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

                                   FORM 10-KSB

(Mark One)

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

                   For the fiscal year ended December 31, 2001

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
         ACT OF 1934

              For the transition period from_________ to___________

                         Commission file number 0-023075

                     PELICAN PROPERTIES INTERNATIONAL CORP.
                 (Name of Small Business Issuer in its Charter)

            Florida                                      65-0616879
(State or Other Jurisdiction of            (I.R.S. Employer Identification No.)
Incorporation or Organization)

                2 Fenwick Road, Suite 100, Fort Monroe, VA 23651
               (Address of Principal Executive Offices)(Zip Code)

                                 (757) 224-5234
                           (Issuer's Telephone Number)

              Securities registered under Section 12(g) of the Act:

                     Common Stock, par value .001 par share
                                (Title of Class)


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

                           Yes  [X]    No  [ ]

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in the definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. |X|

         State issuer's revenues for its most recent fiscal year: $7,314,082

         The aggregate market value of the Registrant's voting Common Stock held
by non-affiliates of the registrant was approximately $561,729(computed using
the closing bid price per share of Common Stock on March 31, 2002, based on the
assumption that directors and officers and more than 5% stockholders are
affiliates).

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

         There were 5,975,851 shares of the registrant's Common Stock, par value
$.001 per share outstanding on March 31, 2002.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None
<PAGE>


                                TABLE OF CONTENTS
                                -----------------

<TABLE>
<CAPTION>

<S>       <C>                                                                           <C>
1.   Part 1
     Item 1.    Description of Business                                                 3
     Item 2.    Description of Property                                                 5
     Item 3.    Legal Proceedings                                                       7
     Item 4.    Submission of Matters to a Vote of Security Holders                     8

2.   Part II
     Item 5.    Market for Common Equity and Related Shareholder Matters                8
     Item 6.    Management's Discussion and Analysis of Financial Condition             9
                and Results of Operations
     Item 7.    Financial Statements                                                    17
     Item 8.    Changes in and Disagreements with Accountants on Accounting
                And Financial Disclosure                                                17

3.   Part III
     Item 9.    Directors, Executive Officers, Promoters and Control Persons;
                Compliance with section 16(a) of the Exchange Act (Items 401
                and 405)                                                                18
     Item 10.   Executive Compensation                                                  18
     Item 11.   Security Ownership of Certain Beneficial Owners and Management          19
     Item 12.   Certain Relationships and Related Transactions                          19
     Item 13.   Exhibits, and Reports on Form 8-K                                       20
</TABLE>


<PAGE>


                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

         General

         Pelican Properties International Corp. (the "Company") was incorporated
under the laws of the State of Florida on June 1, 1990 under the name Optimum
Computing Inc. Its subsidiaries, Ohio Key I, Inc. and Ohio Key II, Inc., were
incorporated under the laws of the State of Florida on December 19, 1996. In
August 1995, the Company changed its name to Pelican Properties, International
Corp.

         On August 31, 1995, the Company entered into a Share Exchange Agreement
with the limited partners of the Sunshine Key Associates limited partnership, a
Florida limited Partnership (the "Partnership") whereby a 99% interest in the
Partnership was transferred to the Company in exchange for 3,100,000 shares, or
83.6%, of the Company's common stock. On December 31, 1996, the Partnership
entered into agreements with Ohio Key I, Inc. and Ohio Key II, Inc., both
wholly-owned subsidiaries of the Company (the "Subsidiaries") pursuant to which
with the Subsidiaries were assigned the assets and assumed the liabilities of
the Partnership including the Sunshine Key RV Resort and Marina, a resort
property located in Ohio Key, Florida ("Property").

         Until June 4, 1998, the Company, through the Subsidiaries, engaged in
the ownership and management of the Property. On June 4, 1998, the Company's
Subsidiaries sold (the "Sale") the Property for a sale price of $15,750,000
cash. A portion of the proceeds from the Sale, or $5,589,908, was used to pay
all of the Company's long-term debt (including all debt associated with the
Property). Proceeds were also used to redeem all of the Company's outstanding,
Series A preferred stock and satisfy all other loans associated with the
Property and Partnership. After provisions for closing costs and the resolution
of certain issues with respect to the Property, the Company placed the remaining
proceeds of the Sale, $8,149,727.15 (the "Remaining Proceeds"), in an IRS Rule
1031 Exchange Account with the intention of taking advantage of tax deferral
strategies if reinvested in real estate properties within specified time frames
and if certain criteria were met.

         On October 15, 1998, the Company, through its Subsidiaries, purchased
the McLure House Hotel and Conference Center (now Ramada Plaza City Center)
located in Wheeling, West Virginia for $3,200,000 paid in cash and $2,400,000
being financed. The cash was drawn from the proceeds held in the Company's Rule
1031 Exchange Account.

         On November 25, 1998, the Company, through its Subsidiaries, purchased
the Palmer Inn Hotel located in Princeton, New Jersey for $7,500,000. The
Company paid $2,500,000 in cash with the remaining balance being financed. The
cash was drawn from the proceeds held in the Company's Rule 1031 Exchange
Account.

         On November 30, 1998, the Company, through its Subsidiaries, purchased
the Chamberlin Hotel located in Hampton Roads, Virginia for $5,350,000. The
Company paid $2,350,000 in cash with the remaining balance being financed. The
cash was drawn from the proceeds held in the Company's Rule 1031 Exchange
Account. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Description of Property" for further discussion of
these properties.

         As of this date, all assets and liabilities of the Chamberlin Hotel and
the Palmer Inn were transferred by Ohio Key I, Inc. and Ohio Key II, Inc. to Old
Point Comfort Hotel, LLC and Palmer Inn, Princeton, LLC, respectively, and all
assets and liabilities of the Ramada Plaza City Center were transferred to
Wheeling City Center Hotel, LLC.


                                       3
<PAGE>


         Business Strategy

         The Company continues to increase the growth of its existing hotels
through concentrated management efforts. The Company has seen an increased
profitability through the centralization of management of the three hotels. The
Company has centralized accounting operations at its corporate office (which
produces monthly financial statements and operational data), has published
standardized accounting procedures for all hotel locations and performs periodic
internal audits at each of its hotels. The Company has developed a consistent
standard at each hotel in relation to the customer service with periodic
training by the Company's corporate staff, as well as monitoring of guest
satisfaction through customer surveys and comment cards.

         Management intends to continue implementing its marketing strategies
directed towards the business traveler, tour groups and weekend travelers. The
Palmer Inn has a "Preferred Lodger" relationship with Princeton University, and
efforts will continue to capitalize on this relationship through alumni
reunions, athletic events, and University sponsored meetings. The Ramada Plaza
City Center has negotiated a contract to provide hotel services to individuals
associated with a class action lawsuit being held in the City of Wheeling, West
Virginia. It is expected that this lawsuit will continue into the third quarter
of 2002.

         Although other potential investment opportunities have been presented
to the Company, management believes that the sale or alternate business usage of
the Chamberlin Hotel is necessary prior to acquiring other properties or
embarking on a new venture. At such time as the Company is successful in
achieving management's goals relative to the Chamberlin Hotel, management
intends to resume its efforts to purchase additional hotels and management
further intends to investigate suitable merger opportunities.

         Competition

         The hotel industry is highly competitive and the Company's hotels are
subject to competition from other hotels. Many of the Company's competitors have
substantially greater marketing and financial resources than those of the
Company's. Each of the Company's hotels competes for guests primarily with other
similar hotels in its immediate vicinity and secondarily with other hotels in
its geographic market. Management believes that brand recognition, location,
quality of hotel and services provided, and price are the principal competitive
factors affecting the Company's hotels.

         Seasonality

         The hotel industry is seasonal in nature. Generally, the Company's
hotel revenue will be greater in the second and third quarters of a calendar
year. The Ramada Plaza City Center also historically generates greater revenues
in the fourth quarter of the calendar year due to an annual local area festival.
This seasonality can be expected to cause quarterly fluctuations in revenues and
profitability of the Company. Quarterly earnings also may be adversely affected
by events beyond the Company's control, such as extreme weather conditions,
general economic factors, increasing fuel prices, and other considerations
affecting travel.

         Employees

         The Company currently has three corporate management employees
consisting of its President, Chief Operating Officer, and Legal Counsel. The
Company presently employs approximately 190 persons through its subsidiaries, of
which about 120 are full time employees. All three hotels are full service, but
only one operates its own food service, with the other two locations leasing the
restaurant out to an independent operator. The number of employees at each hotel
is subject to change based on seasonal considerations. Management believes that
it has an adequate number of employees to support its current operations,
although the Company intends to hire additional employees upon the acquisition
of other properties. Management believes its relations with employees are
satisfactory.

         Insurance

         The Company maintains insurance covering liabilities for personal
injuries and property damage. The Company also maintains, among other types of
insurance coverage, real and personal property insurance, directors' and
officers' liability insurance, liquor liability insurance, and workers'
compensation insurance. Management believes it maintains sufficient insurance
coverage for the operation of its business.


                                       4
<PAGE>


ITEM 2. DESCRIPTION OF PROPERTY

         The Company currently operates three full-service hotels with food
service and banquet facilities; one is under a franchise agreement with Best
Western, another is under a franchise agreement with Hospitality Franchise
Services and carries the name of Ramada Plaza City Center, an upscale brand of
the Ramada chain. All hotels are concentrated in the Mid-Atlantic Region of the
United States. The Company maintains its principal place of business at the
Chamberlin Hotel in Hampton, Virginia.

         The Ramada Plaza City Center, built in 1852, is located in downtown
Wheeling, West Virginia, and, until December 1999, was known as the McLure House
Hotel. The hotel continues its AAA rating as a Three-Diamond property. It has
170 guestrooms inclusive of 1 and 2 bedroom suites, a VIP executive floor, 27
apartments, and a full service attached parking garage. The hotel has
approximately 7,500 square feet of banquet/conference space. The ground floor
has several storefront tenants who offer both street and lobby access to their
facilities. The world's original Hallmark gift shop is among these tenants.
Changes are continuing to be implemented to satisfy franchise requirements and
enhance brand recognition. The hotel property is subject to a mortgage with a
financial lending institution at 7.5% interest per annum on a remaining
principal balance of $2,449,745 as of December 31, 2001. The mortgage's maturity
date is October 30, 2003; prepayment of the loan is allowed under the terms of
the mortgage with no penalty.

         Construction on a MacGregor's Market(R) restaurant, located on the
first floor of the Ramada Plaza City Center, began in January 2002 and it is
expected to be completed in July 2002. The restaurant will be operated by
Sparachane Enterprises, Inc. under a three year lease. Renovations are also
planned for the lobby area, various room floor corridors, and guestrooms on the
fourth floor.

         The Best Western Palmer Inn is located in Princeton, New Jersey. The
hotel is currently a AAA rated Three Diamond property. There are 106 guestrooms
inclusive of deluxe rooms, suites and efficiencies that are equipped for
extended stays. The hotel has five meeting/banquet rooms, a business center with
computer stations, fax and copier equipment, a pool, and an exercise room,
complete with a sauna. There is a Charlie Brown franchised restaurant in the
hotel with lobby access for which there is a long-term lease arrangement between
the hotel and the restaurant. The hotel property is subject to a mortgage with a
financial lending institution at 9.75% interest per annum on remaining principal
balance of $5,027,705 as of December 31, 2001. The mortgage's maturity date is
July 20, 2005; there are graduated penalties for prepayment of the mortgage
before the maturity date.

         The Palmer Inn has no definite plans for renovation until negotiations
with the county of West Windsor (concerning an extension/renewal of the
construction permit for a 22-room addition) are completed. No other renovation
plans are scheduled for the year 2002.

         The Chamberlin Hotel is situated on historic Fort Monroe, located on
the Chesapeake Bay, in the Hampton, Virginia area. The hotel is listed on the
National Register of Historic Places. It has 185 rooms, a banquet room and the
second largest meeting space in the local market, indoor and outdoor pools, and
a business center with computer stations, fax and copier equipment. The hotel
also has a restaurant and bar. AAA does not currently rate the hotel. The hotel
property is subject to a mortgage with a lending institution at an interest rate
of prime plus 5% per annum on the remaining principal balance of $1,675,000 as
of December 31, 2001. The mortgage's maturity date is September 13, 2002;
prepayment of the principal is allowed with a letter disclosing such intention
within ten days of the payment, and a minimum payment of $100,000 or more. The
Chamberlin Hotel has had minor repairs and renovations limited to the public
areas and rooms, as needed. However, the Chamberlin has no definite plans for
renovation in the year 2002.




                                       5
<PAGE>

         Statistics

The Company uses several measurements to determine its success in implementation
of its business plans and overall financial profitability. They are as follows:

a)   Percentage of Occupied Rooms (POR). This measures the room inventory used
     based on the number of days in the period and the number of rooms available
     in that same period.

b)   Revenue per Occupied Rooms (RevPOR). This measures the average rate
     realized by the property based on the total rooms revenue for the period
     divided by the total number of rooms occupied for that same period.

c)   Revenue per Available Rooms (RevPAR). This measures the average rate
     realized by the property based on the total rooms revenue for the period
     divided by the total number of rooms available for that same period.


Hotel Location:                 POR             RevPOR             RevPAR
                            2001   2000      2001    2000      2001     2000

Best Western Palmer Inn     63.9    70.9     95.47   97.70     60.97   69.28
Ramada Plaza City Center    44.5    44.7     64.86   58.64     35.52   29.85
Chamberlin Hotel            27.8    27.2     66.25   74.34     18.36   20.25

         Analysis of Statistics

         The Ramada Plaza City Center remained at a similar occupancy rate as in
2000 while the Palmer Inn fell below 2000 occupancy levels. Management believes
that the decrease at the Palmer Inn is attributable to the events of September
11, 2001, such hotel's proximity to New York City, and the decrease in business
travel in the northeast. The Chamberlin Hotel maintained a similar occupancy in
2001 despite staff fluctuations in the hotel sales department (affecting the
consistency of sales and marketing efforts), and increased security at Fort
Monroe, where the Chamberlin Hotel is located, following the events of September
11, 2001. The occupancy level at the Chamberlin Hotel was achieved by renting
guestrooms to the Army at rates below the government per diem. However, by
virtue of the limitations and restrictions on access further described in Item 6
below, commercial activity and social events (such as weddings and bar mitzvahs)
have dramatically declined and consequently revenue at the Chamberlin Hotel has
declined. The similar occupancy level at the Ramada Plaza City Center was
reflected through its franchise reservation system and increased sales and
marketing efforts on behalf of the hotel sales department. Revenue per Occupied
Room decreased for all three hotel locations due to increased competition at all
three locations as well as the decrease in travel experienced after the events
of September 11, 2001. The Revenue per Available Room also reflects the decline
in occupancy experienced throughout the industry. Overall the Company
experienced a decrease in room departmental profit in the amount of $302,464
from 2000, a loss of 6.9%. This loss was kept to a minimum by strict operational
controls at the properties.




                                       6
<PAGE>


ITEM 3.  LEGAL PROCEEDINGS

          (a) In June, 1999, the Company's subsidiaries Ohio Key I, Inc. and
Ohio Key II, Inc. (collectively, "Ohio Key") filed suit against JCB Financial
Corporation, James C. Barggren, Chamberlin Hotel, L.L.C., and The Chamberlin
Hotel Company in the Circuit Court for the City of Hampton, State of Virginia.
When Ohio Key purchased The Chamberlin Hotel, Ohio Key assumed two notes in the
aggregate principal amount of $3,000,000 payable to The Chamberlin Hotel
Company, which were secured by two deeds of trust (the "Deeds of Trust"). Said
notes were paid, in full, on or about February 4, 1999. Despite such payment,
The Chamberlin Hotel Company assigned the Deeds of Trust to JCB Financial
Corporation, a corporation controlled by James C. Barggren. Subsequent to such
assignment, JCB Financial Corporation refused to satisfy said Deeds of Trusts in
the public records. Ohio Key filed the subject litigation (i) to have the Deeds
of Trust judicially determined to be satisfied and discharged, and (ii) to
obtain a determination as to what amounts of money, if any, were owed by Ohio
Key to James C. Barggren and his affiliates (collectively, "Barggren").

         On October 6, 2000, the parties agreed to settle this case. Pursuant to
such settlement, the parties agreed, among other things, that (i) as of October
6, 2000, the principal balance due Barggren was $1,536,276 together with
interest in the amount of $15,151 for a total of $1,551,427, (ii) Ohio Key would
pay Barggren as soon as possible the principal sum of $1,400,000 plus accrued
interest, (iii) JCB Financial Corporation would satisfy the Deeds of Trust, and
(iv) at such time as the matters set forth in (ii) and (iii) were fulfilled, the
Court would enter an order dismissing this case and the Court would retain
jurisdiction to enforce the settlement and to enter any other appropriate
orders.

         On or about October 13, 2000, and as a result of the settlement, Ohio
Key paid Barggren the principal sum of $1,400,000 plus accrued interest and JCB
Financial Corporation satisfied the Deeds of Trust in the public records. The
Court dismissed this lawsuit but retained jurisdiction to, among other things,
clarify matters pertaining to the arbitration referred to below.

         In the above litigation, the Court appointed an auditor to prepare a
report ("Report") regarding the indebtedness and claims by and between Ohio Key
and Barggren. The final Report states that Barggren owes Ohio Key the sum of
$265,678.88. Ohio Key and Barggren agreed in such litigation that the
appropriateness of the Report would be submitted to "fast track" arbitration. In
October 2000, James C. Barggren and JCB Financial Corp. requested arbitration
with respect to the Report and any credits or setoffs Barggren may be entitled
to.


                                       7
<PAGE>


         (b) On November 30, 2000, Ohio Key I, Inc. and Sunshine Key Associates
Limited Partnership (the "Partnership) filed suit against Monroe County in the
Circuit Court for the Sixteenth Judicial Circuit In and For Monroe County,
Florida. The subject matter of this suit is the Sunshine Key RV Resort and
Marina (the "Park") located in Big Pine Key, Florida; the Park was sold by Ohio
Key I, Inc. on June 4, 1998. The nature of this litigation is, among other
things, a request for monetary damages in the amount of $10,000,000 based upon
Monroe County's alleged improper code enforcement activities that resulted in
Ohio Key I, Inc. selling the Park at below market value. Monroe County filed a
motion to dismiss the complaint. On July 2, 2001, the Court granted said motion
to dismiss and Ohio Key I, Inc. and the Partnership were given permission to
file a second amended complaint. On or about October 15, 2001, a second amended
complaint was filed naming Monroe County and the county attorney for Monroe
County, James T. Hendrick, Esquire, as defendants. The causes of action in the
second amended complaint are based upon, among other things, defamation, abuse
of process, malicious prosecution and tortious interference with contractual and
business relationships. Monroe County has filed a motion to dismiss the second
amended complaint. A hearing on such motion has been scheduled for June 6, 2002.

         (c) In October 2000, Linda Lutz filed suit against Vintage Hotels
Corporation (a wholly-owned subsidiary of the Company) and Palmer Inn,
Princeton, LLC, among others, in the Superior Court of New Jersey in Middlesex
County. The nature of this litigation is, among other things, a request for
unspecified monetary damages based upon alleged sexual harassment by the
defendants, in the form of pregnancy discrimination. The causes of action in the
Complaint are based upon, among other things, sexual harassment, retaliation and
disparate treatment. The Palmer Inn, Princeton, LLC and Vintage Hotels
Corporation have filed answers to the Complaint. The parties have agreed upon
the terms of a settlement arrangement; however, a written settlement agreement
has not been executed.

         (d) On June 30, 2000, an Order was entered in a suit filed by
PYA/Monarch, Inc. against the Company in the Circuit Court for the City of
Virginia Beach, Virginia. The Order provided for the entry of a default judgment
against the Company in the sum of $72,138, with interest thereon at the rate of
24% per annum from March 22, 2000, and reasonable attorney's fees in the amount
of $18,000. The Company was not aware of such Order, or the existence of the
underlying lawsuit, until on or about August 14, 2000. Shortly thereafter, the
Company filed a motion to set aside the default judgment and a hearing on such
motion was held on January 9, 2001. At the hearing, PYA/Monarch, Inc. agreed to
voluntarily dismiss this lawsuit and to file appropriate pleadings stating that
the default judgment is a nullity. Also, at such hearing, Old Point Comfort
Hotel, LLC agreed to sign a Confession of Judgment Note in the original
principal amount of $77,500. Said note was subsequently paid off and this case
has been dismissed.

         (e) The Company is involved in various other legal actions arising in
the normal course of business, both as claimant and defendant. While it is not
possible to determine with certainty the outcome of these matters, in the
opinion of management, the eventual resolution of these claims and actions
outstanding will not have a material adverse effect on the Company's financial
position or operating results.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         The Company held its Annual Shareholders Meeting on January 17, 2002.
The meeting was held at the Ramada Plaza City Center Hotel in Wheeling, West
Virginia. The only matter of business voted upon was the election of Directors
for 2002 with the following results:
<TABLE>
<CAPTION>

    Officer              Votes Cast for:             Votes cast against:               Withheld:
    -------              --------------              ------------------                --------
<S>                         <C>                                                         <C>
C. John Knorr, Jr.          2,902,506                          --                       89,586


Nathan A Roesing            2,992,102                          --                         --


Gorham Rutter, Jr.         2,992,102                           --                         --
</TABLE>

All three Directors were elected.
No additional matters were submitted to a vote of shareholders.



                                       8
<PAGE>


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

         As of March 31, 2002, there were approximately 257 shareholders of
record of the Company's common stock. The Company's common stock is currently
reported on the over-the-counter (OTC) bulletin board under the symbol "PELP".
The following table sets forth, for the period since January 1, 2000, the high
and low closing sales prices for the common stock as reported by the OTC
Bulletin Board.

                                                                COMMON STOCK
                                                                ------------
                                                            HIGH           LOW
                                                            ----           ---
2000
First Quarter .............................                 0.49          0.31
Second Quarter ............................                 0.31          0.13
Third Quarter .............................                 0.25          0.125
Fourth Quarter ............................                 0.34          0.07

2001
First Quarter ..............................                 0.44         0.08
Second Quarter .............................                 0.125        0.09
Third Quarter ..............................                 0.16         0.125
Fourth Quarter .............................                 0.125        0.06

         The prices listed above for the Company's common stock reflect
inter-dealer quotations, without retail mark-ups, markdowns or commissions, and
do not necessarily represent actual transactions.

         The transfer agent for the Company's common stock is Florida Atlantic
Stock Transfer, Inc., 7130 Nob Hill Road, Tamarac, Florida 33321. The
approximate number of holders of record of the Company's common stock is 257.

         The Company has never paid cash dividends on its common stock. The
Company presently intends to retain future earnings, if any, to finance the
expansion of its business and does not anticipate that any cash dividends will
be paid in the foreseeable future. The future dividend policy will depend on the
Company's earnings, capital requirements, expansion plans, financial condition
and other relevant factors.

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

         Management believes that results of operations in the hotel industry
are best explained by three key performance measures: occupancy, average daily
rate, and revenue per available room ("RevPAR") levels. These measures are
influenced by a variety of factors including national, regional and local
economic conditions, the degree of competition with other hotels in the area and
changes in travel patterns. The demand for accommodations is also affected by
normally recurring seasonal patterns and most of the Company's hotels experience
lower occupancy levels in the winter and spring months (November through
February) which may result in lower revenues, lower net income and less cash
flow during these months.

          Revenues

          Revenues are derived from the sale of rooms, food and beverage (both
of which are classified as direct revenues), rental space, and other related
activities. Food and beverage revenues primarily include sales from hotel
restaurants, room service and hotel catering. Rental revenues are from leased
store and/or office space, and restaurant space at two hotel locations. Other
revenues include charges for guests' long-distance telephone service, laundry
service, and the use of meeting facilities.

         Operating Expenses

         Operating expenses are comprised of direct, general and administrative,
other hotel operating expenses, depreciation and amortization, and other
expenses. Direct expenses, including rooms, food and beverage and other
operations, reflect expenses directly related to their respective profit
centers. These expenses generally vary with available rooms and occupancy rates,
but also have a small fixed component. General and administrative expenses
represent management salaries and other non-allocated departmental operating
expenses and are generally fixed. Other hotel operating expenses include
expenses related to general operations such as advertising, utilities, repairs
and maintenance and other property administrative costs. These expenses are also
primarily fixed.


                                       9
<PAGE>

         The following discussion should be read in conjunction with the
consolidated financial statements and notes thereto appearing elsewhere in this
Report.

         Year Ended December 31, 2000 Compared to Year Ended December 31, 2001

         Revenues

         For the year ended December 31, 2001, the Company's total revenues
decreased by 12.4 % to $7,314,082, from $8,350,152 for the year ended December
31, 2000. The change in revenues was attributable to increased competition in
the Princeton, New Jersey area, limited access (due to increased security) to
the Chamberlin Hotel, located on the army base of Fort Monroe, as well as a
general down-turn of the national economy.

         Cost and Expenses

         Cost of revenues, consisting of rooms, food and beverage, and other
operating expenses, decreased 17.3% to $3,827,665 for the year ended December
31, 2001, from $4,633,364 for the year ended December 31, 2000. The decrease in
the cost of revenues corresponds directly to the decrease in revenues, along
with strict cost control efforts at the properties.

         Loss from operations before income taxes increased to $(2,325,804) in
2001 as compared to $(1,160,007) in 2000. Net loss increased to $(1,762,804) in
2001 as compared to $(421,007) in 2000. The increase in loss from operations
before income taxes was due to an impairment loss of $1,058,727 incurred at the
Chamberlin as well as tax penalties. The net loss decreased as a result of an
income tax benefit of $563,000 in 2001.

         Liquidity and Capital Resources

         The Company's working capital deficit increased from $(3,472,080) at
December 31, 2000 to $(3,554,813) at December 31, 2001. This change was due to
an increase in current maturities of long-term debt, an increase in unpaid
vendor invoices and unpaid tax liabilities at December 31, 2001.

         As of December 31, 2000, the Company held accounts receivable of
$185,227 as compared to $171,027 at December 31, 2001. This sustained level is
due to several large accounts carrying balances accumulated in the month of
December that would be paid within thirty days of the dates of the functions
that were held at the hotels. As of December 31, 2000 the Company had accounts
payable and accrued expenses of $1,594,469 as compared to $2,248,925 at December
31, 2001. The increase is due to the accumulated accrual of outstanding debts to
vendors and tax liabilities that have remained unpaid through the year's end.

         The Company, and its subsidiaries, are overdue in the payment of
certain payroll taxes estimated to be approximately $930,000, and possibly
interest and penalties of unknown amounts. Management anticipates entering into
negotiations with the taxing authorities in an effort to implement a payment
plan for such unpaid sums. However, there is no assurance that such a payment
plan can be agreed to and in the event the Company is unable to work out such
plan, the Company and its operations could be thereby materially adversely
affected.

         The Company's auditors have informed management that the Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of", requires any
long-lived asset that is considered impaired to be written down to fair value. A
long-lived asset is considered impaired when the future net cash flows expected
to be generated by the asset are less than the carrying amount of the asset. By
virtue of the events of September 11, 2001, the dramatic decline of commercial
activity and social events at the Chamberlin Hotel, and the substantial decline
in future reservations at such hotel, management expects that the future net
cash flows expected to be generated by the Chamberlin Hotel will be less than
the carrying amount of the hotel. Accordingly, upon consultation with the
Company's auditors, the book value of the Chamberlin Hotel has been reduced.
Management is nonetheless hopeful of exploring a number of alternatives so that
the Company realizes an appropriate value for such hotel.

           The cost basis of the Palmer Inn was $7,226,887, less accumulated
depreciation of $578,059, at December 31, 2001. An MAI appraisal of the Palmer
Inn, dated as of April 27, 2000, indicates that the fair market value of such
hotel as of said date is $11,000,000. The Company's auditors have informed
management that accounting principles and guidelines prohibit the Company from
increasing the book value of the Palmer Inn to reflect the increased valuation
set forth in the foregoing appraisal, while the same accounting principles and
guidelines require a reduction in the book value of the Chamberlin Hotel.


                                       10
<PAGE>

         During the second quarter of 2001, a ten year franchise agreement was
signed with Orion Food Systems to open a MacGregor's Market(R) restaurant at the
Ramada Plaza City Center. The restaurant, which will be a quick, casual dining
restaurant featuring a distinctive menu and a relaxed contemporary atmosphere,
will be operated by Sparachane Enterprises, Inc. under a three year lease.
Sparachane Enterprises, Inc. currently operates several Undo's restaurants in
the Ohio Valley. Construction on the restaurant has begun and it is anticipated
that such construction will be completed in July 2002. Management anticipates
that this restaurant will increase revenues through the addition of rent
payments. However, there can be no assurance that the Company will be successful
in this effort.

         During the summer of 2001, legislation was passed in West Virginia
allowing video gambling slot machines in certain establishments provided certain
requirements and qualifications were satisfied by the applicant. One of such
requirements is that if the applicant is a corporation, the members of the
applicant, both in number and percentage of ownership interest, must have been
residents of the State of West Virginia for the four year period immediately
preceding the application. On August 1, 2001, the Company formed Wheeling City
Center Hotel, LLC and the Company is the sole member of such limited liability
company. On August 1, 2001, McLure House Hotel & Conference Center, LLC
("McLure") transferred the Ramada City Center Hotel to Wheeling City Center
Hotel, LLC; however, McLure retained its private club liquor license and certain
assets used in connection with the lounge located at the Ramada City Center
Hotel (the "lounge"). The Company has transferred its membership interest in
McLure to two individuals who have been residents of West Virginia for more than
four years. Wheeling City Center Hotel, LLC has leased the lounge to McLure for
a term of twenty years, unless sooner terminated pursuant to the terms of the
lease, and McLure has engaged Vintage Hotels Corporation (a wholly-owned
subsidiary of the Company) to manage the lounge pursuant to a management
agreement. On or about August 1, 2001, McLure applied for a license to operate
video gambling machines at the lounge and such license was granted effective as
of January 1, 2002. Management anticipates that gaming activities, which began
on January 12, 2002, will increase revenue through, among other things, the
addition of rent payments and the payment of management fees. However, there can
be no assurance that such gaming activities will increase revenue.

         The terrorist activities of September 11, 2001, have adversely affected
the national economy and the hotel industry. It is uncertain how long, and to
what extent, such activities will negatively impact travel and the hotel
industry. Management is attempting to ameliorate the negative impact on the
Company's business through the implementation of various marketing and
advertising strategies, and steps have been taken to reduce costs at each hotel
location. However, there can be no assurance that the Company will be successful
in these efforts.

         By virtue of the tragic events of September 11, 2001, and the
subsequent tightening of security on all military bases, access to the
Chamberlin Hotel, located on Fort Monroe, has become limited. These limitations
have caused delays for our guests, patrons and vendors in obtaining access and
such limitations have resulted in the cancellation of several social events at
the Chamberlin Hotel. As a consequence, revenue at the Chamberlin Hotel has
declined and future reservations have likewise declined as compared to the same
time period in the year 2001. The Company has filed a loss of business claim
with its insurance carrier and this claim is pending. However, there can be no
assurance that such claim will be approved by the insurance carrier, or should
such claim be approved, that the insurance proceeds will be in an amount
sufficient to reimburse Company for the losses sustained.

         Capital expenditures for property and equipment totaled approximately
$538,489 in 2000 as compared to $340,237 in 2001.

         The members of the Company's current Board of Directors were elected on
January 17, 2002. The initial focus of the current Board has been to evaluate
the Company's properties, their respective markets and clientele, operating
costs, present and projected property values, and the methods for maximizing the
value and marketability of the Company's common stock. Management believes that
the number one priority of the Company should be the sale of the Chamberlin
Hotel and, until such time as the Chamberlin Hotel is sold, management will
attempt to reduce operations, activities and costs at the Chamberlin Hotel and
management will attempt to increase the Army's rental of space at such hotel.
Management has been, and will continue, discussing the future of the Chamberlin
Hotel with the Army. There can be no assurance that the Company will be
successful in achieving profitable operations at the Chamberlin Hotel and there
can be no assurance that the Company will achieve its objective of selling the
Chamberlin Hotel at an amount equal to, or greater than, the book value of such
hotel. Additionally, there can be no assurance that the Company will realize
proceeds from a sale of the Chamberlin Hotel, should such sale occur, in an
amount necessary to eliminate its working capital deficit and repay its maturing
debt.


                                       11
<PAGE>

         Long-term debt of $9,314,316 in 2000 increased to $9,324,268 in 2001.
Debts of $2,371,726.50 and $100,990.31 for the Ramada Inn were refinanced in
December 2001 with new loans in the same amounts. In August 2001 the debt for
the Chamberlin Hotel was modified with a new maturity date of September 13,
2002.. Capital resources available for fiscal year 2002 will be generated
through operations.

         Income Taxes and Loss Carryovers

         In 1998, the Company used a portion of the proceeds from the sale of
the Sunshine Key RV Resort and Marina (the "Property") in the acquisition of the
three hotels. Under section 1031 of the IRS code, the Company elected to reduce
the tax basis of the Property exchanged in 1998 rather than having to recognize
taxable income currently. At December 31, 2001, the Company had a remaining
$2,600,000 estimated deferred gain from the like-kind exchange. The Company has
unused net operating loss carry forwards of approximately $1,309,000 at December
31, 2001, of which approximately $158,000, $565,000 and $586,000 expire in the
year 2012, 2020 and 2021, respectively.

         When calculating the estimated tax basis of its assets and the tax
provision at December 31, 1998, certain information related to a forgiveness of
indebtedness from a debt restructuring in 1996 was not considered when
determining the tax basis of the assets. This change in basis resulted in an
additional deferral of income taxes in 1999 of $1,023,000 and is reflected in
the Company's 1999 income tax provision.

         Outlook

         Management anticipates an increase in revenues through the end of 2002.
Revenue increases are mostly anticipated at the Ramada Plaza City Center Hotel
and the Palmer Inn by improving room occupancy rates. In addition, the Palmer
Inn is continuing its efforts to commence construction of a 22-room suite wing
and negotiations with the County to extend the construction permit are in
progress. Expenses are anticipated to increase slightly. Further, management
believes that the implementation of its centralized management operation has
proven to decrease management expenses incurred at all hotel operations. The
Company believes that this self-management approach will continue to create
savings in overall management costs as opposed to the use of third party
management companies. Included in this approach are accounting and legal
counsel. In addition to the foregoing factors, the Company plans to improve
operating cash flow and liquidity by continuing to reduce operating losses at
the Chamberlin Hotel. There can be no assurance that the Company will be
successful in those efforts.

FORWARD-LOOKING STATEMENTS

         Certain matters discussed in this Annual Report on Form 10-KSB are
"forward-looking-statements" intended to qualify for the safe harbors from
liability established by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as such because the
context of the statement will include words such as the Company "will", "may",
"should", "believes", "anticipates", "expects" or words of similar import.
Similarly, statements that describe the Company's future plans, objectives or
goals are also forward-looking statements. Such forward-looking statements are
subject to certain known and unknown risks and uncertainties which could cause
actual results to differ materially from those expressed and implied by such
forward-looking statements. Factors that could have a material adverse effect on
our operations and future prospects include, but are not limited to, economic
conditions generally; availability of capital; interest rates; competition;
legislative or regulatory changes to laws affecting hotel operations; supply and
demand for hotel rooms in our current and proposed market areas; the real estate
market; and other risks discussed below "Factors That May Affect Future Results
and Market Price of Our Stock" and elsewhere in this report. Shareholders,
potential investors and other readers are urged to consider these factors in
evaluating the forward-looking statements and are cautioned not to place undue
reliance on such forward-looking statements. The forward-looking statements
included herein are made as of the date of this Report, and the Company
undertakes no obligation to publicly update such forward-looking statements to
reflect subsequent events or circumstances.


                                       12
<PAGE>

FACTORS THAT MAY AFFECT FUTURE RESULTS AND MARKET PRICE OF OUR STOCK.

         We operate in an environment that contains numerous risks, some of
which are beyond our control. The following discussion highlights some of these
risks. Further, the acquisition, renovation and maintenance of hotels is capital
intensive. As part of our growth strategy we intend to acquire and redevelop
additional hotels. To pursue this strategy, we will be required to obtain
additional capital in the future to meet our expansion plans. In addition, in
order for our hotels to remain competitive they must be maintained and
refurbished on an ongoing basis. Moreover, our cash flow from operations may be
adversely affected because portions of the facilities are removed from service
during renovation. We may obtain needed capital from cash on hand, including
reserves, cash flow from operations or from financing, including the issuance of
additional indebtedness or securities. We may also seek financing from other
sources or enter into joint ventures and other collaborative arrangements in
connection with the acquisition of hotel properties. We cannot guarantee that we
will be able to raise any additional financing on acceptable terms on a timely
basis or at all. If we cannot obtain such financing, we may be unable to acquire
additional hotels, and we may experience delays in our planned renovation or
maintenance of our hotels.

         Our auditors have qualified their report on our financial statements
with respect to our ability to continue as a going concern.

         We have experienced recurring net losses and capital deficiencies which
raise with our auditors substantial doubt about our ability to continue as a
going concern, as noted in the Report of Independent Certified Public
Accountants included elsewhere herein. Our financial statements do not include
any adjustments that might result from this uncertainty.

Our results of operations are dependent on revenues generated by our hotels,
which are subject to a number of risks related to the lodging industry.

         If the hotel industry is negatively affected by one or more particular
risks, our results of operations could suffer. Various factors could adversely
affect our hotel revenues, which are subject to all of the operating risks
inherent in the lodging industry. These risks include the following:

o        changes in general and local economic conditions;
o        cyclical overbuilding in the lodging industry;
o        varying levels of demand for rooms and related services;
o        interruption in business caused by acts of terrorism;
o        extreme weather conditions;
o        competition from other hotels, motels and recreational properties, some
         of which may be owned or operated by companies having greater marketing
         and financial resources than we do;
o        dependence on business and commercial travelers and tourism, which may
         fluctuate and be seasonal;
o        the recurring costs of necessary renovations, refurbishment and
         improvements of hotel properties;
o        changes in governmental regulations that influence or determine wages,
         prices and construction and maintenance costs;
o        the availability of financing for operating and capital needs and
         changes in interest rates; and
o        changes in real estate tax rates and other operating expenses.

         In addition, demographic, geographic or other changes in one or more of
the markets of our hotels could impact the convenience or desirability of the
sites of some hotels, which would in turn affect their operations. In addition,
due in part to the strong correlation between the lodging industry's performance
and economic conditions, the lodging industry is subject to cyclical changes in
revenues and profits. Downturns or prolonged adverse conditions in the real
estate or capital markets or in national or local economies, our inability to
secure financing for acquisition and/or renovation of hotels or an oversupply of
hotel rooms, could have a material adverse effect on our business and results of
operations. Furthermore, due to the level of fixed costs required to operate
full-service hotels, significant expenditures necessary for the operation of
hotels generally cannot be reduced when circumstances cause a reduction in
revenue.



                                       13
<PAGE>


The lodging industry is seasonal in nature.

         Generally, hotel revenues are greater in the second and third calendar
quarters than in the first and fourth calendar quarters although this may not be
true for hotels in major tourist destinations. Revenues for hotels in tourist
areas generally are substantially greater during tourist season than other times
of the year. Seasonal variations in revenue at our hotels can be expected to
cause quarterly fluctuations in our revenues. Quarterly earnings also may be
adversely affected by events beyond our control, such as extreme weather
conditions, economic factors and other considerations affecting travel.

We may be adversely affected by the limitations in our franchise and licensing
agreements and possible additional capital expenditures associated with
franchising and licensing.

         Currently, two of our hotels are operated pursuant to franchise or
license agreements with nationally recognized hotel brands, Hospitality
Franchise Services (the Ramada Plaza) and Best Western. The franchise agreements
generally contain specific standards for, and restrictions and limitations on,
the operation and maintenance of a hotel in order to maintain uniformity within
the franchisor system. Standards are often subject to change over time, in some
cases at the discretion of the franchisor, and may restrict a franchisee's
ability to make improvements or modifications to a hotel without the consent of
the franchisor. In addition, compliance with standards could require a
franchisee to incur significant expenses or capital expenditures. Action or
inaction on our part, could result in a breach of standards or other terms and
conditions of the franchise agreements and could result in the loss or
cancellation of a franchise license. Loss of franchise licenses without
replacement would likely have an adverse effect on our hotel revenues.

         In connection with terminating or changing the franchise affiliation of
a hotel or a subsequently acquired hotel, we may be required to incur
significant expenses or capital expenditures. Moreover, the loss of a franchise
license could have a material adverse effect upon the operations or the
underlying value of the hotel covered by the franchise because of the loss of
associated name recognition, marketing support and centralized reservation
systems provided by the franchisor. The franchise agreements covering the hotels
expire or terminate, without specified renewal rights, at various times and have
differing remaining terms. As a condition to renewal, the franchise agreements
frequently contemplate a renewal application process, which may require
substantial capital improvements to be made to the hotel. Unexpected capital
expenditures could adversely affect our results of operations and our ability to
make payments on our indebtedness.

The lodging industry is highly competitive.

         We have no single competitor or small number of competitors that are
considered to be dominant in the industry. We operate in areas that contain
numerous competitors, some of which may have substantially greater resources
than we do. Competition in the lodging industry is based generally on location,
availability, room rates or accommodations price, range and quality of services
and guest amenities offered. New or existing competitors could significantly
lower rates or offer greater conveniences, services or amenities or
significantly expand, improve or introduce new facilities in markets in which we
compete, thereby adversely affecting our operations and the number of suitable
business opportunities.

Costs of compliance with environmental laws could adversely affect our results
of operation.

         Under various federal, state and local environmental laws, ordinances
and regulations, a current or previous owner or operator of real property may be
liable for the costs of removal or remediation of hazardous or toxic substances
on, under or in property. Laws often impose liability whether or not the owner
or operator knew of, or was responsible for, the presence of hazardous or toxic
substances. In addition, the presence of contamination from hazardous or toxic
substances, or the failure to properly re-mediate contaminated property, may
adversely affect the owner's ability to sell or rent real property or to borrow
funds using real property as collateral. Persons who arrange for the disposal or
treatment of hazardous or toxic substances may also be liable for the costs of
removal or remediation of these substances at the disposal or treatment
facility, whether or not the facility is or ever was owned or operated by those
persons.



                                       14
<PAGE>


         We have not undertaken a Phase I site assessments of our properties,
except for the Palmer Inn, which was satisfactory. A Phase Site I assessment
generally provides a non-intrusive physical inspection and database search, but
not soil or groundwater analyses, by a qualified independent environmental
engineer. The purpose of a Phase I is to identify potential sources of
contamination for which the hotels may be responsible and to assess the status
of environmental regulatory compliance; however, even a Phase I may not reveal
all environmental liabilities or compliance concerns. Although we are not aware
of any environmental liability or compliance concerns that we believe would have
a material adverse effect on our operations or financial condition, there is no
assurance that material environmental liabilities or compliance concerns do not
exist.

Aspects of our operations are subject to governmental regulation, and changes in
that regulation may have significant effects on our business.

         A number of states regulate the licensing of hotels and restaurants,
including liquor license grants, by requiring registration, disclosure
statements and compliance with specific standards of conduct. We believe that
our hotels are substantially in compliance with these requirements. In addition,
the hotel industry is subject to numerous federal, state and local government
regulations, including those relating to building and zoning requirements.
Further, we are subject to laws governing the relationships with employees,
including minimum wage requirements, overtime, working conditions, work permit
requirements and dram shop laws, which may give an injured person the right to
recover damages from any establishment which wrongfully served alcoholic
beverages to the person who, while intoxicated, caused the injury. Compliance
with, or changes in, these laws could reduce the revenue and profitability of
our hotels and could otherwise adversely affect our revenues, results of
operations and financial condition.

         Under the Americans with Disabilities Act, or ADA, all public
accommodations are required to meet federal requirements related to access and
use by disabled persons. These requirements became effective in 1992. Although
we believe our hotels are in compliance with ADA standards, a determination that
our hotels are not in compliance with the ADA could result in a judicial order
requiring compliance, imposition of fines or an award of damages to private
litigants.

Risks related to new projects, acquisitions and renovations - we cannot
guarantee future acquisitions or the success of any future projects.

         Part of our growth strategy is to acquire hotels and, as necessary,
redevelop under performing hotels. Acquiring and renovating involve substantial
risks, including:

o        identifying acquisitions that meet our criteria;
o        costs exceeding budgeted or contracted amounts;
o        delays in completion of construction;
o        the failure to obtain necessary construction permits;
o        lack of financing on favorable terms;
o        failure of redeveloped or acquired properties to achieve desired
         revenue or profitability levels;
o        competition for suitable properties from competitors who may have
         greater financial resources;
o        work stoppages; relationships with contractors;
o        changes in governmental rules, regulations and interpretations; and
o        changes in general economic and business conditions.

         We are continuing upgrades on the Ramada Plaza City Center to satisfy
franchise requirements. We also expect to add additional rooms to the Palmer
Inn, subject to renegotiation of an extension or renewal of a construction
permit. We cannot guarantee that present or future renovation will proceed in
accordance with our expectations. We also cannot assure you that we will acquire
and redevelop additional hotels or that any such development or construction
will be completed on time or within budget.



                                       15
<PAGE>


         We compete against numerous entities to acquire hotels. Some of our
competitors have greater financial resources. For successful growth, we must be
able to acquire hotels on attractive terms and integrate the acquired hotels
into our existing operations. For acquired hotels, we must consolidate
management, operations, systems, personnel and procedures. Any delays or
unexpected costs in this integration could materially affect our business,
financial condition, or results of operations. We cannot assure you that any
newly acquired hotels will perform as expected or that we will be able to
realize any expected cost savings.

We may not be able to manage our growth.

         We expect to grow internally and through acquisitions. We expect to
expend significant time and effort in expanding existing businesses and in
identifying, completing and integrating acquisitions. We cannot guarantee that
our systems, procedures and controls will be adequate to support our operations
as they expand. Any future growth also will impose significant added
responsibilities on members of senior management, including the need to
identify, recruit and integrate new managers and executives. We cannot guarantee
that we will identify and retain additional management. If we are unable to
manage our growth efficiently and effectively, or are unable to attract and
retain additional qualified management, our business and results of operations
could be materially adversely affected. In making acquisitions, we may have
difficulty combining the operations or realizing the expected benefits and
operating synergies. Our ability to consolidate our business, operations and
personnel (including reducing duplicate functions and costs) with any
acquisitions will affect our growth and profitability. Delays or unexpected
costs in the integration could reduce the expected gains from the combined
business and results of operations. We cannot assure you that we will be able to
accomplish the consolidation and achieve the cost savings in a timely or
profitable manner or that any savings will be realized.

We have significant capital needs and additional financings may not be
available.

         In order to sustain operations and meet our obligations on a timely
basis, we are dependent upon our ability to generate sufficient cash flow from
operations or to obtain sufficient external financing. There can be no assurance
that any additional financing will be available, or if available, that it will
be on terms and conditions favorable to us. Our operations could be adversely
affected if we are unable to general sufficient cash flow or obtain additional
financing.

Competition in the lodging industry could have a material adverse effect on our
business and results of operations.

         The lodging industry is highly competitive. Competitive factors within
the industry include:

o        room rates;
o        quality of accommodations;
o        name recognition;
o        service levels;
o        reputation;
o        reservation systems;
o        convenience of location; and
o        the supply and availability of alternative lodging.

         We intend to acquire most of our hotels in geographic locations where
other hotels may be located - normally within larger cities or their immediate
surroundings. We expect to compete for hotel properties and guests with national
chains, large franchisees and independent operators. Many of these competitors
have greater financial resources and may have better relationships with
prospective franchisers, representatives in the construction industry and others
in the lodging industry. The number of competitive lodging facilities in a
particular area could have a material adverse effect on our occupancy and rates
and, therefore, revenues of our hotels.



                                       16
<PAGE>


         We believe that competition within the lodging market has increased
substantially and may increase in the foreseeable future. We cannot guarantee
that new or existing competitors will not significantly reduce their rates or
offer greater convenience, services or amenities or significantly expand or
improve hotels in the markets in which we currently or may subsequently compete,
thereby materially adversely affecting our business and results of operations.

Our investment in real estate could decline in value, be illiquid or experience
uninsured or underinsured losses.

         General Risks. Our investment in our hotels will be subject to varying
degrees of risk related to the ownership and operation of real property. The
underlying value of our real estate investments depends significantly on our
ability to maintain or increase cash provided by operating the hotels. The value
of our hotels and income from the hotels may be materially adversely affected
by:

o        changes in national economic conditions;
o        changes in general or local economic conditions and neighborhood
         characteristics;
o        competition from other lodging facilities;
o        changes in real property tax rates;
o        changes in the availability, cost and terms of financing;
o        the effect of present or future environmental laws;
o        the ongoing need for capital improvements;
o        changes in operating expenses;
o        changes in governmental rules and policies;
o        natural disasters; and
o        other factors which are beyond our control.

         Illiquidity of Real Estate. Real estate investments are relatively
illiquid. Our ability to vary our portfolio in response to changes in economic
and other conditions will be limited. We cannot guarantee that we will be able
to dispose of an investment when we find disposition advantageous or necessary
or that the sale price of any disposition will recoup or exceed the amount of
our investment.

         Uninsured and underinsured losses could result in loss of value of
hotels. We maintain comprehensive insurance on each of our hotels, including
liability, fire and extended coverage, of the type and amount we believe is
customarily obtained for or by an owner of similar real property assets.
However, there are types of losses, generally of a catastrophic nature, such as
earthquakes and floods, that may be uninsurable or not economically insurable.
We use our discretion in determining amounts, coverage limits and deductibility
provisions of insurance, with a view to obtaining appropriate insurance on our
hotels at a reasonable cost and on suitable terms. This may result in insurance
coverage that could be insufficient to pay the full current market value or
current replacement cost of our lost investment. Inflation, changes in building
codes and ordinances, environmental considerations and other factors also might
make it infeasible to use insurance proceeds to replace a hotel after it has
been damaged or destroyed. Under these circumstances, the insurance proceeds we
receive might not be enough to restore our economic position with respect to a
damaged or destroyed hotel. In addition, property and casualty insurance rates
may increase depending on claims experience, insurance market conditions and the
replacement value of our hotels.


Dependence on key personnel - loss of management could result in a material
adverse effect.

         We depend substantially on the efforts and skills of members of
management, in particular C. John Knorr, Jr., and Nathan A. Roesing. Mr. Knorr
is our Chairman and Mr. Roesing is our Chief Operating Officer. The loss of the
services of Mssrs. Knorr and Roesing or their inability to devote sufficient
attention to our operations could have a material adverse effect on our
operations. The Company does not currently cover Mssrs. Knorr and Roesing under
a Key Management Insurance policy designed to protect the Company from potential
loss in the event one or both are incapacitated.




                                       17
<PAGE>


The anti-takeover effects of certain provisions of Florida Law may deter or
frustrate a takeover attempt of us that a shareholder might consider in its best
interest.

         We are subject to the "affiliated transactions" and "control share
acquisition" provisions of the Florida Business Corporation Act. These
provisions require, subject to certain exceptions, that certain business
combinations and corporate transactions with beneficial owners of more than 10
percent of a corporation's voting stock, or any entity or individual controlled
by such owner (an "interested shareholder") be approved by a majority of
disinterested directors or the holders of two-thirds of the voting shares other
than those beneficially owned by an "interested shareholder." Voting rights must
also be conferred on "control shares" acquired in specified control share
acquisitions, generally only to the extent conferred by resolution approved by
the shareholders, excluding holders of shares defined as "interested shares."
"Control shares" are defined as shares that, except for the application of the
statute, would have voting power that, when added to all other shares that the
acquirer owns or has the power to vote, would give the acquirer (directly,
indirectly, alone, or as a member of a group) voting power in excess of certain
statutory parameters. "Interested shares" are defined as a corporation's shares
for which any of the following persons have direct or indirect voting power in
the election of directors: (a) the person or group that acquires control shares,
(b) every officer of the corporation, and (c) every employee of the corporation
who is also a director.

ITEM 7.  FINANCIAL STATEMENTS

         The following financial statements are filed as part of this Report:
<TABLE>
<CAPTION>
                                                                                         Page
                                                                                         ----

<S>                                                                                      <C>
     Report of Independent Certified Public Accountants ...............................   F-1
     Consolidated Financial Statements:
     Balance Sheets as of December 31, 2001 and 2000 ..................................   F-2
     Statements of Operations for the years ended December 31, 2001 and 2000 ..........   F-3
     Statements of Changes in Shareholders' Equity
                      for the years ended December 31, 2001 and 2000 ..................   F-4
     Statements of Cash Flows for the years ended December 31, 2001 and 2000 ..........   F-5
     Notes to Consolidated Financial Statements .......................................   F-6
</TABLE>

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

         On October 18, 2001, the Company advised Moore, Stephens Lovelace,
P.A.("Moore") that it would not be appointed as the Company's auditors for the
year ended December 31, 2001. The decision was made by the Company's officers
and approved by the Company's Board of Directors. In connection with the audit
of the Company's financial statements for the fiscal years ended December 31,
2000 and 1999, there were no disagreements with Moore on any matters of
accounting principles or practices, financial statement disclosure, or auditing
scope and procedures which, if not resolved to the satisfaction of Moore, would
have caused Moore to make reference to the matter in its reports. The reports of
Moore for the fiscal years ended December 31, 2000 and 1999 did not contain an
adverse opinion or a disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles.



                                       18
<PAGE>


                                    PART III

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

         The following table sets forth the names, position with the Company and
ages of the executive officers and directors of the Company.

         NAME                         AGE      POSITION
         ----                         ---      --------

         C. John Knorr, Jr.           56       President/Chairman of the Board
         Nathan A. Roesing            34       Chief Operating Officer/Director
         Gorham Rutter, Jr.           49       Director


         Carl John Knorr, Jr. Since June 1, 1996, Mr. Knorr has served as the
Company's Chairman of the Board and from August 31, 1995 as the Company's
President. Mr. Knorr is also President and sole shareholder of Infinity
Investment Group, Inc., the general partner and management company for the
Partnership since 1991.

         Nathan A. Roesing. Since March 1999, Mr. Roesing has served as Chief
Operating Officer and since January 17, 2002 Mr. Roesing has served as a
Director of the Company. Mr. Roesing has extensive hospitality experience,
having worked for Interstate Hotels, Servico Hotels, Brookshire Hotels, and Lane
Hospitality. From 1995 to late 1998 Mr. Roesing served as Director of Sales and
later as General Manager of the McLure House Hotel, managed by Lane Hospitality.
In late 1998 to the present Mr. Roesing has served as the Chief Operating
Officer. Since late 1999 he has also served as President of Vintage Hotels
Corporation, the management company for the hotels owned by the Company.

         Gorham Rutter, Jr. Since January 17, 2002, Mr. Rutter has served as a
Director of the Company. Mr. Rutter graduated from law school in May 1976 and he
has been a member of The Florida Bar since November 1976. From 1996 until 1999,
Mr. Rutter was one of the outside legal counsel for the Company. In October 1999
Mr. Rutter came on staff with the Company as in-house legal counsel. Mr. Rutter
has experience in, among other things, the sale, acquisition and financing of
real property, the formation and operations of business organizations, and
commercial litigation.

         Compliance with Section 16(a) of the Securities Exchange Act of 1934

         Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of the outstanding common stock, to file with the Securities and
Exchange Commission (the "SEC") initial reports of ownership on Form 3 and
reports of changes in ownership of Common Stock on Forms 4 or 5. Such persons
are required by SEC regulation to furnish the Company with copies of all such
reports they file.

         Based solely on its review of the copies of such reports furnished to
the Company or written representations that no other reports were required, the
Company believes that all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners were complied
with during the year ended December 31, 2001.

ITEM 10. EXECUTIVE COMPENSATION

         Only one executive officer of the Company has had annual compensation
in excess of $100,000. The following table shows for the years ended December
31, 1998 through December 31, 2001 the cash and other compensation paid by the
Company to its President and Chief Operating Officer. There was no compensation
to any Directors for the year 2001. In February 2001 an employment contract was
established between the Company and Mr. C. John Knorr, Jr. This contract will
expire on February 9, 2005 and includes a salary increase to $92,000 per year.


                                       19
<PAGE>



                           SUMMARY COMPENSATION TABLE
                           --------------------------


      NAME AND
PRINCIPAL POSITION                              YEAR       SALARY      BONUS
------------------                              ----       ------      -----
C. John Knorr, President                          2001   $ 92,000    $    -0-
                                                  2000   $ 78,500    $    -0-
                                                  1999   $ 73,500    $    -0-
                                                  1998   $ 62,400    $  8,750


Nathan A. Roesing, Chief Operating Officer        2001   $136,000    $    -0-
                                                  2000   $136,000    $    -0-
                                                  1999   $112,452    $ 26,600
                                                  1998   $    -0-    $    -0-

-----------------
         Options Exercised in Last Fiscal Year

         There were no options exercised in fiscal year 2001.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information regarding the
Company's common stock beneficially owned on March 31, 2002 for (i) each
shareholder known by the Company to be the beneficial owner of five (5%) percent
or more of the Company's outstanding Common Stock, (ii) each of the Company's
executive officers and directors, and (iii) all executive officers and directors
as a group. In general, a person is deemed to be a "Beneficial Owner" of a
security if that person has or shares the power to vote or direct the voting of
such security, or the power to dispose of or to direct the disposition of such
security. A person is also deemed to be a beneficial owner of any securities of
which the person has the right to acquire beneficial ownership within sixty (60)
days. On March 31, 2002, there were 5,975,851 shares of common stock
outstanding.

                                                   NO. OF SHARES
                                                   OF COMMON STOCK    PERCENT
NAME AND ADDRESS                                 BENEFICIALLY OWNED   OF CLASS
----------------                                 ------------------   --------
C. John Knorr, Jr., Chairman (1)                   1,018,817             17.1%
Thomas L. Callahan (2)                               675,434             11.3%
Clara Road Investments (3)                           666,666             11.2%
Linda Brauer (4)                                     350,698              5.9%
Gregory Lange (5)                                    323,000              5.4%
All executive officers and directors as a group    1,018,817             17.1%

----------------

(1)      Mr. Knorr's address is 104 Woodhall Drive, Richmond, VA. 23229.
(2)      Mr. Callahan's address is 1001 Oystercove Drive, Grasonville, MD.
         21638.
(3)      Clara Road Investments' address is 2670 Clara Road, Whitehaven, MD.
         21856.
(4)      Ms. Brauer's address is 11308 Bedfordshire Avenue, Potomac, MD. 20854.
(5)      Mr. Lange's address is 3633 E. Morning Side Lane, Doraville, GA. 30340.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         There were no related transactions between the Company and affiliated
persons and entities in the year 2001.



                                       20
<PAGE>



ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>

EXHIBIT
NUMBER            DESCRIPTION
------            -----------
<S>      <C>
3.1      - Articles of Incorporation dated 5/30/90. (1)
3.2      - Amendment to the Articles of Incorporation dated 6/29/95. (1)
3.3      - Amendment to the Articles of Incorporation dated 6/20/90. (1)
3.4      - Amendment to the Articles of Incorporation dated 8/15/95. (1)
3.5      - Ohio Key I Articles of Incorporation date 12/16/96. (1)
3.6      - Ohio Key II Articles of Incorporation dated 12/16/96. (1)
3.7      - Bylaws of Registrant. (1)
3.8      - Ohio  Key I Bylaws. (1)
3.9      - Ohio  Key II Bylaws. (1)
3.10     - Amendment to the Articles of Incorporation dated June 29,1997. (2)
3.11     - Old Point Comfort Hotel, LLC Articles of Organization dated March 1, 1999 (6)
3.12     - Palmer Inn, Princeton, LLC Articles of Organization dated March31, 1999 (6)
3.13     - McLure House Hotel and Conference Center, LLC Articles of Organization dated April 7, 1999 (6)
3.14     - Wheeling City Center Hotel, LLC Articles of Organization dated 8/1/01. (8)
4.1      - Specimen  Common Stock Certificate. (1)
4.2      - Specimen  Class A Common Stock Purchase Warrant. (1)
4.3      - Specimen Class B Common Stock Purchase Warrant. (1)
10.1     - Share Exchange Agreement between the Company and all of the limited partners of Sunshine Key Associates
10.2     - Limited Partnership effective August 30, 1995. (1)
10.3     - Loan  Restructuring  Agreement  between Ohio Key I, Inc.,  WAMCO XXII Ltd.  and Sunshine Key  Associates
                  Limited Partnership dated 1/31/96. (1)
10.4     - Promissory Note between WAMCO XXII, Ltd., Ohio Key I, Inc. and Ohio Key II, Inc. dated 12/31/96. (1)
10.5     - Restated Mortgage and Assumption Agreement. (1)
10.6     - Assignment  for  Assumption  of Leases  between Ohio Key I, Inc.  and  Sunshine Key  Associates  Limited
                  Partnership dated 1/24/97. (1)
10.7     - Agreement for  Assumption of Liabilities  between Ohio Key I, Inc. and Sunshine Key  Associated  Limited
                  Partnership dated 1/24/97. (1)
10.8     - Assignment  and  Assumption of Contracts  between Ohio Key I, Inc. and Sunshine Key  Associated  Limited
                  Partnership dated 1/24/97. (1)
10.9     - Assignment between Ohio Key I, Inc. and Sunshine Key Associated Limited  Partnership dated 1/24/97. (1)
10.10    - Purchase  agreement  between  Ohio Key I, Inc.,  Ohio Key II, Inc.  and WesBanco for the purchase of the
                  Ramada Plaza City Center dated September 23,1998. (3)
10.11    - Agreement of Sale between Ohio Key I, Inc.,  Ohio Key II, Inc. and  Keydocrom,  Inc. for the purchase of
                  the Palmer Inn date November 11, 1998. (4)
10.12    - Sale and Purchase of Assets  Agreement  between Ohio Key I, Inc., Ohio Key II, Inc. and Chamberlin Hotel
                  LLC, dated November 30, 1998 (4)
10.13    - Ramada Plaza City Center $2,371,726.50 Term Note. (8)
10.14    - Palmer Inn $4,000,000 Mortgage Note. (5)
10.15    - Palmer Inn Note and  Mortgage  Modification  and  Assumption  Agreement  for  10.21  $1,000,000  First
                  Mortgage.(5)
10.16    - Palmer Inn Promissory Note of $940,000.(5)
10.17    - Letter on Change in Certifying Accountants. (6)
10.18    - Palmer Inn $5,100,000 Note and Mortgage Agreement to satisfy 10.21, 10.22 and 10.24. (6)
10.19    - Chamberlin Hotel Deed of Trust and Mortgage Agreement $1,675,000. (5)
10.20    - Ramada Plaza City Center $100,990.31 2nd term note. (8)
10.21    - Deed of Trust $2,472,716.81 (8)
10.22    - Chamberlin Modification Agreement (8)
16.1     - Letter Dated October 19, 2001 by Moore, Stephens Lovelace, P.A. (7)
16.2     - Letter Dated October 18, 2001 by Vintage Hotels. (7)
21.1     - Subsidiaries. (8)
23.1     - Independent Auditor's Consent. (8)
</TABLE>



         Footnotes
         ---------

(1)      Incorporation by reference to Registrant's Form SB-2 Registration
         Statement (File No. 0-023075).

(2)      Incorporation by reference to Registrant's Amendment to Form SB-2
         Registration Statement (File No. 0-023075).

(3)      Incorporation by reference to Registrant's current report on Form 8-K
         dated filed on October 22, 1998 (File No. 0-023075).

(4)      Incorporation by reference to Registrant's amended current report on
         Form 8-K/A filed on December 14, 1998 (File No. 0-023075).

(5)      Incorporated by reference to the Registrant's report on Form 10-KSB,
         filed on April 15, 1999 (File no. 0-023075).

(6)      Incorporated by reference to the Registrant's report on Form 10-KSB,
         filed on April 16, 2001(File no. 0 -023075).

(7)      Incorporated by reference to the Registrant's report on Form 8-K filed
         on October 18, 2001(File no. 0-023075).

(8)      Filed herewith.


     (b) Reports on Form 8-K
     The Company filed a current report on Form 8-K, date of report November 19,
     2001, which reported a change in the Company's certifying accountants.



                                       21
<PAGE>

                                   SIGNATURES

         IN ACCORDANCE WITH SECTION 13 OR 15 (D) OF THE EXCHANGE ACT THE
REGISTRANT CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED.

                                  Pelican Properties, International, Corp
                                             (Registrant)



                                  By:
                                     --------------------------------------
                                               C. John Knorr, Jr.
                                                  Chairman


         IN ACCORDANCE WITH THE EXCHANGE ACT, THIS REPORT HAS BEEN SIGNED BELOW
BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND
ON THE DATES INDICATED.

         SIGNATURE                               TITLE                     DATE
         ---------                               -----                     ----


----------------------------------      Chairman of the Board
      C. John Knorr, Jr.                (Principal Executive Officer)



                                       22
<PAGE>


                     PELICAN PROPERTIES INTERNATIONAL CORP.
                     --------------------------------------
                                AND SUBSIDIARIES
                                ----------------

                        CONSOLIDATED FINANCIAL STATEMENTS
                        ---------------------------------

                           DECEMBER 31, 2001 AND 2000
                           --------------------------



<PAGE>


                                    CONTENTS


                                                                          Page
                                                                         Number
                                                                         ------


REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS                         F-2

CONSOLIDATED FINANCIAL STATEMENTS

       Consolidated Balance Sheets as of December 31, 2001 and 2000        F-3

       Consolidated Statements of Operations                               F-4
           For the years ended December 31, 2001 and 2000

       Consolidated Statements of Changes in Shareholders' Equity          F-5
           For the years ended December 31, 2001 and 2000

       Consolidated Statements of Cash Flows                               F-6
           For the years ended December 31, 2001 and 2000

       Notes to Consolidated Financial Statements                          F-7


<PAGE>


                                      F-1


<PAGE>


                        REPORT OF INDEPENDENT ACCOUNTANTS


April 4, 2002

To the Board of Directors and Shareholders of
Pelican Properties International Corp.

We have audited the accompanying consolidated balance sheet of Pelican
Properties International Corp. and Subsidiaries (the "Company") as of December
31, 2001, and the related consolidated statements of operations, changes in
shareholders' equity and cash flows for the year then ended. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit. The consolidated financial statements of the
Company as of and for the year ended December 31, 2000 were audited by other
auditors whose report dated February 16, 2001, expressed an unqualified opinion
on those statements. The prior auditor's report raised substantial doubt about
the Company's ability to continue as a going concern.

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 presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements audited by us present
fairly, in all material respects, the financial position of Pelican Properties
International Corp. and Subsidiaries as of December 31, 2001, and the results of
their operations and their cash flows for the year then ended in conformity with
generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has incurred substantial losses from
operations and has a substantial working capital deficit. The Company incurred a
loss from operations and before income taxes of $2,325,804 for 2001 and had a
working capital deficit as of December 31, 2001 of $3,544,813. These matters
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans concerning these matters are described in Note 1 to
the financial statements. These financial statements do not include any
adjustments that might result from the outcome of these uncertainties.




Certified Public Accountants
Tampa, Florida


                                      F-2
<PAGE>


                     PELICAN PROPERTIES INTERNATIONAL CORP.
                     --------------------------------------
                                AND SUBSIDIARIES
                                ----------------
                           CONSOLIDATED BALANCE SHEETS
                           ---------------------------
<TABLE>
<CAPTION>
                                                                        December 31,
                                                                   2001             2000
                                                               ------------    ------------
                               ASSETS
                               ------
<S>                                                            <C>             <C>
Current assets:
  Cash and cash equivalents                                    $    432,550    $    268,361
  Accounts receivable, net of allowance for doubtful
    accounts of $176,095 and $188,786, respectively                 171,027         185,227
  Supplies                                                          118,065         111,638
  Other current assets                                               46,384         132,173
                                                               ------------    ------------
                  Total current assets                              768,026         697,399

Property and equipment, net                                      14,136,881      16,316,385
Deferred loan costs, net                                            105,725         186,451
Deferred franchise costs, net                                        16,350          17,622
Deposits and other assets                                           145,282         173,094
                                                               ------------    ------------

                                                               $ 15,172,264    $ 17,390,951
                                                               ============    ============

                LIABILITIES AND SHAREHOLDERS' EQUITY
                ------------------------------------

Current liabilities:
  Current maturities of long-term debt                         $  1,954,710    $  1,916,515
  Accounts payable and accrued liabilities                        2,248,925       1,594,469
  Obligation for renovations                                         96,495         646,495
  Income taxes payable                                               12,709          12,000
                                                               ------------    ------------
                  Total current liabilities                       4,312,839       4,169,479

Long-term debt, less current maturities                           7,369,558       7,397,801
Deferred income taxes                                             2,340,000       2,911,000
                                                               ------------    ------------
                  Total liabilities                              14,022,397      14,478,280
                                                               ------------    ------------

Commitments and contingencies

Shareholders' equity:
  Preferred stock, 1,000,000 shares authorized; none issued              --              --
  Common stock, $.001 par value, 100,000,000 shares
    authorized; 5,975,851 shares issued and outstanding               5,975           5,975
  Additional paid-in capital                                      3,393,216       3,393,216
  Accumulated deficit                                            (2,249,324)       (486,520)
                                                               ------------    ------------
                                  Total shareholders' equity      1,149,867       2,912,671
                                                               ------------    ------------

                                                               $ 15,172,264    $ 17,390,951
                                                               ============    ============
</TABLE>


    The accompanying notes are an integral part of these financial statements


                                      F-3
<PAGE>


                     PELICAN PROPERTIES INTERNATIONAL CORP.
                     --------------------------------------
                                AND SUBSIDIARIES
                                ----------------
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      -------------------------------------

                                                        For the years ended
                                                            December 31,
                                                       2001             2000
                                                   -----------      -----------
Revenues
     Rooms                                         $ 5,352,282      $ 5,751,359
     Food and beverage                               1,275,004        1,704,930
     Rental income                                     274,784          488,019
     Other                                             412,012          405,844
                                                   -----------      -----------
                                                     7,314,082        8,350,152
                                                   -----------      -----------
Costs and expenses
     Rooms                                           1,315,302        1,411,915
     Food and beverage                                 950,311        1,548,380
     Other operating                                 1,562,052        1,673,069
     Corporate                                         843,323          933,652
     Sales and marketing                               443,726          537,395
     Utilities                                         514,608          573,097
     Engineering                                       483,376          545,268
     Property taxes and insurance                      416,613          414,375
     Franchise                                         174,871          160,288
     Interest                                          867,216          746,917
     Impairment loss                                 1,058,727
     Depreciation and amortization                   1,009,761          965,803
                                                   -----------      -----------
                                                     9,639,886        9,510,159
                                                   -----------      -----------

Loss from operations                                (2,325,804)      (1,160,007)

Income tax benefit                                     563,000          739,000
                                                   -----------      -----------

Net loss                                           $(1,762,804)     $  (421,007)
                                                   ===========      ===========

Basic and Diluted loss per common share            $     (0.29)     $     (0.07)
                                                   ===========      ===========

      The accompanying notes are an integral of these financial statements


                                      F-4
<PAGE>



                     PELICAN PROPERTIES INTERNATIONAL CORP.
                     --------------------------------------
                                AND SUBSIDIARIES
                                ----------------
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
           ----------------------------------------------------------
                     YEARS ENDED DECEMBER 31, 2001 AND 2000
                     --------------------------------------
<TABLE>
<CAPTION>

                                Common Stock              Preferred Stock       Additional
                                ------------              ---------------         Paid-in        Accumulated
                          Shares           Amount       Shares       Amount       Capital          Deficit           Total
                        -----------     -----------    --------     --------     -----------     -----------      -----------
<S>                       <C>           <C>                         <C>          <C>             <C>              <C>
Balances,
 December 31, 1999        5,975,851     $     5,975          --     $     --     $ 3,393,216     $   (65,513)     $ 3,333,678

        Net loss                 --              --          --           --              --        (421,007)        (421,007)
                        -----------     -----------    --------     --------     -----------     -----------      -----------

Balances,
 December 31, 2000        5,975,851           5,975          --           --       3,393,216        (486,520)       2,912,671

        Net loss                 --              --          --           --              --      (1,762,804)      (1,762,804)
                        -----------     -----------    --------     --------     -----------     -----------      -----------
Balances,
 December 31, 2001        5,975,851     $     5,975          --     $     --     $ 3,393,216     $(2,249,324)     $ 1,149,867
                        ===========     ===========    ========     ========     ===========     ===========      ===========
</TABLE>



    The accompanying notes are an integral part of these financial statements



                                      F-5
<PAGE>


                     PELICAN PROPERTIES INTERNATIONAL CORP.
                     --------------------------------------
                                AND SUBSIDIARIES
                                ----------------
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
<TABLE>
<CAPTION>

                                                                         For the years ended
                                                                             December 31,
                                                                          2001           2000
                                                                       -----------    -----------
<S>                                                                    <C>            <C>
Cash flows from operating activities:
    Net loss                                                           $(1,762,804)   $  (421,007)
    Adjustments to reconcile net loss to net
      cash used by operating activities:
          Depreciation                                                     911,014        875,125
          Impairment loss                                                1,058,727             --
          Amortization                                                      98,747         90,678
          Deferred income taxes                                           (571,000)      (601,000)
          (Increase) decrease in assets:
                Accounts receivable                                         14,200        (97,937)
                Supplies                                                    (6,427)       (28,664)
                Other assets                                                96,852       (424,889)
                Income taxes refundable                                         --        228,000
          Increase (decrease) in liabilities:
                Accounts payable and accrued expenses                      654,456        431,968
                Income taxes payable                                           709       (138,000)
                Other liabilities                                               --         (4,464)
                                                                       -----------    -----------

                           Net cash from operating activities              494,474        (90,190)
                                                                       -----------    -----------

Cash flows from investing activities:
    Collection of note receivable                                               --        500,000
    Capital expenditures                                                  (340,237)      (538,489)
                                                                       -----------    -----------

                           Net cash used by investing activities          (340,237)       (38,489)
                                                                       -----------    -----------

Cash flows from financing activities:
    Repayment of borrowings                                                (90,628)    (6,446,997)
    Proceeds from borrowings                                               100,580      6,775,000
                                                                       -----------    -----------

                           Net cash provided by financing activities         9,952        328,003
                                                                       -----------    -----------

Net increase in cash and cash equivalents                                  164,189        199,324

Cash and cash equivalents, beginning of year                               268,361         69,037
                                                                       -----------    -----------
Cash and cash equivalents, end of year                                 $   432,550    $   268,361
                                                                       ===========    ===========
</TABLE>

    The accompanying notes are an integral part of these financial statements


                                      F-6
<PAGE>


                     PELICAN PROPERTIES INTERNATIONAL CORP.
                     --------------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------


NOTE 1 - BUSINESS AND HISTORY:
------------------------------

Organization

Pelican Properties International Corp. and its subsidiaries (the "Company") own
and operate three hotels: the Ramada Plaza City Center Hotel (formerly known as
McLure House Hotel and Conference Center) in Wheeling, West Virginia ("Ramada
Plaza"), the Palmer Inn in Princeton, New Jersey ("Palmer Inn") and the
Chamberlin Hotel in Hampton, Virginia ("Chamberlin Hotel"). The Company derives
substantially all of its revenue from the operations of the three hotels.

The accompanying consolidated financial statements include the accounts of
Pelican Properties International Corp., and its wholly owned subsidiaries, which
operate Ramada Plaza, Palmer Inn and Chamberlin Hotel. All significant
intercompany transactions and accounts have been eliminated in the
consolidation.

Continued operations
--------------------

The accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. As reflected in the accompanying
financial statements, the Company incurred losses from operations before income
taxes of $2,325,804 and $1,160,007 during the years ended December 31, 2001 and
2000, respectively, and had a deficiency in working capital of approximately
$3,544,813 at December 31, 2001.

The Company's continuation as a going concern is dependent upon its ability to
generate sufficient cash flow from operations or to obtain sufficient external
financing to meet its obligations on a timely basis. The Company plans to
improve operating cash flow and liquidity by reducing operating losses at the
Chamberlin Hotel, either through the sale of the property or through developing
certain space within the Chamberlin into office space and leasing that space to
the United States Army. The Chamberlin Hotel is located on the United States
Military Reservation of Fort Monroe, Virginia and access to the hotel has been
significantly restricted since the terrorist attacks of September 11, 2001.
These circumstances have limited the Company's ability to take any action as it
pertains to the Chamberlin Hotel. There can be no assurance that the Company
will be successful in achieving profitable operations or have the ability to
secure the financing needed to meet its obligations as they become due, or that
such financing, if available, will be on terms and conditions favorable to the
Company. Additionally, there can be no assurance that the Company will be able
to take any action as it pertains to the Chamberlin Hotel that would provide any
significant improvement in the Company's working capital deficit or in its
ability to repay its debt. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.



                                      F-7
<PAGE>


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
----------------------------------------------------

Revenue recognition
-------------------

Revenue is recorded on the accrual basis in the period in which occupancy rights
are provided to guests and tenants. Advance deposits are recorded as "deferred
revenue" until occupancy occurs.

Supplies

Supplies consist primarily of food, beverage and housekeeping inventories.
Supplies are stated at the lower of cost, determined using the first-in,
first-out method, or market value.

Property and equipment

Property and equipment are stated at cost. Depreciation is calculated using the
straight-line method over the estimated useful lives of the respective assets.
Building improvements are amortized over the estimated useful lives of the
improvements. The estimated useful lives for property and equipment are as
follows:

                                                                      Years
                                                                   -----------

      Buildings and building improvements                          15 - 39
      Furniture, fixtures and equipment                             5 - 7
      Computer equipment                                              5

Other assets

Other assets consists primarily of deferred financing costs and deposits.
Deferred financing costs are amortized over the terms of the related borrowings
(see Note 5). Other assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be
recoverable. If the sum of the expected future cash flows is less than the
carrying amount of the asset, a loss is recognized.

Environmental liabilities

Accruals for environmental matters, if any, are recorded in operating expenses
when it is probable that a liability has been incurred and the amount of the
liability can be reasonably estimated. Accrued liabilities are exclusive of
claims against third parties and are not discounted.

In general, costs related to environmental remediation are charged to expense.
Environmental costs are capitalized if the costs increase the value of property
and/or mitigate or prevent contamination from future operations. Management is
presently not aware of any environmental matters pertaining to any of the
Company's properties.

Income taxes

The Company recognizes deferred tax liabilities and assets for the expected
future tax consequences of events that have been included in its financial
statements or tax returns. Deferred income tax liabilities and assets are
determined based on the difference between the financial statement and tax bases
of liabilities and assets using enacted tax rates in effect for the year in
which the differences are expected to reverse (see Note 6).

Earnings (loss) per share

Basic earnings (loss) per share is computed by dividing net income available to
common shareholders for the period by the weighted average number of common
shares outstanding for the period. Diluted earnings (loss) per share reflects
the potential dilution that could occur if securities or other contracts to
issue common stock were exercised or converted. Common share equivalents were
not considered in the diluted earnings per share calculation for 2001 or 2000
because their effect would have been anti-dilutive. As a result, both basic and
diluted earnings (loss) per share for 2001 and 2000 were calculated based on
5,975,851 weighted average common shares outstanding during each year.


                                      F-8
<PAGE>

Credit risk
-----------

Financial instruments which potentially subject the Company to concentrations of
credit risk consist principally of cash and accounts receivable.

The Company maintains its cash primarily in bank deposit accounts, which, at
times, may exceed federally insured limits. The Company has not experienced any
losses in such accounts and management believes that it is not exposed to any
significant credit risk with respect to cash.

Fair value of financial instruments
-----------------------------------

The carrying values of cash, accounts receivable, notes receivable, accounts
payable, accrued expenses and borrowings approximate their fair values.

Comprehensive income
--------------------

There were no items of other comprehensive income for the years ended December
31, 2001 and 2000.

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

Reclassifications
-----------------

Certain amounts in the 2000 consolidated financial statements have been
reclassified to conform to the 2001 presentation.

NOTE 3 - NOTES RECEIVABLE:

In connection with the Company's purchase of the Palmer Inn, the Company loaned
$500,000 to the seller and obtained a promissory note receivable in exchange.
The note receivable was paid during 2000 and earned interest during the year at
an annual rate of 8%.

NOTE 4 - PROPERTY AND EQUIPMENT:
--------------------------------

                                                     2001              2000
                                                 ------------      ------------

Land                                             $  1,084,587      $  1,084,587
Buildings and building improvements                13,351,432        14,769,053
Furniture, fixtures and equipment                   2,189,607         2,140,915
Computer equipment                                     93,699            71,945
Renovations in progress                               120,549            46,780
                                                 ------------      ------------
                                                   16,839,874        18,113,280
Accumulated depreciation                           (2,702,993)       (1,796,895)
                                                 ------------      ------------
       Property and equipment, net               $ 14,136,881      $ 16,316,385
                                                 ============      ============


                                      F-9
<PAGE>

Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of"
requires that any long-lived asset that is considered impaired must be written
down to fair value. A long-lived asset is considered impaired when the future
net cash flows expected to be generated by the asset are less than the carrying
amount of the asset. SFAS No. 121 does not allow, however, companies to write up
long-lived assets to fair value when their expected future cash flows exceed
their carrying value.

During the fourth quarter of 2001, the Company recognized an impairment loss
with respect to the Chamberlin Hotel of $1,058,727. A contributing factor to the
impairment loss was the restricted access to the hotel that has been imposed by
the United States Army since the terrorist attacks of September 11, 2001 (see
Note 1). In connection with recording the impairment loss, the Company wrote off
certain renovation reserves in the amount of $550,000. The impairment loss and
the reduction in the renovation reserve reduced the Company's cost basis in the
Chamberlin Hotel.

NOTE 5 - BORROWING ARRANGEMENTS:
--------------------------------
<TABLE>
<CAPTION>

                                                                                   2001                2000
                                                                               -----------         -------------
<S>                                                                             <C>              <C>
Promissory note payable to a financial institution, payable in monthly payments
of principal and interest of $45,448. Interest payable at a rate of 9.75% with
any unpaid principal and interest due July 20, 2005. Collateralized by the
property and equipment of the Palmer Inn, an interest reserve of $59,000, and
guaranteed by
the Company's chairman.                                                         $5,027,705       $     5,079,618

Mortgage note payable to a corporation, payable in monthly installments of
interest only at prime plus 5%. The principal balance of the note and any
accrued interest is due September 13, 2002. The note is collateralized by
substantially all property and equipment at the Chamberlin Hotel and guaranteed
by the Company's
chairman.                                                                        1,675,000             1,675,000

Mortgage note payable to a financial institution, payable in monthly payments of
principal and interest of $17,736. Interest payable at 7.5% with any unpaid
principal and interest due October 30, 2003. Collateralized by the property and
equipment of the Ramada Plaza.

                                                                                 2,360,136             2,394,515

Mortgage note payable to a financial institution, payable in monthly payments of
principal and interest of $3,492. Interest payable at the bank's base rate plus
one percent. Interest rate of 8.0% at December 31, 2001. Remaining principal and
interest due May 17, 2004. Collateralized by the property and equipment of the
Ramada Plaza.
                                                                                    89,609                    --


                                      F-10
<PAGE>

Obligation due to the former owner of the Chamberlin Hotel pursuant to an
agreement dated October 6, 2000, by which an amount of $151,427 is due the
former owner to satisfy certain obligations resulting from the transfer of
ownership of the Chamberlin Hotel to the Company. The obligation is not subject
to interest and the date of final payment is dependent on further arbitration.

                                                                                   151,427               151,427

Promissory note with a financial institution, interest at 9.65%, payable in
monthly installments of principal and interest, maturing
in 2004, collateralized by a vehicle.                                                  -                  13,756

Promissory note with a financial institution, interest at 9.50%, payable in
monthly installments of principal and interest, maturing in 2006, collateralized
by a vehicle.
                                                                                    20,391                    --
                                                                               -----------         -------------

                                                                                 9,324,268             9,314,316
Less: current maturities                                                        (1,954,710)           (1,916,515)
                                                                               -----------         -------------

     Total long-term debt                                                      $ 7,369,558         $   7,397,801
                                                                               ===========         =============
</TABLE>

Cash paid for interest amounted to approximately $882,000 and $705,000 in 2001
and 2000, respectively.

The aggregate annual maturities of the Company's borrowing arrangements
subsequent to December 31, 2001, approximate the following:


                          Year Ending
                         December 31,                          Amount
                    ------------------------               ----------------

                             2002                          $   1,954,710
                             2003                              2,432,770
                             2004                                 92,570
                             2005                              4,841,105
                             2006                                  3,113


                                      F-11
<PAGE>

NOTE 6 - INCOME TAXES:
----------------------

The components of the Company's benefit (provision) for income taxes for the
years ended December 31, 2001 and 2000 are as follows:
<TABLE>
<CAPTION>

                                                                                        2001                2000
                                                                                    -----------         -----------
<S>                                                                                      <C>                 <C>
                               Current
    Federal                                                                         $        --         $   100,000
    State                                                                                (8,000)             38,000
                                                                                    -----------         -----------
       Total current                                                                     (8,000)            138,000
                                                                                    -----------         -----------

                              Deferred
    Federal                                                                             500,000             513,000
    State                                                                                71,000              88,000
                                                                                    -----------         -----------
       Total deferred                                                                   571,000             601,000
                                                                                    -----------         -----------

       Total benefit (provision) for income taxes                                   $   563,000         $   739,000
                                                                                    ===========         ===========
</TABLE>

Significant components of the Company's deferred tax liabilities and assets at
December 31, 2001 and 2000 are approximately as follows:
<TABLE>
<CAPTION>

                                                                                       2001                2000
<S>                                                                                      <C>                 <C>
                         Deferred Tax Liability
    Deferred gain from like-kind exchange                                           $(2,600,000)        $(3,100,000)

Deferred Tax Asset
    Net operating loss carry forward                                                    196,000             116,000
    Bad debt allowance                                                                   61,000              71,000
    Other                                                                                 3,000               2,000
                                                                                    -----------         -----------

    Total deferred tax assets                                                           260,000             189,000
                                                                                    -----------         -----------

       Net deferred taxes                                                           $(2,340,000)        $(2,911,000)
                                                                                    ===========         ===========
</TABLE>

The deferred tax liability related to the like-kind exchange resulted from the
sale in 1998 of Sunshine Key RV Resort and Marina ("Sunshine Key") and the
subsequent acquisition of the three hotels. The election to treat the
acquisition as a like-kind exchange allowed the Company to reduce the tax basis
of the property exchanged in 1998 rather than having to recognize taxable income
currently.

Reconciliations of the significant differences between the tax at the federal
statutory income tax rate and the effective income tax rate on pre-tax loss, are
as follows:

                                                               2001      2000
                                                               ----      ----

     Statutory federal rate                                   (34)%     (34)%
     Differences in estimated tax and book basis of assets     21       (21)
     Tax benefit of net operating loss carryforward            (8)       (5)
     State tax effect, net of federal benefit                  --        (3)
     Other                                                     (3)       (1)
                                                              ---       ---
                                                              (24)%     (64)%
                                                              ===       ===

                                      F-12
<PAGE>

The Company has unused net operating loss carryforwards of approximately
$1,309,000 at December 31, 2001, of which approximately $158,000, and $565,000
and $586,000 expire in the year 2012, 2020 and 2021, respectively.

Cash paid for income taxes in 2001 was approximately $7,300. There was no cash
paid for income taxes in 2000.

NOTE 7 - SHAREHOLDERS' EQUITY:
------------------------------

Common stock purchase warrants

Through March 19, 2000, the Company had 200,000 Class A common stock purchase
warrants ("Class A Warrants") outstanding. The holders of each Class A Warrant
were entitled to purchase one share of the Company's common stock at an exercise
price of $5.00 per share. The Class A Warrants expired unexercised on March 19,
2000.

The Company also had 200,000 Class B common stock purchase warrants ("Class B
Warrants") outstanding. The holders of each Class B Warrant were entitled to
purchase one share of the Company's common stock at an exercise price of $5.00
per share. The Class B Warrants expired unexercised on March 19, 2001.

Preferred stock

The Company has authorized the issuance of up to 1,000,000 shares of Preferred
Stock in one or more series with rights, preferences, privileges and
restrictions, including voting and conversion rights, as determined by the
Company's Board of Directors.

Common stock options

During 2001 and 2000, the Company had 40,000 stock options outstanding to
certain officers. These options expired during 2001.

NOTE 8 - COMMITMENTS AND CONTINGENCIES:
---------------------------------------

Payroll tax liabilities

The Company is delinquent in filing and paying certain payroll tax liabilities.
Accounts payable and accrued liabilities at December 31, 2001 include payroll
tax liabilities of approximately $930,000. The Company is in the process of
filing all payroll related tax returns that are delinquent and expects to incur
certain penalties and interest from the taxing authorities. Company officials
and or representatives of the Company will meet with those taxing authorities
during the second quarter of 2002 and will attempt to arrange for a payment
schedule of liabilities due acceptable to the taxing authorities and the
Company. Those officials and or representatives will also attempt to mitigate
the amount of penalties assessed by those taxing authorities. The accompanying
financial statements include an accrued liability that management believes is
adequate to pay the penalties and interest due on delinquent payroll tax
liabilities.

Franchise agreement

The Palmer Inn operates under a franchise agreement with a national hotel
franchise system. The agreement provides for, among other things, an annual
membership fee, as determined by the franchisor's board of directors. The
agreement also requires the Company to pay a royalty fee and reservation fee



                                      F-13
<PAGE>

based on room bookings, net of cancellations. The terms of the franchise
agreement renew automatically each year at the discretion of the franchisor. The
Company may terminate the franchise agreement at any time without penalty.

The Ramada Plaza also operates under a franchise agreement with a national hotel
franchise system. Deferred costs related to the acquisition of the franchise
agreement of $19,000 have been recorded as an other asset in the December 31,
2001 and 2000 consolidated balance sheets, net of accumulated amortization of
$2,650 and $1,378, respectively. The franchise agreement provides for, among
other things, a monthly royalty and service fee ranging from 6.5% of monthly
gross room revenues in the first year to 8.5% by year five of the franchise
agreement. The term of the franchise agreement is 15 years.

Operating lease

The Company leases the land upon which the Chamberlin Hotel is located through
an operating lease contract. The lease provides for minimum lease payments of
$6,000 per year through the lease's expiration date in 2037. Total rent expense
approximated $6,000 for the years ended December 31, 2001 and 2000.

Legal proceedings

The Company is engaged in various legal and regulatory proceedings. Management
believes that the range of potential loss resulting from these proceedings will
fall within the Company's available insurance coverage and that the outcomes of
such proceedings will not be material to the Company's consolidated financial
position. Additionally, the Company is subject to extensive federal, state and
local laws and regulations. Management believes that it is in compliance with
all applicable laws and regulations and is not aware of any pending or
threatened investigations involving allegations of potential wrongdoing. While
no such regulatory inquiries have been made, other than with respect to
delinquent payroll taxes as noted above, compliance with such laws and
regulations can be subject to future governmental review and interpretation, as
well as significant regulatory action, including fines and penalties.

Chamberlin Hotel arbitration

In 1998, the Company acquired the assets of the Chamberlin Hotel, including the
building and its furniture, fixtures and equipment for $5,350,000. In June 1999,
the Company filed suit against the previous owner in the Circuit Court of the
City of Hampton, Virginia (the "Court") seeking, among other things, a judicial
determination of the previous owner's obligation for the completion of certain
renovations required by the Secretary of the Army of the United States, the
owner of the land on which the Chamberlin Hotel is located and the lessor to the
Company's land lease noted above. In February 2000, the Company and the previous
owner of the Chamberlin Hotel entered into a stipulated settlement agreement
which provided, among other things, that the previous owner would accept a
payment of $1,630,000 as payment in full for the $2,276,500 that had been
advanced by the former owner on behalf of the Company. These advances by the
former owner were to pay certain indebtedness assumed by the Company in
connection with the acquisition. The resulting difference of approximately
$646,500 represented the estimated cost of the renovations necessary to affect
the assignment of the land lease.

After continued arbitration, the Court entered a Consent Order on July 6, 2000
which provided, among other things, that the Company execute a deed of trust and
a promissory note in the amount of $1,550,000 with interest at 10% per annum. On
October 6, 2000, both parties agreed to settle this proceeding. Pursuant to such
settlement, the parties agreed that the principal sum owed the former owner,
inclusive of interest, amounted to $1,551,427. The Company remitted $1,400,000
plus accrued interest to the former owner in return for a satisfaction of the
deed of trust on the property. The remaining $151,427 is recorded in the
financial statements as an obligation to the former owner. Arbitration regarding
other issues surrounding the sale of the Chamberlin Hotel continue, however,
management does not believe the outcome will be material to the financial
statements.



                                      F-14
<PAGE>