such items as a description  of
products,   services  and  company  history;   management   resumes;   financial
information; available projections, with related assumptions upon which they are
based; an explanation of proprietary products and services; evidence of existing
patents,  trademarks, or services marks, or rights thereto; present and proposed
forms of compensation to management;  a description of transactions between such
company and its affiliates during relevant periods; a description of present and
required  facilities;  an  analysis  of  risks  and  competitive  conditions;  a
financial  plan  of  operation  and  estimated  capital  requirements;   audited
financial  statements,  or  if  they  are  not  available,  unaudited  financial
statements,   together  with  reasonable   assurances  that  audited   financial
statements  would be able to be produced within a reasonable  period of time not
to  exceed  60 days  following  completion  of a merger  transaction;  and other
information deemed relevant.

       As part of the Company's investigation,  the Company's executive officers
and directors may meet personally  with management and key personnel,  may visit
and inspect material facilities,  obtain independent analysis or verification of
certain information provided,  check references of management and key personnel,
and take other reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise.

       It is  possible  that the range of business  opportunities  that might be
available  for  consideration  by the Company  could be limited by the impact of
Securities and Exchange  Commission  regulations  regarding purchase and sale of
"penny stocks." The regulations  would affect,  and possibly impair,  any market
that might develop in the Company's  securities  until such time as they qualify
for listing on NASDAQ or on another  exchange  which would make them exempt from
applicability of the "penny stock" regulations. See "Risk Factors - - Regulation
of Penny Stocks."

                                       7
<PAGE>

        Company  management  believes that various types of potential  merger or
acquisition  candidates might find a business combination with the Company to be
attractive.  These include  acquisition  candidates  desiring to create a public
market for their shares in order to enhance liquidity for current  shareholders,
acquisition  candidates  which have long-term  plans for raising capital through
the public sale of securities and believe that the possible prior existence of a
public  market  for  their  securities  would  be  beneficial,  and  acquisition
candidates  which  plan  to  acquire   additional  assets  through  issuance  of
securities rather than for cash, and believe that the possibility of development
of a public market for their  securities  will be of assistance in that process.
Acquisition  candidates which have a need for an immediate cash infusion are not
likely  to find a  potential  business  combination  with the  Company  to be an
attractive alternative.

        There  are no  loan  arrangements  or  arrangements  for  any  financing
whatsoever relating to any business opportunities.

Form of Acquisition
-------------------

        It is  impossible  to  predict  the  manner  in which  the  Company  may
participate in a business opportunity.  Specific business  opportunities will be
reviewed  as well as the  respective  needs and  desires of the  Company and the
promoters of the opportunity and, upon the basis of that review and the relative
negotiating  strength of the Company and such promoters,  the legal structure or
method deemed by management to be suitable will be selected.  Such structure may
include, but is not limited to leases,  purchase and sale agreements,  licenses,
joint ventures and other contractual arrangements.  The Company may act directly
or indirectly through an interest in a partnership, corporation or other form of
organization.  Implementing such structure may require the merger, consolidation
or  reorganization  of the Company with other  corporations or forms of business
organization,  and although it is likely, there is no assurance that the Company
would  be  the  surviving  entity.  In  addition,  the  present  management  and
stockholders  of the Company  most likely will not have control of a majority of
the voting shares of the Company following a reorganization transaction. As part
of such a  transaction,  the  Company's  existing  directors  may resign and new
directors may be appointed without any vote by stockholders.

        It is likely  that the  Company  will  acquire  its  participation  in a
business opportunity through the issuance of Common Stock or other securities of

                                       8

<PAGE>
the Company.  Although the terms of any such transaction cannot be predicted, it
should be noted that in  certain  circumstances  the  criteria  for  determining
whether or not an acquisition is a so-called "tax free" reorganization under the
Internal Revenue Code of 1986,  depends upon the issuance to the stockholders of
the acquired company of a controlling  interest (i.e. 80% or more) of the common
stock of the combined entities  immediately  following the reorganization.  If a
transaction  were structured to take advantage of these  provisions  rather than
other "tax free"  provisions  provided  under the  Internal  Revenue  Code,  the
Company's current  stockholders would retain in the aggregate 20% or less of the
total issued and outstanding shares. This could result in substantial additional
dilution in the equity of those who were  stockholders  of the Company  prior to
such  reorganization.  Any such issuance of additional shares might also be done
simultaneously  with a sale or transfer  of shares  representing  a  controlling
interest  in the  Company  by the  current  officers,  directors  and  principal
shareholders. (See "Description of Business - General").

        It is anticipated that any new securities  issued in any  reorganization
would  be  issued  in  reliance  upon  exemptions,  if any are  available,  from
registration  under  applicable  federal  and  state  securities  laws.  In some
circumstances,  however, as a negotiated element of the transaction, the Company
may agree to register  such  securities  either at the time the  transaction  is
consummated,  or under certain conditions or at specified times thereafter.  The
issuance of substantial  additional securities and their potential sale into any
trading  market  that  might  develop  in the  Company's  securities  may have a
depressive effect upon such market.

         The Company will  participate in a business  opportunity only after the
negotiation  and  execution of a written  agreement.  Although the terms of such
agreement  cannot  be  predicted,  generally  such an  agreement  would  require
specific  representations and warranties by all of the parties thereto,  specify
certain events of default,  detail the terms of closing and the conditions which
must be satisfied by each of the parties thereto prior to such closing,  outline
the manner of bearing costs if the transaction is not closed, set forth remedies
upon default, and include miscellaneous other terms.

        As a  general  matter,  the  Company  anticipates  that it,  and/or  its
officers and principal  shareholders will enter into a letter of intent with the
management,  principals or owners of a prospective business opportunity prior to
signing a binding agreement. Such a letter of intent will set forth the terms of

                                       9
<PAGE>

the proposed  acquisition but will not bind any of the parties to consummate the
transaction.  Execution  of a letter of intent  will by no means  indicate  that
consummation  of an acquisition is probable.  Neither the Company nor any of the
other  parties  to the  letter  of  intent  will  be  bound  to  consummate  the
acquisition unless and until a definitive  agreement  concerning the acquisition
as described  in the  preceding  paragraph is executed.  Even after a definitive
agreement  is  executed,  it is  possible  that  the  acquisition  would  not be
consummated  should  any  party  elect to  exercise  any right  provided  in the
agreement to terminate it on specified grounds.

        It  is  anticipated  that  the   investigation   of  specific   business
opportunities   and  the   negotiation,   drafting  and  execution  of  relevant
agreements,  disclosure documents and other instruments will require substantial
management time and attention and substantial  costs for accountants,  attorneys
and others.  If a decision  is made not to  participate  in a specific  business
opportunity,  the costs theretofore incurred in the related  investigation would
not be  recoverable.  Moreover,  because  many  providers  of goods and services
require  compensation  at the time or soon  after  the goods  and  services  are
provided, the inability of the Company to pay until an indeterminate future time
may make it impossible to procure goods and services.

        In all probability,  upon completion of an acquisition or merger,  there
will be a change in control  through  issuance of  substantially  more shares of
common stock.  Further,  in conjunction  with an  acquisition  or merger,  it is
likely that  management may offer to sell a controlling  interest at a price not
relative to or reflective of any value of the shares sold by management,  and at
a price which could not be achieved by individual shareholders at the time.

Investment Company Act and Other Regulation
-------------------------------------------

        The Company may  participate  in a business  opportunity  by purchasing,
trading or selling  the  securities  of such  business.  The  Company  does not,
however,  intend to  engage  primarily  in such  activities.  Specifically,  the
Company intends to conduct its activities so as to avoid being  classified as an
"investment  company" under the Investment  Company Act of 1940 (the "Investment
Act"),  and  therefore  to  avoid  application  of the  costly  and  restrictive
registration  and other  provisions of the Investment  Act, and the  regulations
promulgated thereunder.

                                       10
<PAGE>

        Section  3(a)  of the  Investment  Act  contains  the  definition  of an
"investment  company," and it excludes any entity that does not engage primarily
in the business of investing, reinvesting or trading in securities, or that does
not engage in the business of investing,  owning, holding or trading "investment
securities"  (defined as "all  securities  other than  government  securities or
securities of  majority-owned  subsidiaries")  the value of which exceeds 40% of
the value of its total assets  (excluding  government  securities,  cash or cash
items).  The Company  intends to implement  its business  plan in a manner which
will  result  in the  availability  of this  exception  from the  definition  of
"investment company." Consequently, the Company's participation in a business or
opportunity  through the  purchase  and sale of  investment  securities  will be
limited.

        The  Company's  plan of  business  may  involve  changes in its  capital
structure,  management,  control and business,  especially  if it  consummates a
reorganization  as  discussed  above.  Each of these areas is  regulated  by the
Investment Act, in order to protect purchasers of investment company securities.
Since the Company will not register as an investment company,  stockholders will
not be afforded these protections.

        Any  securities  which the Company  might  acquire in  exchange  for its
Common Stock are expected to be  "restricted  securities"  within the meaning of
the  Securities  Act of 1933, as amended (the "Act").  If the Company  elects to
resell such securities, such sale cannot proceed unless a registration statement
has been  declared  effective by the  Securities  and Exchange  Commission or an
exemption from registration is available. Section 4(1) of the Act, which exempts
sales of securities  not involving a  distribution,  would in all  likelihood be
available to permit a private  sale.  Although  the plan of  operation  does not
contemplate resale of securities acquired,  if such a sale were to be necessary,
the Company would be required to comply with the provisions of the Act to effect
such resale.

        An  acquisition  made by the  Company  may be in an  industry  which  is
regulated or licensed by federal,  state or local  authorities.  Compliance with
such regulations can be expected to be a time-consuming and expensive process.

Competition
-----------

        The Company expects to encounter substantial  competition in its efforts
to  locate  attractive   opportunities,   primarily  from  business  development
companies,  venture  capital  partnerships  and  corporations,  venture  capital
affiliates  of  large  industrial  and  financial  companies,  small  investment
companies,   and  wealthy   individuals.   Many  of  these  entities  will  have
significantly greater experience, resources and managerial capabilities than the
Company and will  therefore be in a better  position  than the Company to obtain
access to  attractive  business  opportunities.  The Company also will  possibly
experience competition from other public "blank check" companies,  some of which
may have more funds available than does the Company.

                                       11
<PAGE>

No Rights of Dissenting Shareholders
------------------------------------

        The  Company  does not  intend  to  provide  Company  shareholders  with
complete  disclosure   documentation  including  audited  financial  statements,
concerning a possible  target  company prior to  acquisition,  because  Colorado
Business Corporation Act vests authority in the Board of Directors to decide and
approve  matters  involving   acquisitions  within  certain  restrictions.   Any
transaction  would be  structured  as an  acquisition,  not a  merger,  with the
Registrant  being the parent company and the acquiree being merged into a wholly
owned subsidiary.  Therefore,  a shareholder will have no right of dissent under
Colorado law.

No Target Candidates for Acquisition
------------------------------------

        None of the Company's Officers,  Directors,  promoters,  affiliates,  or
associates  have had any  preliminary  contact or  discussion  with any specific
candidate for acquisition. There are no present plans, proposals,  arrangements,
or  understandings  with any  representatives  of the owners of any  business or
company regarding the possibility of an acquisition transaction.

Administrative Offices
----------------------

     The Company currently  maintains a mailing address at 10200 W. 44th Avenue,
Suite #400, Wheat Ridge, Colorado 80033 which is the office address of its legal
counsel,  Michael A. Littman.  The Company's telephone number is (303) 422-8127.
Other than this mailing  address,  the Company does not  currently  maintain any
other office facilities, and does not anticipate the need for maintaining office
facilities at any time in the  foreseeable  future.  The Company pays no rent or
other  fees  for the use of this  mailing  address.  Legal  counsel  will not be
involved in any day to day  activities  but will handle  securities  related and
corporate matters for the Company, so long as he is engaged to do so.

                                       12
<PAGE>

Employees
---------

     The Company is a development  stage company and currently has no employees.
Management of the Company expects to use consultants,  attorneys and accountants
as necessary,  and does not anticipate a need to engage any full-time  employees
so long as it is seeking and  evaluating  business  opportunities.  The need for
employees  and their  availability  will be  addressed  in  connection  with the
decision  whether  or  not  to  acquire  or  participate  in  specific  business
opportunities. There is no current plan under which, remuneration may be paid to
or  accrued  for  the  benefit  of,  the  Company's  officers  prior  to,  or in
conjunction with, the completion of a business acquisition for services actually
rendered,  and the company has adopted a resolution  and policy which  precludes
payment of any  compensation  or finder's  fees to officers  or  directors.  See
"Executive   Compensation"   and  under  "Certain   Relationships   and  Related
Transactions."

Risk Factors
------------

1.  Conflicts of Interest.  Certain  conflicts of interest may exist between the
Company and its officers and directors.  They have other  business  interests to
which they  devote  their  attention,  and may be  expected to continue to do so
although  management time should be devoted to the business of the Company. As a
result,  conflicts  of  interest  may arise that can be  resolved  only  through
exercise of such judgment as is consistent with fiduciary duties to the Company.
See "Management," and "Conflicts of Interest."

        It is  anticipated  that  Company's  officers and directors may actively
negotiate or otherwise  consent to the purchase of a portion of his common stock
as a condition  to, or in  connection  with,  a proposed  merger or  acquisition
transaction.  In this  process,  the  Company's  officers  may  consider his own
personal  pecuniary  benefit  rather than the best  interests  of other  Company
shareholders, and the other Company shareholders are not expected to be afforded
the  opportunity  to  approve  or  consent  to  any  particular   stock  buy-out
transaction. See "Conflicts of Interest."

2. Need For Additional  Financing.  The Company has very limited funds, and such
funds  may  not  be  adequate  to  take  advantage  of  any  available  business
opportunities.  Even if the Company's funds prove to be sufficient to acquire an
interest in, or complete a transaction with, a business opportunity, the Company
may not have enough capital to exploit the opportunity.  The ultimate success of


                                       13
<PAGE>


the Company may depend upon its ability to raise additional capital. The Company
has not investigated the  availability,  source,  or terms that might govern the
acquisition of additional  capital and will not do so until it determines a need
for additional financing. If additional capital is needed, there is no assurance
that funds will be available from any source or, if available,  that they can be
obtained on terms  acceptable to the Company.  If not  available,  the Company's
operations  will be  limited  to those  that  can be  financed  with its  modest
capital.

3.  Regulation of Penny Stocks.  The Company's  securities,  when  available for
trading,  will be subject to a  Securities  and  Exchange  Commission  rule that
imposes special sales practice  requirements upon  broker-dealers  who sell such
securities to persons other than established  customers or accredited investors.
For purposes of the rule, the phrase  "accredited  investors"  means, in general
terms, institutions with assets in excess of $5,000,000, or individuals having a
net worth in excess of  $1,000,000  or  having  an annual  income  that  exceeds
$200,000 (or that, when combined with a spouse's income, exceeds $300,000).  For
transactions  covered  by the  rule,  the  broker-dealer  must  make  a  special
suitability  determination for the purchaser and receive the purchaser's written
agreement  to the  transaction  prior to the  sale.  Consequently,  the rule may
affect the ability of broker-dealers  to sell the Company's  securities and also
may affect the ability of purchasers  in this offering to sell their  securities
in any market that might develop therefore.

       In addition,  the Securities and Exchange Commission has adopted a number
of rules to regulate  "penny  stocks." Such rules  include Rules 3a51-1,  15g-1,
15g-2,  15g-3,  15g-4,  15g-5,  15g-6,  15g-7,  and 15g-9  under the  Securities
Exchange  Act of 1934,  as amended.  Because the  securities  of the Company may
constitute "penny stocks" within the meaning of the rules, the rules would apply
to the Company and to its  securities.  The rules may further affect the ability
of owners of Shares to sell the  securities  of the  Company in any market  that
might develop for them.

        Shareholders should be aware that,  according to Securities and Exchange
Commission,  the  market  for penny  stocks has  suffered  in recent  years from
patterns of fraud and abuse. Such patterns include (i) control of the market for
the  security  by one or a few  broker-dealers  that are  often  related  to the
promoter or issuer; (ii) manipulation of prices through prearranged  matching of
purchases and sales and false and misleading press releases; (iii) "boiler room"

                                       14
<PAGE>

practices   involving   high-pressure   sales  tactics  and  unrealistic   price
projections  by  inexperienced  sales persons;  (iv)  excessive and  undisclosed
bid-ask  differentials  and  markups  by  selling  broker-dealers;  and  (v) the
wholesale dumping of the same securities by promoters and  broker-dealers  after
prices  have been  manipulated  to a desired  level,  along  with the  resulting
inevitable  collapse of those prices and with consequent  investor  losses.  The
Company's  management is aware of the abuses that have occurred  historically in
the penny stock market. Although the Company does not expect to be in a position
to dictate the behavior of the market or of  broker-dealers  who  participate in
the market,  management will strive within the confines of practical limitations
to prevent the  described  patterns from being  established  with respect to the
Company's securities.

4.Lack of Operating  History.  The Company was formed in December,  1993 for the
purpose of  registering a common stock  offering under the 1933 Act and engaging
in  consulting  services  for  clients as to  methods  to obtain  debt or equity
financing for start-up  companies.  Although some minimal revenues were achieved
in the  period  1994 - 1996,  such were not  significant,  the  Company  was not
profitable and the business effort was terminated.  Due to the special risks
inherent in the investigation, acquisition,  or involvement in a new business
opportunity,  The Company must be regarded  as a new  or  start-up  venture with
all of  the  unforeseen  costs, expenses, problems, and difficulties to which
such ventures are subject.

5. No Assurance  of Success or  Profitability.  There is no  assurance  that the
Company  will  acquire a  favorable  business  opportunity.  Even if the Company
should become involved in a business opportunity,  there is no assurance that it
will  generate  revenues or profits,  or that the market price of the  Company's
Common Stock will be increased thereby.

6. Possible  Business - Not  Identified  and Highly  Risky.  The Company has not
identified and has no  commitments to enter into or acquire a specific  business
opportunity  and  therefore  can disclose the risks and hazards of a business or
opportunity that it may enter into in only a general manner, and cannot disclose
the risks and hazards of any specific  business or opportunity that it may enter
into. An investor can expect a potential business opportunity to be quite risky.
The Company's  acquisition of or  participation  in a business  opportunity will
likely be highly  illiquid  and could  result in a total loss to the Company and
its stockholders if the business or opportunity  proves to be unsuccessful.  See
Item 1 "Description of Business."

7. Type of Business  Acquired.  The type of  business to be acquired  may be one
that desires to avoid  effecting  its own public  offering and the  accompanying
expense, delays, uncertainties, and federal and state requirements which purport
to protect  investors.  Because of the  Company's  limited  capital,  it is more
likely than not that any  acquisition  by the Company will involve other parties
whose  primary  interest  is the  acquisition  of control  of a publicly  traded
company.   Moreover,   any  business   opportunity  acquired  may  be  currently
unprofitable or present other negative factors.

                                       15
<PAGE>

8. Impracticability of Exhaustive Investigation. The Company's limited funds and
the lack of full-time  management will likely make it impracticable to conduct a
complete and  exhaustive  investigation  and analysis of a business  opportunity
before the Company  commits its capital or other resources  thereto.  Management
decisions,  therefore, will likely be made without detailed feasibility studies,
independent analysis, market surveys and the like which, if the Company had more
funds  available to it,  would be  desirable.  The Company will be  particularly
dependent in making decisions upon information provided by the promoter,  owner,
sponsor,  or  others  associated  with  the  business  opportunity  seeking  the
Company's participation.  A significant portion of the Company's available funds
may be  expended  for  investigative  expenses  and other  expenses  related  to
preliminary aspects of completing an acquisition transaction, whether or not any
business opportunity investigated is eventually acquired.

9. Lack of Diversification.  Because of the limited financial resources that the
Company  has, it is  unlikely  that the Company  will be able to  diversify  its
acquisitions or operations.  The Company's  probable  inability to diversify its
activities  into  more  than one area  will  subject  the  Company  to  economic
fluctuations within a particular business or industry and therefore increase the
risks associated with the Company's operations.

10.  Reliance upon  Financial  Statements.  The Company  generally  will require
audited financial  statements from companies that it proposes to acquire.  Given
cases where audited financials are not available,  the Company will have to rely
upon  interim  period  unaudited  information  received  from target  companies'
management that has not been verified by outside auditors.  The lack of the type
of independent  verification  which audited financial  statements would provide,
increases the risk that the Company,  in evaluating an  acquisition  with such a
target company, will not have the benefit of full and accurate information about
the  financial  condition  and recent  interim  operating  history of the target
company. This risk increases the prospect that the acquisition of such a company
might  prove to be an  unfavorable  one for the  Company  or the  holders of the
Company's securities.

         Moreover,  the Company will be subject to the  reporting  provisions of
the Securities  Exchange Act of 1934, as amended (the "Exchange  Act"), and thus
will be required to furnish certain information about significant  acquisitions,
including  audited  financial  statements  for any  business  that it  acquires.
Consequently,  acquisition  prospects that do not have, or are unable to provide
reasonable  assurances  that they will be able to obtain,  the required  audited
statements  would  not  be  considered  by the  Company  to be  appropriate  for
acquisition  so long  as the  reporting  requirements  of the  Exchange  Act are
applicable.  Should  the  Company,  during  the time it  remains  subject to the
reporting  provisions of the Exchange Act,  complete an acquisition of an entity
for which audited  financial  statements prove to be  unobtainable,  the Company
would  be  exposed  to  enforcement  actions  by  the  Securities  and  Exchange
Commission (the  "Commission")  and to corresponding  administrative  sanctions,
including  permanent  injunctions  against the Company and its  management.  The
legal and other costs of  defending a Commission  enforcement  action would have
material,  adverse consequences for the Company and its business. The imposition
of  administrative  sanctions  would  subject  the  Company to  further  adverse
consequences.

                                       16
<PAGE>

         In addition, the lack of audited financial statements would prevent the
securities  of the Company from becoming  eligible for listing on NASDAQ,  or on
any existing stock exchange.  Moreover, the lack of such financial statements is
likely to  discourage  broker-dealers  from  becoming or  continuing to serve as
market  makers in the  securities  of the  Company.  Without  audited  financial
statements,  the Company  would almost  certainly be unable to offer  securities
under a registration  statement  pursuant to the Securities Act of 1933, and the
ability of the Company to raise  capital  would be  significantly  limited until
such financial statements were to become available.

11. Other  Regulation.  An acquisition  made by the Company may be of a business
that is  subject  to  regulation  or  licensing  by  federal,  state,  or  local
authorities.  Compliance with such  regulations and licensing can be expected to
be  a   time-consuming,   expensive  process  and  may  limit  other  investment
opportunities of the Company.

12. Dependence upon Management; Limited Participation of Management. The Company
currently has only two individuals who are serving as its officers and directors
on a part time basis.  The Company will be heavily  dependent upon their skills,
talents,  and  abilities to implement its business  plan,  and may, from time to
time, find that the inability of the officers and directors to devote their full
time  attention  to the  business of the Company  results in a delay in progress
toward implementing its business plan. See "Management."  Because investors will
not be able to evaluate  the merits of  possible  business  acquisitions  by the
Company, they should critically assess the information  concerning the Company's
officers and directors.

13. Lack of  Continuity in  Management.  The Company does not have an employment
agreement  with  its  officers  and  directors,  and as a  result,  there  is no
assurance they will continue to manage the Company in the future.  In connection
with  acquisition of a business  opportunity,  it is likely the current officers
and directors of the Company may resign  subject to compliance  with Section 14f
of the Securities  Exchange Act of 1934. A decision to resign will be based upon
the identity of the business opportunity and the nature of the transaction,  and
is  likely to occur  without  the vote or  consent  of the  stockholders  of the
Company.

14. Indemnification of Officers and Directors. Colorado Revised Statutes provide
for the indemnification of its directors, officers, employees, and agents, under
certain  circumstances,  against  attorney's fees and other expenses incurred by
them in any  litigation  to  which  they  become  a  party  arising  from  their
association  with or activities on behalf of the Company.  The Company will also
bear  the  expenses  of  such  litigation  for any of its  directors,  officers,
employees,  or agents,  upon such person's promise to repay the Company therefor
if it is ultimately determined that any such person shall not have been entitled
to  indemnification.  This  indemnification  policy could result in  substantial
expenditures by the Company which it will be unable to recoup.

                                       17
<PAGE>

15.  Director's  Liability  Limited.  Colorado Revised Statutes exclude personal
liability  of its  directors  to the Company and its  stockholders  for monetary
damages for breach of fiduciary duty except in certain specified  circumstances.
Accordingly,  the Company will have a much more limited right of action  against
its directors than otherwise  would be the case.  This provision does not affect
the liability of any director under federal or applicable state securities laws.

16. Dependence upon Outside Advisors.  To supplement the business  experience of
its officers and directors,  the Company may be required to employ  accountants,
technical experts, appraisers,  attorneys, or other consultants or advisors. The
selection of any such advisors will be made by the Company's  President  without
any input from  stockholders.  Furthermore,  it is anticipated that such persons
may be engaged on an "as needed" basis  without a continuing  fiduciary or other
obligation to the Company.  In the event the President of the Company  considers
it  necessary  to hire  outside  advisors,  he may elect to hire persons who are
affiliates, if they are able to provide the required services.

17.  Leveraged  Transactions.  There is a possibility  that any acquisition of a
business  opportunity  by the Company may be  leveraged,  i.e.,  the Company may
finance the  acquisition of the business  opportunity  by borrowing  against the
assets of the  business  opportunity  to be acquired,  or against the  projected
future revenues or profits of the business opportunity.  This could increase the
Company's exposure to larger losses. A business  opportunity  acquired through a
leveraged  transaction  is profitable  only if it generates  enough  revenues to
cover the  related  debt and  expenses.  Failure  to make  payments  on the debt
incurred to purchase  the  business  opportunity  could  result in the loss of a
portion or all of the assets  acquired.  There is no assurance that any business
opportunity  acquired through a leveraged  transaction will generate  sufficient
revenues to cover the related debt and expenses.

18. Competition. The search for potentially profitable business opportunities is
intensely  competitive.  The  Company  expects  to  be  at a  disadvantage  when
competing  with  many  firms  that  have  substantially  greater  financial  and
management  resources  and  capabilities  than the  Company.  These  competitive
conditions  will  exist  in  any  industry  in  which  the  Company  may  become
interested.

19. No Foreseeable  Dividends.  The Company has not paid dividends on its common
stock and does not anticipate paying such dividends in the foreseeable future.

                                       18
<PAGE>

20.  Loss of Control by Present  Management  and  Stockholders.  The Company may
consider an  acquisition in which the Company would issue as  consideration  for
the business  opportunity  to be acquired an amount of the Company's  authorized
but  unissued  Common  Stock that  would,  upon  issuance,  represent  the great
majority of the voting  power and equity of the  Company.  The result of such an
acquisition  would be that the acquired  company's  stockholders  and management
would  control the Company,  and the Company's  management  could be replaced by
persons  unknown at this time.  Such a merger would result in a greatly  reduced
percentage of ownership of the Company by its current shareholders. In addition,
the Company's major shareholders could sell control blocks of stock at a premium
price to the acquired company's stockholders.

21. No Public Market Exists.  There is no public market for the Company's common
stock,  and no  assurance  can be given  that a market  will  develop  or that a
shareholder ever will be able to liquidate his investment  without  considerable
delay, if at all. If a market should develop,  the price may be highly volatile.
Factors  such as those  discussed  in this  "Risk  Factors"  section  may have a
significant impact upon the market price of the securities offered hereby. Owing
to the low price of the  securities,  many brokerage firms may not be willing to
effect  transactions  in the  securities.  Even if a  purchaser  finds a  broker
willing  to  effect  a  transaction  in these  securities,  the  combination  of
brokerage commissions, state transfer taxes, if any, and any other selling costs
may exceed the selling price. Further, many lending institutions will not permit
the use of such securities as collateral for any loans.

22.  Rule 144  Sales.  All of the  outstanding  shares of Common  Stock  held by
present officers, directors, and stockholders are "restricted securities" within
the  meaning  of Rule 144 under  the  Securities  Act of 1933,  as  amended.  As
restricted  shares,  these  shares may be resold only  pursuant to an  effective
registration statement or under the requirements of Rule 144 or other applicable
exemptions  from  registration  under the Act and as required  under  applicable
state  securities  laws. Rule 144 provides in essence that a person who has held
restricted  securities  for one year may, under certain  conditions,  sell every
three months, in brokerage transactions, a number of shares that does not exceed
the  greater of 1.0% of a  company's  outstanding  common  stock or the  average
weekly trading volume during the four calendar weeks prior to the sale. There is
no  limit  on  the  amount  of  restricted  securities  that  may be  sold  by a
nonaffiliate  after the restricted  securities have been held by the owner for a
period of two years.  Nonaffiliate shareholders holding 425,362 common shares of
the  Company  have held their  shares  for two years and under  Rule  144(K) are
eligible  to have  freely  tradable  shares.  A sale under Rule 144 or under any
other  exemption  from  the  Act,  if  available,   or  pursuant  to  subsequent
registration  of shares  of Common  Stock of  present  stockholders,  may have a
depressive  effect  upon the price of the Common  Stock in any  market  that may
develop. Of the total,  1,016,667 shares become available for resale (subject to
volume  limitations for  affiliates)  under Rule 144, ninety (90) days after the
Company  registers its common stock under Section 12(g) with the  Securities and
Exchange  Commission,  all  of  which  will  be  subject  to  applicable  volume
restrictions under the Rule.

23. Blue Sky Considerations.  Because the securities  registered  hereunder have
not been registered for resale under the blue sky laws of any state, the holders
of such shares and persons  who desire to  purchase  them in any trading  market
that might develop in the future,  should be aware that there may be significant
state  blue-sky  law  restrictions  upon the  ability of  investors  to sell the
securities and of purchasers to purchase the securities.  Some jurisdictions may
not under  any  circumstances  allow the  trading  or  resale of  blind-pool  or
"blank-check" securities.  Accordingly,  investors should consider the secondary
market for the Company's securities to be a limited one.

                                       19
<PAGE>

Item 2.           Property
------------------------------

     The  Company  does not have any  formal  offices at year end.  Records  are
maintained and mail received at 10200 W. 44th Ave., #400, Wheat Ridge,  Colorado
80033. The company owns no real property.

Item 3.           Legal Proceedings
-----------------------------------

     The Company is a party to no pending legal proceedings, nor is its property
subject to such proceedings, at year end 1999.

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

     No matters were submitted  during the fiscal year covered by this report to
a vote of security  holders of the Company,  through the solicitation of proxies
or otherwise.

                                    PART II

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

     As of the date of this report,  management knows of no trading or quotation
of the Company's  common stock.  The range of high and low trade  quotations for
each fiscal quarter since the last report, as reported by the National Quotation
Bureau Incorporated, was as follows

                                 1999                   High          Low
                           First quarter                 *             *
                           Second quarter                *             *
                           Third quarter                 *             *
                           Fourth quarter                *             *

                                 1998                   High          Low
                           First quarter                 *             *
                           Second quarter                *             *
                           Third quarter                 *             *
                           Fourth quarter                *             *

                                 1997                   High          Low
                           First quarter                 *             *
                           Second quarter                *             *
                           Third quarter                 *             *
                           Fourth quarter                *             *

* No quotations reported

     The above quotations reflect inter-dealer  prices,  without retail mark-up,
mark-down, or commission and may not necessarily represent actual transactions.

     As of December  31,  1999,  there were 42 record  holders of the  Company's
common Stock.

     The Company has not declared or paid any cash dividends on its common stock
and does not anticipate paying dividends for the foreseeable future.

                                       20
<PAGE>
Item 6.          Management's Discussion and Analysis of Financial Condition and
                 Results of Operations

                 Financial Condition and Changes in Financial Condition
--------------------------------------------------------------------------------

     No operations  were  conducted and no revenues were generated in the fiscal
year. The Company had no income in 1999. The Company at year end had no capital,
no cash, and no other assets.  The Company at year end was totally  illiquid and
needed cash infusions from  shareholders to provide  capital,  or loans from any
sources.

     Results of  Operations  for the year ended  December 31, 1999,  compared to
year ended December 31, 1998
--------------------------------------------------------------------------------

     The Company  incurred  expenses  totalling $950 in 1999 compared to $950 in
1998.  The Company had no operations or revenues in 1999 or 1998.   The net loss
for 1999 and 1998 was  ($950).  The net loss per  share  was  ($.01) in 1999 and
1998. A  continuation  of the trend of net losses should be expected to continue
in the future until some  profitable  operations  are achieved,  if ever any are
acquired or developed.

Results of Operations year ended December 31, 1998 compared to 1997
-------------------------------------------------------------------

     The Company had no revenues in 1997 or 1998.  The Company  incurred $950 in
expenses in 1998 as compared to $8,493 in expenses in 1997.

     The net operating  loss in 1998 was ($950) as compared to ($3,493) in 1997.
The  losses  in 1998  were as a  result  of  accrued  interest  of  $700.00  and
miscellaneous  expenses.  In 1997 the company  incurred  an interest  accrual of
$700.00,  office  expenses of  $3,214.00,  professional  fees of  $1,500.00  and
consulting fees of $2,200.00.  The net loss per share each year was less than
($.01) per share.

                                       21
<PAGE>

Item 7.           Financial Statements and Supplementary Data
-------------------------------------------------------------

                  Please refer to pages F-1 through F-10.


Item 8.           Changes  in  and  Disagreements  on  Accounting and  Financial
                  Disclosure
--------------------------------------------------------------------------------

     Michael B. Johnson & Company,  CPA's of Denver,  Colorado  were retained in
1996 as auditors for the Company for fiscal year 1995 and thereafter.

     In  connection  with audits of two most recent fiscal years and any interim
period preceding resignation,  no disagreements exist with any former accountant
on any  matter  of  accounting  principles  or  practices,  financial  statement
disclosure, or auditing scope of procedure,  which disagreements if not resolved
to the  satisfaction  of the former  accountant  would  have  caused him to make
reference  in  connection   with  his  report  to  the  subject  matter  of  the
disagreement(s).

     The decision to change  accountants  was approved by the Board of Directors
as the registrant has no audit committee.

     The principal  accountants'  reports on the financial statements for any of
the past two years  contained no adverse  opinion or a disclaimer of opinion nor
was qualified as to uncertainty,  audit scope, or accounting  principles  except
for the "going concern" qualification.

                                       22
<PAGE>

                                    PART III

Item 9.           Directors  and  Executive  Officers   of  the  Registrant  and
                  Compliance with Section 16(a)
--------------------------------------------------------------------------------

     The directors and executive  officers  currently serving the Company are as
follows:

Name                                           Position Held              Tenure
--------------------------------------------------------------------------------
Donald R. Schenkier                            President and Director     Annual

Gregory Boyd                                   Secretary, Treasurer
                                               and Director               Annual

     The  directors  and  officers of the  Company  will devote such time to the
Company's  affairs on an "as needed" basis, but less than 20 hours per month. As
a result,  the actual  amount of time which  they will  devote to the  Company's
affairs is unknown and is likely to vary substantially from month to month.

Biographical Information

     DONALD R.  SCHENKIER has been a director of the company since June 1994 and
President  since 1996.  He has been the  treasurer  and a director of Sole Track
Group International,  Inc. since September 1994. He was a director of Sole Track
Inc.  from July 1992 to October  1992 and has been a director  since April 1994.
From   November   1975  to  April   1994,   he  was  the  lead   person  in  the
machine/welding/sheet   metal/carpenter   shops   working   on  the  design  and
fabrication  of  prototype  scientific  equipment  for the  Marathon Oil Company
research  center for  Denver,  Colorado  from 1969 to October  1975 as the plant
manager for operation  engaged in manufacturing  interior  decorating items. Mr.
Schenkier received a bachelor's degree from Metropolitan State College of Denver
in 1972.

     GREGORY E. BOYD has served as the President,  Treasurer,  and a Director of
the Company since its inception and he is currently Secretary Treasurer.  He has
been the  secretary  and a director of Sole Track Group  International,  Inc., a
Denver,  Colorado,  since  September  1994.  He has also been a director of Sole
Track, Inc.,  Denver,  Colorado since October 1990, and from 1993 to March 1994,
he was  involved as a  consultant  with  Colorado  Clearwater  Company,  Denver,
Colorado.

                                       23
<PAGE>

Conflicts of Interest

     Members  of the  Company's  management  are  associated  with  other  firms
involved in a range of business  activities.  Consequently,  there are potential
inherent  conflicts of interest in their acting as officers and directors of the
Company.  Insofar as the officers and  directors  are engaged in other  business
activities, management anticipates it will devote only a minor amount of time to
the Company's affairs.

     Certain of the officers  and  directors  of the Company are  directors  and
principal  shareholders  in  other  blank  check  companies,  and  officers  and
directors  of the Company  may in the future  become  shareholders,  officers or
directors of other  companies which may be formed for the purpose of engaging in
business  activities  similar to those  conducted by the  Company.  Accordingly,
direct  conflicts  of  interest  may arise in the  future  with  respect to such
individuals acting on behalf of the Company or other entities. Conflicts of
interest may arise with respect to opportunities  which come to the attention of
such  individuals in the  performance of their duties or otherwise.  The Company
does not  currently  have a right of first refusal  pertaining to  opportunities
that come to management's  attention insofar as such opportunities may relate to
the Company's proposed business operations.

     The officers and  directors  are, so long as they are officers or directors
of the Company,  subject to the restriction that all opportunities  contemplated
by the Company's plan of operation which come to their attention,  either in the
performance  of  their  duties  or in  any  other  manner,  will  be  considered
opportunities  of, and be made  available to the Company and the companies  that
they are affiliated with on an equal basis. A breach of this requirement will be
a breach of the fiduciary duties of the officer or director.  If the Company and
the companies with which the officers and directors are  affiliated  both desire
to take advantage of an opportunity, then the Board of Directors has agreed that
said opportunity  should be available to each such company in the order in which
such  companies  registered  or became  current in the filing of annual  reports
under the Exchange Act  subsequent  to January 1, 1997.  All directors may still
individually take advantage of opportunities if the Company should decline to do
so. Except as set forth above, the Company has not adopted any other conflict of
interest policy with respect to such transactions.

     The Company's Board of Directors has adopted a policy that the Company will
not seek a merger with,  or  acquisition  of, any entity in which any officer or
director  serves as an officer  or  director  or in which  they or their  family
members own or hold a  controlling  ownership  interest.  Although  the Board of
Directors  could  elect to change this  policy,  the Board of  Directors  has no
present intention to do so.

     There can be no assurance  that  management  will resolve all  conflicts of
interest in favor of the Company.

                                       24
<PAGE>

Item 10.          Executive Compensation
---------------------------------------------

         The Company  accrued no  compensation  to the  executive  officers as a
group for  services  rendered to the Company in all  capacities  during the 1999
fiscal year. No one executive officer received,  or has accrued for his benefit,
in excess of $60,000  for the year.  No cash  bonuses  were or are to be paid to
such persons.

         The Company does not have any employee incentive stock option plans.

         There are no plans pursuant to which cash or non-cash  compensation was
paid or  distributed  during the last fiscal year,  or is proposed to be paid or
distributed in the future, to  the executive officers of the Company.   No other
compensation not described above was paid or distributed  during the last fiscal
year to the executive  officers of the Company.  There are no compensatory plans
or  arrangements,  with respect to any  executive  office of the Company,  which
result or will result from the resignation,  retirement or any other termination
of such individual's  employment with the Company or from a change in control of
the Company or a change in the individual's  responsibilities following a change
in control.
                    SUMMARY COMPENSATION TABLE OF EXECUTIVES
                    ----------------------------------------

                           Annual Compensation                 Awards
--------------------------------------------------------------------------------
Name and Principal   Year  Salary  Bonus  Other Annual Restricted    Securities
Position                   ($)     ($)    Compensation Stock Award(s) Underlying
                                          ($)                          Options/
                                                                        SARs (#)
 -------------------------------------------------------------------------------

Donald R. Schenkier, 1997      0     0         0           0              0
President,           1998      0     0         0           0              0
Director             1999      0     0         0           0              0
--------------------------------------------------------------------------------
Gregory E. Boyd,     1997      0     0         0           0              0
Secretary,           1998      0     0         0           0              0
Treasurer, Director  1999      0     0         0           0              0
--------------------------------------------------------------------------------

Option/SAR Grants Table (none)

Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR
value (None)

Long Term Incentive Plans - Awards in Last Fiscal Year (None)

                                       25
<PAGE>


                  Directors' Compensation for Last Fiscal Year
                             -----------------------

Name                  Annual     Meeting  Consulting    Number     Number of
                      Retainer   Fees     Fees/Other    of         Securities
                      Fee ($)    ($)      Fees ($)      Shares     Underlying
                                                        (#)        Options
                                                                   SARs(#)
--------------------------------------------------------------------------------
A. Director          0             0        0            0              0
   Donald R. Schenkier

B. Director
   Gregory E. Boyd   0             0        0            0              0



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

        The  following  table sets  forth,  as of the date of this  Registration
Statement, the number of shares of Common Stock owned of record and beneficially
by  executive  officers,  directors  and  persons  who hold  5.0% or more of the
outstanding  Common Stock of the Company.  Also  included are the shares held by
all executive officers and directors as a group.

                                                 NUMBER OF SHARES      OWNERSHIP
SHAREHOLDERS BENEFICIAL OWNERS                                        PERCENTAGE
--------------------------------------------------------------------------------

Donald R. Schenkier, President & Director           333,333                23%
555 W. Peakview Avenue
Littleton, CO 80120
                                                    333,334                23%
Gregory E. Boyd, Secretary, Treasurer and Director
13105 Monaco Parkway #A
Denver, CO 80222
                                                    342,334                23.7%
Te Huey Urich, Shareholder
83855 Cobblestone St.
Highlands Ranch, CO 80126


All directors and executive                         666,667                46%
officers as a group (2 persons)

Each principal  shareholder has sole investment power and sole voting power over
the shares.

                                       26
<PAGE>

Item 12.       Certain Relationships and Related Transactions
---------------------------------------------------------------

     None for fiscal year 1999.


                                    PART IV


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

     The following documents are filed as part of this report:

     1.   Reports on Form 8-K:
          None

     2.   Exhibits:
          None

                                       28
<PAGE>
                                      INDEX

                                                      Form 10-K
Regulation                                            Consecutive
S-K Number                 Exhibit                    Page Number

3.1               Articles of Incorporation           *Incorporated by reference
                                                      to Registration Statement
                                                      10SB/12(g) #0-114873

3.2               Amendment to Articles of            Incorporated by Reference
                  Incorporation                       to Registration Statement
                                                      10SB/12(g) #0-114873


3.2               Bylaws                              *Incorporated by reference
                                                      to Registration Statement
                                                      10SB/12(g) #0-114873

27.1              Financial Data Schedule             EX-27.1



                                       29
<PAGE>

                                   SIGNATURES:
                                   -----------
Pursuant to the  requirements  of Section 12 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.

DATED:  April 13, 2000



                                  ROCKY MOUNTAIN FINANCIAL ENTERPRISES, INC.
                                  -----------------------------------------

                                              by: /s/ Donald Schenkier
                                              ------------------------
                                              Donald Schenkier
                                              President

                                              /s/  Gregory E. Boyd
                                              --------------------
                                              Gregory E. Boyd
                                              Secretary Treasurer and Director

                                              Directors:

                                              /s/Donald Schenkier
                                              -------------------
                                              Donald Schenkier


                                              /s/Gregory E. Boyd
                                              ------------------
                                              Gregory E. Boyd

                                       30
<PAGE>
                   ROCKY MOUNTAIN FINANCIAL ENTERPRISES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                              FINANCIAL STATEMENTS
                            DECEMBER 31, 1999 & 1998








                                      F-1
<PAGE>


                           Michael Johnson & Co., LLC
                          Certified Public Accountants
                        9175 East Kenyon Ave., Suite 100
                             Denver, Colorado 80237

Michael B. Johnson C.P.A.                              Telephone: (303) 796-0099
Member: A.I.C.P.A.                                     Fax:(303) 796-0137
Colorado Society of C.P.A.s

                          INDEPENDENT AUDITOR'S REPORT

To the Board of Directors
Rocky Mountain Financial Enterprises, Inc.
Denver, Colorado

We have audited the  accompanying  balance  sheets of Rocky  Mountain  Financial
Enterprises,  Inc. (A  Development  Stage  Company) as of December  31, 1999 and
1998,  and the related  statements  of  operations,  cash flows,  and changes in
stockholders'  equity  for the  period  December  2, 1993  (inception),  through
December  31,  1999,  and the years  ended  December  31,  1999 and 1998.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of Rocky  Mountain  Financial
Enterprises,  Inc.  at  December  31,  1999 and  1998,  and the  results  of its
operations  and its cash  flows for the  period,  December  2, 1993  (inception)
through December 31, 1999 and the fiscal years ended December 31, 1999 and 1998,
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  described  in  Note 1 to the
financial statements,  the Company is in the development stage, conditions exist
which raise substantial doubt about the Company's ability to continue as a going
concern  unless  it is  able to  generate  sufficient  cash  flows  to meet  its
obligations  and sustain its  operations.  Since its inception,  the Company has
lost  $125,243  from  operations.  The  financial  statements do not include any
adjustments that might result from the outcome of this uncertainty.

/s/Michael Johnson & Co., LLC

Denver, Colorado
April 3, 2000

                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                   ROCKY MOUNTAIN FINANCIAL ENTERPRISES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                  BALANCE SHEET
<S>                                                                                    <C>                    <C>

                                                                                          December 31,             December 31,
                                                                                               1999                     1998
                                                                                        ---------------------  ---------------------
ASSETS:

CURRENT ASSETS:

Cash                                                                                                      $0                     $0
                                                                                        ---------------------  ---------------------

Total Current Assets                                                                                       0                      0
                                                                                        =====================  =====================

OTHER ASSETS:
Organizational Costs

Net of Amortization                                                                                        0                      0
                                                                                        ---------------------  ---------------------

Total Other Assets                                                                                         0                      0

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


LIABILITIES AND STOCKHOLDERS' DEFICIT:

CURRENT LIABILITIES:

Accrued Expenses                                                                                     $11,248                $10,298
Notes Payable                                                                                         52,488                 52,488
                                                                                        ---------------------  ---------------------

TOTAL CURRENT LIABILITIES                                                                             63,736                 62,786
                                                                                        ---------------------  ---------------------

STOCKHOLDERS' EQUITY (DEFICIT):
Common Stock, no par value,  20,000,000

authorized, 1,442,028 issued and outstanding                                                          61,507                 61,507

Preferred Stock, no par value, 5,000,000
shares authorized, none issued and outstanding                                                             0                      0

Deficit Accumulated During the Development Stage                                                    (125,243)              (124,293)
                                                                                        ---------------------  ---------------------

TOTAL STOCKHOLDERS' DEFICIT                                                                          (63,736)               (62,786)
                                                                                        ---------------------  ---------------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                                               $0                     $0
                                                                                        =====================  =====================

   The accompanying notes are an integral part of these financial statements.
                                       F-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                   ROCKY MOUNTAIN FINANCIAL ENTERPRISES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF OPERATIONS

<S>                                                          <C>                   <C>                    <C>
                                                                   For the              For the             December 31, 1993
                                                                  Year Ended           Year Ended           (Inception) thru
                                                                 December 31,         December 31,            December 31,
                                                                     1999                 1998                    1999
                                                              -------------------  -------------------     --------------------


INCOME

Revenue, Consulting Fees                                                   $0.00                   $0                   $8,000


OPERATING EXPENSES:                                                                                 0
Consulting Fees                                                                0                    0                   73,955
Office Expense                                                               250                   50                    8,980
Travel                                                                         0                    0                    4,989
Telephone Expense                                                              0                    0                    2,559
Professional Fees                                                              0                    0                   28,627
Rent                                                                           0                    0                   10,022
Interest Expense                                                             700                  700                    3,111
Amortization Expense                                                           0                  200                    1,000
                                                              -------------------  -------------------     --------------------

Total Operating Expenses                                                     950                  950                  133,243
                                                              -------------------  -------------------     --------------------

NET (LOSS) ACCUMULATED

DURING  THE DEVELOPMENT STAGE                                              ($950)               ($950)               ($125,243)
                                                              ===================  ===================     ====================

Weighted average number of
  shares outstanding                                                   1,442,028            1,442,028                1,442,028

Net Loss Per Common Share                                                 ($0.01)              ($0.01)                  ($0.09)
                                                              ===================  ===================     ====================


The accompanying notes are an integral part of these financial statements.
                                       F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                  ROCKY MOUNTAIN FINANCIAL ENTERPRISES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENT OF CASH FLOWS

<S>                                                       <C>                     <C>                      <C>
                                                                  For the                For the                December 2, 1993
                                                                Year Ended             Year Ended             (Inception) through
                                                               December 31,           December 31,               December 31,
                                                                   1999                   1998                       1999
                                                           ---------------------  ---------------------    -------------------------

CASH FLOWS FROM OPERATING ACTIVITIES:

Net (Loss)                                                                ($950)                 ($950)                   ($125,243)
Changes in assets and liabilities:
Increase (Decrease) in  Accrued Expenses                                     950                    950                      11,248
                                                           ---------------------  ---------------------    -------------------------

Net Cash Used in Operating Activities                                          0                      0                    (113,995)

CASH FLOW FROM FINANCING ACTIVITIES:

Issuance of Common Stock                                                       0                      0                       61,507
Funds from Notes Payable                                                       0                      0                       52,488
                                                           ---------------------  ---------------------    -------------------------
Net Cash Provided By Financing Activites                                       0                      0                      113,995

INCREASE (DECREASE) IN CASH                                                    0                      0                            0

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

CASH AND CASH EQUIVALENTS - END OF PERIOD                                     $0                     $0                           $0
                                                           =====================  =====================    =========================



Supplemental Cash Flow Information:
Interest paid                                                                 $0                     $0                           $0
                                                           ---------------------  ---------------------    -------------------------
Taxes paid                                                                    $0                     $0                           $0
                                                           ---------------------  ---------------------    -------------------------

   The accompanying notes are an integral part of these financial statements.
                                        F-5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                   ROCKY MOUNTAIN FINANCIAL ENTERPRISES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                        STATEMENT OF STOCKHOLDER'S EQUITY
<S>                                <C>                      <C>                 <C>              <C>                   <C>
                                                                                                     Deficit
                                                                                                   Accumulated
                                                              Common Stock                         During the
                                               ------------------------------------------------    Development
                                    Price per share         Shares             Amount                Stage              Totals
                                  -----------------------   ------------------  ---------------- -------------------- --------------
Balance -  December 3, 1993                                                  0                $0                   $0            $0

Stock issued for services - December 3, 1993        0.001               52,000                52                    0            52
                                                             ------------------  ---------------- -------------------- -------------
Balance - December 31, 1993                                             52,000                52                    0            52
                                                             ------------------  ---------------- -------------------- -------------

Stock issued for services -  March 31, 1994         0.001              948,000               948                    0           948
Stock issued for cash - June 16, 1994                0.25               28,000             7,000                    0         7,000
Stock issued for cash - July 14, 1994                0.25                  800               200                    0           200
Stock issued for cash - July 15, 1994                0.25                4,000             1,000                    0         1,000
Stock Issued for cash - July 25, 1994                0.25                2,000               500                    0           500
Stock Issued for cash - July 31, 1994                0.25                2,200               550                    0           550
Stock Issued for cash - August 1, 1994               0.25                  400               100                    0           100
Stock Issued for cash - August 9, 1994               0.25               20,000             5,000                    0         5,000
Stock Issued for cash - September 13, 1994           0.25               12,000             3,000                    0         3,000
Stock Issued for services - September 15, 1994       0.25               10,000             2,500                    0         2,500
Stock Issued for services - September 21, 1994       0.25              100,000            25,000                    0        25,000
Stock Issued for cash - September 23, 1994           0.25                  160                40                    0            40
Stock Issued for cash - September 25, 1994           0.25                  200                50                    0            50
Stock Issued for cash - September 26, 1994           0.25                  268                67                    0            67
Stock Issued for cash - October 6, 1994              0.25                4,000             1,000                    0         1,000
Net loss for year                                                            0                 0              (76,381)      (76,381)
                                                             ------------------  ---------------- -------------------- -------------
Balance -   December 31, 1994                                        1,184,028            47,007              (76,381)      (29,374)
                                                             ------------------  ---------------- -------------------- -------------

Net loss for year                                                            0                 0               (8,820        (8,820)
                                                              -----------------  ---------------- -------------------- -------------
Balance -   December 31, 1995                                        1,184,028            47,007              (85,201)      (38,194)
                                                             ------------------  ---------------- -------------------- -------------

Stock issued for cash - February 15, 1996            0.25                8,000             2,000                    0         2,000
Stock issued for cash - October 26, 1996             0.05              250,000            12,500                    0        12,500
Net loss for year                                                            0                 0              (34,649)      (34,649)
                                                             ------------------  ---------------- -------------------- -------------
Balance - December 31, 1996                                          1,442,028            61,507             (119,850)      (58,343)
                                                             ------------------  ---------------- -------------------- -------------

Net loss for year                                                            0                 0               (3,493)       (3,493)
                                                             ------------------  ---------------- -------------------- -------------
Balance - December 31, 1997                                          1,442,028            61,507             (123,343)      (61,836)
                                                             ------------------  ---------------- -------------------- -------------

Net loss for year                                                            0                 0                 (950)         (950)
                                                             ------------------  ---------------- -------------------- -------------
Balance - December 31, 1998                                          1,442,028            61,507             (124,293)      (62,786)
                                                             ------------------  ---------------- -------------------- -------------

Net loss for year                                                            0                 0                 (950)         (950)
                                                             ------------------  ---------------- -------------------- -------------
Balance - December 31, 1999                                           1,442,028           $61,507            ($125,243)    ($63,736)
                                                             ==================  ================ ==================== =============

 The accompanying notes are an integral part of these financial statements.
                                        F-6


</TABLE>
<PAGE>


                   Rocky Mountain Financial Enterprises, Inc.
                          (A Development Stage Company)
                          Notes To Financial Statements
                            December 31, 1999 & 1998

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

         ORGANIZATION - NATURE OF OPERATIONS

         Rocky   Mountain   Financial   Enterprises,   Inc.  (the  Company)  was
         incorporated  December  2, 1993 under the laws of the State of Colorado
         for the purpose of engaging in the transactions of all lawful business.
         The Company is presently engaged in providing consulting services as to
         methods of  obtaining  financing.  Activity to date has been  primarily
         organization  of the Company.  Although the Company has  commenced  its
         principal   business   operations,   the  revenues  therefrom  are  not
         significant enough to warrant a  reclassification  from the status of a
         company in the development stage.

         The accompanying  financial  statements have been prepared on the going
         concern basis,  which  contemplates  the  realization of assets and the
         satisfaction  of  liabilities  in the normal  course of  business.  The
         Company's  continuation  as a going concern is dependent on its ability
         to generate  sufficient  cash flows to meet its obligations on a timely
         basis, to raise  additional cash as may be required,  and ultimately to
         attain successful  operations.  The financial statements do not include
         any   adjustments   that  might   result  from  this  outcome  of  this
         uncertainty.

         On or about March 29, 1990, the Company filed a registration  statement
         on Form S-18 with the Securities and exchange  commission,  wherein the
         company attempted to register 20,000 Units, each Unit consisting of 100
         shares of the  Company's  Common  Stock  and 100 Class A,  Class B, and
         Class  C  Common  Stock  Purchase   Warrants.   The  company  prior  to
         effectiveness  subsequently  voluntarily  abandoned  this  registration
         statement.  Other than filing of the aforesaid registration statements,
         the only  activities  undertaken by the Company since its inception has
         been the issuing of 4,500,000  shares of the Company's  Common Stock to
         its  original  shareholders,  which  stock was issued in  exchange  for
         aggregate  cash  consideration  of  $13,500.  Each  shareholder  of the
         Company  has  executed  and  delivered a  "lock-up"  letter  agreement,
         affirming  that they  shall  not sell  their  respective  shares of the
         Company's  Common Stock until such time as the Company has successfully
         consummated a merger or acquisition  has been  consummated.  Also, each
         shareholder  has agreed to place their  respective  stock  certificates
         with the Company's legal counsel who will not release these  respective
         certificates  until such time as legal  counsel  has  confirmed  that a
         merger or acquisition has been successfully consummated.

         BASIS OF PRESENTATION:  DEVELOPMENT STAGE COMPANY

         The Company has not earned  significant  revenue from planned principal
         operations.  Accordingly,  the Company's activities have been accounted
         for as  those  of a  "Development  Stage  Enterprise"  as set  forth in
         Financial  Accounting Standards Board Statement No. 7 ("SFAS 7"). Among
         the  disclosures  required by SFAS 7 are that the  Company's  financial
         statements be identified as those of a development  stage company,  and
         that the statements of operations,  stockholders'  equity (deficit) and
         cash flows disclose activity since the date of the Company's inception.

         BASIS OF ACCOUNTING

         The accompanying financial statements have been prepared on the accrual
         basis of accounting in accordance  with generally  accepted  accounting
         principles.

         The Company's fiscal year end is December 31.
                                      F-7
<PAGE>


                   Rocky Mountain Financial Enterprises, Inc.
                          (A Development Stage Company)
                          Notes To Financial Statements
                            December 31, 1999 & 1998

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED):


         ESTIMATES

         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and assumptions  that affect certain  reported amounts and disclosures.
         Accordingly, actual results could differ from those estimates.

         CASH AND CASH EQUIVALENTS

         For purposes of the statement of cash flows, the Company considered all
         cash and other  highly  liquid  investments  with initial maturities of
         three months or less to be cash equivalents.

         PROPERTY AND EQUIPMENT

         Property  and  equipment  is  stated  at  cost.  The  cost of  ordinary
         maintenance  and repairs is charged to  operations  while  renewals and
         replacements   are   capitalized.   Depreciation  is  computed  on  the
         straight-line method over the following estimated useful lives:

                         Manufacturing Equipment 5 years
                          Furniture & Equipment 5 years

         REVENUE RECOGNITION

         Product  Sales are  sales of  on-line  products  and  specialty  items.
         Revenue is  recognized  at the time of sale.  Accounts  Receivable  are
         written off when deemed uncollectable.

NOTE 2 - RELATED PARTY TRANSACTIONS:

         SHORT TERM BORROWING FROM SHAREHOLDERS

         Shareholders of the Company provided  services and advanced cash to the
         Company for operations. Certain of these transactions resulted in notes
         being issued that are still outstanding at December 31, 1999.

NOTE 3 - STOCKHOLDERS' EQUITY:

         Of the  20,000,000  shares of no par  value  common  stock  authorized,
         1,000,000  shares were issued to the  officers of the  Corporation  for
         services  rendered.  These  services  were  valued at  $1,000  and were
         included in the organizational costs.

                                      F-8
<PAGE>
<TABLE>
<CAPTION>


                   Rocky Mountain Financial Enterprises, Inc.
                          (A Development Stage Company)
                          Notes To Financial Statements
                            December 31, 1999 & 1998
<S>                                                                                  <C>

NOTE 4 - NOTES PAYABLE:

        Notes Payable consists of the following:

        Notes Payable to G. Paul Music Ltd., 7% annual rate, note stated
        September 19, 1994 and matured May 31, 1995:                                  $10,000

        Notes Payable to Sole Track, Inc.,
        Non-interest bearing and uncollateralized.  Due on Demand                      17,488

        Notes Payable to Steven L. Earley for $25,000 for consideration of
        making the loan Mr. Earley was given 250,000 shares.  This Note is a
        non-interest bearing demand note.                                              25,000
                                                                                   ----------

        TOTAL NOTES PAYABLE                                                           $52,488
                                                                                      =======

</TABLE>

NOTE 5 - INCOME TAXES:

         The Financial Accounting Standards Board (FASB) has issued Statement of
         Financial Accounting Standards Number 109 ("SFAS 109"), "Accounting for
         Income Taxes",  which requires a change from the deferred method to the
         asset and liability  method of accounting  for income taxes.  Under the
         asset and liability  method,  deferred  income taxes are recognized for
         the tax  consequences of "temporary  differences"  by applying  enacted
         statutory tax rates  applicable to future years to differences  between
         the financial  statement carrying amounts and the tax basis of existing
         assets and liabilities.

         The  Company  has  deferred  income  tax  assets  that have been  fully
         reserved as follows:

             Deferred tax assets

             Net operating loss carryforwards                         $ 125,243
             VALUATION ALLOWANCE FOR DEFERRED TAX ASSETS               (125,243)
                                                                       --------
             NET DEFERRED TAX ASSETS                                  $ -
                                                                       ========

         At December 31, 1999, the Company had net operating loss  carryforwards
         of  approximately  $46,258  for  federal  income  tax  purposes.  These
         carryforwards,  if not utilized to offset taxable income will expire at
         the end of the indicated years:

                      2008 -         $76,381            2009 -          $8,820
                      2010 -         $34,649            2011 -          $3,493
                      2012 -            $950            2013 -            $950



                                      F-9
<PAGE>


                   Rocky Mountain Financial Enterprises, Inc.
                          (A Development Stage Company)
                          Notes To Financial Statements
                            December 31, 1999 & 1998

NOTE 6 GOING CONCERN:

         The Company is a development  state  company,  and as such is dependent
         upon its ability to raise capital  through  private and public funding.
         In view of these matters,  realization of a major portion of the assets
         in  the   accompanying   balance  sheet  is  dependent  upon  continued
         operations  of the  Company,  which  in  turn  is  dependent  upon  the
         Company's ability to meet its financial  requirements,  and the success
         of its future  operations.  Management  believes that actions presently
         being  taken  to  revise  the   Company's   operating   and   financial
         requirements  provide the  opportunity for the Company to continue as a
         going concern.



                                      F-10