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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington D.C. 20549

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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, 2000

|/ / | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission file number 000-17001

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CECS CORP.(Name of small business issuer in its charter)

DELAWARE(State or other jurisdiction of
incorporation or organization)

52-1529536(I.R.S. employer identification No.)111 Queen Anne Avenue North, Suite 501
Seattle, Washington(Address of principal executive offices)

98109(Zip Code)


Issuer's telephone number, including area code:(206) 279-9200

Securities
registered under Section 12(b) of the Exchange Act:NONE

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

COMMON STOCK, PAR VALUE $.01 PER SHARE(Title of class)

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Check
whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days. Yes /x/  No / /

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 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/

Issuer's
revenues for the year ended December 31, 2000:    $0

Aggregate
market value of the voting stock held by non-affiliates of the registrant based upon a price of $.01 per share, the closing price of the registrant's Common Stock at March
29, 2001:    $477,179

For
purposes of this calculation, all directors and officers of the registrant have been considered affiliates.

Number
of outstanding shares of Common Stock at March 29, 2001:    47,717,875

Transitional
Small Business Disclosure Format (check one): Yes / /  No /x/

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive proxy statement (the "Definitive Proxy Statement") to be filed with the Securities and Exchange Commission relative to the Company's
2001 Annual Meeting of Stockholders are incorporated by reference into Part III of this Report.

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FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-KSB contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended, and Section 27A of the Securities Act of 1933, as amended. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects" and similar expressions are intended to identify forward-looking statements. The
important factors discussed under the caption "Risks Relating to Our Business," among others, could cause actual results to differ materially from those indicated by forward-looking statements made
herein and presented elsewhere by management. Such forward-looking statements represent management's current expectations and are inherently uncertain. Investors are warned that actual results may
differ from management's expectations.

PART I

Item 1.  Description of Business

Our Business

The Board of Directors (the "Board") of Choices Entertainment Corporation (the "Company" or "We") adopted a proposal on January 17, 2000 to change the
business of the Company to that of a technology holding company. The shareholders of the Company approved the change of the name of the company to CECS CORP. at their annual meeting held on
May 26, 2000 in Seattle, Washington.

We
are acquiring, investing in, and incubating companies engaged in Internet, computing and other technologies in various stages of development with a primary focus of operating these
companies.

What We Have Done

Photochannel Networks Inc.

We acquired securities issued by publicly traded Photochannel Networks Inc. In January 2000, the Company subscribed to a private placement of
CAN$2,300,000 principal amount of Convertible Subordinated Redeemable 0% Debentures maturing April 30, 2000 (the "Debentures") issued by PhotoChannel Networks Inc., a British Columbia
corporation ("Photochannel"). The subscription agreement calls for advances to Photochannel in exchange for the issuance of Debentures as follows: CAN$350,000 by January 31, 2000; CAN$750,000
by February 29, 2000; and CAN$1,200,000 by April 14, 2000. The Debentures are convertible into Photochannel common stock, no par value, ("Photochannel Stock") at the rate of 1 share of
Photochannel Stock for each CAN$.50 in Debenture principal amount. The Debentures were converted to Photochannel Stock prior to maturity in accordance with the terms of the Debentures.

Also,
the company was granted warrants pursuant to a vesting schedule to purchase additional shares of Photochannel Stock as follows: 140,000 warrants with an exercise price of
CAN$.75; 300,000 warrants with an exercise price of CAN$1.00; and 480,000 warrants with an exercise price of CAN$1.25. Each warrant entitled the Company to purchase 1 share of Photochannel Stock at
the exercise price, for cash. The warrants were exercised in full before the expiration date of June 30, 2000. As of the date of the filing of this report on Form 10KSB, the Company had
completed its obligations under the subscription agreement.

In
September 2000, we received a certificate for 1,590,250 shares of freely trading Photochannel Stock representing our portion of the total offering of Debentures actually
subscribed, paid for, and converted by us and our exercise of the warrants with an exercise price of CAN$.50 and the partial exercise by us of the warrants with an exercise price of CAN$.75. The
contract rights to subscribe to

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the balance of the debentures and warrants were sold by us to third parties for an aggregate cash amount of US$203,095.

As
of the end of March 2001, we held only 10,000 shares of Photochannel Stock. In late September 2000, the board of directors decided to reduce our exposure to the
vagaries of the stock market by commencing to sell Photochannel Stock. This decision was additionally based on the fact that substantially all of our working capital was overly concentrated in the
Photochannel Stock position. See, Management's Discussion and Analysis Or Plan Of Operation for details relating to the liquidation of shares of Photochannel Stock.

About Photochannel

Photochannel is a development stage company engaged in E-commerce selling online photo-finishing services and digital and other cameras and photographic
equipment. Photochannel's website may be viewed atwww.photochannel.com.

Tridium Research, Inc.

We acquired securities of non-publicly traded Tridium Research, Inc. In March 2000, the Company paid $50,000 cash to acquire 250,000 shares of
common stock of Tridium Research Inc., a Washington corporation ("Tridium") based in Kirkland, Washington. In June 2000, we acquired an additional 125,000 shares of common stock in Tridium for
$25,000. The 375,000 shares of common stock acquired represents in excess of 5% of all Tridium common stock issued and outstanding. Originally, the Company obligated itself to provide an additional
$200,000 to Tridium, upon terms and conditions to be determined, but no satisfactory agreement could be reached as to such terms and conditions and other than the additional $25,000 invested, we have
made no further acquisition of Tridium securities.

About Tridium

Tridium Research Inc. ("Tridium") is a development stage company that produces and sells a dual monitor video card featuring "dual direct draw" (on both
screens) that plugs into the AGP (as opposed to the PCI) slot on a computer. The ability to run multiple monitors is particularly applicable to networked systems for businesses needing to display and
provide user interface to multiple users. The cards also permit multiple monitor arrays of, for example, advertising displays, stock quoting systems, streaming video, and even wide-screen movies.

Tridium
has a patent application pending with respect to the hardware and the software that it has developed, but no assurance can be given that a patent or patents will issue.

More
information about Tridium can be obtained from its website at www.dualmonitor.com.

SoftUse, Inc.

We organized a wholly owned subsidiary named SoftUse, Inc. ("SoftUseSM") under the laws of the state of Delaware on November 2, 2000. The
total number of shares SoftUseSM is authorized to issue is 1,000 shares of common stock, all of which have been subscribed by CECS CORP. SoftUseSM had no material
operating or financial activity in the fiscal year covered by this report.

About SoftUseSM

SoftUseSM has obtained domain names as Softuse.com and Softuse.ws. Still in the early stages of organization and development,
SoftUseSM will be developed as an application service provider or "ASP". The new subsidiary has developed a demonstration website still under construction, and is in the process of
establishing strategic alliances with companies engaged in providing services to ASP's.

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SoftUseSM is also engaged in discussions regarding the acquisition of other companies with particular applications to be offered by SoftUseSM.

Speaklink, Inc.

We have provided capital on a loan basis to Speaklink, Inc. (Speaklink), a privately held company based in Seattle, Washington. The Company is the holder of
two Speaklink promissory notes each in the amount of $35,000. The first note, dated October 19, 2000, matured December 19, 2000 and the second note, dated October 27, 2000,
matured December 27, 2000, in each case with accrued interest. The notes contain all of the standard terms and conditions of commercially reasonable promissory notes written or made in the
ordinary course of business. The Company has not demanded repayment of the notes at this time and is in discussion with Speaklink as to repayment, conversion of the notes to equity or other
satisfaction of the notes.

About Speaklink

Speaklink is a voice application service provider (VASP) making business applications and Internet-based content available to anyone with a telephone.
Speaklink designs, develops, hosts and maintains platform agnostic, 100 percent VoiceXML compliant applications for companies, organizations, and government entities looking to gain a presence on the
burgeoning "Voice Web". At the same time, Speaklink provides the telecommunications infrastructure that allows end users to access voice applications developed in-house or by outside developers.
Combining all of these services makes Speaklink the ideal partner for companies wanting to extend their reach to anyone with a telephone, anytime, anywhere. Speaklink:

It's your Web . . . Speak to it!SM

More information about Speaklink can be obtained from its website at www.Speaklink.com.

Fastvoice.com, Inc.

We have provided capital pursuant to a bridge loan regime to Fastvoice.com, Inc. (Fastvoice), a privately held company based in Seattle, Washington. The
Company is the holder of a Fastvoice.com promissory note in the amount of $72,000 dated January 11, 2001 and maturing July 31, 2001. The rate of interest on the note is 11%. The
promissory note of Fastvoice.com has been structured as a part of a Term Sheet with Zilkah Venture Partners, L.P. ("Zilkah") pursuant to which Zilkah and others have advanced approximately $700,000 to
Fastvoice.com.

About Fastvoice

Fastvoice has developed an integrated communications solution that is device, operating system and "last mile" independent. Fastvoice offers a market-ready
telecom carrier grade solution that is truly scaleable and that offers full integration of calendaring, scheduling, task management, messaging, contact management, CRM, call screening, alerting, and
real time group collaboration. All of the features are made available using any duplex communication device. Fastvoice enables WAP like functionality to standard wire-line as well as non-WAP wireless
telephony. Fastvoice compliments most legacy systems, synchronizing with MS-Outlook, Lotus, Palm, and other similar systems. More information about FastVoice can be obtained from its website at www.fastvoice.com.

Other Matters

Since the board of directors resolution in January 2000 adopting what we call the Millenium Initiative, the two executives of the company, Tracy Shier
and Thomas Renna, have spent substantially all of their time: raising capital, establishing headquarters offices in leased facilities at Seattle,

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Washington, administering the Company's obligations as a publicly traded company, finding, evaluating, negotiating for and acquiring interests in technologies and technology companies to be acquired,
attempting to attract additional qualified personnel to handle managerial, administrative and clerical tasks, and maintaining shareholder relations.

In
deciding to change the direction of the Company, we decided to terminate a letter of intent to acquire the business plan of Republic Hotel Investors, Inc. (Republic"). The
business plan called for the acquisition of a substantial hotel portfolio that would have resulted in turning the Company into a hotel properties holding company. On September 21, 1999, the
Company announced entering into a letter of intent to acquire the business of privately held Republic Hotel Investors, Inc. of Seattle, Washington and Vancouver B.C. That letter of intent was
intended to lead to an agreement which would have transferred to Choices all of Republic's assets in exchange for 144,789,382 shares of restricted Choices common stock. The details of the transaction
are contained in a Form 8-K filed with the Securities and Exchange Commission on September 20, 1999.

As
a result of the termination of the letter of intent, Lorne Bradley resigned as our Chairman and President. Also, we have issued 500,000 restricted shares of the Company's common
stock to Republic or its nominee as a negotiated settlement with Mr. Bradley in connection with the termination of the letter of intent. The reasons the Board decided to terminate the Republic
agreement included the then current state of the hotel financing market, the overbuilt and late stage status of the hotel industry and, most importantly, a lack of enthusiasm for financing the hotel
business plan on the part of our existing shareholders.

From
June 1998 to September 1999, we focused on: (i) satisfying and compromising various claims and liabilities; (ii) defending and settling litigation,
and paying professional fees, including substantial professional fees associated with such litigation; (iii) maintaining administrative functions (at present the Company has no employees);
(iv) marshalling the books, documents and records of the Company and transferring them to the storage facilities in Coral Springs, Florida: (iv) retaining new independent public auditors
to replace the Company's prior independent public auditors, who resigned; (v) actively engaging in discussions with various persons for the acquisition of a new business or business
opportunity for the Company; and, (vi) continuing the status of the Company as a reporting registrant under the Securities Exchange Act of 1934 and a publicly traded company.

Our Business Strategy

We intend to operate in four modalities: providing capital to public companies, providing capital to start-ups, acquiring operating companies, and incubating
new businesses under the corporate umbrella.

Our
goal is to be the most profitable technology holding company in the group of publicly traded companies of similar business focus by successfully implementing our business plan and
achieving our objectives.

Our
objectives are:



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Our
strategies include:



Our
tactics include:



Risks Relating to our Business

We may not have operating income or net income in the future.

During the fiscal year ended December 31, 2000, we had an operating loss of approximately $425,000, net loss of approximately 61,000, and other
comprehensive income of $57,763. We may not have operating income or net income in the future. If we continue to operate at a loss, we may not have enough money to maintain or grow our business.

Our operating history under the new business plan is limited.

We have limited operating history. Our success cannot be guaranteed or accurately predicted. There can be no assurance that we will be able to acquire,
incubate, own or operate Internet and other technologies profitably. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered in the establishment of a
new company or line of business in a highly competitive market and industry.

There
is no assurance that we will be able to operate and manage our technology business on a profitable basis or that cash flow from operations will be sufficient to pay our
operating costs. We anticipate the need to raise additional capital to finance our initial operations. We will seek, if necessary, additional financing through debt or equity financing. We cannot
assure that additional

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financing, if needed, will be available to us, or that, if available, the financing will be on terms acceptable to the Company. There is no assurance that the our estimate of our reasonably
anticipated liquidity needs is accurate or that new business developments or other unforeseen events will not occur resulting in the need to raise additional funds. In the event that we cannot raise
needed capital, it will have a material adverse effect on the Company.

We
expect to incur significant operating losses and to generate negative cash flow from operating activities during the next several years. There can be no assurance that we will
achieve or sustain profitability or positive cash flow from operating activities in the future or that it will generate sufficient cash flow to service any debt requirements.

We may have problems raising money we need in the future.

In recent years, we have financed our operating losses in part with loans from shareholders and private placements of the Company's securities. This funding
source may not be sufficient in the future, and we may need to obtain funding from outside sources. However, we may not be able to obtain funding from outside sources. In addition, even if we find
outside funding sources, we may be required to issue securities to them with greater rights than those currently possessed by holders of shares of the Company's common and preferred stock. We may also
be required to take other actions that may lessen the value of the Company's common and preferred stock, including borrowing money on terms that are not favorable to us.

Our growth places strains on our managerial, operational and financial resources.

Our rapid growth has placed, and is expected to continue to place, a significant strain on our managerial, operational and financial resources. Further, as the
number of our subsidiaries, client companies, and other business partners grows, we will be required to manage multiple relationships with various strategic partners and other third parties. Further
growth of ur business will increase the strain on our managerial, operational and financial resources, which in turn will limit our ability to successfully implement our business plan. In addition,
our success is dependent on our ability to attract, train, retain and motivate highly skilled people, especially for our management team. Our success also depends on our ability to attract, train,
retain, and motivate other highly qualified technical and managerial personnel. Competition for people such as these is intense. In addition, our future success will depend on our ability to build a
support organization commensurate with the growth of our business and the Internet. Currently, the Company only has two unpaid executive officers and no employees.

We may incur significant costs to avoid investment company status and may suffer other adverse consequences if deemed to be an investment company.

We may incur significant costs to avoid investment company status and may suffer other adverse consequences if we are deemed to be an investment company under
the Investment Company Act of
1940. We have made some equity investments in other businesses that may constitute investment securities under the 1940 Act. A company may be deemed to be an investment company if it owns investment
securities with a value exceeding 40% of its total assets, subject to certain exclusions. Investment companies are subject to registration under, and compliance with, the 1940 Act unless a particular
exclusion or Securities and Exchange Commission safe harbor applies. If we were to be deemed an investment company, we would become subject to the requirements of the 1940 Act. As a consequence, we
would be prohibited from engaging in business or issuing our securities as we have in the past and we might be subject to civil and criminal penalties for noncompliance. In the future, contracts we
enter into might be voidable, and a court-appointed receiver could take control of the Company and liquidate its business.

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Our investment securities currently comprise more than 40% of our assets in this interim start-up and organizational phase of our business. Unless an exclusion or safe harbor is
available, we will have to attempt to reduce our investment securities as a percentage of our total assets. This reduction can be accomplished in a number of ways, including the disposition of
investment securities and the acquisition of non-investment security assets. Our current business plan includes an emphasis on the latter method and we believe that during any relevant time period, we
will not ultimately be deemed to be an investment company. If we are wrong, we will be required to sell investment securities sooner than we otherwise would. These sales may be at depressed prices and
we may never realize anticipated benefits from, or may incur losses on, these investments. Some investments may not be sold due to contractual or legal restrictions or the inability to locate a
suitable buyer. Moreover, we may incur tax liabilities when we sell assets. We may also be unable to purchase additional investment securities that may be important to our operating strategy. If we
decide to acquire non-investment security assets, we may not be able to identify and acquire suitable assets and businesses upon acceptable terms.

We depend on certain important executive officers, and the loss of any of them may harm our business.

Our performance is substantially dependent on the performance of our executive officers and, in particular, Tracy M. Shier, our President and Chief Executive
Officer. His familiarity with the Internet industry and technology in general, investment methods and structures, financial markets, business organization, especially in a start-up phase, law, and
other matters makes him especially important at this time to our success. The loss of the services of any of our executive officers or future key employees may harm our business.

Our strategy of expanding our business through acquisitions of other businesses and technologies presents special risks.

We intend to continue to expand our business through the acquisition of businesses, technologies, products and services from other businesses. Acquisitions
involve a number of special problems, including, depending on the nature and structure of the acquisition, and not necessarily in the order of importance: difficulty integrating acquired technologies,
operations, and people with the existing business; diversion of management attention in connection with both negotiating the acquisitions and integrating the acquired assets; potential issuance of
securities in connection with the acquisition that may lessen the rights of holders of our currently outstanding securities; the need to incur additional debt; strain on managerial and operational
resources as management tries to oversee the larger operations; the requirement to record additional amortization of good will and other intangible assets that could be significant; and, exposure to
unforeseen liabilities of acquired companies.

We
may not be able to successfully address these problems. Moreover, our future operating results will depend to a significant degree on our ability to successfully manage growth and
integrate acquisitions. In addition, some of our investments are in early-stage companies with limited operating histories and limited or no revenues. We may not be able to successfully develop these
young companies.

If the United States or other governments regulate the Internet more closely, our business may be harmed.

Because of the Internet's popularity and increasing use, new laws and regulations may be adopted. These laws and regulations may cover issues such as privacy,
pricing and content. The enactment of any additional laws or regulations may impede the growth of the Internet and our Internet-related business and could place additional financial burdens on us.

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We must be able to respond to the rapid changes in technology and distribution channels related to the internet.

Our success will depend on our ability to adapt to a rapidly evolving marketplace. We may not be able to adequately adapt our products and services or acquire
new products and services that can compete successfully. In addition, we may not be able to establish and maintain effective distribution channels.

We are subject to intense competition.

The market for Internet products and services is highly competitive. Moreover, the market for Internet products and services lacks significant barriers to
entry, enabling new businesses to enter this market relatively easily. Competition in the market for Internet products and services may intensify in the future. Numerous well-established companies and
smaller entrepreneurial companies are focusing significant resources on developing and marketing products and services that will compete with our products and services. In addition, many of our
current and potential competitors have greater financial, technical, operational and marketing resources. We may not be able to compete successfully against these competitors. Competitive pressures
may also force prices for Internet goods and services down and may reduce our revenues.

Our strategy of selling assets of, or investments in, the companies that we acquire and develop presents risks.

A significant element of our business plan involves selling, in public or private offerings, the companies, or portions of the companies, that we have acquired
and developed. Market and other conditions largely beyond our control affect: our ability to engage in such sales; the timing of such sales; and the amount of proceeds from such sales.

As
a result, we may not be able to sell some of these assets. In addition, even if we are able to sell, we may not be able to sell at favorable prices. If we are unable to sell these
assets at favorable prices, our business will be harmed.

The value of our business may fluctuate because the value of some of our assets fluctuates.

A portion of our assets includes the equity securities of both publicly traded and non-publicly traded companies. In particular, we own or have the right to
own a significant number of shares of common stock of Photochannel Networks Inc., which is a publicly traded company. The market price and valuations of the securities that we hold in this and other
companies may fluctuate due to market conditions and other conditions over which we have no control. Fluctuations in the market price and valuations of the securities that we hold in other companies
may result in fluctuations of the market price of our common stock and may reduce the amount of working capital available to us.

Our quarterly results may fluctuate widely.

Our operating results have fluctuated widely on a quarterly basis during the last several years, and we expect to experience significant fluctuation in future
quarterly operating results. Many factors, some of which are beyond our control, have contributed to these quarterly fluctuations in the past and may continue to do so. These factors include: payment
of costs associated with our acquisitions, timing and sales of assets; specific economic conditions in the industries in which we do business; and general economic conditions.

The
emerging nature of the commercial uses of the Internet makes predictions concerning our future revenues difficult. We believe that period-to-period comparisons of our results of
operations will not necessarily be meaningful and should not be relied upon as indicative of our future performance. It is also possible that in some future fiscal quarters, our operating results will
be below the expectations of securities analysts and investors. In such circumstances, the price of our common stock may decline.

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The price of our common stock has been volatile.

The market price of our common stock has been, and is likely to continue to be, volatile, experiencing wide fluctuations. In recent years, the stock market has
experienced significant price and volume fluctuations that have particularly impacted the market prices of equity securities of many companies engaged in Internet-related businesses. Some of these
fluctuations appear to be unrelated or disproportionate to the operating performance of such companies. Future market movements may adversely affect the market price of our common stock.

Ownership of our company is concentrated.

Our officers, directors and 5% or greater shareholders beneficially owned approximately 45% of our voting stock on a fully diluted basis as of March 29, 2001.
As a result, this group possesses significant influence over the Company on matters including the election of directors. The concentration of ownership may: delay or prevent a change in control;
impede a merger, consolidation, takeover or other business involving the Company; or discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of the
Company.

The success of our cross-border operations is subject to special risks and costs.

We intend to continue to make investments in and acquire businesses, technologies and operations outside of the United States. This international activity
requires significant management attention and financial resources. Our ability to expand internationally will be limited by the general acceptance of the Internet and intranets in other countries.
Accordingly, we expect to commit substantial time and development resources to selected international markets.

We
expect that the financial results of our international activities will be denominated in United States dollars. As a result, an increase in the value of the United States dollar
relative to other currencies may make the financial results of our international activities result in gains or losses on foreign currency translations.

General descriptionhistory

On June 16, 1997, the Company sold substantially all of its assets and business to West Coast Entertainment Corporation ("West Coast"). Prior to the sale to
West Coast (the "West Coast Transaction"), the Company operated a chain of retail video home entertainment stores, principally under the trade name CHOICES® MOVIES AND GAMES, which rented
and sold videocassette tapes, video games and other video home entertainment products. The Company's home entertainment stores were located in Delaware, New Jersey and Pennsylvania.

The
Company's board of directors by resolution dated January 17, 2000, adopted the Millenium Initiative and changed the business of the Company from video rentals to that of being a
technology holding company.

The
Company was incorporated in Maryland in July 1985, under the name PPV Enterprises, Inc., and was reincorporated in Delaware under the name DataVend, Inc. in August 1987. In March
1990, the Company changed its name to "Choices Entertainment Corporation." In May 2000, the company changed its name to CECS CORP.

Employees and other matters

The company has no paid employees. The two primary executives of the Company are Tracy M. Shier ("Shier") and Thomas Renna ("Renna"), both of whom provide all
or substantially all of their time to the business affairs of the Company. In return, the board of directors has from time-to-time granted Shier and Renna cash and other compensation on a past
services rendered basis. In the future,

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Mr. Shier will not contribute full time to the company and will be paid on a time and billing basis at the rate of $250 per hour, his usual professional services billing rate. Other terms of both
Shier's and Renna's involvement in the company have yet to be negotiated and finalized.

Item 2.  Description of Property

The Company's executive offices of approximately 2,200 square feet of Class B office space are subleased pursuant to a non-cancelable operating lease
that expires December 30, 2001. The rent is $4,292 per month through December 30, 2001.

Item 3.  Legal Proceedings

The Company is a defendant to the lawsuit Dion Signs & Service, Inc. vs. Choices Entertainment Corporation, Civil Action No. 91-6871. The case is now pending
in the Providence County Superior Court, Providence, Rhode Island. Dion Signs & Service, Inc. alleges that it is owed approximately $33,000 plus interest, costs and reasonable attorney's fees for the
failure by Choices Entertainment Corporation to pay for signage that was erected at various locations pursuant to a contract. The Company is advised that pre-judgment interest on the claim accrues
from the date the cause of action arose and that the amount of pre-judgment interest could approximate the amount of the claim, or approximately $33,000. Litigation is always uncertain and management
intends to vigorously defend the lawsuit.

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

None.

PART II

Item 5.  Market for Common Equity Stock and Related Stockholder Matters

The Company's Common Stock trades in the over-the-counter market on the Bulletin Board ("OTC-Bulletin Board") under the symbol CECS. The following table sets
forth the high and low inside bid prices as reported by the Bulletin Board.

Common Stock (CESC)High

Low2000First quarter

.32

.32Second quarter

.08

.08Third quarter

.10

.09Fourth quarter

.02

.021999First quarter

.01

.006Second quarter

.03

.006Third quarter

.155

.01Fourth quarter

.10

.045


On
March 29, 2001, the closing price for the Company's common stock was $.01 as reported by the OTC-Bulletin Board.

The
quotations set forth above reflect inter-dealer prices, without retail markup, markdown or commission and may not necessarily represent actual transactions.

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Holders.As of March 29, 2000, approximately 598 holders of record held the outstanding shares of the Company's common
stock and 2 holders of record held the outstanding shares of the Company's preferred stock.

Dividends.The Company has not declared or paid any dividends on its common stock since its inception. The Board of
Directors does not contemplate the payment of dividends in the foreseeable future.

Item 6.  Management's Discussion and Analysis of Financial Condition and Results of Operation or Plan of Operation

The following is management's discussion and analysis of certain significant factors that have affected the Company's financial condition, changes in financial
condition and results of operations. It also includes a discussion of the Company's liquidity and capital resources at December 31, 2000, and later dated information, where practicable. This
discussion should be read together with the Company's Financial Statements and the Notes thereto beginning on page F-1.

This
schedule contains summary unaudited financial information taken from the financial statements of CECS CORP. (formerly "Choices Entertainment Corporation") and is qualified in its
entirety by reference to such financial statements.

|                                            |  | 2000 |            | 1999 |   | 1998       |   | 1997 |            | 1996 |  
|------------------------------------------- |  | ---- | ---------- | ---- | - | ---------- | - | ---- | ---------- | ---- | -
|Statement of Operations Data:               |  |      |            |      |   |            |   |      |            |      |  
|Net Sales                                   |  | $    |           |      | $ |           |   | $    |           |      | $
|Cost of Sales                               |  |      |           |      |   |           |   |      |           |      |  
|                                            |  |      |            |      |   |            |   |      |            |      |  
|Gross Profit                                |  |      |           |      |   |           |   |      |           |      |  
|Operating Expenses                          |  |      | 425,808    |      |   | 825,816    |   |      | 117,736    |      |  
|                                            |  |      |            |      |   |            |   |      |            |      |  
|Income (Loss) From Operations               |  |      | (425,808   | )    |   | (825,816   | ) |      | (117,736   | )    |  
|Other Income (Expense)                      |  |      | 364,652    |      |   | (14,973    | ) |      | 353,307    |      |  
|                                            |  |      |            |      |   |            |   |      |            |      |  
|Income (Loss) from Continuing Operations    |  | $    | (61,156    | )    | $ | (840,789   | ) | $    | 235,571    |      | $
|                                            |  |      |            |      |   |            |   |      |            |      |  
|Per Share Data:                             |  |      |            |      |   |            |   |      |            |      |  
|Continuing Operations                       |  | $    | .00        |      | $ | (.03       | ) | $    | .01        |      | $
|                                            |  |      |            |      |   |            |   |      |            |      |  
|Weighted Average Shares Outstanding (Basic) |  |      | 40,674,367 |      |   | 24,489,327 |   |      | 22,004,000 |      |  
|                                            |  |      |            |      |   |            |   |      |            |      |  
|Balance Sheets:                             |  |      |            |      |   |            |   |      |            |      |  
|Total Assets                                |  |      | 689,590    |      |   | 20,113     |   |      | 2,220      |      |  
|Total Liabilities                           |  |      | 520,816    |      |   | 625,936    |   |      | 92,254     |      |  
|                                            |  |      |            |      |   |            |   |      |            |      |  
|Stockholders' Equity                        |  |      | 168,774    |      |   | (605,823   | ) |      | (90,034    | )    |  
|                                            |  |      |            |      |   |            |   |      |            |      |  

Financial Condition, Liquidity and Capital Resources

On June 16, 1997, the Company sold substantially all of its assets and business to West Coast Entertainment Corporation ("West Coast"). Notwithstanding the
sale of its operating business, the Company's financial statements included herein have been presented on the basis that the Company is a going concern, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business. The accounting affect of the sale of substantially all of the Company's assets and business to West Coast (the "West Coast
Transaction") was a net loss of $2,663 for the year ended December 31, 1998, before extraordinary income of $303,799 relating to the affects of the West Coast

11

---

Transaction. There was no material accounting effect on the financial statements of the Company due to the West Coast Transaction for the periods ended December 31, 2000 and December 31,
1999.

As
of December 31, 2000, the Company had a net working capital of approximately $1,100. As of March 31, 2001, the Company had approximate cash balances of $74,000
(unaudited).

The
primary source of funds for the year ended December 31, 2000 was the net proceeds of a private offering of the Company's Series C Preferred Stock, shareholder loans
evidenced by promissory notes, and the sale of marketable securities and contract rights.

During
the course of the year, we borrowed $340,000 net of repayments, at interest rates of 12%. The Company had no revenues.

In
February 2000, the Company closed a self-offered private offering of 390 of the Company's Series C Preferred Stock in the aggregate offering amount of $780,000. Offering expenses
were less than $3,000. Each share of the Preferred Stock is convertible into 40,000 shares of the Company's common stock, par value $.01, the ("Common Stock") and carries the voting rights of the
underlying Common Stock. The proceeds from this offering were used to retire all notes payable, to pay down the obligations of the Company to officers and directors of the Company, to pay down
accounts payable to an immaterial amount, and to acquire minority interests in two companies.

From
September 2000 to the present, the Company has been engaged in a selling program of its Photochannel Stock.

In
the event the Company is not successful in securing needed capital in the near term, as to which no assurance can be given, the Company does not believe that there will be any
amounts available for distribution to the Company's stockholders.

Capital Expenditures

The Company's capital expenditures were $25,212 during the year ended December 31, 2000.

Material Changes in Financial Condition

The following material changes in financial condition reflect changes occurring during the period from December 31, 1999 through December 31, 2000.

Assets:

Total assets increased by approximately $669,000 during the period from December 31, 1999 through December 31, 2000, as the result of the investment of the
proceeds from: the private placement of 390 shares of Series C Preferred Stock, shareholder loans and the sale of securities and contract rights held by the Company.

Liabilities:

Total liabilities decreased by approximately $105,000 during the period from December 31, 1999 through December 31, 2000, primarily due to the
conversion of certain prior existing debt to equity in connection with the private offering of Series C Preferred Stock, the repayment of indebtedness for cash, and the settlement and
satisfaction of outstanding accrued payables.

Stockholders' Equity:

During the period from December 31, 1999 through December 31, 2000, the increase in stockholders' equity of approximately $775,000 was due to an increase in
assets with a reduction of

12

---

liabilities and and increase in other comprehensive income of approximately $57,700 for the year ended December 31, 2000.

Material Changes in Results of Operations

The following material changes in results of operations occurred during the two-year period from January 1, 1999 through December 31, 2000.

Continuing Operations:

Losses from continuing operations were approximately $425,000 during 2000, compared to losses of approximately $841,000 during 1999. The decrease of
approximately $416,000 was due primarily to the repayment, settlement and other disposition of the Company's accrued professional and consulting expense. General and administrative expense increased
to $225,933 in 2000 from $29,985 in 1999 due primarily to the establishment of corporate offices and increased business activity at the Company.

Net Loss:

The Company had a net loss of approximately $61,000 for 2000, which included non-operating gain of $364,652 compared to net loss of approximately $841,000 in
1999. The non-operating gain was due primarily to the sale of the Company's securities and contract rights.

Item 7.  Financial Statements

Our financial statements and notes thereto are filed together with this report starting at Page F-1. The financial statements and notes for the period
ending December 31, 2000 are audited by Miller and Co. LLP and are included herein based on their report dated April 11, 2001.

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

None.

PART III

The information called for by Items 9-12 of Form 10KSB are contained in the definitive proxy statement (the "Definitive Proxy Statement") to be filed with the
Securities and Exchange Commission relative to the Company's 2001 Annual Meeting of Stockholders and is hereby incorporated by reference to the Definitive Proxy Statement, as filed.

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

13

---

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report on Form 10KSB for the period ending December 31, 2000 to be
signed on its behalf by the undersigned, thereunto duly authorized.

|                     |  | CHOICES ENTERTAINMENT CORPORATION
|-------------------- |  | ---------------------------------
|Date: April 16, 2001 |  | By:                              
|Date: April 16, 2001 |  | By:                              

In
accordance with the Exchange Act, this report is signed by the following persons on behalf of the registrant in the capacities and on the dates indicated.

|/s/PATRICK HOWARDPatrick Howard |  | Director |  | April 16, 2001
|------------------------------- |  | -------- |  | --------------
|/s/TRACY M. SHIERTracy M. Shier |  | Director |  | April 16, 2001
|/s/THOMAS RENNAThomas Renna     |  | Director |  | April 16, 2001

14

---



INDEX TO FINANCIAL STATEMENTS

|                                                  |  | Page
|------------------------------------------------- |  | ----
|Independent auditors' report                      |  | F-2 
|Balance Sheet                                     |  | F-3 
|Statements of Operations and Comprehensive Income |  | F-4 
|Statements of Changes in Stockholders' Equity     |  | F-5 
|Statements of cash flows                          |  | F-6 
|Notes to financial statements                     |  | F-7 

F-1

---



[LETTERHEAD]  INDEPENDENT AUDITORS' REPORT

To the shareholders CECS CORP.
Seattle, Washington

We
have audited the accompanying balance sheet of CECS CORP. as of December 31, 2000, and the related statements of operations and comprehensive income, changes in stockholders'
equity, and cash flows for the years ended December 31, 2000 and 1999. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

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

In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of CECS CORP. as of December 31, 2000, and the results of
its operations and its cash flows for the years ended December 31, 2000 and 1999 in conformity with generally accepted accounting principles.

The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company is
a development stage enterprise, and suffered recurring losses from operations for the years ended December 31, 2000 and 1999. Those conditions raise substantial doubt about its ability to continue as
a going concern. Management's plans regarding those matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this
uncertainty.



Santa
Monica, California
April 11, 2001

F-2

---



CECS CORP.  (A development stage company)    BALANCE SHEET

|                                     |                                                                           | December 31, 2000                                                                |  
|------------------------------------ | ------------------------------------------------------------------------- | -------------------------------------------------------------------------------- | -
|ASSETS                               |                                                                           |                                                                                  |  
|Current assets:                      |                                                                           |                                                                                  |  
|                                     | Cash                                                                      |                                                                                  | $
|                                     | Cash due from brokers                                                     |                                                                                  |  
|                                     | Marketable securities                                                     |                                                                                  |  
|                                     | Prepaid rent                                                              |                                                                                  |  
|                                     |                                                                           |                                                                                  |  
|                                     |                                                                           | Total current assets                                                             |  
|Other assets:                        |                                                                           |                                                                                  |  
|                                     | Furniture fixtures and equipment
Less accumulated depreciation of $2,521 |                                                                                  |  
|                                     | Non-marketable securities, at cost                                        |                                                                                  |  
|                                     | Notes receivable                                                          |                                                                                  |  
|                                     |                                                                           |                                                                                  |  
|                                     |                                                                           | Total assets                                                                     |  
|                                     |                                                                           |                                                                                  |  
|LIABILITIES AND STOCKHOLDERS' EQUITY |                                                                           |                                                                                  |  
|Current liabilities:                 |                                                                           |                                                                                  |  
|                                     | Accounts payable                                                          |                                                                                  | $
|                                     | Accrued expenses                                                          |                                                                                  |  
|                                     | Accrued professional feesrelated parties                                 |                                                                                  |  
|                                     | Notes payable                                                             |                                                                                  |  
|                                     |                                                                           |                                                                                  |  
|                                     |                                                                           | Total current liabilities                                                        |  
|Long-term liabilities                |                                                                           |                                                                                  | 
|                                     |                                                                           |                                                                                  |  
|                                     |                                                                           | Total liabilities                                                                |  
|Commitments and contingencies        |                                                                           |                                                                                  |  
|Stockholders' equity:                |                                                                           |                                                                                  |  
|                                     | Preferred stock, par value $.01 per share                                 |                                                                                  |  
|                                     |                                                                           | Authorized 50,000,000 shares: 17.741 issued and outstanding at
December 31, 2000 |  
|                                     | Common stock, par value $.01 per share:                                   |                                                                                  |  
|                                     | Authorized 200,000,000 shares:                                            |                                                                                  |  
|                                     |                                                                           | Issued and outstanding 47,717,875 shares at December 31, 2000                    |  
|                                     |                                                                           | Additional paid-in-capital                                                       |  
|                                     |                                                                           | Accumulated deficit                                                              |  
|                                     |                                                                           | Accumulated other comprehensive income                                           |  
|                                     |                                                                           |                                                                                  |  
|                                     |                                                                           | Total stockholders' equity                                                       |  
|                                     |                                                                           |                                                                                  |  
|                                     |                                                                           | Total liabilities and stockholders' equity                                       |  
|                                     |                                                                           |                                                                                  |  

See
accompanying notes to financial statements.
See Accompanying Independent Auditors' Report.

F-3

---

CECS CORP.  (A development stage company)    STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

|                                    |                                         | For the Years Ended December 31,   |         
|----------------------------------- | --------------------------------------- | ---------------------------------- | --------
|
|Operating costs and expenses:       |                                         |                                    |         
|                                    | General and administrative expenses     |                                    | $       
|                                    | Professional and consulting expenses    |                                    |         
|                                    | Acquisition termination                 |                                    |         
|                                    |                                         |                                    |         
|                                    |                                         | Total operating costs and expenses |         
|Other expense:                      |                                         |                                    | (14,973 
|                                    |                                         |                                    |         
|Loss from operations                |                                         |                                    | (840,789
|                                    |                                         |                                    |         
|Non-operating gain:                 |                                         |                                    |         
|                                    | Gain on sale of marketable securities   |                                    |         
|                                    | Gain on sale of certain contract rights |                                    |         
|                                    |                                         |                                    |         
|                                    |                                         | Total non-operating gain           |         
|                                    |                                         |                                    |         
|Net loss                            |                                         |                                    | (840,789
|                                    |                                         |                                    |         
|                                    | Other comprehensive income              |                                    |         
|                                    |                                         |                                    |         
|Comprehensive loss                  |                                         | $                                  | (840,789
|                                    |                                         |                                    |         
|Net loss per share of common stock: |                                         |                                    |         
|                                    | Basic net loss per share                |                                    | $       
|                                    | Diluted net loss per share              |                                    | $       

See
accompanying notes to financial statements.
See Accompanying Independent Auditors' Report.

F-4

---

CECS CORP.  (A development stage company)    STATEMENT OF STOCKHOLDERS' EQUITY  For the Year Ended 12/31/00

|                                                          |  | Preferred Stock |   | Common Stock |       |   |            |  |   |         |  |   |           
|--------------------------------------------------------- |  | --------------- | - | ------------ | ----- | - | ---------- |  | - | ------- |  | - | ----------
|
|
|Balance at December 31, 1999                              |  | 109.100         |   | $            | 1.09  |   | 28,504,395 |  | $ | 285,044 |  | $ | 21,496,035
|Issuance of preferred stock in exchange for debt and cash |  | 390.000         |   |              | 3.90  |   |            |  |   |         |  |   | 777,996   
|Issuance of common stock on conversion of preferred stock |  | (481.359        | ) |              | (4.81 | ) | 19,213,480 |  |   | 192,135 |  |   | (192,130  
|Net loss for the year ended December 31, 2000             |  |                 |   |              |       |   |            |  |   |         |  |   |           
|Accumulated other Comprehensive Income                    |  |                 |   |              |       |   |            |  |   |         |  |   |           
|                                                          |  |                 |   |              |       |   |            |  |   |         |  |   |           
|Balance at December 31, 2000                              |  | 17.741          |   | $            | 0.18  |   | 47,717,875 |  | $ | 477,179 |  | $ | 22,081,901
|                                                          |  |                 |   |              |       |   |            |  |   |         |  |   |           

See accompanying notes to financial statements.
See Accompanying Independent Auditors' Report.

F-5

---

CECS CORP.  (A development stage company)    STATEMENT OF CASH FLOWS

|                                                                                          |                                                        | For the Years Ended December 31,                                |         
|----------------------------------------------------------------------------------------- | ------------------------------------------------------ | --------------------------------------------------------------- | --------
|
|Cash flows from operating activities:                                                     |                                                        |                                                                 |         
|Net loss                                                                                  |                                                        | $                                                               | (840,789
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |                                                        |                                                                 |         
|                                                                                          | Depreciation and amortization                          |                                                                 |         
|                                                                                          | Stock issued as compensation and services              |                                                                 |         
|                                                                                          | Realized gain on sale of investments                   |                                                                 |         
|                                                                                          | Change in operating assets and liabilities:            |                                                                 |         
|                                                                                          |                                                        | (Increase) decrease in cash due from brokers                    |         
|                                                                                          |                                                        | (Increase) decrease in prepaid rent                             |         
|                                                                                          |                                                        | Increase (decrease) in accounts payable and accrued liabilities |         
|                                                                                          |                                                        |                                                                 |         
|Total adjustments                                                                         |                                                        |                                                                 | 608,209 
|                                                                                          |                                                        |                                                                 |         
|Net cash used in operating activities                                                     |                                                        |                                                                 | (232,580
|                                                                                          |                                                        |                                                                 |         
|Cash flows from investing activities:                                                     |                                                        |                                                                 |         
|                                                                                          | Additions to furniture and fixtures                    |                                                                 |         
|                                                                                          | Acquisition of non-marketable investments and rights   |                                                                 |         
|                                                                                          | Acquisition of marketable securities, at cost          |                                                                 |         
|                                                                                          | Issuance of notes receivable                           |                                                                 |         
|                                                                                          |                                                        |                                                                 |         
|Net cash used in investing activities                                                     |                                                        |                                                                 |         
|                                                                                          |                                                        |                                                                 |         
|Cash flows from financing activities:                                                     |                                                        |                                                                 |         
|                                                                                          | Proceeds from sale of investments                      |                                                                 |         
|                                                                                          | Proceeds from notes payable                            |                                                                 |         
|                                                                                          | Payments of notes payable                              |                                                                 |         
|                                                                                          | Proceeds from issuance preferred stock, net            |                                                                 |         
|                                                                                          |                                                        |                                                                 |         
|Net cash provided from financing activities                                               |                                                        |                                                                 | 250,000 
|                                                                                          |                                                        |                                                                 |         
|Net increase in cash                                                                      |                                                        |                                                                 | 17,420  
|Cash at the beginning of the period                                                       |                                                        |                                                                 | 2,074   
|                                                                                          |                                                        |                                                                 |         
|Cash at the end of the period                                                             |                                                        | $                                                               | 19,494  
|                                                                                          |                                                        |                                                                 |         
|Supplemental disclosure of cash flow information:                                         |                                                        |                                                                 |         
|                                                                                          | Cash paid during the year for interest                 |                                                                 | $       
|                                                                                          |                                                        |                                                                 |         
|                                                                                          | Non-cash exchange of notes payable for preferred stock |                                                                 |         
|                                                                                          |                                                        |                                                                 |         

See
accompanying notes to financial statements.
See Accompanying Independent Auditors' Report.

F-6

---



CECS CORP.  (A development stage company)        NOTES TO FINANCIAL STATEMENTS        YEARS ENDED DECEMBER 31, 2000 AND 1999

Note 1Nature of Operations

Business Activities

The Company was incorporated under the laws of the State of Maryland on July 11, 1985, as "PPV Enterprises, Inc." On August 18, 1987, the Company
changed its name to "DataVend, Inc." and reincorporated under the laws of the State of Delaware. On March 14, 1990, the Company changed its name to Choices Entertainment Corporation. On
June 16, 1997, the Company sold substantially all of its assets and business to West Coast Entertainment Corporation. On August 30, 1999, the Company entered into an agreement the effect of
which would have been to change the company to a hotel properties holding and operating company. On January 16, 2000, the Company's Board of Directors adopted a plan to change the business of
the Company to that of a technology holding company and terminated the plan to become a hotel company effective as of December 30, 1999. On May 26, 2000, the Company's shareholders
approved the change of the name of the corporation to CECS CORP.

Note 2Summary of Significant Accounting Policies

Equity Securities

The Company accounts for investment in accordance with SFAS No. 115 "Accounting for Certain Investments in Debt and Equity Securities," which classifies
investments as trading securities, available for sale securities, and held to maturity securities. SFAS No. 115 requires unrealized holding gains and losses for available-for-sale securities to
be excluded from earnings and reported as a net amount in a separate component of shareholders' equity until realized.

Non-marketable
securities are carried at cost, unless the Company believes and has reason to believe that the securities should be valued at some lower basis due to impairment or
realization.

Comprehensive Income

The Company accounts for other comprehensive income in accordance with SFAS No. 130, "Reporting Comprehensive Income." SFAS No. 130 establishes
standards for reporting comprehensive income and its components (revenues, expenses, gains, and losses) in a full set of general purpose financial statements. SFAS No. 130 requires that the Company
(a) classify items of other comprehensive income by their nature in a financial statement and (b) display the accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in capital in the equity section of a statement of financial position. The Company's other comprehensive income is composed of unrealized holding gains during the year and
reclassification adjustments for realized gains are included in net income or loss.

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 the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

F-7

---

Reclassification and Restatement

In order to facilitate the comparison of financial information, certain amounts reported in prior year comparative totals have been reclassified to conform
with the current year presentation.

Development Stage Enterprise

The Company is considered as a dormant enterprise that was reactivated to undertake development stage activities. Statement of Financial Accounting Standards
No. 7, "Accounting and Reporting by Development Stage Enterprise", requires the disclosure of cumulative amounts of results of operations and cash flows from the inception of each development
stage. The cumulative amounts from January 16, 2000 to December 31, 2000 are substantially the same as the results of operations and cash flows for the year ended December 31, 2000.

New Accounting Pronouncements

The SEC issued accounting guidance for stock option exercise rescissions under EITF Topic No. D-93, which was discussed January 17-18, 2001. This
accounting guidance did not affect the direct grant of common stock that was recorded as Compensation expense in the third quarter. The recipients declined the grant before the common stock could be
issued. The board voided the grant. Compensation expense for the grant of common stock was subsequently corrected in the fourth quarter.

Note 3Liquidity

The Company's financial statements included herein have been presented on the basis that the Company is a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business. The Company has an accumulated deficit of $22,448,069 as of December 31, 2000 and net loss of approximately of
$61,000 and $841,000 for the years ended December 31, 2000 and 1999 respectively.

As
of March 31, 2001, the Company has approximately $74,000 in cash. In the year 2000, the Company relied on raising capital privately, borrowing, and the proceeds from the
sale of marketable securities to provide capital for its operating and investing activities. The Company's viability for the foreseeable
future is dependent upon its ability to find business opportunities and raise needed capital. The Company's ability to raise needed capital is seriously in question. In the event the Company is not
successful in securing needed capital in the near term, as to which no assurance can be given, the Company does not believe that its viability as an ongoing business is assured. The Company's business
plan is focused, in the near term, on acquiring assets and building operating companies. The Company is involved in discussions with several companies about acquiring either the target company or
certain assets of the target company. None of the referenced discussions are sufficiently far advanced to warrant specific disclosure about the target property or company. In each case, additional
capital is required to realize the value of the intellectual property or franchise value of the target company to be acquired. Management intends, among other things, to raise capital privately prior
to the end of June 2001. If the Company is unable to raise needed capital, then it is likely that current management will not implement the current business plan.

F-8

---

Note 4Marketable Equity Securities

The Company's investments in marketable equity securities are classified as available-for-sale. The cost and approximate fair value of marketable equity
securities available-for-sale are summarized as follows at December 31, 2000:

Cost

Unrealized Gain

Fair ValuePublicly traded securities

$
388,596

$
57,763

$
446,359


Gross
unrealized holding gains were $57,763 at December 31, 2000. For the year ended December 31, 2000, gross proceeds from the sale of securities was $378,662, with an
average cost of $217,105, and gross realized gains of $161,557 using the average cost method. See Note 14Subsequent Events.

Note 5Notes Receivable

We have provided capital on a loan basis to Speaklink, Inc. (Speaklink), a privately held company based in Seattle, Washington. The Company is the holder of
two Speaklink promissory notes each in the amount of $35,000. The first note, dated October 19, 2000, matured December 19, 2000 and the second note, dated October 27, 2000,
matured December 27, 2000, in each case with accrued interest. The notes contain all of the standard terms and conditions of commercially reasonable promissory
notes written or made in the ordinary course of business. The Company has not demanded repayment of the notes at this time and is in discussion with Speaklink as to repayment, conversion of the notes
to equity or other satisfaction of the notes. See also Note 14Subsequent Events.

Note 6Notes Payable

As of December 31, 2000, the Company has notes payable outstanding in the amount of $340,000. The Company's 12% unsecured promissory notes in the principal
amount of $340,000 are mature at December 31, 2000 See Note 14Subsequent Events as to subsequent repayments.

Note 7Disclosure of Information About Capital Structure

The Financial Accounting Standards Board issued in February 1997, SFAS No. 129 "Disclosure of Information about Capital Structure". SFAS 129 requires
disclosure of descriptive information about
securities, e.g. rights and privileges of the various securities outstanding, the number of shares issued upon conversion, exercise, or satisfaction, or required conditions and liquidation preferences
of preferred stock (Convertible Preferred Shares).

At
the Company's Annual Meeting of Stockholders held in May 2000, the Company's stockholders approved an increase of the capital stock of the Company to 200,000,000 shares of
common stock and 50,000,000 shares of preferred stock.

The
Company's common stock is currently traded in the over-the-counter market on the OTC-Bulletin Board. On March 29, 2001 the last sale price was $.01 as reported by the
OTC-Bulletin Board.

F-9

---

The Company has not declared or paid any dividends on its preferred or common stock. The Board of Directors does not contemplate the payment of dividends in the foreseeable future.

Rights and Privileges

The holders of outstanding shares of Common Stock are entitled to receive dividends out of assets legally available therefore at such times and in such amounts
as the board may from time to time determine. The shares of Common Stock are neither redeemable nor convertible, and the holders thereof have no preemptive or subscription rights to purchase any
securities of the Company. Upon liquidation, dissolution or winding up of the company, the holders of Common Stock are entitled to
receive the assets of the company which are legally available for distribution, after payment of all debts, other liabilities and any liquidation preference of any outstanding preferred stock. Each
outstanding share of Common Stock is entitled to one vote on all matters submitted to a vote of stockholders. There is no cumulative voting and no preemptive right.

The
Convertible Preferred Shares are the company's only authorized and outstanding series or class of preferred shares.

The
Convertible Preferred Shares have no liquidation preference. Upon liquidation, dissolution or winding up of the Company, the holders of Convertible Preferred Shares will receive
an amount equal to the amount, if any, received by holders of the Common Stock, in pari passu.

Dividends
on the Convertible Preferred Shares are non-cumulative and will only be paid when, as and if declared by the Board of Directors of the Company, in its sole discretion, in an
amount per share equal to the amount of the dividend declared on the Common Stock, if any.

Convertible
Preferred Shares are convertible, in whole or in part, at any time, at the option of the holder, into Common Stock at a ratio of 40,000 shares of the Company's Common
Stock (as more fully described above) for each Convertible Preferred Share. Holders of the Convertible Preferred Shares are not entitled to any distributions unless declared by the Board of Directors
as described above.

The
holders of Convertible Preferred Shares have voting rights equivalent to the rights of holders of the Common Stock. Each Convertible Preferred Share bears 40,000 votes on any
matter brought before the stockholders such as the election of Directors and are entitled to notice of annual or special
stockholder meetings. The Board of Directors of the Company is not prohibited from adopting and submitting to the Company's voting stockholders any proposed amendment to the Certificate of
Incorporation of the Company or a Certificate of Designation which would create a class of preferred shares ranking senior to the Convertible Preferred Shares as to dividends and liquidation
preference.

Convertible
Preferred Shares are not redeemable by the Company.

Note 8Stock Options

Stock Option and Appreciation Rights Plan

The Company has an unallocated reserve of 1,694,000 shares of its common stock for grant under its 1987 Stock Option and Appreciation Rights Plan (the "1987
Plan"). Pursuant to the 1987 Plan, the

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Company may grant either incentive stock options, intended to comply with the requirements of Section 422A of the Internal Revenue Code of 1986, as amended (the "Code"), or non-qualified stock
options, as well as stock appreciation rights.

All
matters relating to the 1987 Plan are administered by a committee selected by the Company's Board of Directors, including selection of participants, allotment of shares,
determination of price and other conditions of purchase. The exercise price of incentive stock options granted under the 1987 Plan may not be less than the fair market value of the common stock on the
date of grant and the term of the option may not exceed ten years from the date of grant. In the case of incentive options granted to individuals who own more than 10% of the outstanding common stock
of the Company, the exercise price may not be less than 110% of the fair market value of the common stock on the date of the 1987 Plan grant and the term of the option may not exceed five years from
the date of grant. All options and stock appreciation rights granted under the 1987 Plan are non-transferable other than by will or by the laws of descent and distribution.

The
following table sets forth information with respect to incentive stock options under the Plan for the year ended December 31, 2000:

Expiration Date

Number of Holders

Shares of Common Stock Subject to Option

Exercise Price per ShareNovember 29, 2001

1

1,500,000

$
0.75


Non-qualified management incentive options

On January 31, 1991, the Board of Directors approved the grant of 4,750,000 1991 Management Options to four executive officers of the Company. One officer has
subsequently retired and two other officers have left the Company. One ex-officer exercised his options in full, one ex-officer exercised 540,000 options leaving 510,000 options outstanding, and
1,000,000 options held by the second officer who has left the Company remains outstanding. All of the 1991 Management Options were issued at an exercise price of $.4325 per share, which represented
the bid price for the Company's common stock on the date of the grant of such options. The 1991 Management Options vested fully as of August 2, 1991, and expire January 31, 2001.

On
February 9, 1994, the Board of Directors approved the grant of 915,000 1994 Management Options to three officers and one director of the Company at an exercise price of $.23
per share, which represented the bid price for the Company's common stock on the date of grant of such options. The 1994 Management Options vested fully as of April 7, 1994, and expire on
January 31, 2001.

Registration
statements under the 1933 Act have been filed by the Company with respect to the 8,425,001 shares underlying the 1987 Stock Option and Appreciation Rights Plan (the "1987
Plan"), the outstanding Long-Term Management Incentive Options, the 1991 Management Options, and the 1994 Management Options, and an option held by a director. Of these options, 3,591,501 have either
been cancelled, exercised or have expired and 1,694,000 options remained unissued under the 1987 SOP.

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Generally, such registration permits the immediate sale of the 3,139,500 vested shares upon exercise, subject to the volume limitations imposed by Rule 144.

Holders
of these options are afforded certain anti-dilution and piggyback rights under the 1933 Act with respect to the shares of common stock issuable upon exercise of said options.

On
February 13, 1997, the Board of Directors of the Company authorized the grant of non-qualified stock options to purchase 450,000 shares of the Company's common stock at $.05 per
share, the fair market value of the common stock on that date, to three directors of the Company. The options became fully vested after six months from the date of grant.

Note 9Net Income (Loss) Per Share of Common Stock

Basic and diluted loss per share for the years ended December 31, 2000 and 1999, was computed by dividing the net loss by the weighted average number of
common shares outstanding during the periods. No consideration was given to the conversion of preferred stock since the result of that calculation would be antidilutive. The approximate number of
shares used in the computation of loss per share amounts is as follows:

Year ended December 31,

Number of Shares used in Calculation2000Basic and Diluted

40,674,3671999Basic and Diluted

24,489,387


Note 10Income Taxes

The Company accounts for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes. SFAS No. 109 requires the liability method of accounting
for deferred income taxes. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured by applying
enacted tax rates for the taxable years in which those differences are expected to reverse. Recognition of deferred tax assets is subject to a valuation allowance if it is more likely than not that
some or all of a deferred tax asset will not be realized.

As
of December 31, 2000 the Company had approximately $19,575,000 of net operating loss carry-forwards for tax purposes which may be available to offset future federal income, if any,
through 2021. The amount ultimately available, if any in future years, is subject to certain limitations. Should the Company operate profitably in future years, it may be subject to current tax
expense in certain states for which no net operating loss carry-forwards are available.

Note 11Commitments

The Company leases its office facilities in Washington under a noncancelable operating lease that expires December 30, 2001. The rent is $4,292 per month
through December 30, 2001. Prior to June

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2000, the Company's executive office was provided rent-free by the Company's President. The rent expenses for the years ended December 31, 2000 and 1999 were $34,595 and $0 respectively.

Note 12Pending Litigation

The Company is a defendant to the lawsuit Dion Signs & Services, Inc. vs. Choices Entertainment Corporation, Civil Action No. 91-6871. The case is now pending
in the Providence County Superior Court, Providence, Rhode Island. Dion Signs & Services, Inc. alleges that it is owed approximately $33,000 plus interest, costs and reasonable attorney's fees for the
failure by Choices Entertainment Corporation to pay for signage that was erected at various locations pursuant to a contract. The case has been set for trial, and the parties are in the process of
discovery. Litigation is always uncertain and management intends to vigorously defend the lawsuit.

Note 13Payments to Related Parties

The Company made payments to Tracy Shier, President and CEO ("Shier"), Thomas Renna, Vice President ("Renna") and George Pursglove, formerly Interim CFO and
Director ("Pursglove") in the amounts of $147,000, $166,000 and $20,000 respectively during the year 2000, of which $180,000 was for payment for services incurred and accrued in prior years. The
Company also settled a $25,000 obligation to a company of which a Company director is an officer of Seattle Northwest.

The
board of directors approved cash compensation for past services in the year 2000 to Shier and Renna for $100,000 each through October 2000, some portion of which compensation is
included in the above amounts.

Additionally,
the board of directors approved a direct grant of common stock of the company to Shier and Renna in the amounts of 10,000,000 and 3,000,000 shares respectively of the
Company's common stock. The fair market value per share of the Company's common stock as quoted on the OTC-BB was approximately $0.04 as of the day of the grant. These grants were recorded as Stock
Based Compensation in the approximate amount of $520,000 in the Statement of Operations in the quarter ended September 30, 2000. The grant of stock to Renna and Shier has been declined by recipients
and the board has voided the grant. Compensation expense for the grant of common stock was subsequently corrected in the fourth quarter.

Note 14Subsequent Events

Subsequent to the balance sheet date, the Company sold 976,000 shares of marketable securities at prices ranging from $0.43 to $0.11 per share. Net proceeds
were $238,483 with an average cost of $368,543 and net realized loss of $130,060 in the subsequent period. As of March 16, 2001, the Company had 52,650 shares remaining with a fair value of
$8,161, cost of $20,054, unrealized loss of $11,893.

In
January 2001 the Company loaned $72,000 in cash to Fastvoice.com, Inc., a Washington corporation ("Fastvoice") based in Seattle, Washington. The Company is the holder of a
Fastvoice.com promissory note in the amount of $72,000 dated January 11, 2001 and maturing July 31, 2001. The rate of interest on the note is 11%. The promissory note of Fastvoice.com
has been structured as a part of a

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Term Sheet with a third party pursuant to which that third party and others have advanced approximately $700,000 to Fastvoice.com.

The
Company repaid $10,000 in full satisfaction of principal to a noteholder in February 2001; repaid $20,000 in partial payment of principal to a noteholder in
April 2001; and came to an agreement with a noteholder on the characterization of an obligation and paid the amount thereof for $12,000.

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INDEX TO EXHIBITS

|Exhibit No. |        | Description of Exhibit                                                                                                        
|----------- | ------ | ------------------------------------------------------------------------------------------------------------------------------
|3           | (a)    | Certificate of Incorporation, as amended(1)                                                                                   
|            | (b)    | Certificate of Designations of Series C Preferred Stock, as amended(2)                                                        
|            | (c)    | Amended and Restated By-Laws,(13)                                                                                             
|4           |        | Form of certificate evidencing shares of Common Stock(14)                                                                     
|10          | (a)    | Stock Option and Appreciation Rights Plan of 1987 (4)                                                                         
|            | (b)    | Form of Long-Term Management Incentive Stock Option Agreement(5)                                                              
|            | (c)    | Form of 1991 Management Option Agreement(5)                                                                                   
|            | (d)    | Consulting Agreement between Registrant and Ronald W. Martignoni(6)                                                           
|            | (e)    | Severance Benefits Agreement, as amended, between Registrant and Lorraine E. Cannon(7)                                        
|            | (f)    | Form of 1994 Management Option Agreement(7)                                                                                   
|            | (g)    | Non-Employee Director Stock Option Agreement between Registrant and Fred E. Portner(8)                                        
|            | (h)    | Non-Employee Director Stock Option Agreement between Registrant and Fred E. Portner(9)                                        
|            | (i)    | Non-Employee Director Stock Option Agreement between Registrant and James D. Sink(9)                                          
|            | (j)    | Asset Purchase Agreement, dated December 16, 1996, as amended, between West Coast Entertainment Corporation and Registrant(10)
|10.99       | (a)    | Consulting Agreement between Registrant and Thomas Renna(11)                                                                  
|            | (b)    | Letter of Intent to Acquire Republic Hotel Investors, Inc.(12)                                                                
|            | (c)    | Termination Contract with Republic Hotel Investors, Inc.(13)                                                                  
|            | (d)    | Sublease Agreement between Northwest Strategies, Inc. and CECS, Inc. [sic.] dated May 25, 2000                                
|            | (e)    | Private Placement Subscription Agreement dated January 12, 2000 re: Photochannel Networks Inc.                                
|            | (f)    | Subscription Agreement re: Tridium Research, Inc. dated March 1, 2000                                                         
|            | (g)(1) | Promissory NoteSpeaklink Inc. dated October 19, 2000                                                                         
|            | (g)(2) | Promissory NoteSpeaklink Inc. dated October 27, 2000                                                                         
|            | (h)(1) | Fastvoice Term SheetThird Party dated October 31, 2000                                                                       
|            | (h)(2) | Promissory NoteFastvoice.com dated January 11, 2001                                                                          
|21          |        | Subsidiaries of Registrant(14)                                                                                                

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