SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-KSB

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

    For the fiscal year ended                      Commission file number
         DECEMBER 31, 1999                                 0-3296

                               ETHIKA CORPORATION
             (Exact Name of Registrant As Specified In Its Charter)

                  MISSISSIPPI                       64-0440887
               (State or other jurisdiction        (IRS employer
           of incorporation or organization)     identification no.)

                               11249 W 103rd Drive
                           Westminster, Colorado 80021
                     (Address of Principal Executive Office)

        Registrant's telephone number, including area code: 303-637-2351

           Securities registered pursuant to section 12(g) of the Act:
                   Common Capital Stock par value $1 per share
                                (Title Of Class)

INDICATE  BY CHECK  MARK  WHETHER  THE  REGISTRANT:  (1) HAS FILED  ALL  REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE  SECURITIES  EXCHANGE  ACT OF
1934  DURING  THE  PRECEDING  12 MONTHS  (OR FOR SUCH  SHORTER  PERIOD  THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS),  AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES [ X ] NO [ ]

INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT  FILERS  PURSUANT TO ITEM 405
OF REGULATION  S-B IS NOT CONTAINED  HEREIN,  AND WILL NOT BE CONTAINED,  TO THE
BEST OF REGISTRANT'S  KNOWLEDGE,  IN DEFINITIVE PROXY OR INFORMATION  STATEMENTS
INCORPORATED  BY REFERENCE  IN PART III OF THIS FORM 10-KSB OR ANY  AMENDMENT TO
THIS FORM 10-KSB. [ ]

STATE ISSUER'S REVENUES FOR ITS MOST RECENT FISCAL YEAR:  $0.00

AS OF  MARCH  31  2000,  28,360,346  COMMON  SHARES  WERE  OUTSTANDING,  AND THE
AGGREGATE  MARKET VALUE OF THE COMMON SHARES (BASED UPON THE CLOSING  AVERAGE OF
THE BID AND ASKED  PRICES ON THE  OVER-THE-COUNTER  MARKET ON March 24,  2000)OF
ETHIKA CORPORATION HELD BY NON-AFFILIATES  (12,860,018 shares) WAS APPROXIMATELY
$900,200.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                Certain Exhibits




<PAGE>



PART I
ITEM 1 - BUSINESS

General

Ethika  Corporation  ("Ethika"  or the  "Registrant"),  for the two most  recent
fiscal years has focused primarily on reducing its operating expenses and paying
its liabilities while seeking a privately held business, which seeks to become a
publicly held corporation  through a change in control  reorganization  with the
Registrant.  As of  this  date,  the  Registrant  has no  agreement  for  such a
reorganization  though it has held several  discussions  with different  parties
seeking such a  reorganization.  The Registrant's  criteria for a reorganization
candidate  is that the  reorganization  candidate  be engaged  in an  attractive
revenue producing  business which has audited financial  statements for its most
recently completed fiscal year.

Business Developments over the Past three Fiscal Years

The discussion  that follows  includes  forward-looking  statements that involve
risks and uncertainties. The Registrant's actual results could differ materially
from those  discussed  herein.  Factors that could cause or  contribute  to such
differences  include, but are not limited to those discussed in this section and
elsewhere in this report.

Settlement of Litigation and Change in Control

In December 1997 the  Registrant  entered into a Settlement  Agreement  with the
Plaintiffs  of the legal  action filed in U.S.  District  Court for the Southern
District of Mississippi Jackson Division (see Legal  Proceedings).  The terms of
the  settlement  included;  the dismissal of the pending  proceeding  and mutual
release of any and all other claims  between the parties,  the sale of 7,000,000
shares of the Registrant's common stock to La Salle Investment, Ltd., one of the
Plaintiffs   for  $630,000,   (comprised  of  cash   ($25,000)  and   marketable
securities($605,000)),  the resignations of three of the Registrant's directors,
and the  appointment  of  three  directors  designated  by the  Plaintiffs.  The
resignation of the Registrant's  President was requested and received and Dennis
Brovarone,  one of the newly  appointed  directors was made  President.  The new
management of the Registrant then embarked on the actions described below.

Agreement and Plan of Reorganization and Termination Thereof

On January 26,  1998,  the  Registrant  entered  into an  Agreement  and Plan Of
Reorganization  (the  Reorganization  Agreement)  with  North  American  Digicom
Registrant  ("NADC"),  a privately  owned  company  headquartered  in  Lakewood,
Colorado,  to  acquire  100% of the  outstanding  common  stock of NADC.  During
February and March of 1998, the Registrant  extended loans to NADC in the amount
of $450,000.

Closing of the  Reorganization  Agreement was  conditioned  upon the  Registrant
holding a  Shareholders  meeting to approve  the  Reorganization  Agreement  and
effect certain amendments to the Registrant's  Articles of Incorporation as well
as other conditions.  The Registrant was unable to hold the Shareholders Meeting
within a time  period  acceptable  to NADC and in July,  1998 NADC  unilaterally
terminated  the  Reorganization  Agreement.  Concurrent  with  the  termination,
Phillip F. Grey,  Wayne Johnson and Louis Scotti resigned from the  Registrant's
board of directors.  NADC defaulted upon the payment of its indebtedness and the
Registrant has filed claim against NADC.

<PAGE>
Disposition of Electronic Publishing Operating Units

Based  upon  analysis  of the  electronic  publishing  market  and the amount of
capital  that will be  required  to  compete  effectively  in this  marketplace,
together with the poor  performance the Registrant  experienced  since its entry
into this industry, the Board of Directors and management determined it to be in
the  best  interest  of the  Registrant  to  divest  itself  of  its  electronic
publishing  business unit which was comprised of Text  Retrieval  Systems,  Inc.
Compass  Data  Systems,   Inc.  and  Legislative   Information   Systems,   Inc.
Accordingly,  the  accompanying  financial  statements  reflect the  decision to
dispose of this segment.

Acquisition and Disposition of Text Retrieval Systems, Inc.

On April 2, 1996 the  Registrant  completed the  acquisition  of Text  Retrieval
Systems, Inc. ("TRS"), a privately-held corporation based in Ponte Vedra, Beach,
Florida.  TRS published  electronic  reference  libraries that link related data
sources  for  convenient  access  by  personal  computers.  The  Registrant  had
previously acquired a 35% initial ownership interest in TRS through the issuance
of 100,000  shares of its stock to the TRS  shareholders  and the extension of a
line of credit during 1995. The completion of the purchase  transaction included
cash paid through prior advances to TRS and the issuance of 2,500,000  shares of
contingently  returnable common stock. In the fourth quarter of 1996, management
determined that earnings  targets would not be met. The Registrant in March 1997
amended the  agreement  whereby the  earnings  targets were revised and extended
through  December  31,  1997.   Based  upon  this  amended   agreement  and  the
Registrant's actual performance for the year ended December 31, 1997, the number
of shares  issued in this  transaction  were  reduced  to  732,640  shares.  The
remaining 1,767,360 contingently  returnable shares issued have been returned to
the Registrant and canceled.

As a result of the continued  losses in TRS and its  extensive  capital needs to
achieve  profitability  the  Registrant  negotiated an agreement to sell TRS. On
February 17, 1998, the Registrant  completed the sale of Text Retrieval Systems,
Inc., to TRS Acquisition  Corporation,  a closely held  corporation for $150,000
and future royalties not to exceed $1,500,000 over the next ten years.

Acquisition and Disposition of Compass Data Systems, Inc. and Code Manager

On August 17, 1996 Ethika purchased 100% of Compass Data Systems,  Inc. ("CDS"),
a privately-held  corporation based in Salt Lake City, Utah for a total purchase
price of $500,000  paid as $100,000 in cash and 726,612  shares of common stock.
CDS publishes  electronic  information  reference  services to a wide variety of
industries and  organizations.  Among its principal  product offerings are state
tax law reference libraries which keep subscribers current on tax law changes.

On November 22, 1996 the Registrant  entered into an agreement with the American
Medical  Association  ("AMA") to  cooperatively  publish and  distribute a newly
developed  electronic  reference library for medical service providers.  The new
PC-based product, known as CodeManager, simplifies and speeds the coding process
of procedures and diagnoses for health  insurance  claim forms.  The publishing,
distribution, and future development rights of the CodeManager Reference Library
were purchased from American  Practice  Management,  Inc. ("APM") and Consulting
Concepts,  Inc. in a  transaction  closed on January  31,  1997 in exchange  for
180,000 shares of Ethika common stock.

On April 2, 1998, the Registrant completed a transaction with Ben Ezra Weinstein
and Company,  Inc., a publicly held New Mexico  corporation  ("BNEZ") engaged in
the sale of financial software to sell CDS (including Code Manager,  see below),
and  its  8%  interest  in  InfoDynamics  including  the  note  receivable  from
InfoDynamics.  The selling price of $850,000 was paid in  convertible  preferred

<PAGE>
stock of BNEZ. In September  1998, the Registrant  converted its preferred stock
into 1,687,000 shares of BNEZ common stock.

Acquisition of Legislative Information Systems, Inc. and Closing Thereof

On June  10,  1997  the  Registrant  acquired  Legislative  Information  Systems
Corporation  ("LIS").  LIS became a wholly owned  subsidiary  of the  Registrant
through the exchange of 1,123,433  shares of the  Registrant's  common stock for
all of the outstanding  stock of LIS. LIS was an electronic  publishing  company
located in Annandale,  Virginia  specializing in federal  aviation  regulations,
banking regulations, and custom service contracts.

In July,  1998,  LIS ceased  operations  as a result of the  resignation  of its
president,  Donald Withrow on or before May 22, 1998.  The  Registrant  believes
that Mr. Withrow's resignation was in violation of his employment agreement with
LIS and a breach of his fiduciary duty to LIS as an officer and director.

Settlement of Kidztime TV Litigation

On  September  20,  1998,  the  Registrant  was  served  with the Third  Amended
Complaint in an action entitled  Jeffrey Allard,  et al v. Kidztime TV, Inc., et
al in Colorado  District Court,  Jefferson County,  Colorado.  The Third Amended
Complaint  which named Ethika  Corporation as a Defendant  alleges that Kidztime
TV, Inc., a  subsidiary  of North  American  Digicom  Corporation  engaged in an
illegal   enterprise   whereby  Kidztime  TV  and  other   Defendants   obtained
approximately $50,000,000 from more than 3,000 individuals during 1996 and 1997,
including  approximately  $1,300,000  obtained  from the  Plaintiffs.  The Third
Amended  Complaint  alleges that Ethika is jointly and severally liable with the
other Defendants in that Ethika was controlled by NADC and acted in continuation
of concealment of the illegal  enterprise in violation of the Colorado Organized
Crime  Control Act by its  execution of a letter of intent and the Agreement and
Plan of Reorganization with NADC and by the joint press releases disseminated by
Ethika  Corporation  and NADC. The Third Amended  Complaint does not allege that
Ethika  Corporation sold securities in violation of the Colorado  Securities Act
or the Colorado Consumer  Protection Act. On January 6, 1999, the Registrant was
served with the Amended  Complaint in an action entitled Ramona Chapman et al v.
Kidztime TV, Inc., et al in Colorado District Court, Jefferson County, Colorado.
This Complaint is virtually  identical to the Jeffrey Allard,  et al v. Kidztime
TV, Inc., et al, action described above. The Registrant filed its Answer to this
action on or above January 26, 1999.

The Registrant  filed its Answer on October 16, 1998 denying the  allegations of
participation in an illegal enterprise  contained in the Third Amended Complaint
in that the sale of securities to the  Plaintiffs  all occurred  prior to Ethika
entering into the letter of intent and the Agreement and Plan of  Reorganization
with  NADC  and  prior  to the  joint  press  releases  disseminated  by  Ethika
Corporation  and NADC. In addition the Registrant  denied that it was controlled
by NADC or  otherwise  participated  in the illegal  enterprise  or received any
proceeds  thereof.  The Registrant also filed a Cross Claim against NADC for the
$450,000  of  principal  and  accrued  interest  loaned to NADC during the first
quarter of 1998.  As of the date of this  Report,  NADC has not yet answered the
Cross Claim.

On July 6, 1999, the Registrant  entered into and closed a settlement  agreement
on its  previously  disclosed  Legal  Proceedings  of JEFFREY  ALLARD,  ET AL V.
KIDZTIME TV, INC., ET AL in Colorado District Court, Jefferson County, Colorado.
The settlement  releases all of the plaintiffs claims against the Registrant and
any potential claims against the Registrant's management. The terms of the offer
were the payment of $100,000 and the issuance of 5,000,000  shares of restricted
common   stock.   The  legal proceedings are to be dismissed with prejudice.

<PAGE>
Employees

At December 31, 1999, the Registrant had one employee, its President.


ITEM 2 -  PROPERTIES

The Registrant's  office space is provided by its President  without cost to the
Registrant.


ITEM 3 - LEGAL PROCEEDINGS

The Registrant is not a party to any litigation at this time.


ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:  NONE


                                     PART II

ITEM 5- MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The  Registrant's  common stock is traded on the OTC  Electronic  Bulletin Board
under the symbol ETKA. The following  table sets forth the reported high and low
sales price as reported by the OTC Electronic  Bullentin  Board for the quarters
indicated.  This  information  does not include retail  markups,  markdowns,  or
commissions.

                                         1999                   1998
                                    ---------------       ---------------
                                    High       Low        High        Low
                                    ----       ---        ----        ---

           Quarter
           First                    0.015      0.015      0.4375   0.25
           Second                   0.038      0.015      0.22     0.07
           Third                    0.035      0.02       0.07     0.03
           Fourth                   0.03       0.02       0.06     0.00

No  dividends  were paid on the  Registrant's  common  stock during the last two
years,  and the Registrant  does not intend to pay dividends in the  foreseeable
future.  The number of holders of record of common  stock of the  Registrant  on
March 31, 2000 was approximately 2,400.


ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

The Registrant did not have any revenue from  operations  during the fiscal year
ended December 31, 1999 nor during the first quarter of the current fiscal year.
The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern.  Having  investment income as its only
source of income,  raises  substantial doubt about the ability of the Company to
continue as a going concern.

The Registrant's plan of operations for the remainder of the fiscal year is seek
out a privately  held business with whom the  Registrant can reorganize so as to

<PAGE>
take advantage of the  Registrant's  status as a publicly held  corporation.  In
order to facilitate this objective, the Registrant settled the Kidztime TV legal
proceeding described above. The Registrant also held a Shareholder's  Meeting in
June 1999 and adopted  certain  measures to  facilitate  a  reorganization.  The
measures approved by the Shareholders  authorized the Board of Directors to take
the following actions pursuant to a reorganization of the Registrant:

     1. Increase the size of the Board of Directors to seven members
     2. Amend the Articles of Incorporation to Change the Name of the Registrant
     3. Declare a reverse split of up to 50 to 1.

As of the  date of this  report,  Management  has  evaluated  several  potential
reorganizations.  However  as of the  date of this  report,  there  has  been no
decision to proceed on any  reorganization nor has any agreement been reached on
even principal terms of such a reorganization.

Liquidity and Capital Resources

The Registrant  has reduced its overhead  expenses to  approximately  $6,000 per
month and is paying $1,000 per month  against its account  payable to its former
auditor.  The  Registrant  receives  $8,000  per  month in  payment  of its note
receivable from Alanco Environmental  Resources Corporation and from these funds
the  Registrant  expects  to have  sufficient  cash  resources  for its  reduced
operations.

In order to fund the settlement of the legal  proceeding  described  below,  the
Registrant  sold 820,513  shares of its Ben Ezra  Weinstein  and Company,  Inc.,
common  stock for $80,000 in cash.  The  Registrant  paid a total of $100,000 to
settle  the  action.  The  Registrant  retains  866,487  shares  of its Ben Ezra
Weinstein and Company,  Inc., common stock and expects to continue to hold these
shares as a reserve against future needs.

In September, 1999 the Registrant received a royalty payment of $7,244 from Text
Retrieval Systems, Inc., pursuant to the Registrant's February, 1998 sale of its
former subsidiary. The royalty payment is on each subscription of Text Retrieval
Systems,  Inc.'s HR Comply  product and will  continue  until such time that the
Registrant has been paid a total of $1,500,000.

Results of Operation

During the fiscal year ended  December 31, 1999,  administrative  expenses  were
$94,166 as compared to $413,614 for the fiscal year ended December 31, 1998. The
fiscal year ended December 31, 1999, generated a net loss of $99,963 compared to
a loss of $1,599,461 for the fiscal year ended December 31, 1998.

The Company also revised its  outstanding  liabilities  to remove  approximately
$186,000 in liabilities which the Company had accrued for not less than the past
five fiscal years against  potential  claims arising from the potential claim of
approximately  $157,000 by Standard  Insurance  against a tax refund received by
the Company  prior to 1995 and a potential  claim of  approximately  $29,000 for
sales  taxes  arising  from the use of the Fry Guy fryers  which the Company had
leased.  Since no claims have been made during the past five fiscal years by any
parties relative to these booked  liabilities,  Management believed that removal
of these liabilities more accurately  reflected the true financial  condition of
the Company.



<PAGE>
ITEM 7 - FINANCIAL STATEMENTS



                              MILLER AND MCCOLLOM
                          CERTIFIED PUBLIC ACCOUNTANTS



                          Independent Auditors' Report


Board of Directors
Ethika Corporation


     We have audited the accompanying  balance sheet of Ethika Corporation as of
December 31,  1999,  and the related  statements  of  operations,  stockholders'
equity,  and cash flows for each of the two years in the period  ended  December
31, 1999.  These financial  statements are the  responsibility  of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

         We conducted our 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 presentations.
We believe that our audits provide a reasonable basis for our opinion.

         In our opinion,  the  financial  statements  referred to above  present
fairly, in all material  respects,  the financial position of Ethika Corporation
as of December 31, 1999,  and the results of its  operations  and its cash flows
for each of the two years in the period ended  December 31, 1999,  in conformity
with generally accepted accounting principles.

         The accompanying  financial statements have been prepared assuming that
the  Company  will  continue  as a going  concern.  As  shown  in the  financial
statements,  the Company incurred a net loss from operations of $99,963 for 1999
and it has incurred substantial net losses for each of the past two years. As of
December  31,  1999,  the Company  had no source of  operating  revenues.  These
factors and the others discussed in Note 13, raise  substantial  doubt about the
Company's  ability to continue as a going concern.  The financial  statements do
not include any adjustments relating to the recoverability and classification of
recorded assets, or the amounts and  classification of liabilities that might be
necessary in the event the Company cannot continue in existence.



                                                   /s/  MILLER AND MCCOLLOM




Denver, Colorado
March 23, 2000

   2170 South Parker Road Suite 270 - Denver Colorado 80231 - 303 745-2217 -
                                FAX 303 745-2265

<PAGE>

                               ETHIKA CORPORATION
                                  Balance Sheet
                                December 31, 1999

                                     ASSETS
Current assets
    Cash and cash equivalents                                   $ 21,922
    Note receivable                                               69,515
    Investment securities - Trading                               48,523
                                                               ---------
Total current assets                                             139,960

Note receivable                                                        -

Total assets                                                   $ 139,960
                                                               =========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
    Accounts payable and accrued expenses                       $ 30,793
                                                              ----------

Total current liabilities


Common stock, $1 par value authorized 50,000,000 shares;
issued 28,537,658 shares: outstanding 28,510,346 shares       28,511,458
Discount on common stock                                     (16,166,028)
Accumulated deficit                                          (12,235,151)
                                                             -----------
                                                                 110,279

Less:  27,312 shares of treasury stock at cost                    (1,112)
                                                             -----------

Total stockholders' equity                                       109,167
                                                             -----------

Total liabilities and stockholders' equity                     $ 139,960
                                                             ===========

  The accompanying notes are an integral part of these consolidated financial
                                   statements

                                       2
<PAGE>

                               ETHIKA CORPORATION
                             Statement of Operations
<TABLE>
<CAPTION>

                                                    For the Years Ended December 31,
                                                     1999                   1998
                                                ---------------------------------------
<S>                                                  <C>                    <C>
General and administrative expenses                  $ (94,166)             $ (413,614)
Allowance for bad debts                                      -                (477,292)
Settlement of lawsuit                                 (200,000)                      -


Interest income                                          9,342                 41,651
Royalty income                                           7,244                       -
Gain (loss) on disposal of fixed assets                      -                 (35,397)
Gain (loss) from investment securities                  (6,477)               (668,262)
Forgiveness of debt                                    184,091                       -

Interest expense                                             -                      -
                                                       -------              ----------

                                                       (99,963)             (1,572,914)

Income tax benefit                                           -                  3,158

Loss from continuing operations                        (99,963)             (1,549,756)

Discontinued operations:
Loss from operations                                         -                  (6,974)
Loss on disposals                                            -                 (42,731)
                                                     ---------            ------------
Net loss                                             $ (99,963)           $ (1,599,461)
                                                     =========           =============
Basic and diluted earnings per share:
Loss from continuing operations                        $  (.01)              $   (.076)
                                                       =======               =========
Loss from discontinued operations                      $     -               $   (.003)
                                                       =======               =========
Basic and diluted net loss per share                   $  (.01)              $   (.079)
                                                       =======               =========
</TABLE>



 The accompanying notes are an integral part of these consolidated financial
                                   statements


                                       3
<PAGE>
                               ETHIKA CORPORATION
                             Statement of Cash Flows
<TABLE>
<CAPTION>

                                                      For the Years Ended December 31,
                                                              1999            1998
                                                     ---------------------------------
Cash flows from operating activities:
<S>                                                     <C>           <C>
Net loss                                                $ (99,963)    $ (1,599,461)
Adjustments to reconcile net (loss)
to net cash provided by operating activities
Shares issued for settlement                              100,000                -
Shares issued for services                                  7,500                -
Loss on disposal discontinued operations                        -           42,730
(Gain) loss on disposal of fixed assets                         -           35,987
Other                                                           -          (13,168)
Realized and unrealized (gain) loss on
investment securities                                       6,477          668,262
Provision for bad debts                                         -          450,000
Changes in balance sheet accounts:
Decrease in assets held for sale                                -          739,545
(Increase) decrease in accounts receivable                  7,457           (7,457)
(Decrease) in accounts payable
and other liabilities                                     (42,936)        (214,469)
Sales of investment securities - trading                   80,000          217,792
Net cash provided by (used from)
Operating activities                                      (58,835)         319,761

Cash flows from investing activities:
Issuance of notes receivable                                    -         (450,000)
Payments on notes receivable                               74,683                -
Proceeds from cash escrow                                   5,299                -
Proceeds from sale of fixed assets                              -            9,109
Payments received from leases                                   -          108,020
Proceeds from sale of discontinued operations, net              -         (479,522)
Net cash (used from) provided by
Investing activities                                       79,982         (812,393)
</TABLE>


The accompanying notes are an integral part of these consolidated financial
                                   statements

                                       4
<PAGE>

                               ETHIKA CORPORATION
                       Statement of Cash Flows, Continued
<TABLE>
<CAPTION>

                                                   For the Years Ended December 31,
                                                        1999            1998
                                                   --------------------------------
<S>                                                  <C>            <C>
Cash flows from financing activities:
Net cash used from financing activities                    -               -
                                                     -------        --------
Net increase (decrease) in cash and cash
equivalents                                          (21,147)       (492,632)
Cash and cash equivalents - beginning of period       43,019         535,651
                                                     --------      ---------
Cash and cash equivalents - end of period            $ 21,872       $ 43,019
                                                     ========      =========
Supplemental cash flow information:
Cash payments for interest                           $      -         $   89
                                                     ========      =========
Supplemental schedule of non-cash
Investing and financing activities:

Common stock issued for equity
Settlement of lawsuit                               $ 100,000         $    -
                                                    =========      =========
Common stock issued for services                      $ 7,500         $    -
                                                    =========      =========
Assigned lease receivable for
promissory note                                       $     -       $144,198
                                                    =========      =========
</TABLE>


The accompanying notes are an integral part of these consolidated financial
                                   statements


                                       5
<PAGE>

                               ETHIKA CORPORATION
                  Statement of Changes in Shareholders' Equity
                For the Years Ending December 31, 1999, and 1998
<TABLE>
<CAPTION>

                                                                                                   Retained
                                                                                Discount on        Earnings/        Total
                                            Common                          Common          Accumulated    Shareholders'
                                         Stock Shares      Amount            Stock            Deficit         Equity
                                         ------------   ------------      ------------    --------------   -----------
<S>                                      <C>           <C>               <C>             <C>              <C>
 Balance at December 31, 1997             20,360,346    $ 20,361,458      $(8,123,528)    $ (10,535,727)   $ 1,702,203

Net loss                                          -               -                -        (1,599,461)    (1,599,461)
                                         ----------      ----------       ----------        ----------      ---------

Balance at December 31, 1998             20,360,346      20,361,458       (8,123,528)      (12,135,188)       102,742

Replacement certificate                     150,000         150,000         (150,000)                -              -

Shares issued for services                3,000,000       3,000,000       (2,992,500)                -          7,500

Shares issued in settlement of lawsuit    5,000,000       5,000,000       (4,900,000)                -        100,000

Net loss                                          -               -                -           (99,963)       (99,963)
                                         ----------    ------------     ------------     -------------      ---------
Balance at December 31, 1999             28,510,346    $ 28,511,458     $ (16,166,028)   $ (12,235,151)     $ 110,279
                                         ==========    ============     =============    =============      =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
                                   statements

                                       6

<PAGE>

                               ETHIKA CORPORATION
                          Notes to Financial Statements
                                December 31, 1999

Note 1 - Business and Significant Accounting Policies

Nature of Operations

Ethika Corporation (the  "Corporation"  "Registrant") had operated as an applied
technology  company  through  its  formerly  wholly-owned   subsidiaries,   Text
Retrieval  Systems,  Inc.  ("TRS"),  Compass  Data  Systems,  Inc.  ("CDS")  and
Legislative   Information  Systems,   Inc.  ("LIS").  See  business  combination
information  in Note 5. TRS,  CDS and LIS are engaged in  publishing  electronic
libraries  that link  related  data  sources for  convenient  access by personal
computers.  Certain  products of TRS,  CDS, and LIS are sold  nationally,  while
others are specific to states such as Florida, Missouri, and Kansas.

Basis of Presentation

During the first quarter of 1998, the Board of Directors and management began to
implement a plan of disposition for the Corporation's  operating units; TRS, CDS
and LIS.  Accordingly,  the  operations of these segments have been presented as
discontinued operations in the accompanying financial statements.

On February 17,  1998,  the  Corporation  completed  the sale of Text  Retrieval
Systems,  Inc. to TRS Acquisition  Corporation,  a closely held  corporation for
$150,000 cash and future  royalties not to exceed  $1,500,000  over the next ten
years.  Moreover on April 2, 1998, the Corporation  completed a transaction with
Ben Ezra  Weinstein and Company,  Inc., a publicly  held New Mexico  corporation
("BNEZ") engaged in the electronic  publishing of financial software to sell CDS
and its 8% equity interest in InfoDynamics,  Inc., including the note receivable
from  InfoDynamics,  Inc. The selling price of $850,000 was paid in  convertible
preferred stock BNEZ which has not resulted in any impairment of the net assets.
On or about July 1, 1998,  management  closed the business of LIS and have taken
appropriate action to dissolve the LIS Corporation.

Cash and Cash Equivalents

Cash and cash  equivalents  include cash in banks and money market  investments,
which  carry no  withdrawal  restrictions,  and that have  original  maturity of
ninety days or less.

                                       7


<PAGE>




                               ETHIKA CORPORATION
                          Notes to Financial Statements
                                December 31, 1999

Note 1 - Business and Significant Accounting Policies

Investments

At December 31, 1999, and 1998 marketable securities were classified as trading,
which, under the provisions of Statement of Financial  Accounting  Standards No.
115 - Accounting  for Certain  Investments in Debt and Equity  Securities,  were
reported at market value with unrealized  market gains or losses being reflected
in the statement of  operations.  During the years ended  December 31, 1999, and
1998,  the  reported  unrealized  losses of $20,816  and  $648,888  and  $14,339
realized gain and $19,296 realized losses in 1999 and 1998.

Use of 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 the  disclosure  of
contingent liabilities at the date of the financial statements, and the reported
amounts of revenues and expenses  during the reporting  period.  Actual  results
could differ from those estimates.

Income Taxes

Deferred taxes are provided on a liability  method  whereby  deferred tax assets
are recognized for deductible  temporary  differences and operating loss and tax
credit  carry-forwards  and deferred tax  liabilities are recognized for taxable
temporary  differences.  Temporary  differences are the differences  between the
reported amounts of assets and liabilities and their income tax bases.  Deferred
tax  assets  are  reduced  by a  valuation  allowance  when,  in the  opinion of
management,  it is more likely than not that some portion or all of the deferred
tax  assets  will not be  realized.  Deferred  tax assets  and  liabilities  are
adjusted for changes in tax laws and rates on the date of enactment.

Concentration of Risk

Financial instruments that potentially subject the Corporation to concentrations
of credit risk consist principally of trade accounts receivable. The Corporation
extends  credit  to its  customers  based  on an  evaluation  of the  customer's
financial condition, generally without requiring collateral.  Exposure to losses
on accounts  receivables  is primarily  dependent on each  customer's  financial
condition. The Corporation monitors its exposure for credit losses and maintains
allowances for such losses.

                                       8
<PAGE>




                               ETHIKA CORPORATION
                          Notes to Financial Statements
                                December 31, 1999

Note 2 - Business and Significant Accounting Policies, Continued

Earnings Per Share

The Corporation  adopted  Statement of Financial  Accounting  Standards No. 128,
"Earnings Per Share" ("SFAS No. 128") during 1997. SFAS No. 128 provides for new
accounting  principles to be used in the  calculation  of earnings per share and
was effective for financial statements for both interim and annual periods ended
after December 15, 1997.  Basic and diluted  earnings per share are based on the
weighted  average  number  of  common  shares   outstanding  of  26,010,346  and
20,360,346 and for the years ended December 31, 1999, and 1998, respectively.

Note 3 - Office Lease

During 1998,  Ethika's  corporate office space is leased from a former member of
the Board of Directors at the rate of  approximately  $1,400 per month.  For the
years ended December 31, 1999, and payments on all operating  leases were $0 and
$11,994.

Note 4 - Business Combinations

On April 2, 1996, the  Corporation  completed the  acquisition of Text Retrieval
Systems, Inc. ("TRS"), a privately-held  corporation based in Ponte Vedra Beach,
Florida.  The  transaction  has been accounted for as a purchase and accordingly
the results of operations of TRS since April 2, 1996,  have been included in the
Corporation's   Results  of  Operations.   TRS  publishes  electronic  reference
libraries  that link  related  data  sources for  convenient  access by personal
computers.  The  Corporation  had  previously  acquired a 35% initial  ownership
interest in TRS through the  issuance of 100,000  shares of its stock to the TRS
shareholders  and the extension of a line of credit during 1995.  The completion
of the purchase transaction included cash paid through prior advances to TRS and
the  issuance of  2,500,000  shares of  contingently  returnable  common  stock.
Management  originally  believed it was probable  that the  established  targets
would be met in total;  accordingly,  as of April 2, 1996, the fair value of the
2,500,000  contingently  returnable  shares  ($1,991,250)  was  included  in the
purchase price resulting in a total  estimated  purchase price at acquisition of
$2,659,482.  In the fourth quarter of 1996,  management determined that earnings
targets would not be met in total and accordingly, recorded an adjustment to the
purchase price reducing  intangible assets by the remaining  unamortized balance
related to the contingent  shares of $1,792,125.  The Corporation in March 1997,
amended the  agreement  whereby the  earnings  targets were revised and extended
through  December  31,  1997.   Based  upon  this  amended   agreement  and  the
Corporation's  actual  performance  for the year ended  December 31,  1997,  the
number of shares issued in this transaction were reduced to 732,640 shares.  The
remaining 1,767,360 contingently  returnable shares issued have been returned to
the Corporation and canceled.  The issuance of the additional shares resulted in
recording of additional goodwill in 1997 of $181,571.

                                      9

<PAGE>




                               ETHIKA CORPORATION
                          Notes to Financial Statements
                                December 31, 1999

Note 4- Business Combinations, Continued

On February 17,  1998,  the  Corporation  completed  the sale of Text  Retrieval
Systems,  Inc. to TRS Acquisition  Corporation,  a closely held  corporation for
$150,000 cash and future  royalties not to exceed  $1,500,000  over the next ten
years.

Effective  August 17, 1996, the  Corporation  purchased 100% of the  outstanding
common stock of CDS, a privately-held  corporation based in Salt Lake City, Utah
for a total  purchase  price of $500,000  which included the issuance of 726,612
shares of the Corporation's common stock with a fair market value of $400,000.

On June 10, 1997,  the  Corporation  acquired  Legislative  Information  Systems
Corporation  ("LIS") in a  business  combination  accounted  for as a pooling of
interests.  LIS became a wholly owned subsidiary of the Corporation  through the
exchange of 1,123,433 shares  ($616,203) of the  Corporation's  common stock for
all of the outstanding stock of LIS.

Note 5 - Income Taxes

The  Corporation  files a federal  income tax return and state income returns in
various states as required by the applicable state income tax laws.

Net deferred tax liabilities (assets) from continuing  operations consist of the
following components as of December 31:

                                                 1999                1998
                                                 ----------          -----------
Deferred tax assets:
    Unrealized loss on equity investment          $ 357,410           $ 357,410
    Allowance for bad debts                         153,000             153,000
    Net operating loss carry-forward              1,279,764           1,258,003
    Unrealized loss in marketable securities        167,631             220,622
                                                  ---------           ---------
                                                  1,957,805           1,989,053
Valuation allowance                               1,957,805          (1,989,035)
                                                  ---------           ---------
Deferred tax asset                                        -                   -
                                                  ---------           ---------
Net deferred tax liability                        $       -           $       -
                                                  =========           =========

The Corporation  recorded a valuation  allowance of $1,957,805 and $1,989,035 as
of December 31,  1999,  and 1998  respectively,  due to the  uncertainty  of the
Corporation's   ability  to  realize  future  benefits  of  net  operating  loss
carry-forwards or other future tax deductions.


                                       10
<PAGE>




                               ETHIKA CORPORATION
                          Notes to Financial Statements
                                December 31, 1999

Note 5 - Income Taxes

The (provision  for) benefit from income taxes for the year ended December 31 is
summarized as follows:

                                 1999              1998
                                 --------          ---------
Current                          $ 33,987          $ 402,503
Deferred                          (33,987)          (399,345)
                                 --------          ---------
                                    $   -            $ 3,158
                                 ========          =========

The Corporation has net operating loss  carry-forwards  at December 31, 1999, of
approximately  $3,800,000 which expire through 2019 and capital loss carrforward
of approximately $1,700,000.

The  Corporation's  effective  income tax  (provision)  benefit from  continuing
operations  differs from amounts applying the statutory  federal income tax rate
of 34% as follows:

                                  1999               1998
                                 ---------          ---------
Expected tax benefit              $ 33,987          $ 543,817
Valuation allowance                (31,230)          (543,990)
Other                               (2,757)             4,331
                                  --------          ---------
Total income tax benefit             $   -            $ 3,158
                                  ========          =========

Note 6 - Discontinued Operations

In February 1998, the Corporation's  Board of Directors and management adopted a
formal plan to divest itself of its electronic  publishing business,  consisting
of TRS, CDS and LIS (collectively the "Segment"),  based upon an analysis of the
electronic  publishing market and the amount of capital that management  expects
will be required to compete effectively in that market, together with the recent
poor performance  that the Corporation has experienced  since its entry into the
industry.  The Segment represents  virtually all of the Corporation's assets and
operations.  The Segment has been accounted for as a  discontinued  operation in
accordance  with APB 30,  which  among  other  provisions  requires  the plan of
disposal  to  be  carried  out  within  one  year.  Accordingly,  the  financial
statements have been restated for this  transaction.  A provision of $80,000 has
been recorded in the financial statements related to anticipated losses from the
operations of the Segment through the actual disposal dates. Further, net assets
consisting  primarily of accounts  receivable,  notes  receivable,  property and
equipment,  intangibles,  accounts  payable and deferred revenue of this segment
have been reclassified to net assets held for sale.


                                       11
<PAGE>


                               ETHIKA CORPORATION
                          Notes to Financial Statements
                                December 31, 1999

Note 6 - Discontinued Operations, Continued

Revenues for the Segment  approximated  $510,767 for the year ended December 31,
1998.

As a part of the plan of disposal,  the Corporation completed the sale of TRS to
TRS Acquisition  Corporation,  a closely held corporation,  for $150,000 in cash
and future  royalties  not to exceed  $1,500,000  over the next ten  years.  The
Corporation  placed  $50,000 in escrow to pay unrecorded  liabilities  and other
items. As of December 31, 1999, all of these funds has been disbursed.

On  April  2,  1998,  the  Corporation  completed  a  transaction  with Ben Ezra
Weinstein and Company,  Inc.  ("BNEZ"),  a publicly held New Mexico  corporation
engaged in the electronic  publishing of financial software, to sell CDS and its
8%  equity  interest  in  InfoDynamics,   including  the  note  receivable  from
InfoDynamics.  The selling price of $850,000 was paid in  convertible  preferred
stock of BNEZ which has not resulted in any impairment of the net assets.

Note 7 - Stock Options and Stock-Based Compensation

On May 26, 1995, the Corporation created the 1995 Stock Option Plan (the "Plan")
with a maximum  amount of 500,000  common  stock  shares  reserved  for  options
eligible to be granted under the Plan during its ten-year life. The  Corporation
granted  various stock  options to Employees  and  Directors  during 1998. As of
December 31,  1999,  there were no  remaining  common stock shares  reserved for
granting and there were 1,500,000 options  outstanding from the Plan.  Employees
vest in stock options granted at the rate of 20% each year on a cumulative basis
commencing one year after the date of grant.  Members of the Corporation's Board
of  Directors  vest in stock  options  at the  grant  date.  If an  optionee  is
involuntarily   terminated  for  reasons  other  than  justifiable   cause,  all
outstanding options become vested and may be executed within three (3) months of
termination.

                                       12

<PAGE>



                               ETHIKA CORPORATION
                          Notes to Financial Statements
                                December 31, 1999

Note 7 - Stock Options and Stock-Based Compensation, Continued

As  permitted  by SFAS  123,  "Accounting  for  Stock-Based  Compensation,"  the
Corporation has elected not to record compensation cost for stock options in the
accompanying   statement  of   operations.   The   compensation   cost  for  the
Corporation's  stock options have been determined based on the fair value at the
grant  dates  consistent  with  the  methodology  prescribed  by SFAS  123.  The
Corporation's  net loss and loss per share would have been  increased to the pro
forma  amounts  indicated  below  if these  amounts  had  been  recorded  in the
financial statements:

                                    1999                1998
                                    ---------           ------------
Net loss             As reported    $ (99,963)          $ (1,599,461)
                     Proforma       $ (99,963)          $ (1,608,557)

Loss per share       As reported      $  (.01)             $   (.076)
                     Proforma         $  (.01)             $   (.079)

The fair value of each option  grant is estimated on the date of grant using the
Black  Scholes   option-pricing   model  with  the  following   weighted-average
assumptions used for grants in 1999 and 1998:


                   Dividend yields                                     0%
                   Expected volatility                               137%
                   Risk-free interest rate                          6.26%
                   Expected life of option                         4 years

The fair  value of  options  granted  during  1999,  and 1998 was $0 and  $9,096
respectively.

The following  table  summarized  the changes in the number of options  included
under the Plan:

                                                                      Weighted
                                                                      Average
                                                       Exercise       Exercise
                                          Shares       Price Range    Price
                                        ----------     ------------   ----------

Outstanding at December 31, 1996           250,000      $.50 - $.91   $.70
Granted                                    125,000      $.32 - $.42   $.41
Expired                                    (20,000)            $.68   $.68
                                         ---------
Outstanding at December 31, 1997           355,000      $.35 - $.91   $.60
Granted                                  1,500,000             $.02   $.02
Expired                                   (355,000)     $.35 - $.91   $.60
                                         ---------
Outstanding at December 31, 1998         1,500,000             $.02   $.02
Granted                                          -                -      -
Expired                                    500,000             $.02   $.02
                                         ---------
Outstanding at December 31, 1999         1,000,000             $.02   $.02
                                         =========


                                       13
<PAGE>




                               ETHIKA CORPORATION
                          Notes to Financial Statements
                                December 31, 1999

Note 7 - Stock Options and Stock-Based Compensation, Continued

In addition to 500,000 exercisable stock options issued to current directors, on
December 30, 1998,  the Board of Directors  authorized the issuance of 1,000,000
shares of the Corporation's common stock to each current directors.  Such shares
shall vest in their entirety earlier of one year from date of issuance or on the
date of closing of any reorganization or merger.

Note 8 - Note Receivable

During 1995, the Corporation  entered into leasing  activities  which consist of
the leasing of fry cook units to be placed in various  locations and operated by
the lessee.  All of the Corporation's  leases are classified as direct financing
leases.  Under the direct financing  method of accounting for leases,  the total
net rental receivable under the lease contracts are recorded as a net investment
in direct financing leases,  and the unearned income on each lease is recognized
each month at a constant periodic rate of return on the unrecovered  investment.
At December 31, 1998, the Corporation  had a net investment in direct  financing
leases of $171,490.

On March 12, 1999,  the  Corporation  entered into an agreement  with the Parent
Corporation of the lessee,  whereby the  Corporation  assigned its leases to the
Parent  Corporation for a non interest bearing  promissory note in the amount of
$128,000  plus a $12,000 cash  payment.  The note  provides for sixteen  monthly
installments of $8,000 beginning on April 15, 1999. The Corporation recorded the
note at present value of $144,198  imputing  interest at 8.00%.  The Corporation
recognized a loss of $27,292 on this  transaction.  At December  31,  1999,  the
outstanding balance was $69,515.

Note 9 - Contingencies

The  Corporation  was notified by Standard  Management  Corporation  on June 26,
1997,  that its subsidiary,  Standard Life Insurance of Indiana,  had received a
Citation and Original  Petition  captioned  "Rilla Lindley versus  Standard Life
Insurance  Company of Indiana,  Dixie  National Life  Insurance  Company,  Randy
Owens" filed in 2nd  Judicial  District  Court,  Parish of  Brenville,  State of
Louisiana.  Standard's  notification  constituted  a claim  notice  pursuant  to
Section 10.3 of the Second  Restated Stock Purchase  Agreement  dated August 30,
1995,  by and among  Standard Life and Dixie  National  Life and Dixie  National
Corporation  (now  Ethika  Corporation)  in which  Ethika  agreed  to  indemnify
Standard  under  certain   conditions   against  qualified   third-party  claims
originating  prior to the sale of Dixie National Life to Standard.  The scope of
Ethika's indemnity obligation,  if any, under the Agreement is limited to claims
predicated  upon  occurrences  prior to closing based on actions or inactions of
Dixie National Life Insurance Company.


                                       14
<PAGE>




                               ETHIKA CORPORATION
                          Notes to Financial Statements
                                December 31, 1999

Note 9 - Contingencies, Continued

The third-party  claim  involves,  among other things,  allegations  regarding a
vanishing  premium life insurance policy issued by Dixie National Life which was
purchased by the plaintiff in August 1989 from defendant Owens, an employee of a
general  insurance  agency in  Louisiana.  The claim appears to be styled in the
form of a class action. An investigation into the Citation's  allegations by the
defendants,   including  legal  representation  of  the  Corporation,  has  been
initiated.  Potential  liabilities,  if any, of the various  defendants have not
been determined.

Pursuant to agreements  with Plaintiff  counsel no answer would be filed pending
settlement  discussions and the filing of an amended complaint properly pleading
as a class action suit. In January 1998,  the  Corporation  informed SMC that it
could  not  defend  the  action.  To the  Corporation's  knowledge,  no  further
settlement discussions have been held and no amended complaint has been filed.

On  September  20,  1998,  the  Registrant  was  served  with the Third  Amended
Complaint in an action entitled Jeffrey Allard,  et al. v. Kidztime TV, Inc., et
al in Colorado  District Court,  Jefferson County,  Colorado.  The Third Amended
Complaint  which named Ethika  Corporation as a Defendant  alleges that Kidztime
TV, Inc., a  subsidiary  of North  American  Digicom  Corporation  engaged in an
illegal   enterprise   whereby  Kidztime  TV  and  other   Defendants   obtained
approximately $50,000,000 from more than 3,000 individuals during 1996 and 1997,
including  approximately  $1,300,000  obtained  from the  Plaintiffs.  The Third
Amended  Complaint alleges that Ethikka is jointly and severally liable with the
other Defendants in that Ethika was controlled by NADC and acted in continuation
of concealment of the illegal  enterprise in violation of the Colorado Organized
Crime  Control Act by its  execution of a letter of intent and the Agreement and
Plan of Reorganization with NADC and by the joint press releases disseminated by
Ethika  Corporation  and NADC. The Third Amended  Compliant does not allege that
Ethika  Corporation sold securities in violation of the Colorado  Securities Act
or the Colorado Consumer Protection Act.

The Registrant filed its Answer on October 16, 1998,  denying the allegations of
participation in an illegal enterprise  contained in the Third Amended Complaint
in that the sale of securities to the  Plaintiffs  all occurred  prior to Ethika
entering into the letter of intent and the Agreement and Plan of  Reorganization
with  NADC  and  prior  to the  joint  press  releases  disseminated  by  Ethika
Corporation  and NADC. In addition the Registrant  denied that it was controlled
by NADC or  otherwise  participated  in the illegal  enterprise  or received any
proceeds thereof.  The Registrant  believes that it has substantial  defenses to
all allegations made against it.


                                       15

<PAGE>




                               ETHIKA CORPORATION
                          Notes to Financial Statements
                                December 31, 1999

Note 9 - Contingencies, Continued

On January 6, 1999, the  Registrant  was served with an Amended  Complaint in an
action  entitled  Romona  Chapman et al v.  Kidztime TV, Inc., et al in Colorado
District  Court,  Jefferson  County,   Colorado.  This  complaint  is  virtually
identical to the action described above. On July 5, 1999, the Registrant settled
this lawsuit by issuing the plaintiffs  5,000,000 shares of the Company's common
stock and paying $100,000 in cash.

The  Registrant  also  filed a Cross  Claim  against  NADC for the  $450,000  of
principal and accrued interest loaned to NADC during the first quarter of 1998.

Note 10 - Reorganization Agreement

On January 26, 1998,  the  Corporation  entered  into an  Agreement  and Plan of
Reorganization (the "Reorganization  Agreement") with the North American Digicom
Corporation  ("NADC"),  a privately  owned  company  headquartered  in Lakewood,
Colorado,  to acquire 100% of the  outstanding  common stock of NADC in exchange
for Ethika common stock. The NADC shareholders would have received approximately
95% of the then outstanding shares.

Subsequent  to the  approval  of the  Reorganization  Agreement  by the Board of
Directors  of Ethika and NADC,  Ethika  extended a line of credit to NADC not to
exceed $500,000 to be secured by NADC's equipment and accounts receivable. As of
March 31, 1999, $450,000 with interest at 6% had been advanced against this line
of credit.
The Registrant has provided $450,000 allowance against this Note.

On July 30, 1998,  the  Registrant  received  notification  from North  American
Digicom  Corporation (NADC) that it had abandoned its  Reorganization  Plan with
the Registrant.  Concurrent with its termination, Phillip F. Grey, Wayne Johnson
and  Louis  Scotti  resigned  from  the  Registrant's  board of  directors.  The
Registrant and NADC had previously agreed to extend the closing of the Agreement
and Plan of Reorganization  until August 31, 1998. However, due to the inability
of either  party to satisfy the terms of the  agreement  on or before such date,
NADC chose to terminate the Reorganization Plan.

Note 11 - Going Concern

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue as a going  concern.  For the twelve  month period ended
December 31, 1999,  the Company  incurred a loss from  operations of $99,963 and
had an accumulated deficit of $12,235,151 that raise substantial doubt about its
ability to continue as a going concern.


                                       16
<PAGE>




                               ETHIKA CORPORATION
                          Notes to Financial Statements
                                December 31, 1999

Note 12 - Year 2000 Compliance

The only software program the Company utilizes is a general ledger program.  The
Company does not anticipate any compliance  problems with its software  programs
or vendors.

Note 13 - Forgiveness of Debt

At the end of 1999, the Company removed  $184,091 of liabilities from the books.
These  liabilities were setup over the last five years and no claims for payment
have been made.


                                       17




<PAGE>




<PAGE>



PART III

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

The directors of the Registrant are:

                                       Director
           Name               Age        Since

Dennis Brovarone               44        1997
Dennis P. Nielsen              57        1997


Each  director  holds office until the next annual  meeting of  shareholders  or
until a successor shall be duly elected and qualified.

The executive officer of the Registrant is:

                                                        Executive Officer
        Name                               Age                  Since

Dennis Brovarone                            44                   1997
Chairman and President,
Chief Executive Officer

The Registrant's officer serves at the pleasure of the Board of Directors.

BUSINESS EXPERIENCE

The principal  occupations  and business  experience  for the last five years or
more of the directors and executive officer of the Registrant are as follows:

Dennis  Brovarone  - Mr.  Brovarone,  43,  has  been  practicing  corporate  and
securities law since 1986 and as a sole practitioner  since 1990. He was elected
to the Board in  December  1997 and is  Chairman  of the  Registrant's  Board of
Directors. Mr. Brovarone also serves as President.  Prior to 1990, Mr. Brovarone
served as  in-house  counsel to R.B.  Marich,  Inc.;  a Denver,  Colorado  based
brokerage  firm. Mr.  Brovarone  served as President  (Chairman) of the Board of
Directors of The Community  Involved Charter School,  from January 1995 to March
1998, a four-year old K-12  independently  chartered  public  school  located in
Lakewood, Colorado. He also serves as a Director of Innovative Medical Services,
a publicly held corporation located in San Diego, California.

Dennis Nielsen - Mr.  Nielsen,  56, has been a director since March 1993, he has
been self employed as a business  consultant  offering assistance to business on
restructuring,  financing or assisting  with possible  mergers or  acquisitions.
Previously he was owner of P&N, Inc. and Hufburn Sales,  Inc.,  both  automobile
dealerships.

In 1992 the Registrant was the subject of an investigation by the Securities and
Exchange  Commission  ("SEC"),  which  was  resolved  by means of a  settlement.
Pursuant to the  settlement,  on March 9, 1994, the United States District Court
for the District of Columbia  entered  final  judgment of  permanent  injunction
against the  Registrant.  The  judgment  was entered on the basis of a complaint
filed by the SEC. The  Registrant  consented  to the entry of final  judgment of
permanent  injunction without admitting or denying the allegations  contained in
the SEC's complaint. The final judgment to which the Registrant consented enjoin
it from  violating or aiding and abetting  future  violations of sections of the
Securities Act of 1933 and the Securities Exchange Act of 1934 and certain rules
thereunder.


COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities  Exchange Act of 1934 requires the  Registrant's
Executive Officers and Directors and persons who own more than 10% of its common
stock to file reports of ownership  and changes in ownership  with the SEC. Such
persons are required by SEC regulations to furnish the Registrant with copies of
all Section 16(a) forms filed by such person. Based upon a review of the initial
and annual  statements  of  beneficial  ownership,  the  Registrant's  Executive
Officer and Directors have timely filed their reports of ownership.


ITEM 10 - EXECUTIVE COMPENSATION

Summary Compensation Table

The following Summary  Compensation Table sets forth information  concerning the
total  compensation paid or awarded to the Registrant's  Chief Executive Officer
for services rendered in all capacities to the Registrant and its subsidiaries.

                                                                      Number of
                                               Annual                Securities
Name and                                    Compensation             Underlying
Principal Position          Year          Salary      Bonus           Options

Dennis Brovarone            1999         $60,000        $0             500,000
President and Chairman

Option Grants in 1998

The following table sets forth information concerning options to purchase shares
of common stock which were granted during 1998 to the  individuals  named in the
Summary Compensation table.

                  Date          Number of Shares     Exercise  Date
Name              Granted       Underlying Option(1) Price(1)  Exercisable
--------------------------------------------------------------------------------
Dennis Brovarone       12/30/98       500,000          $0.02     (2)
Dennis Nielsen         12/30/98       500,000          $0.02     (2)

(1)  Not  subject  to  adjustment  as a  result  of  any  reverse  split  of the
     outstanding common stock


(2)  Exercisable  ninety days from the date of closing of any  reorganization or
     merger agreement which results in a change in control of the Registrant and
     expiring if unexercised by December 31, 2004.

Fiscal Year End Option  Value  Table:  Omitted as the Options  granted  have not
vested and are not exercisable


COMPENSATION OF DIRECTORS

Directors who are not employees of the Registrant  received no cash compensation
or reimbursement of expenses.


ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners

The  following  table  sets forth  pertinent  information  as to the  beneficial
ownership of the Registrant's common stock as of March 31, 2000 of persons known
by the  Registrant to be holders of 5% or more of the  outstanding  common stock
(28,360,346). Information as to the number of shares beneficially owned has been
furnished by the persons named in the table as the holders of 5% or more of such
common stock.

Name and Address                          Shares
Of Beneficial Owner                       Beneficially Owned    Percent of Class


Alfred Peeper (1)                         10,500,428                      37.0%
Calle Hamburg 22
Benidorm, Spain ALC 03500

Fond Mondial D'Investissement(1)(2)        9,890,038                      34.9%
c/o SAGEM
Route Des Acacia 54
1127 Carouge, Switzerland

Noel Guardi and                            5,000,000                      17.6%
The Boyle Partnership
1175 Sherman St. # 1375
Denver, CO 80203

Eur-Am B.V. (1)(3)                           610,100                       2.2%
Calle Hamburg 22
Benidorm, Spain ALC 03500


(1)  Alfred  Peeper is an  investment  manager  headquartered  and  operating in
     Benidorm,  Spain.  Mr. Peeper holds a power of attorney for each  following
     person which gives him authority to purchase, sell, and exercise all voting
     rights  relating to each "Group Member." This Reporting  Person  represents
     37% of the total outstanding shares of Ethika common stock.

(2)  Fond Mondial  D'Investissement  is a British  Virgin  Islands  corporation.
     Beverly Hunt and Darlene  Baynes are the directors with the power to revoke
     Mr. Peeper's power of attorney.

(3)  Eur-Am, B.V., is a corporation organized under the laws of the Netherlands.
     Mr. Peeper and Mr. Evert Eggink are the directors  with the power to revoke
     Mr. Peeper's power of attorney.




<PAGE>



Security Ownership of Management

The following table sets forth information as to the beneficial ownership of the
Registrant's  common  stock as of March 31,  2000,  by each  Director,  nominee;
Executive Officer named in the Summary  Compensation  Table and by all Directors
and Executive Officers as a group.

       Name of                             Shares                    Percent
       Beneficial Owner                    Beneficially Owned        of Class

       Dennis Brovarone                    1,000,000                   4.2%
       Dennis P. Nielsen                   1,000,000                   4.2%
       Directors, nominees, and
       Executive  Officers  as a group     2,000,000                   8.4%
       (2 persons)

ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Registrant did not enter into any reportable  relationships  or transactions
with its  officers,  directors or control  persons  during the fiscal year ended
December  31,  1999,  except  for the  granting  of shares  and  options  to the
directors as set forth above.





<PAGE>



ITEM 13 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

The following documents are filed as part of this report under Part II, Item 8:

Financial Statements

Reference  is made to the Index to  Financial  Statements  included in Item 8 of
Part II hereof, where such documents are listed.

(a) Exhibits as Required by Item 601 of Regulation S-B:

Exhibit
Number       Description                        Incorporation by Reference to


(3)(a)(1)  Articles of Incorporation as         Registrant's Annual Report on
           Amended and restated                 Form 10-K for the year ended
                                                December 31, 1985. Exhibit (3a)

(3)(a)(2)  Articles of Amendment to the         Registrant's  Annual Report of
           Articles of  Incorporation of        Form  10-K for the year  ended
           Dixie  National Corporation          December 31, 1994. Exhibit
           Dated May 23, 1986                   (3)(a)(2).

3)(a)(3)   Articles of Amendment to the         Registrant's  Annual Report on
           Articles of  Incorporation of        Form 10-K for the year  ended
           Dixie  National Corporation          December  31,  1994.  Exhibit
           Dated  January  24,  1995            (3)(a)(2).

(3)(b)     Bylaws, as amended                   Registrant's Annual Report on
                                                Form 10-K for the year ended
                                                December, 31, 1990.  Ex. (3(b).

(3)(b)(1) Amendment to Article III              Registrants Annual Report on
          of Bylaws Effective                   Form 10-K for the year ended
          Jan. 24, 1996                         December 31, 1995.  Ex.(3)(b)(1)

(3)(b)(2) Amendment  to  Article  IV of         Registrants  Annual  Report  on
          Bylaws Effective March 24, 1996       Form 10-K for the year ended
                                                December 31, 1995. Ex.(3)(b)(2)

(3)(b)(3) Amended Bylaws at Article III         Registrants  Annual Report on
          Effective September 26, 1996          Form 10-K for the year ended
                                                December 31, 1996. Ex.(3)(b)(3)

(2)(1)   Agreement and Plan of Reorganization  Registrant's Annual Report of
         for Ethika  Corporation  to  acquire  Form 10-K for the year  ended
         North American Digicom Corporation    Dec 31, 97 Ex( 2)(1)(4)

(2)(7)  Purchase Agreement between Ethika     Registrant's Annual Report of Form
        Corporation and TRS Acquisition Corp. 10-K for the year ended
                                              Dec  31, 1997 Ex(2)(7)




<PAGE>



(2)(8)  Stock Purchase Agreement between      Registrant's Annual Report of Form
        Ethika Corporation and Ben Ezra       10-K for the year ended
        Weinstein & Company for the sale of   December 31, 1997 Exhibit (2)(8)
        Compass Data Systems, Inc. to Ben
        Ezra Weinstein & Company

(10)(1) Agreement to restructure Fry Guy Equipment Leases

(21)    Subsidiaries of the Registrant

(27)    Financial Data Schedule



(b) Reports on Form 8-K

The  Registrant  did not file any reports on Form 8-K during the last quarter of
the year ended December 31, 1999.



<PAGE>



SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                                        ETHIKA CORPORATION
                                                       (Registrant)
Date: March 28, 2000                               By: /s/Dennis Brovarone
                                                       -------------------
                                                       Dennis Brovarone
                                                       Chairman of the Board
                                                       Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.

/s/Dennis Brovarone                                           March 28, 2000
---------------------
Dennis Brovarone
Chairman of the Board & Chief Executive Officer
(Principal Executive Officer)


/s/ Dennis Nielsen                                            March 28, 2000
---------------------
Dennis Nielsen, Director

<PAGE>