DEL CERRO ENTERPRISES INC
SB-2/A, 2001-01-19
RACING, INCLUDING TRACK OPERATION
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<PAGE>   1

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

                                    FORM SB-2
                                  2ND AMENDMENT

                             REGISTRATION STATEMENT
                        UNDER THE SECURITIES ACT OF 1933
                              File Number 333-50332



                           DEL CERRO ENTERPRISES, INC.
                 (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)



<TABLE>
<CAPTION>
          NEVADA                          7948                  88-0453649
          ------                          ----                  ----------
<S>                                    <C>                   <C>
(STATE OR OTHER JURISDICTION OF        (PRIMARY              (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)         SIC NUMBER)           IDENTIFICATION NO.)
</TABLE>


2635 Camino del Rio South #211, San Diego, CA 92108           619-692-2171
---------------------------------------------------           ------------
      (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                 (TELEPHONE)


Rodger Ward
2635 Camino del Rio South #211, San Diego, CA 92108           619-692-2171
---------------------------------------------------           ------------
       (NAME & ADDRESS OF AGENT FOR SERVICE)                   (TELEPHONE)


Approximate Date of Commencement of Proposed Sale to the Public: As soon as
practicable after the effective date of this Registration Statement.

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]



<PAGE>   2


                        CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
Title of Each                          Proposed              Proposed
Class of                               Maximum               Maximum
Securities                             Offering              Aggregate         Amount of
to be             Amount to be         Price                 Offering          Registration
Registered        Registered           Per Unit(1)           Price(2)          Fee
-------------------------------------------------------------------------------------------------
<S>               <C>                  <C>                   <C>               <C>
Common            4,189,000            $0.10                 $418,900          $110.59
</TABLE>


(1)  Based on the price paid per share by the selling shareholders.

(2)  Estimated solely for the purpose of calculating the registration fee in
     accordance with Rule 457 under the Securities Act.

The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.



<PAGE>   3

                                   PROSPECTUS

                           DEL CERRO ENTERPRISES, INC.
                                4,189,000 SHARES
                                  COMMON STOCK

The selling shareholders named in this prospectus are offering all of the shares
of common stock offered through this prospectus. See the section entitled
"Selling Shareholders". The shares were acquired by the 59 selling shareholders
directly from the company in a private offering that was exempt from
registration under the U.S. Securities laws. See section entitled "Description
of Securities".

Our common stock is presently not traded on any market or securities exchange.

THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH
DEGREE OF RISK. SEE SECTION ENTITLED "RISK FACTORS" ON PAGE 6.

Neither the Securities Exchange Commission nor any state securities commission
has approved or disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.

The date of this Prospectus is: January 19, 2001



<PAGE>   4

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>                                                                  <C>
Summary ..........................................................    5
Offering .........................................................    5
Risk Factors .....................................................    6
Forward Looking Statements .......................................    7
Use of Proceeds ..................................................    8
Determination of Offering Price ..................................    8
Dilution .........................................................    8
Dividend Policy ..................................................    8
Selling Shareholders .............................................    8
Plan of Distribution .............................................   10
Legal Proceedings ................................................   11
Directors, Officers, Promoters and Control Persons ...............   12
Security Ownership of Certain Beneficial Owners and Management ...   13
Description of Securities ........................................   14
Interests of Named Experts and Counsel ...........................   14
Securities Act Indemnification Disclosure ........................   14
Organization within the Last Five Years ..........................   14
Description of Business ..........................................   15
Plan of Operation ................................................   20
Description of Property ..........................................   21
Certain Relationships and Related Transactions ...................   21
Market for Common Equity and Related Stockholder Matters .........   21
Executive Compensation ...........................................   22
Financial Statements .............................................   23
Changes in or Disagreements with Accountants Disclosure ..........   23
Available Information ............................................   24
</TABLE>


<PAGE>   5

                                     SUMMARY

Del Cerro Enterprises, Inc. was incorporated in Nevada on March 10, 1999 for the
purpose of developing a high performance driving school in conjunction with
annual nationwide open road races.

We received our initial funding through the sale of common stock to investors
from the period of approximately March 15, 1999 until March 31, 1999. We offered
and sold 59,000 common stock shares at $0.10 per share to non-affiliated private
investors. From inception until the date of this filing we have had no material
operating activities.


                                    OFFERING

<TABLE>
<CAPTION>
<S>                                 <C>
Securities Being Offered            Up to 4,189,000 shares of common stock.

Securities Issued
And to be Issued                    8,449,000 shares of common
                                    stock were issued and outstanding as of the
                                    date of this prospectus.

Use of Proceeds                     We will not receive any proceeds
                                    from the sale of the common stock by the
                                    selling shareholders.
</TABLE>


                                       5
<PAGE>   6

                                  RISK FACTORS

Investors in Del Cerro should be particularly aware of the inherent risks
associated with the company's business plan. These risks include but are not
limited to:

WE ARE IN THE DEVELOPMENT STAGE OF OUR BUSINESS. DEL CERRO HAS NO OPERATING
HISTORY, NO MATERIAL CURRENT OPERATIONS, AND NO PROFITS. AT THIS STAGE OF OUR
BUSINESS PLAN, EVEN WITH OUR GOOD FAITH EFFORTS, OUR SHAREHOLDERS ARE ACCEPTING
A HIGH PROBABILITY OF LOSING THEIR INVESTMENT.

        While we fully intend to meet our goals per our business plan, our plan
        may not work. In such a scenario, we could remain as a start-up company
        with no material operations, revenues, or profits. Although management
        has been successful in planning and operating other auto racing
        businesses and events and believes their plan for Del Cerro will
        generate revenue and profit, there is no guarantee their past
        experiences will provide Del Cerro with similar future successes.


OUR BUSINESS STRATEGY REQUIRES US TO RAISE FUNDS OF $2,500,000 THROUGH A PRIVATE
PLACEMENT. WITHOUT FUNDING, WE COULD REMAIN AS A START-UP COMPANY WITH NO
MATERIAL OPERATIONS, REVENUES, OR PROFITS.

        Although we intend to implement our business plan through the
        foreseeable future and will do our best to mitigate the risks associated
        with the business plan, there can be no assurance that our efforts will
        be successful. Depending upon the amount of additional funding we
        receive, we may be only partially successful or completely unsuccessful
        in implementing our business plan, and our shareholders may lose part or
        all of their investment.


OUR COMPETITORS ARE WELL-ESTABLISHED AND HAVE SUBSTANTIALLY GREATER FINANCIAL,
MARKETING, PERSONNEL AND OTHER RESOURCES THAN WE DO. SHOULD WE BE UNABLE TO
ACHIEVE ENOUGH CUSTOMER MARKET SHARE IN OUR INDUSTRY, WE MAY EXPERIENCE LESS
REVENUE THAN ANTICIPATED AND A SIGNIFICANT REDUCTION IN OUR PROFIT.

        We plan to capitalize on our management's contacts in auto racing and
        name recognition among competition drivers and auto racing fans. While
        we believe we will be able to successfully compete against other similar
        auto racing companies, there is no assurance we will be successful in
        attracting enough competition drivers and auto racing fans to be a
        competitive force in our industry.


THE CURRENT OFFICERS, RODGER WARD AND SHERRIE WARD, ARE THE SOLE OFFICERS AND
DIRECTORS OF THE COMPANY, AND AT THE SAME TIME, THEY ARE INVOLVED IN OTHER
BUSINESS ACTIVITIES. DEL CERRO'S NEEDS FOR THEIR TIME AND SERVICES COULD
CONFLICT WITH THEIR OTHER BUSINESS ACTIVITIES. THIS POSSIBLE CONFLICT OF
INTEREST COULD RESULT IN THEIR INABILITY TO PROPERLY MANAGE DEL CERRO'S AFFAIRS,
RESULTING IN DEL CERRO REMAINING A START-UP COMPANY WITH NO MATERIAL OPERATIONS,
REVENUES, OR PROFITS.

        We have not formulated a plan to resolve any possible conflicts that may
        arise. While Del

                                       6
<PAGE>   7

        Cerro and its officers and directors have not formally adopted a plan to
        resolve any potential or actual conflicts of interest that exist or that
        may arise, they have verbally agreed to limit their roles in all other
        business activities to roles of passive investors and devote full time
        services to Del Cerro after we raise capital of $2,500,000 through the
        sale of securities through a private placement and are able to provide
        officers' salaries per our business plan.

THERE IS NO CURRENT PUBLIC MARKET FOR DEL CERRO'S SECURITIES. WE HAVE NO CURRENT
PUBLIC OFFERING AND NO PROPOSED PUBLIC OFFERING OF OUR EQUITY. AS OUR STOCK IS
NOT PUBLICLY TRADED, INVESTORS SHOULD BE AWARE THEY PROBABLY WILL BE UNABLE TO
SELL THEIR SHARES AND THEIR INVESTMENT IN OUR SECURITIES IS NOT LIQUID.

        We plan to file for trading on the OTC Electronic Bulletin Board which
        is sponsored by the National Association of Securities Dealers, the
        NASD. While this could create liquidity for our shareholders through
        public trading by securities dealers, we do not know when we will be
        able to file for trading, and there is no guarantee of trading volume or
        trading price levels sufficient for investors to sell their stock,
        recover their investment in our stock, or profit from the sale of their
        stock.

IF THE COMPANY BECOMES LISTED FOR TRADING ON THE OTC ELECTRONIC BULLETIN BOARD
THE TRADING IN THE COMPANY'S SHARES MAY BE REGULATED BY SECURITIES AND EXCHANGE
COMMISSION RULE 15G-9 WHICH ESTABLISHED THE DEFINITION OF A "PENNY STOCK."

        The Securities and Exchange Commission Rule 15g-9 establishes the
        definition of a "penny stock", for the purposes relevant to the Company,
        as any equity security that has a market price of less than $5.00 per
        share or with an exercise price of less than $5.00 per share, subject to
        certain exceptions. For any transaction involving a penny stock, unless
        exempt, the rules require: (i) that a broker or dealer approve a
        person's account for transactions in penny stocks; and (ii) the broker
        or dealer receive from the investor a written agreement to the
        transaction, setting forth the identity and quantity of the penny stock
        to be purchased. In order to approve a person's account for transactions
        in penny stocks, the broker or dealer must (i) obtain financial
        information and investment experience objectives of the person; and (ii)
        make a reasonable determination that the transactions in penny stocks
        are suitable for that person and the person has sufficient knowledge and
        experience in financial matters to be capable of evaluating the risks of
        transactions in penny stocks. The broker or dealer must also deliver,
        prior to any transaction in a penny stock, a disclosure schedule
        prepared by the Commission relating to the penny stock market, which, in
        highlight form, (i) sets forth the basis on which the broker or dealer
        made the suitability determination; and (ii) that the broker or dealer
        received a signed, written agreement from the investor prior to the
        transaction.

        The effective result of this Rule 15g-9, is that if the share price is
        below $5.00 there will be less purchasers qualified by their brokers to
        purchase shares of the company, and therefore a less liquid market for
        the securities.


                           FORWARD LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve risk and
uncertainties. We use words such as "anticipate", "believe", "plan", "expect",
"future", "intend", and similar expressions to identify such forward-looking

                                       7
<PAGE>   8

statements. Investors should be aware that all forward-looking statements
contained within this filing are good faith estimates of management as of the
date of this filing. Our actual results could differ materially from those
anticipated in these forward-looking statements for many reasons, including the
risks faced by us as described in the "Risk Factors" section and elsewhere in
this prospectus.


                                 USE OF PROCEEDS

We will not receive any proceeds from the sale of the common stock offered
through this prospectus by the selling shareholders.


                         DETERMINATION OF OFFERING PRICE

We will not determine the offering price of the common stock. The offering price
will be determined by market factors and the independent decisions of the
selling shareholders. See section entitled "Selling Shareholders".


                                    DILUTION

The common stock to be sold by the selling shareholders is common stock that is
currently issued and outstanding. Accordingly there will be no dilution to our
existing shareholders.

                                 DIVIDEND POLICY

We have never declared or paid any cash dividends on our common stock. We
currently intend to retain future earnings, if any, to finance the expansion of
the business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future.


                              SELLING SHAREHOLDERS

The selling shareholders named in this prospectus are offering all of the
4,189,000 shares of common stock offered through this prospectus. The shares
include the following:

1.      59,000 shares of our common stock that the selling shareholders acquired
        from us in an offering that was exempt from registration pursuant to
        Section 4(2) as amended of the Securities Act of 1933 and completed on
        March 31, 1999; and

2.      4,130,000 shared of our common stock that the selling shareholders
        received pursuant to an 71 for 1 forward stock split executed March 15,
        2000.

The following table provides as of November 15, 2000, information regarding the
beneficial ownership of our common stock held by each of the selling
shareholders, including:

1.      The number of shares owned by each prior to this offering;

2.      The total number of shares that are to be offered for each;

3.      The total number of shares that will be owned by each upon completion of
        the offering;

4.      The percentage owned by each; and

                                       8
<PAGE>   9

5.      The identity of the beneficial holder of any entity that owns the
        shares.

To the best of our knowledge, the named parties in the table that follows are
the beneficial owners and have the sole voting and investment power over all
shares or rights to the shares reported. In addition, the table assumes that the
selling shareholders do not sell shares of common stock not being offered
through this prospectus and do not purchase additional shares of common stock.
The column reporting the percentage owned upon completion assumes that all
shares offered are sold, and is calculated based on 4,189,000 shares outstanding
on November 15, 2000.


<TABLE>
<CAPTION>
                              Shares        Total of       Total       Percent
                              Owned Prior   Shares         Shares      Owned
Name of                       To This       Offered        After       After
Selling Shareholder           Offering      For Sale       Offering    Offering
-------------------------------------------------------------------------------
<S>                           <C>           <C>            <C>         <C>
Ross Aguiar                   71,000        71,000         0           0
Clarence Allen                71,000        71,000         0           0
Ronalene Apodaca              71,000        71,000         0           0
Barbara Auberry               71,000        71,000         0           0
Molly Baldwin                 71,000        71,000         0           0
Jo Ann Banks                  71,000        71,000         0           0
Richard R. Beeghly            71,000        71,000         0           0
Richard S. Beeghly            71,000        71,000         0           0
Ruth Blumberg                 71,000        71,000         0           0
Richard Bowen                 71,000        71,000         0           0
Robert Boyd                   71,000        71,000         0           0
Gary Brafford                 71,000        71,000         0           0
Gail Brown                    71,000        71,000         0           0
Rita Cannizzaro               71,000        71,000         0           0
Donald Clark                  71,000        71,000         0           0
Kimberly Culver               71,000        71,000         0           0
Angela Dawson                 71,000        71,000         0           0
Ray Decker                    71,000        71,000         0           0
John Dolan                    71,000        71,000         0           0
Paula Downing                 71,000        71,000         0           0
Charles Ferlatte              71,000        71,000         0           0
Louis Freeman                 71,000        71,000         0           0
Gary Gil                      71,000        71,000         0           0
Patrick Gilmore               71,000        71,000         0           0
Kenneth Gingras               71,000        71,000         0           0
C.S. Hill                     71,000        71,000         0           0
Thomas Hodges                 71,000        71,000         0           0
Scott Hodges                  71,000        71,000         0           0
Frank Ikeler                  71,000        71,000         0           0
Stephen Jiroch                71,000        71,000         0           0
Lorne Johnson                 71,000        71,000         0           0
Paul Lane                     71,000        71,000         0           0
Brandee Lee                   71,000        71,000         0           0
Randy Long                    71,000        71,000         0           0
</TABLE>

                                       9
<PAGE>   10

<TABLE>
<CAPTION>
<S>                           <C>           <C>            <C>         <C>
Lyle Mason                    71,000        71,000         0           0
Robert Mason                  71,000        71,000         0           0
Patricia Matteo               71,000        71,000         0           0
Alice Maxwell                 71,000        71,000         0           0
Gerald McDonald               71,000        71,000         0           0
Bill McMillen                 71,000        71,000         0           0
George Millar                 71,000        71,000         0           0
Alan Mooers                   71,000        71,000         0           0
Barbara Morrison              71,000        71,000         0           0
Angele Navares                71,000        71,000         0           0
George Obi                    71,000        71,000         0           0
Eric Olsen                    71,000        71,000         0           0
Charles Perkins               71,000        71,000         0           0
Paula Rightmire               71,000        71,000         0           0
Karen Smith                   71,000        71,000         0           0
Michele Sterner               71,000        71,000         0           0
John Sturtevant               71,000        71,000         0           0
Vi Sweet                      71,000        71,000         0           0
Yvonne Terry                  71,000        71,000         0           0
Denise & Kevin Tirrell        71,000        71,000         0           0
Lisa Tom                      71,000        71,000         0           0
Janet Usher                   71,000        71,000         0           0
Michelle Walsh                71,000        71,000         0           0
Patricia White                71,000        71,000         0           0
Ramona Whyno                  71,000        71,000         0           0
</TABLE>

To our knowledge, none of the selling shareholders:

1.      Has had a material relationship with Del Cerro Enterprises other than as
        a shareholder as noted above at any time within the past three years; or

2.      Has ever been an officer or director of Del Cerro Enterprises.


                              PLAN OF DISTRIBUTION

The selling shareholders have not informed us of how they plan to sell their
shares. However, they may sell some or all of their common stock in one or more
transactions, including block transactions:

1.      on such public markets or exchanges as the common stock may from time to
        time be trading;

2.      in privately negotiated transactions;

3.      through the writing of options on the common stock;

4.      in short sales; or

5.      in any combination of these methods of distribution.

The sales price to the public may be:

1.      the market price prevailing at the time of sale;

2.      a price related to such prevailing market price; or

3.      such other price as the selling shareholders determine from time to
        time.

                                       10
<PAGE>   11

The shares may also be sold in compliance with the Securities and Exchange
Commission's Rule 144.

The selling shareholders may also sell their shares directly to market makers
acting as principals or brokers or dealers, who may act as agent or acquire the
common stock as a principal. Any broker or dealer participating in such
transactions as agent may receive a commission from the selling shareholders,
or, if they act as agent for the purchaser of such common stock, from such
purchaser. The selling shareholders will likely pay the usual and customary
brokerage fees for such services. Brokers or dealers may agree with the selling
shareholders to sell a specified number of shares at a stipulated price per
share and, to the extent such broker or dealer is unable to do so acting as
agent for the selling shareholders, to purchase, as principal, any unsold shares
at the price required to fulfill the respective broker's or dealer's commitment
to the selling shareholders. Brokers or dealers who acquire shares as principals
may thereafter resell such shares from time to time in transactions in a market
or on an exchange, in negotiated transactions or otherwise, at market prices
prevailing at the time of sale or at negotiated prices, and in connection with
such re-sales may pay or receive commissions to or from the purchasers of such
shares. These transactions may involve cross and block transactions that may
involve sales to and through other brokers or dealers. If applicable, the
selling shareholders also may have distributed, or may distribute, shares to one
or more of their partners who are unaffiliated with us. Such partners may, in
turn, distribute such shares as described above. We can provide no assurance
that all or any of the common stock offered will be sold by the selling
shareholders.

We are bearing all costs relating to the registration of the common stock. Any
commissions or other fees payable to brokers or dealers in connection with any
sale of the common stock, however, will be borne by the selling shareholders or
other party selling the common stock.

The selling shareholders must comply with the requirements of the Securities Act
of 1933 and the Securities Exchange Act of 1934 in the offer and sale of their
common stock. In particular, during times that the selling shareholders may be
deemed to be engaged in a distribution of the common stock, and therefore be
considered to be an underwriter, they must comply with applicable law and may,
among other things:

1.      not engage in any stabilization activities in connection with our common
        stock;

2.      furnish each broker or dealer through which common stock may be offered,
        such copies of this prospectus, as amended from time to time, as may be
        required by such broker or dealer; and

3.      not bid for or purchase any of our securities or attempt to induce any
        person to purchase any of our securities other than as permitted under
        the Securities Exchange Act.


                                LEGAL PROCEEDINGS

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


                                       11
<PAGE>   12


                    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS,
                               AND CONTROL PERSONS

The directors and officers of Del Cerro, all of those whose one year terms will
expire 3/31/01, or at such a time as their successors shall be elected and
qualified are as follows:

<TABLE>
<CAPTION>
Name & Address                              Age      Position          Date First Elected        Term Expires
--------------                              ---      --------          ------------------        ------------
<S>                                         <C>      <C>               <C>                       <C>
Rodger Ward                                 79       President,        3/15/99                   3/31/01
2635 Camino del Rio S. #211                          Treasurer,
San Diego, CA 92108                                  Director

Sherrie Ward                                49       Secretary,        3/15/99                   3/31/01
2635 Camino del Rio S. #211                          Director
San Diego, CA 92108
</TABLE>

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

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

The directors, Rodger and Sherrie Ward, are husband and wife.

No executive officer or director of the corporation has been the subject of any
Order, Judgement, or Decree of any Court of competent jurisdiction, or any
regulatory agency permanently or temporarily enjoining, barring suspending or
otherwise limiting him from acting as an investment advisor, underwriter, broker
or dealer in the securities industry, or as an affiliated person, director or
employee of an investment company, bank, savings and loan association, or
insurance company or from engaging in or continuing any conduct or practice in
connection with any such activity or in connection with the purchase or sale of
any securities.

No executive officer or director of the corporation has been convicted in any
criminal proceeding (excluding traffic violations) or is the subject of a
criminal proceeding which is currently pending.

No executive officer or director of the corporation is the subject of any
pending legal proceedings.


Resumes

Rodger Ward, President, Treasurer & Director

1995 - Current            President, Classic Auto Racing Society, El Cajon,
                          California. Company specializes in staging open road
                          competition races in various states. Responsible for
                          staff and safety personnel training, public relations,
                          marketing, technical rule enforcement, technical
                          inspection personnel training, course design and
                          selection.

                                       12
<PAGE>   13

1980 - Current            Racing Analyst, Speaker

1979 - 1984               Director of Special Events, Circus Circus Hotel &
                          Casino, Las Vegas, NV Manager, Circus Circus Unlimited
                          Hydroplane Racing Team

1975 - 1978               Owner/Promoter, Owasso Motor Speedway, Michigan

1969 - 1972               Director of Public Relations, Ontario Motor Speedway,
                          California

                          Indianapolis 500 Champion 1959 & 1962
                          USAC National Champion 1959 & 1962


Sherrie Ward, Secretary & Director

1994 - Current            Secretary, Treasurer, Classic Auto Society, El Cajon,
                          California. Company specializes in staging open road
                          competition races in various states. Responsible for
                          licensing, state and local permits, pre-event planning
                          and setup, administration, accounting, contract
                          preparation, television broadcasting negotiations,
                          event scheduling, sponsorships, and daily operations
                          management.



                 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                                 AND MANAGEMENT

The following table sets forth information on the ownership of the company's
voting securities by officers, directors and major shareholders as well as those
who own beneficially more than five percent of the company's common stock
through the most current date - January 19, 2001:

<TABLE>
<CAPTION>
Title Of                                 Amount &                Percent
Class             Name                   Nature of owner         Owned
--------          ----                   ---------------         -------
<S>               <C>                    <C>                     <C>
Common            Rodger Ward            2,130,000(a)            25%

Common            Sherrie Ward           2,130,000(b)            25%

Total Shares Owned by Officers
& Directors As a Group                   4,260,000               50%
</TABLE>

(a) Mr. Ward received 30,000 shares of the company's common stock on March 12,
1999 for administrative services and services related to the company's business
plan. 2,100,000 shares of the company's common stock were issued to him per a 71
for 1 stock split on March 15, 2000.

(b) Mrs. Ward received 30,000 shares of the company's common stock on March 12,
1999 for administrative services and services related to the company's business
plan. 2,100,000 shares of the company's common stock were issued to her per a 71
for 1 stock split on March 15, 2000.


                                       13
<PAGE>   14


                           DESCRIPTION OF SECURITIES

Del Cerro's Certificate of Incorporation authorizes the issuance of 50,000,000
shares of common stock, .001 par value per share. There is no preferred stock
authorized. Holders of shares of common stock are entitled to one vote for each
share on all matters to be voted on by the stockholders. Holders of common stock
have cumulative voting rights. Holders of shares of common stock are entitled to
share ratably in dividends, if any, as may be declared, from time to time by the
board of directors in its discretion, from funds legally available therefore. In
the event of a liquidation, dissolution, or winding up of the company, the
holders of shares of common stock are entitled to share pro rata all assets
remaining after payment in full of all liabilities. Holders of common stock have
no preemptive or other subscription rights, and there are no conversion rights
or redemption or sinking fund provisions with respect to such shares.


                      INTEREST OF NAMED EXPERTS AND COUNSEL

No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the
registration or offering of the common stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial
interest, direct or indirect, in the registrant. Nor was any such person
connected with the registrant as a promoter, managing or principal underwriter,
voting trustee, director, officer or employee.

Jennifer Pulver, our independent counsel, has provided an opinion on the
validity of our common stock.


                    SECURITIES ACT INDEMNIFICATION DISCLOSURE

Del Cerro's By-Laws allow for the indemnification of company officers and
directors in regard to their carrying out the duties of their offices. We have
been advised that in the opinion of the Securities and Exchange Commission
indemnification for liabilities arising under the Securities Act is against
public policy as expressed in the Securities Act, and is, therefore
unenforceable. In the event that a claim for indemnification against such
liabilities is asserted by one of our directors, officers, or other controlling
persons in connection with the securities registered, we will, unless in the
opinion of our legal counsel the matter has been settled by controlling
precedent, submit the question of whether such indemnification is against public
policy to a court of appropriate jurisdiction. We will then be governed by the
court's decision.


                       ORGANIZATION WITHIN LAST FIVE YEARS

Del Cerro Enterprises, Inc. was incorporated in Nevada on March 10, 1999. In
March of 1999 the board of directors voted to seek capital and began development
of our business plan. During March 1999 we received our initial funding through
the sale of common stock to non-affiliated private investors.


                                       14
<PAGE>   15

                             DESCRIPTION OF BUSINESS

FORM AND YEAR OF ORGANIZATION

Del Cerro Enterprises, Inc. was incorporated in Nevada on March 10, 1999. From
inception until the date of this filing we have had no material operating
activities.


Any Bankruptcy, Receivership, Or Similar Proceedings

There have been no bankruptcy, receivership or similar proceedings.


Any Material Reclassification, Merger, Consolidation, Or Purchase Or Sale Of A
Significant Amount Of Assets Not In The Ordinary Course Of Business

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


Principal Products Or Services And Their Markets

We intend to offer high speed driving courses at local road racing facilities in
conjunction with established open road races. The extensive instruction will
include a structured curriculum of classroom and track sessions that will
provide an understanding of the fundamentals of road racing. Classroom sessions
will emphasize techniques, racing lines, equipment preparation, technical
inspections and safety procedures. For those participating in the open road
races, sessions will also be offered to cover timing, driver/navigator team
participation, pre-run videos and detailed course notes. Track time will be an
intensive series of slalom, braking and downshifting exercises that give the
participant the opportunity to utilize the techniques and skills discussed in
the classroom in a systematic and controlled environment. Additional track time
will allow the instructor to critique the racer's skill application in a series
of lapping sessions at progressively higher speeds, utilizing radio
communication between instructor and student.

We will initially focus on the participants in the three established open road
races organized by Rodger Ward's Classic Auto Racing Society:

Big Bend Open Road Race
        US Highway 285, Fort Stockton - Sanderson - Ft. Stockton, Texas. 120
        mile "boomerang" event held each April.

Gambler's Run Twin 50's
        Nevada State Route 225, Elko - Wild Horse - Elko, Nevada. 100 mile
        "boomerang" event held each June.

Pony Express Open Road Race
        Nevada State Route 305, Battle Mountain - Austin, Nevada. 84 mile event
        held each September.

                                       15
<PAGE>   16

Open Road Races are conducted on a section of State or Federal Highway,
generally 50 miles or more in length. The participants race the entire distance
at a target speed that they have qualified for based upon the tech speed of
their vehicle. The cars are started in a staggered format with the faster cars
starting first at two to three minute intervals. There is virtually no passing
and no wheel to wheel competition. Participants are required to show proof of
completion of an approved high speed driving course. Awards are given to
participants who come closest to averaging their target speed. Speed divisions
are differentiated by vehicle safety equipment and driver's racing experience -
Touring: 95-110mph, Grand Touring: 115-130mph, Grand Sport: 135-160mph, Super
Sport: 170-180mph, and Unlimited: 180+ mph.

Utilizing management's experience in and knowledge of the motorsport industry,
we plan to conduct multi-day courses at a selection of the more than 25 road
courses located in the states surrounding the open road races. While the company
has not begun race track rental discussions or signed rental agreements with any
course to date, management has identified primary race track facilities that may
include:

<TABLE>
<CAPTION>
<S>               <C>                                         <C>               <C>
         Arizona

                  Firebird Intl. Raceway                      Chandler          1.6 mile
                  Phoenix Intl. Raceway                       Mesa              1.51 mile

         California

                  Holtville Raceway                           Holtville         1.43 mile
                  Buttonwillow Raceway                        Buttonwillow      3 mile
                  Laguna Seca                                 Monterey          2.24 mile
                  Sears Point Raceway                         Sonoma            2.52 mile
                  Willow Springs Motorsports Park             Rosamond          2.5 mile

         Colorado

                  Pueblo Motorsports Park                     Pueblo            2.2 mile
                  Aspen Sports Car Club                       Woody Creek       1.1 mile
                  LaJunta Raceway                             LaJunta           1.6 mile
                  Mountain View Motor Sport Park              Mead              1.8 mile
                  Pikes Peak Intl Raceway                     Fountain          1.3 mile
                  Second Creek Raceway                        Denver            1.7 mile

         Nevada

                  Las Vegas Motor Speedway                    Las Vegas         2.5 mile
                  Reno-Fernley Raceway                        Fernley           15 mile

         Texas

                  Cabaniss N.A.S.                             Corpus Cristi     2.6 mile
                  Texas Motor Speedway                        Fort Worth        2.5 mile
                  Texas World Speedway                        College Stn.      3.1 mile
                  Abilene Municipal Airport                   Abilene           1.7 mile
                  Oak Hill Raceway                            Henderson         1.8 mile
</TABLE>


                                       16
<PAGE>   17

Courses for those not participating in the open road races will also be offered.
These may include High Performance Driving - a course combining advanced street
driving skills with techniques refined through years on the racetrack; Highway
Survival Training - emphasizing defensive driving skills and elements of car
control such as accident avoidance, skid control and high-speed braking; and
Teenage Defensive Driving - teaching teens skills such as accident avoidance,
skid control, advanced braking and ABS techniques.

Management is familiar with the operating procedures and rental availability of
all of the racing facilities for planned use in the company's road course racing
and driving instruction. These facilities are available throughout the year on
rental schedules. However, if scheduling conflicts arise at these facilities,
management believes they will be able to arrange rental dates at alternate
suitable racing facilities as there are eighteen race tracks in Arizona, ninety
in California, twenty-four in Colorado, twenty-two in Nevada, and eighty-eight
in Texas. Management is confident, based upon prior experience, that they will
be able to secure rental racing facilities at either primary or alternate race
courses suitable for the company's planned multi-day driving and instructions
courses.

In management's opinion and experience the popularity of open road racing is
increasing along with other forms of motorsport. Open road racing had it's
beginnings in the 19th century and experienced a revival in the years following
World War II. In recent years the number and types of open road races have
increased including a new motorsports sanctioning body, the Grand American Road
Racing Association.

The company's business plan proposes to utilize its founders' backgrounds to
develop its racing school. The business plan requires we, during the first six
months, raise capital of $2,500,000 through the sale of common stock in a
private placement. After raising the projected capital, we have a planned budget
for months seven through twelve of $957,000 for development of its school to
include $215,000 for five track vehicles and one pre-run van, $240,000 for one
equipment hauler, $80,000 for two full-time instructors, $30,000 for temporary
track personnel, $180,000 for facility rentals - including insurance and safety
personnel, $25,000 for one marketing manager, $17,000 for one office staff
assistant, $25,000 for purchase of computers and fixed assets, $75,000 for
advertising, $20,000 for travel expenses, and $50,000 for rent and other
operating expenses. In addition, based upon management's experience and the
company's business plan, the company will budget approximately $60,000 per year
for property and injury insurance coverage of $5,000,000. Management believes
this level of insurance is adequate as race track facilities include insurance
coverage in their rental rates, and all driving participants will be required to
sign property damage and injury disclaimers related to the inherent risks in
high speed driving activities.

There are no assurances that the company's planned sale of $2,500,000 of common
stock will be successful. If no funding is received during the next twelve
months, we will be forced to rely on its existing cash in the bank and funds
loaned by the directors and officers. The officers and directors have no formal
commitments or arrangements to advance or loan funds to the company. In such a
restricted cash flow scenario, we would be unable to complete our business plan
steps, and would, instead, delay all cash intensive activities. Without
necessary cash flow, we may be dormant during the next twelve months, or until
such time as necessary funds could be raised in the equity securities market.


                                       17
<PAGE>   18


DISTRIBUTION METHODS OF PRODUCTS OR SERVICES

For the first two years of our business plan, we plan to advertise the driving
school through our directors' web site, www.openroadracing.com. In addition, we
plan to advertise in publications, such as AutoWeek, AutoRacingDigest, and
Grassroots Motorsports, maintain links on Internet web pages such as
racingschools.com, TheRaceNet.com, and RacingPress.com. Ads in local newspapers
and track publications surrounding the open road races may be placed prior to
each event. Sponsorships for drivers in local events may also be considered.


PLANNED NEW PRODUCT OR SERVICE

Del Cerro has no new product or service planned or announced to the public.


COMPETITION AND COMPETITIVE POSITION

The size and financial strength of our primary competitors, The Bondurant
School, Richard Petty Driving Experience and Skip Barber Racing School are
substantially greater than those of the company. In examining major competitors,
we have concluded none offer a driving school in conjunction with a competitive
open road race. The Bondurant and Barber racing schools target the amateur and
professional race car driver seeking to improve specific areas of their driving
and racing techniques. The Petty Driving Experience targets racing enthusiasts
with programs designed to provide them the opportunity to drive a race car in a
controlled environment. However, the company's competitors have longer operating
histories, larger customer bases, and greater brand recognition than Del Cerro.
We are not aware of any significant barriers to our entry into the motorsport
market, however, at this time we have no market share of this market.


SUPPLIERS AND SOURCES OF RAW MATERIALS


Management will rely on their combined experience and knowledge in the auto
racing business to arrange for the acquisition of vehicles for the racing
school. We plan to utilize road race chassis builders to design and assemble our
vehicles and purchase engines from motorsport engine builders to be installed in
the cars. While we have no current contracts with chassis or engine builders,
management is aware of chassis builders such as Neely Motorsports,
Hutcherson-Pagan Enterprises and S&W Race Cars, and engine builders such as
Gustaf Engine & Machine, Draime Racing Engines and Skip Govia Motorsports, Inc.
Miscellaneous parts and safety equipment are available from many suppliers such
as Trac Dynamics, Simpson Racing, BSR Products and Port City Racing. Management
is also aware of opportunities to purchase turnkey vehicles from professional
race teams at auctions held annually throughout the U.S. and will consider the
most cost-efficient means for the acquisition of the vehicles while meeting all
safety specifications. We plan to enter into agreements with chassis and engine
builders per our business plan after raising capital during the first six months
of the plan.


DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS

We will not depend on any one or a few major customers. Our target market is the
millions of auto


                                       18
<PAGE>   19

racing fans and competition drivers in the U.S. There are currently 1,585 race
tracks located in the United States, 286 of those located in the states
surrounding the road races organized by Del Cerro's Directors.

PATENTS, TRADEMARKS, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS, LABOR
CONTRACTS

We have no current plans for any registrations such as patents, trademarks,
copyrights, franchises, concessions, royalty agreements or labor contracts. When
we have sufficient funding, management will seek legal counsel to determine if
any registrations would be in the best interests of the company.

REQUIREMENTS FOR GOVERNMENT APPROVAL OF PRINCIPAL PRODUCTS OR SERVICES

We are not required to apply for or have any government approval for our
products or services. Open Road Races are organized with State or Federal
Highway officials allowing promoters to shut down a designated section of
highway for a period of 8 to 10 hours. Drivers participating in the school will
be required to show a valid state, military or international driver's license.


EFFECT OF GOVERNMENTAL REGULATIONS ON THE COMPANY'S BUSINESS

Del Cerro's business is not subject to material regulation by federal
governmental agencies. We will be required to meet all state and local safety
standards for the vehicles used in our driving schools. Management personnel are
familiar with all state and local safety requirements based on their experience
operating open road racing events.


RESEARCH AND DEVELOPMENT FUNDING DURING THE LAST TWO YEARS

We have not expended funds for research and development costs since inception.


COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS

We have not expended any funds for compliance with environmental laws and do not
anticipate our business plan will encompass any such compliance requirements.


NUMBER OF EMPLOYEES

Del Cerro's only current employees are its two officers who will devote as much
time as the board of directors determines is necessary to manage the affairs of
the company. The officers intend to work on a full-time basis when the company
raises capital per its business plan. The business plan calls for hiring four
new full time employees during the next twelve months.


REPORTS TO SECURITY HOLDERS

We provide an annual report that includes our financial information to our
shareholders. We make our financial information equally available to any
interested parties or investors through compliance


                                       19
<PAGE>   20

with the disclosure rules of Regulation S-B for a small business issuer under
the Securities Exchange Act of 1934. Del Cerro became subject to disclosure
filing requirements effective July 18, 2000, was cleared of all comments on May
25, 2000, and is current in its required filings, including Form 10-KSB annually
and Form 10-QSB quarterly. In addition, we will file Form 8 and other proxy and
information statements from time to time as required. We do not intend to
voluntarily file the above reports in the event our obligation to file such
reports is suspended under the Exchange Act.

The public may read and copy any materials that we file with the Securities and
Exchange Commission, ("SEC"), at the SEC's Public Reference Room at 450 Fifth
Street NW, Washington D. C. 20549. The public may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The
SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy
and information statements, and other information regarding issuers that file
electronically with the SEC.


                                PLAN OF OPERATION

Our current cash balance is $1,439. Management believes the current cash balance
is sufficient to fund the current minimum level of operations through the third
quarter of 2001, however, in order to advance the business plan we must raise
capital through the sale of equity securities. We are a development stage
company and have generated no revenue to date. We have sold $5,900 in equity
securities. These sales of equity securities have allowed us to maintain a
positive cash flow balance. We have received a going concern opinion of our
financial statements that raises substantial doubt as to our ability to continue
as a going concern.

Our two-year business plan encompasses the following steps to implement our
goals: during months one through six raise capital of $2,500,000 through the
sale of common stock in a private placement; during months seven through twelve
budget $957,000 for development of its school to include $215,000 for five track
vehicles and one pre-run van, $240,000 for one equipment hauler, $80,000 for two
full-time instructors, $30,000 for temporary track personnel, $180,000 for
facility rentals - including insurance and safety personnel, $25,000 for one
marketing manager, $17,000 for one office staff assistant, $25,000 for purchase
of computers and fixed assets, $75,000 for advertising, $20,000 for travel
expenses, and $50,000 for rent and other operating expenses. In addition, based
upon management's experience and the company's business plan, the company will
budget approximately $60,000 per year for property and injury insurance coverage
of $5,000,000. Management believes this level of insurance is adequate as race
track facilities include insurance coverage in their rental rates, and all
driving participants will be required to sign property damage and injury
disclaimers related to the inherent risks in high speed driving activities.

We will only be able to advance our business plan after we receive capital
funding through the sale of equity securities. After raising capital, management
intends to hire employees, rent commercial space in San Diego County,
California, purchase furniture and equipment, and begin development of its
operations. We intend to use the equity capital to fund the business plan during
the next twelve months as cash flow from sales is not estimated to begin until
year two of the business plan. We will face considerable risk in each of our
business plan steps, such as difficulty of hiring competent personnel within
budget, difficulty in securing track facility rental, and a shortfall of funding
due to our inability to raise capital in the equity securities market. If no
funding is received during the next twelve months, we will be forced to rely on
its existing cash in the bank and funds loaned by the directors and officers.
The officers and directors have no formal commitments or arrangements to

                                       20
<PAGE>   21

advance or loan funds to the company. In such a restricted cash flow scenario,
we would be unable to complete our business plan steps, and would, instead,
delay all cash intensive activities. Without necessary cash flow, we may be
dormant during the next twelve months, or until such time as necessary funds
could be raised in the equity securities market.

There are no current plans for additional product research and development. We
plan to purchase approximately $25,000 in furniture, computers, and software
during the next twelve months from proceeds of the equity security sales. The
business plan provides for an increase of four employees during the next twelve
months.


                             DESCRIPTION OF PROPERTY

Del Cerro's principal executive office address is 2635 Camino del Rio South
#211, San Diego, CA 92108. The principal executive office and telephone number
are provided by an officer of the corporation. The costs associated with the use
of the telephone and mailing address were deemed by management to be immaterial
as the telephone and mailing address were almost exclusively used by the officer
for other business purposes. Management considers the current principal office
space arrangement adequate until such time as we are able to achieve our
business plan goal of raising capital of $2,500,000 and then begin hiring new
employees per the business plan.


                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The principal executive office and telephone number are provided by Mr. Ward, an
officer of the corporation. The costs associated with the use of the telephone
and mailing address were deemed by management to be immaterial as the telephone
and mailing address were almost exclusively used by the officer for other
business purposes.


       MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
                            OTHER SHAREHOLDER MATTERS

Del Cerro plans to file for trading on the OTC Electronic Bulletin Board which
is sponsored by the National Association of Securities Dealers (NASD) as soon as
the Securities and Exchange commission notifies us that our SB-2 Registration
Statement is effective. The OTC Electronic Bulletin Board is a network of
security dealers who buy and sell stock. The dealers are connected by a computer
network which provides information on current "bids", "asks" and volume.

As of the date of this filing, there is no public market for our securities.
There has been no public trading of our securities, and, therefore, no high and
low bid pricing. As of November 15, 2000, Del Cerro had 61 shareholders of
record. We have paid no cash dividends and have no outstanding options.



                                       21
<PAGE>   22

                             EXECUTIVE COMPENSATION

Del Cerro's current officers receive no compensation.

                           Summary Compensation Table


<TABLE>
<CAPTION>
                                                      Other
Name &                                                annual      Restricted               LTIP        All other
principle                   Salary       Bonus        compen-     stock        Options     Payouts     compen-
position         Year         ($)         ($)         sation($)   awards($)    SARs          ($)       sation($)
----------------------------------------------------------------------------------------------------------------
<S>              <C>        <C>          <C>          <C>         <C>          <C>         <C>         <C>
R Ward           1999         -0-         -0-         -0-         3,000         -0-         -0-         -0-
President        2000         -0-         -0-         -0-           -0-         -0-         -0-         -0-

S Ward           1999         -0-         -0-         -0-         3,000         -0-         -0-         -0-
Secretary        2000         -0-         -0-         -0-           -0-         -0-         -0-         -0-
</TABLE>


There are no current employment agreements between Del Cerro and its executive
officers.

The Board agreed to pay Mr. Ward for administrative services and services
related to the company's business plan 30,000 shares of the company's common
stock on March 12, 1999. The stock was valued at the price unaffiliated
investors paid for stock sold by the company, $.10 per share. On March 15, 2000,
2,100,000 shares of the company's common stock were issued to him per a 71 for 1
stock split.

The Board agreed to pay Mrs. Ward for administrative services and services
related to the company's business plan 30,000 shares of the company's common
stock on March 12, 1999. The stock was valued at the price unaffiliated
investors paid for stock sold by the company, $.10 per share. On March 15, 2000,
2,100,000 shares of the company's common stock were issued to her per a 71 for 1
stock split.

The terms of these stock issuances were as fair to Del Cerro, in the board's
opinion, as could have been made with an unaffiliated third party.

The officers currently devote an immaterial amount of time to manage the affairs
of the company. The directors and principal officers have agreed to work with no
remuneration until such time as we receive sufficient revenues necessary to
provide proper salaries to all officers and compensation for directors'
participation. The officers and the board of directors have the responsibility
to determine the timing of remuneration for key personnel based upon such
factors as positive cash flow to include stock sales, product sales, estimated
cash expenditures, accounts receivable, accounts payable, notes payable, and a
cash balance of not less than $25,000 at each month end. When positive cash flow
reaches $25,000 at each month end and appears sustainable the board of directors
will readdress compensation for key personnel and enact a plan at that time
which will benefit the company as a whole. At this time, management cannot
accurately estimate when sufficient revenues will occur to implement this
compensation, or the exact amount of compensation.

There are no annuity, pension or retirement benefits proposed to be paid to
officers, directors or


                                       22
<PAGE>   23

employees of the corporation in the event of retirement at normal retirement
date pursuant to any presently existing plan provided or contributed to by the
corporation or any of its subsidiaries, if any.


                              FINANCIAL STATEMENTS

The audited financial statements of Del Cerro for the years ended September 30,
2000 and 1999 and related notes which are included in this offering have been
examined by Barry Friedman, CPA, and have been so included in reliance upon the
opinion of such accountants given upon their authority as an expert in auditing
and accounting.



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

None.


                                       23
<PAGE>   24


                           DEL CERRO ENTERPRISES, INC.
                          (A Development Stage Company)


                              FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2000
                               SEPTEMBER 30, 1999

<PAGE>   25


                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                             PAGE #
                                                             ------
<S>                                                          <C>
INDEPENDENT AUDITORS REPORT                                       F1

ASSETS                                                            F2

LIABILITIES AND STOCKHOLDERS' EQUITY                              F3

STATEMENT OF OPERATIONS                                           F4

STATEMENT OF STOCKHOLDERS' EQUITY                                 F5

STATEMENT OF CASH FLOWS                                           F6

NOTES TO FINANCIAL STATEMENTS                                 F7-F11
</TABLE>

<PAGE>   26

                            BARRY L. FRIEDMAN, P.C.
                          CERTIFIED PUBLIC ACCOUNTANT

1582 TULITA DRIVE                                         OFFICE  (702) 361-8414
LAS VEGAS, NEVADA 89123                                   FAX NO. (702) 896-0278
                          INDEPENDENT AUDITORS' REPORT
Board of Directors                                              October 23, 2000
DEL CERRO ENTERPRISES, INC.
San Diego, California

        I have audited the accompanying Balance Sheets of DEL CERRO ENTERPRISES,
INC. (A Development Stage Company), as of September 30, 2000, and September 30,
1999, and the related statements of operations, stockholders' equity and cash
flows for the year ended September 30, 2000, and the period March 10, 1999,
(inception), to September 30, 1999. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.

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

        In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of DEL CERRO
ENTERPRISES, INC. (A Development Stage Company), as of September 30, 2000, and
September 30, 1999, and the related statements of operations, stockholders'
equity and cash flows for the year ended September 30, 2000, and the period
March 10, 1999, (inception), to September 30, 1999, in conformity with generally
accepted accounting principles.

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

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

                                     - F1 -
<PAGE>   27


                           DEL CERRO ENTERPRISES, INC.
                          (A Development Stage Company)

                                  BALANCE SHEET

                                     ASSETS


<TABLE>
<CAPTION>
                               SEPTEMBER     SEPTEMBER
                               30, 2000      30, 1999
                                ------        ------
<S>                            <C>           <C>
CURRENT ASSETS

    CASH                        $1,554        $5,900
                                ------        ------

    TOTAL CURRENT ASSETS        $1,554        $5,900
                                ------        ------

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

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

TOTAL ASSETS                    $1,554        $5,900
                                ------        ------
</TABLE>



   The accompanying notes are an integral part of these financial statements



                                     - F2 -
<PAGE>   28

                           DEL CERRO ENTERPRISES, INC.
                          (A Development Stage Company)


                                  BALANCE SHEET


                      LIABILITIES AND STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                       SEPTEMBER     SEPTEMBER
                                       30, 2000      30, 1999
                                       ---------     ---------
<S>                                    <C>           <C>
CURRENT LIABILITIES                     $    0        $    0
                                        ------       -------

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


STOCKHOLDERS' EQUITY (Note #4)

    Common stock
    Par value $0.001
    Authorized 50,000,000 shares
    Issued and outstanding at

    September 30, 1999--
    119,000 shares                                    $  119

    September 30, 2000--
    8,449,000 shares                    $8,449

    Additional Paid-In Capital          +3,451       +11,781

    Deficit accumulated during
    The Development stage              -10,346        -6,000
                                        ------       -------

TOTAL STOCKHOLDERS' EQUITY              $1,554        $5,900
                                        ------       -------

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY                    $1,554        $5,900
                                        ------       -------
</TABLE>



    The accompanying notes are an integral part of these financial statements


                                     - F3 -
<PAGE>   29

                           DEL CERRO ENTERPRISES, INC.
                          (A Development Stage Company)


                             STATEMENT OF OPERATIONS


<TABLE>
<CAPTION>
                                   YEAR            MAR. 10,       MAR. 10, 1999
                                  ENDED            1999, TO        (INCEPTION)
                                 SEP. 30,          SEPT. 30,       TO SEP. 30,
                                   2000              1999              2000
                                ----------        ----------       -----------
<S>                             <C>               <C>               <C>
INCOME
    Revenue                     $        0        $        0        $        0
                                ----------        ----------        ----------


EXPENSES

    General, Selling and
    Administrative              $    4,346        $    6,000        $   10,346
                                ----------        ----------        ----------

    TOTAL EXPENSES              $    4,346        $    6,000        $   10,346
                                ----------        ----------        ----------

NET PROFIT/LOSS (-)                $-4,346           $-6,000          $-10,346
                                ----------        ----------        ----------


Net Profit/Loss (-)
per weighted share
(Note #1)                             $Nil              $Nil              $Nil
                                ----------        ----------        ----------


Weighted average
Number of common
shares outstanding               8,449,000         8,449,000         8,449,000
                                ----------        ----------        ----------
</TABLE>


    The accompanying notes are an integral part of these financial statements


                                     - F4 -
<PAGE>   30

                           DEL CERRO ENTERPRISES, INC.
                          (A Development Stage Company)


                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                             Additional       Accumu-
                            Common           Stock            paid-in         lated
                            Shares           Amount           Capital         Deficit
                           ---------        ---------        ---------        --------
<S>                        <C>              <C>              <C>              <C>
March 24, 1999
Issued For Services           60,000        $      60        $   5,940

April 2, 1999
Issued For Cash               59,000               59            5,841

Net loss year ended
March 10, 1999
(Inception) to
September 30, 1999                                                             $-6,000
                           ---------        ---------        ---------        --------

Balance,
September 30, 1999           119,000        $     119        $  11,781         $-6,000

March 15, 2000
Forward Stock Split
70 for 1                   8,330,000           +8,330           -8,330

Net Loss Year Ended
September 30, 2000                                                              -4,346
                           ---------        ---------        ---------        --------
Balance,
September 30, 2000         8,449,000        $   8,449        $   3,451        $-10,346
                           ---------        ---------        ---------        --------
</TABLE>



    The accompanying notes are an integral part of these financial statements


                                     - F5 -
<PAGE>   31


                           DEL CERRO ENTERPRISES, INC.
                          (A Development Stage Company)


                             STATEMENT OF CASH FLOWS


<TABLE>
<CAPTION>
                                     YEAR            MAR. 10,        MAR. 10, 1999
                                     ENDED           1999, TO         (INCEPTION)
                                    SEP. 30,         SEPT. 30,        TO SEP. 30,
                                     2000              1999              2000
                                    --------         --------         -----------
<S>                                <C>              <C>               <C>
Cash Flows from
Operating Activities

    Net Loss                       $-4,346           $-6,000           $-10,346

    Adjustment to
    Reconcile net loss
    To net cash provided
    by operating
    Activities
    Issue Common Stock
    For Services                         0            +6,000             +6,000

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

Net cash used in
Operating activities               $-4,346           $     0           $ -4,346

Cash Flows from
Investing Activities                     0                 0                  0

Cash Flows from
Financing Activities

    Issuance of Common
    Stock for Cash                       0            +5,900             +5,900
                                    ------            ------           --------

Net Increase (decrease)            $-4,346           $+5,900             +1,554

Cash,
Beginning of period                 +5,900                 0                  0
                                    ------            ------           --------

Cash, End of Period                $ 1,554           $ 5,900           $  1,554
                                   -------           -------           --------
</TABLE>


    The accompanying notes are an integral part of these financial statements


                                     - F6 -
<PAGE>   32


                           DEL CERRO ENTERPRISES, INC.
                          (A Development Stage Company)


                          NOTES TO FINANCIAL STATEMENTS

                   SEPTEMBER 30, 2000, AND SEPTEMBER 30, 1999



NOTE 1 -- HISTORY AND ORGANIZATION OF THE COMPANY

        The Company was organized March 10,1999, under the laws of the State of
        Nevada as DEL CERRO ENTERPRISES, INC. The Company currently has no
        operations and in accordance with SFAS #7, is considered a development
        company. In March 1999, the board of directors voted to seek capital and
        began developing a business plan. In March 1999 the Company received its
        initial funding through the sale of common stock. The company remains in
        a development stage until it completes its registration statement
        process with the U.S. Securities and Exchange Commission, is listed on a
        stock exchange, and secures equity funding.


NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        Accounting Method

               The Company records income and expenses on the accrual method.

        Estimates

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

        Cash and equivalents

               The Company maintains a cash balance in a non-interest-bearing
               bank that currently does not exceed federally insured limits. For
               the purpose of the statements of cash flows, all highly liquid
               investments with the maturity of three months or less are
               considered to be cash equivalents.

                                     - F7 -
<PAGE>   33


                           DEL CERRO ENTERPRISES, INC.
                          (A Development Stage Company)



                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                   SEPTEMBER 30, 2000, AND SEPTEMBER 30, 1999


NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

        Income Taxes

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


        Reporting on Costs of Start-Up Activities

               Statement of Position 98-5 ("SOP 98-5"), "Reporting on the Costs
               of Start-Up Activities" which provides guidance on the financial
               reporting of start-up costs and organization costs. It requires
               most costs of start-up activities and organization costs to be
               expensed as incurred. SOP 98-5 is effective for fiscal years
               beginning after December 15, 1998. With the adoption of SOP 98-5,
               there has been little or no effect on the company's financial
               statements.

        Loss Per Share

               Net loss per share is provided in accordance with Statement of
               Financial Accounting Standards No. 128 (SFAS #128) "Earnings Per
               Share". Basic loss per share is computed by dividing losses
               available to common stockholders by the weighted average number
               of common shares outstanding during the period. Diluted loss per
               share reflects per share amounts that would have resulted if
               dilative common stock equivalents had been converted to common
               stock. As of September 30, 2000, the Company had no dilative
               common stock equivalents such as stock options.


                                     - F8 -
<PAGE>   34


                           DEL CERRO ENTERPRISES, INC.
                          (A Development Stage Company)


                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                   SEPTEMBER 30, 2000, AND SEPTEMBER 30, 1999


NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


        Year End

        The Company has selected September 30th as its fiscal year-end.


NOTE 3 -- INCOME TAXES

        There is no provision for income taxes for the period ended September
        30, 2000. The Company's total deferred tax asset as of September 30,
        2000, is as follows:

              Net operation loss carry forward            $  10,346
              Valuation allowance                         $  10,346

              Net deferred tax asset                      $       0


        The federal net operating loss carry forward will expire between 2019
        and 2020.

        This carry forward may be limited upon the consummation of a business
        combination under IRC Section 381.


                                     - F9 -
<PAGE>   35


                           DEL CERRO ENTERPRISES, INC.
                          (A Development Stage Company)


                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                   SEPTEMBER 30, 2000, AND SEPTEMBER 30, 1999

NOTE 4 -- STOCKHOLDERS' EQUITY

        Common Stock

        The authorized common stock of the corporation consists of 50,000,000
        shares with a par value $0.001 per share.

        Preferred Stock

        The Company has no preferred stock.

        On March 24, 1999, the Company issued 60,000 shares of its $0.001 par
        value common stock for services of $6,000 to its directors.

        On March 24, 1999, the State of Nevada approved the Company's restated
        Articles of Incorporation, which changed the par value from no par to
        $0.001. Also, the Company's authorized common stock was increased from
        25,000 shares to 50,000,000 shares.

        On March 15, 2000, the Company approved a forward stock split on the
        basis of 70 for 1, thus increasing the common stock from 119,000 shares
        8,449,000 shares.


NOTE 5 -- GOING CONCERN

        The Company's financial statements are prepared using generally accepted
        accounting principles applicable to a going concern which contemplates
        the realization of assets and liquidation of liabilities in the normal
        course of business. However, the Company does not have significant cash
        or other material assets, nor does it have an established source of
        revenues sufficient to cover its operating costs and to allow it to
        continue as a going concern. The Company hopes to raise operating
        capital through a private placement during the first seven months of its
        business plan, develop its facilities during months seven through
        twelve, and begin operations at the beginning of year two of its plan.
        The stockholders/officers and/or directors have informally committed to
        advancing the operating costs of the Company interest free, if
        necessary.

                                    - F10 -
<PAGE>   36

                           DEL CERRO ENTERPRISES, INC.
                          (A Development Stage Company)


                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                   SEPTEMBER 30, 2000, AND SEPTEMBER 30, 1999


NOTE 6 -- WARRANTS AND OPTIONS

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


NOTE 7 -- RELATED PARTY TRANSACTIONS

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



                                    - F11 -
<PAGE>   37


                                     PART II

                    INDEMNIFICATION OF DIRECTORS AND OFFICERS

Del Cerro's By-Laws allow for the indemnification of the officers and directors
in regard to their carrying out the duties of their offices. The board of
directors will make determination regarding the indemnification of the director,
officer or employee as is proper under the circumstances if he/she has met the
applicable standard of conduct set forth in the Nevada General Corporation Law.

Section 78.751 of the Nevada Business Corporation Act provides that each
corporation shall have the following powers:

"1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of any fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys fees, judgements, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgement, order, settlement,
conviction, or upon a pleas of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had a reasonable cause to believe that his conduct was unlawful.

2. A corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the corporation to procure a judgement in its favor by reason of
the fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction, determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.

3. To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in sections 1 and 2, or in defense of any claim, issue or
matter therein, he must be indemnified by the corporation against expenses,
including attorneys fees, actually and reasonably incurred by him in connection


                                       24
<PAGE>   38

with the defense.

4. Any indemnification under sections 1 and 2, unless ordered by a court or
advanced pursuant to section 5, must be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances. The
determination must be made:

        a.     By the stockholders;

        (B)    By the board of directors by majority vote of a quorum consisting
               of directors who were not parties to the act, suit or proceeding;

        (C)    If a majority vote of a quorum consisting of directors who were
               not parties to the act, suit or proceeding so orders, by
               independent legal counsel, in a written opinion; or

        (D)    If a quorum consisting of directors who were not parties to the
               act, suit or proceeding cannot be obtained, by independent legal
               counsel in a written opinion.

5. The certificate of articles of incorporation, the bylaws or an agreement made
by the corporation may provide that the expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding must be
paid by the corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an undertaking by
or on behalf of the director or officer to repay the amount if it is ultimately
determined by a court of competent jurisdiction that he is not entitled to be
indemnified by the corporation. The provisions of this section do not affect any
rights to advancement of expenses to which corporate personnel other than
director or officers may be entitled under any contract or otherwise by law.

6. The indemnification and advancement of expenses authorized in or ordered by a
court pursuant to this section:

        (a)    Does not include any other rights to which a person seeking
               indemnification or advancement of expenses may be entitled under
               the certificate or articles of incorporation or any bylaw,
               agreement, vote of stockholders or disinterested directors or
               otherwise, for either an action in his official capacity or an
               action in another capacity while holding his office, except that
               indemnification, unless ordered by a court pursuant to section 2
               or for the advancement of expenses made pursuant to section 5,
               may not be made to or on behalf of any director or officer if a
               final adjudication establishes that his acts or omission involved
               intentional misconduct, fraud or a knowing violation of the law
               and was material to the cause of action.

        (B)    Continues for a person who has ceased to be a director, officer,
               employee or agent and inures to the benefit of the heirs,
               executors and administrators of such a person.

        (C)    The Company's Articles of Incorporation provides that "the
               Corporation shall indemnify its officers, directors, employees
               and agents to the fullest extent permitted by the General
               Corporation Law of Nevada, as amended from time to time."


                                       25
<PAGE>   39

As to indemnification for liabilities arising under the Securities Act of 1933
for directors, officers or persons controlling the company, we have been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy and unenforceable. See section entitled
"Disclosure of Commission Position on Indemnification for Securities Act
Liabilities".


                  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The estimated costs of the offering are denoted below. Please note all amounts
are estimates other than the Commission's registration fee.

<TABLE>
<S>                                                                  <C>
Securities and Exchange Commission registration fee                  $ 111
Accounting fees and expenses                                         $1000
Legal fees                                                           $ 500
Total                                                                $1611
</TABLE>

Del Cerro will pay all expenses of the offering listed above. No portion of
these expenses will be borne by the selling shareholders.


                     RECENT SALES OF UNREGISTERED SECURITIES

On March 12, 1999, the shareholders authorized the issuance of 30,000 shares of
common stock for services to each of the officers and directors of the company
for a total of 60,000 shares. We relied upon Section 4(2) of Securities Act of
1933, as amended (the "Act"). We issued the shares in satisfaction of management
services rendered by the officers and directors, which does not constitute a
public offering.

From the period of approximately March 15, 1999 until March 31, 1999, we offered
and sold 59,000 shares at $0.10 per share to 59 non-affiliated private
investors. We relied upon Section 4(2) of the Securities Act of 1933, as amended
(the "Act"). Each prospective investor was given a private placement memorandum
designed to disclose all material aspects of an investment in Del Cerro,
including the business, management, offering details, risk factors and financial
statements. Each investor also completed a subscription confirmation letter and
private placement subscription agreement whereby the investors certified that
they were purchasing the shares for their own accounts, with investment intent
and that each investor was either "accredited", or were "sophisticated"
purchasers, having prior investment experience or education, and having adequate
and reasonable opportunity and access to any corporate information necessary to
make an informed investment decision. This offering was not accompanied by
general advertisement or general solicitation and the shares were issued with a
Rule 144 restrictive legend.

Under the Securities Act of 1933, all sales of an issuers's securities or by a
shareholder, must either be made (i) pursuant to an effective registration
statement filed with the SEC, or (ii) pursuant to an exemption from the
registration requirements under the 1933 Act.

Rule 144 under the 1933 Act sets forth conditions which if satisfied, permit
persons holding control securities (affiliated shareholders, i.e., officers,
directors or holders of at least ten percent of the outstanding shares) or
restricted securities (non-affiliated shareholders) to sell such securities
publicly without registration. Rule 144 sets forth a holding period for
restricted securities to


                                       26
<PAGE>   40
establish that the holder did not purchase such securities with a view to
distribute. Under Rule 144, several provisions must be met with respect to the
sales of control securities at any time and sales of restricted securities held
between one and two years. The following is a summary of the provisions of Rule
144: (a) Rule 144 is available only if the issuer is current in its filings
under the Securities an Exchange Act of 1934. Such filings include, but are not
limited to, the issuer's quarterly reports and annual reports; (b) Rule 144
allows resales of restricted and control securities after a one year hold
period, subjected to certain volume limitations, and resales by non-affiliates
holders without limitations after two years; (c) The sales of securities made
under Rule 144 during any three-month period are limited to the greater of: (i)
1% of the outstanding common stock of the issuer; or (ii) the average weekly
reported trading volume in the outstanding common stock reported on all
securities exchanges during the four calendar weeks preceding the filing of the
required notice of the sale under Rule 144 with the SEC.

On March 15, 2000, the board of directors authorized a forward stock split of 71
for 1 resulting in a total of 8,449,000 shares of common stock issued and
outstanding.


                                    EXHIBITS


<TABLE>
<S>               <C>                                                                   <C>
Exhibit 1         Underwriting Agreement                                                None
Exhibit 2         Plan of acquisition, reorganization or liquidation                    None
Exhibit 3(i)      Articles of Incorporation and Amendment                               Included Previously
Exhibit 3(ii)     By-laws                                                               Included Previously
Exhibit 4         Instruments defining the rights of holders                            None
Exhibit 5         Opinion re: Legality                                                  Included Previously
Exhibit 8         Opinion re: Tax Matters                                               None
Exhibit 9         Voting Trust Agreement                                                None
Exhibit 10        Material Contracts                                                    None
Exhibit 11        Statement re: computation of per share earnings                       See Financials
Exhibit 13        Annual or Quarterly Reports
                  The company's 10K-SB for the year ended 9/30/00 and the
                  company's 10QSB for the quarter ended 6/30/00 are available
                  through EDGAR on the Securities and Exchange Commission web
                  site (www.sec.gov)
Exhibit 15        Letter on unaudited interim financial information                     None
Exhibit 16        Letter on change of certifying accountant                             None
Exhibit 21        Subsidiaries of the registrant                                        None
Exhibit 23        Consent of experts and counsel                                        Included
Exhibit 24        Power of Attorney                                                     None
Exhibit 25        Statement of eligibility of trustee                                   None
Exhibit 26        Invitations for competitive bids                                      None
Exhibit 27        Financial Data Schedule                                               Included
</TABLE>



                                       27
<PAGE>   41

                                  UNDERTAKINGS

The undersigned registrant hereby undertakes:

1.      To file, during any period in which offers of sales are being made, a
        post-effective amendment to this registration statement to:

        1.     Include any prospectus required by Section 10(a)(3) of the
               Securities Act of 1933;

        2.     Reflect in the prospectus any facts or events arising after the
               effective date of this registration statement, or most recent
               post-effective amendment, which, individually or in the
               aggregate, represent a fundamental change in the information set
               forth in this registration statement; and

        3.     Include any material information with respect to the plan of
               distribution not previously disclosed in this registration
               statement or any material change to such information in the
               registration statement.

2.      That, for the purpose of determining any liability under the Securities
        Act, each such post-effective amendment shall be deemed to be a new
        registration statement relating to the securities offered herein, and
        that the offering of such securities at that time shall be deemed to be
        the initial bona fide offering thereof.

3.      To remove from registration by means of a post-effective amendment any
        of the securities being registered hereby which remain unsold at the
        termination of the offering.

Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers and controlling persons pursuant to the
provisions above, or otherwise, we have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities is asserted by
one of our directors, officers, or other controlling persons in connection with
the securities registered, we will, unless in the opinion of our legal counsel
the matter has been settled by controlling precedent, submit the question of
whether such indemnification is against public policy to a court of appropriate
jurisdiction. We will then be governed by the final adjudication of such issue.


                                       28
<PAGE>   42

                                   SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe it meets all of
the requirements for filing Form SB-2 and authorized this registration statement
to be signed on its behalf by the undersigned, in the city of San Diego, state
of California, on January 19, 2001.

                                    Del Cerro Enterprises, Inc.


                                    By /s/ Rodger Ward
                                       -----------------------------------------
                                       Rodger Ward, President, Treasurer &
                                       Director


                                    By /s/ Sherrie Ward
                                       -----------------------------------------
                                       Sherrie Ward, Secretary & Director


In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
dates stated.



/s/ Rodger Ward                                               1/19/01
------------------------------                                ------------------
Rodger Ward                                                   Date
President, Treasurer & Director
(Principal Financial Officer, Principal Accounting Officer)

/s/ Sherrie Ward                                              1/19/01
------------------------------                                ------------------
Sherrie Ward                                                  Date
Secretary & Director


                                       29


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