SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20559

                                   FORM 10-KSB
                              AMENDMENT NUMBER ONE

(Mark One)
[X]          Annual Report Under Section 13 or 15(d) of
             the Securities Exchange Act of 1934

                   For the fiscal year ended December 31, 2000

                                       or

[ ]           Transition Report Under Section 13 or 15(d)
              of the Securities Exchange Act of 1934

                        Commission file number 000-22845

                          CREATIVE HOST SERVICES, INC.
             (Exact name of registrant as specified in its charter)

      California                                       33-0169494
(State of Incorporation)                   (I.R.S. Employer Identification No.)

           6335 FERRIS SQUARE, SUITES G-H, SAN DIEGO, CALIFORNIA 92126
               (Address of principal executive offices) (Zip Code)

                                 (858) 587-7300
               Registrant's telephone number, including area code


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

                                                    Name of Each Exchange On
        Title of Each Class                              Which Registered

           COMMON STOCK                                       NASDAQ


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

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. / /

         Revenues for fiscal year 2000 were $23,725,859

         The aggregate market value of voting stock held by non-affiliates of
the registrant was $9,767,640 as of March 25, 2001 (computed by reference to the
last sale price of a share of the registrant's Common Stock on that date as
reported by NASDAQ).

         There were 6,794,880 shares of the registrant's Common Stock
outstanding as of March 26, 2001.


<PAGE>

                                TABLE OF CONTENTS


-------------------------------------------------------------------------------
                                      10KSB

PART I..............................................1
ITEM 1..............................................1
ITEM 2..............................................9
ITEM 3..............................................9
ITEM 4..............................................9
PART II.............................................9
ITEM 5..............................................9
ITEM 6.............................................10
ITEM 7.............................................14
Balance Sheet......................................F2
Income Statement...................................F3
Cash Flow Statement................................F6
ITEM 8.............................................33
PART III...........................................33
ITEM 9.............................................33
ITEM 10............................................33
ITEM 11............................................35
ITEM 12............................................36
ITEM 13............................................36


<PAGE>

                                     PART I

ITEM 1.   BUSINESS

THE CONCESSION BUSINESS

         The Company is primarily engaged in the business of acquiring and
operating food, beverage and other concessions at airports throughout the
United States. The Company currently has approximately 95 operating
concession facilities at 23 airports, 93 of which are Company owned and two
of which are franchised, including concessions at Los Angeles International
Airport, Denver International Airport, Portland International Airport, and
the airports in Orange County and Ontario, California; Madison and Appleton,
Wisconsin; Lexington, Kentucky; Asheville and Greensboro (Piedmont Triad),
North Carolina; Pittsburgh and Allentown, Pennsylvania; Roanoke, Virginia;
Columbia, South Carolina; Sioux Falls, South Dakota; Cedar Rapids and Des
Moines, Iowa; Baton rouge and Shreveport, Louisiana; Midland, Texas; Atlantic
City, New Jersey; Albany, New York; and Saginaw (MBS), Michigan. The airport
contracts include concessions that range from a concession to operate single
and multiple food and beverage outlets to a master concession to operate all
food and beverage, as well as news and gift and merchandise, locations at an
airport. The Company's airport concession business is complemented by
inflight catering contracts awarded to it by major airlines at certain
airports. The Company currently utilizes its existing facilities at airports
to provide fresh meals to airlines. In October 2000 the Company completed
acquisition of an airport concession company located in Pittsburgh,
Pennsylvania. The Company is currently seeking and evaluating additional
concession opportunities at several other airports in the United States and
acquisition of related companies.

         Concessions to operate food and beverage and other retail operations
at domestic airports are generally granted by an airport authority pursuant
to a request for proposal process. Proposals generally contain schematic
drawings for the concession layout, a commitment to make capital improvements
at the concession location, and sample menus. Rent is paid to the airport
authority on the basis of a percentage of sales, with a minimum amount of
rent guaranteed by the concessionaire. For airport locations with a history
of operations, the Company evaluates information concerning historical
revenues for the location to determine the amount to bid for both percentage
and minimum rent. For locations which are newly constructed, the Company
evaluates projections for the number of passengers expected to use the
airport and amounts to be spent per person at airport concessions to form
revenue projections. Given the requirement to make capital improvements, the
Company makes large capital outlays at the beginning of a concession term,
which it seeks to recover during the remaining term. Concessions are usually
awarded for a ten year term. Generally concessions are resubmitted for
proposals at the end of the term and the Company must resubmit a bid to
secure an additional ten year term.

         The Company has secured nearly all of its existing airport concessions
through the request for proposal process. The Company believes its success in
securing concessions through this process is attributable to tailoring its bids
to each specific airport's needs, offering a unique selection of quality food
and beverages, and a distinctive decor. In its proprietary menu items the
Company strives to provide foods which are healthy and higher quality than
typical fast food or cafeteria style products, while maintaining value pricing.
The Company's Bakery/Deli style restaurants feature a selection of croissant
sandwiches and a selection of vegetable, fruit and pasta salads. At locations
which are anticipated to have higher revenues, the Company's strategy is to
secure franchise relationships with nationally recognized food and beverage
companies as part of its proposals. The Company has entered into agreements with
several such companies, including Carl's Jr., Schlotsky's Deli, Nathan's Hotdogs
and TCBY Yogurt. Under these arrangements, the Company owns the concession
rights from the airport authority and the Company's employees operate the
location. The Company then pays franchise fees under a franchise agreement. The
Company's strategy is to continue to develop relationships with a number of
national and regional food and beverage companies, which it expects will provide
the Company with the flexibility to tailor product offerings to meet a
particular airport's desires.

         While the Company has seriously pursued the submission of proposals
only since 1989, it has been successful in a significant number of the proposals
it has submitted. Management attributes this success in winning airport
proposals principally to its efforts to customize each bid, striving to make
creative proposals that address local preferences and distinguish the Company
from its competitors in its offering of decor as well as food products. The
Company focuses on small to medium size airports and has found itself a niche
market. The following are examples of the Company's approaches to the concession
business:

         MASTER CONCESSION: The Company will generally seek to become the master
concessionaire for all airport services, including food and beverage, lounge and
bar, specialty retail, news and gifts, and other services at airports with at
least 400,000 enplanements per year. The Company currently serves as the master
concessionaire at the Cedar Rapids, Iowa airport.

         CAFE AND SPIRITS: If the opportunity for a master concession is not
available, then the Company submits bids utilizing specific food and beverage
concepts, or other service concepts depending on the nature of the concession.
One such concept is "Cafe and Spirits" which features


                                     Page 1
<PAGE>

various branded and nonbranded food and beverages, such as TCBY Yogurt and
Creative Croissants, along with a bar, lounge and mini library. The Company
currently operates Cafe and Spirts formats at all Creative Croissants locations
that serve liquor.

         CREATIVE CROISSANTS-Registered Trademark- BAKERY DELI: The Company can
implement its bakery/deli concept, Creative Croissants, either as a stand alone
concession or as part of a food court, depending on the preference of the
airport authority and the available concession category. The Company currently
operates Creative Croissants at every airport it currently services, with the
exception of the airport in Ontario, California.

         ATTAINING FRANCHISE RIGHTS: For larger concessions, where the airport
desires branded food products, the Company attempts to secure franchise rights
from nationally or regionally recognized food and beverage companies. The
Company has entered into Franchise Agreements with (i) TCBY Yogurt to operate
TCBY franchises at its Lexington, Roanoke, Columbia and Cedar Rapids concession
facilities; (ii) Carl's Jr./Green Burrito to operate franchises at its two
Ontario, California concession facilities which opened in October 1998; (iii)
ICBY to operate ICBY franchises at its Greensboro, Des Moines, Allentown,
Asheville and Sioux Falls concession facilities; (iv) Schlotsky's to operate a
Schlotsky's Deli at Pittsburgh; and (v) Nathan's Hot Dog to operate franchises
at various airports. The Company may in the future purchase and operate
franchises from other major food or beverage franchisors to include in its bid
proposals.

         ACQUISITION OF OTHER CONCESSIONAIRES: The Company has also sought to
expand its physical presence at airports by acquiring existing concessionaires
with one or more airport locations. Generally, the airport authority overseeing
the operations at the airport will have the right under the existing concession
agreement to approve the change in control. The strengths the Company
demonstrates in the request for proposal process are used to secure the consent
of an airport authority to a transfer of concession rights in an acquisition of
an existing location. The Company has typically negotiated for an extension of
the concession term in exchange for additional capital improvements or
additional facilities or menu items to be offered at the concession location as
part of securing the airport authority's consent to the transfer.

         In October 2000, the company completed the acquisition of Gladco
Enterprises, an airport concessions company from Pittsburgh, Pennsylvania with
annual revenues of approximately $10 million. The Company's strategy is to
expand its concession business to more airports in the United States, and
eventually to other public venues. The Company also intends to seek to expand
the types of concession services which it provides, and to be awarded more
multiple and master concession contracts such as the one it has been awarded for
the Cedar Rapids, Iowa airport. While the Company has historically focused on
the food and beverage segment, it intends to seek concession awards to provide
news stands, gift shops, specialty stores and other services to augment the
Company's food and beverage business at airports and other venues.

         Prior to the Company's initial public offering in July 1997, the
Company qualified as a Disadvantaged Business Enterprise ("DBE") based on Mr.
Ali's ownership of all of the Company's common stock. The Company's historical
success in securing concession locations may have been partially attributed to
its DBE status. The impact of the initial public offering on the Company's
status as a DBE and the impact of any such potential loss of DBE status on its
ability to secure new concession locations is unclear. To the extent that the
Company's historic rate of success in securing new airport concessions was
partially attributable to its status as a DBE, that growth rate may decline if
the Company is not recognized as a DBE or if DBE programs are eliminated or
curtailed.

         In analyzing a concession opportunity, particularly in the airport
industry, the Company evaluates the following factors, among others: (1) the
estimated rate of return on the investment in the facilities, (2) the historical
performance of the location, (3) the historical and estimated future number of
annual enplanements at the airport, (4) the competition in the vicinity of the
proposed facility, (5) the rent and common area maintenance charges for the
proposed facilities and (6) the length of the proposed concession term. In
customizing the design proposal and theme for a concession opportunity, the
Company analyzes the character of the community and the expected preferences of
the patrons (for example, whether they are primarily tourists or business
persons) to determine the most attractive facility. The scope of the contract
and the size and shape of the site are other elements considered in the
analysis.

         As part of any proposal or acquisition, the Company receives
information concerning any historical operations conducted at the specific
location. Generally, an airport authority will provide three years of historical
information for a location with its request for proposal. Similarly, in an
acquisition transaction, the Company will review a target operator's historical
performance as part of its due diligence review. In either scenario, the Company
then evaluates the estimated impact on revenues and gross margins that will
result from any remodeling, capital improvements and menu changes. Where the
concession location is to be newly constructed, such as at the Ontario,
California, airport, the Company reviews estimates of passenger enplanements for
the new terminals and amounts typically spent per passenger at concessions.


                                     Page 2
<PAGE>

         Once the Company has been awarded a concession contract at an airport,
it is generally scheduled to assume the management of the existing facilities
within 90 to 120 days after the award, or to commence construction of an
entirely new facility within three to six months after the award. The Company is
generally required to place three types of bonds with an airport authority
before it may take over operations at a concession. In connection with its bid,
it is occasionally required to post a bond for the amount of capital
improvements it is committed to make at the airport. During commencement of
construction for any specific construction project, the Company is required to
post a construction bond for the specific facilities to be constructed. This
bond terminates upon completion of each specific project and the bond for all of
the capital improvements expires upon completion of all capital improvements for
the airport. In addition, the Company is required to post a performance bond to
cover some specified percentage of the Company's minimum rent obligations. This
bond remains in place during the term of the concession. To date the Company has
not experienced significant difficulty in securing bonds for its obligations to
various airport authorities. The Company's bonding capacity is limited by its
size, and has therefore limited the projects on which it could bid. If the
Company continues to grow, it anticipates increasing its bonding capacity and
the ability to bid for larger projects at the largest domestic airports.

         Typically the Company operates an existing facility for two to three
months before beginning the remodeling of the site according to the
specifications in its airport bid proposal. During the remodeling phase of an
existing facility, which usually takes 45 to 60 days, the facility is either
closed or serves at minimal levels. Once the remodeling is completed, the
facility opens for full service, generally for most hours during which the
airport is actively operating.

ACQUISITION OF GLADCO ENTERPRISES, INC.

         On October 9, 2000, Creative Host Services, Inc. ("CHST") completed the
closing of the acquisition of Gladco Enterprises, Inc. ("Gladco"), a company
located in Pittsburgh, Pennsylvania that currently manages concessions in four
airports.

         CHST completed the acquisition of Gladco in accordance with the terms
of a Purchase Agreement (the "Purchase Agreement"). In accordance with the
Purchase Agreement, CHST acquired 100% of the stock of Gladco, HLG Acquisition
Corporation, a Pennsylvania corporation and an affiliate of Gladco, and HLG
Franchise Marketing Company, a Pennsylvania limited partnership and an affiliate
of Gladco, from Edwin L. Klett, Louis Coccoli, Jr., Herbert H. Gill and the
Virgil A. Gladieux Marital Trust (collectively, the "Sellers") in consideration
for an aggregate amount equal to $7,000,000 (subject to adjustments as set forth
in the Purchase Agreement), payable as follows: (i) $300,000 in cash which had
been prepaid as a deposit, (ii) the payment of all outstanding principal and
accrued interest of, or assumption of obligations and liabilities as set forth
in the Purchase Agreement which were not in excess of $2,500,000; (iii) the
issuance of shares (the "Shares") of CHST common stock equal to $500,000 divided
by the average of the closing prices of CHST Stock on the NASDAQ Small Cap
exchange for each of the thirty trading days ending two days prior to closing of
the transaction (this resulted in an average price of $7.18, which resulted in
69,638 shares issued); and (iv) approximately $3.7 million in cash. CHST agreed
to register the Shares on Form S-3. The total issued shares to the Sellers was
approximately 0.1% of the issued and outstanding stock of CHST immediately after
the acquisition.

         CHST agreed to permit the Sellers to elect, by written notice to CHST,
to require CHST to repurchase the shares when they are freely tradeable and
registered at a price equal to the per share issuance price times the number of
shares repurchased.

         CHST also agreed to increase the purchase price at any time up to one
year from closing by (i) $280,000 upon execution of a definitive lease,
sub-lease or other operating agreement with respect to each of the two retail
sites and commercial operations at the Newark, New Jersey International Airport;
(ii) $295,000 upon execution of a definitive lease, sub-lease or other operating
agreement with respect to each of the two retail sites and commercial operations
at the Harrisburg, Pennsylvania International Airport; and (iii) $120,000 upon
execution of a definitive lease, sub-lease or other operating agreement with
respect to each of the two retail sites and commercial operations at the
Rensselaer Railroad Station in Albany, New York.

         CHST agreed to employ Mr. Coccoli in an executive capacity and as
President of Gladco.


                                     Page 3
<PAGE>

         The consideration exchanged pursuant to the Acquisition Agreement was
negotiated between Gladco and CHST.

         In evaluating Gladco as a candidate for the acquisition, CHST used
criteria such as the value of the airport concession assets of Gladco, its
airport relationships, cash flows, potential growth and its history with the
various airport operations. Creative Host Services determined that the
consideration for the merger was reasonable.

         CHST obtained part of the funds for the acquisition of Gladco by the
sale of approximately $2,500,000 in 7% Convertible Debentures due September 26,
2003 (the "Debentures") to GCA Strategic Investment Fund Limited. The purchase
price of the Debentures was 95% of the principal amount, or $2,375,000. The
Debentures are convertible at the lower of 110% of the volume weighted average
sales price of CHST common stock on the day immediately preceding closing or 85%
of the five lowest volume weighted average sales prices of the CHST common stock
during the 25 days immediately preceding the date of a notice of conversion.
CHST also issued 125,000 warrants to purchase CHST common stock to GCA Strategic
Investment Fund at an exercise price of 102% of the closing bid price on the day
immediately preceding the Closing Date. The exercise price of the warrants is
$6.85 per share. CHST agreed to register the shares of common stock issuable
upon conversion of the Debentures and the shares issuable upon exercise of the
warrants on Form S-3. The agreements provide certain negative covenants
requiring compliance with terms by CHST and are adjustable upon certain events.

         As part of the financing by GCA Strategic Investment Fund, CHST
negotiated for and obtained the right to pay off the GCA investment through
alternative financings. CHST presently intends to seek to repay the GCA
investment no later than the end of October 2001. As of March 26, 2001, Global
Capital has converted approximately $300,000 of the debentures to CHST common
stock.

         CHST intends to continue the historical businesses and proposed
businesses of Gladco.

         Gladco Enterprises, Inc. ("Gladco") is a Pittsburgh-based hospitality
and service company with $10.5 million in annual revenues, that operates food
and beverage concessions in four international airports, including Pittsburgh
International; Atlantic City International; Albany International, in New York;
and M.B.S. International in Freeland, Michigan. The Company operates 22
individual concessions within those airports. Those concessions, combined with
CHST's current concessions, give the combined companies locations in a total of
25 airports nationally, and approximately 95 overall concessions within those
airports. The Gladco acquisition also improves each company's available
co-branding product mix.

         The Creative Host/Gladco business combination is both strategic and
synergistic, providing an experienced management team, heightened East Coast
presence, and creates an infrastructure that provides efficient management,
setting the stage for additional growth both internally and through acquisition.
With the Company's ability to raise equity, combined with years of experience of
Mr. Coccoli and Mr. Ali, it may open the doors for further opportunities.

         Upon completion of the acquisition, Gladco became a wholly-owned
subsidiary of CHST, with no noticeable change to any of Gladco's storefronts,
method of operation or Gladco's current management team, led by 30-year industry
veteran, Louis Coccoli, Jr., who will remain President of Gladco. Through the
acquisition, CHST quickly enhanced its presence on the East Coast through
representation by Gladco's corporate office in Pittsburgh.

         Gladco currently manages concessions in four airports. The Company has
also signed a letter of intent for two store locations in the Newark, New Jersey
International Airport, with projected annual sales of more than $3.7 million. In
addition to its own signature facilities, Gladco operates several national
brands, including Schlotzky's Deli, Hot Licks Bar & Grill and Samuel Adams Brew
Pub, and has an exclusive agreement with Yuengling Brewery, the oldest brewery
in the United States.

         The combined companies are expected to realize the benefits of having
East Coast and West Coast offices, providing geographically appealing
management, operations consolidation, additional industry contacts and clout,
and creativity enhancements from combined co-branding and airport concessions
experience. As a company, Gladco has focused its bids to include bar and lounge
services that return higher margins than typical food service concessions, which
compliments CHST's existing operations.

         Creative Host Services, Inc./ Gladco Enterprises, Inc. are engaged in
the business of acquiring, managing and operating airport concessions such as
food and beverage, news and gift, and other concessions throughout the United
States. In addition, the Company also provides in-flight catering to certain
national airlines at 9 of its airport locations and also manages Airline Clubs.
Six of the Company's 95 operating concessions are food-courts, each consisting
of several food and beverage restaurants that are located within each court. If
the various food courts were separated and counted as individual concessions,
Creative Host/Gladco operate approximately 95 concessions overall. To simplify
accounting, the Company counts these food-courts as one concession. Creative
Host Services, Inc. enjoys co-branding relationships with several


                                     Page 4
<PAGE>

national and regional companies such as Carl's Jr., Schlotzky's Deli, TCBY
Yogurt, Samuel Adams Brew Pubs, Mrs. Fields Cookies, Pretzelmaker, Nathan's
Famous Hotdogs, and Hot Licks Bar & Grill.

CONCESSION LOCATIONS

         WITH THE EXCEPTION OF HISTORICAL MATTERS, THE MATTERS DISCUSSED HEREIN
ARE FORWARD LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. FORWARD
LOOKING STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO, STATEMENTS CONCERNING
ANTICIPATED TRENDS IN REVENUES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THE RESULTS DISCUSSED IN SUCH FORWARD LOOKING STATEMENTS. THERE
IS ABSOLUTELY NO ASSURANCE THAT THE COMPANY WILL ACHIEVE THE RESULTS EXPRESSED
OR IMPLIED IN FORWARD LOOKING STATEMENTS.

         The following table identifies the Company's existing airport
concessions and those which have been awarded and are expected to be in
operation in 2001, including the facilities acquired when The company purchased
Gladco Enterprises, Inc. in October 2000:


                    EXISTING AND AWARDED CONCESSION LOCATIONS
                          Year Ended December 31, 2000

<TABLE>
<CAPTION>
<BTB>
<S>    <C>                       <C>                 <C>            <C>             <C>            <C>

                                                                   Dated of
                                                      Date        Completion
   Name/Location of          Description of        Commenced      or Expected   Expiration Date
      Concession               Concession          Operations     Completion      of Contract        2000
                                                                 of Remodeling                      Revenue

Charleston, SC (1)       Food and Beverage       July 2000       January 2001   January 2011      $990,330


Baton Rouge (1)          Food and Beverage       July 1999       July 2000      July 2010         $855,965


Shreveport, Louisiana    Food and Beverage       May 1999        February       November 2009     $549,321
(1)                                                              1996 & May
                                                                 1999

Midland, Texas (1)       Food and Beverage       January 1999    January 1999   September 2007    $930,304


Ontario, California      Food and Beverage       September 1998  September      July 2008         $1,647,970
                                                                 1998


John F. Kennedy          Food and Beverage                       July 1999      May 2008 (2)      Franchise
International (2)


Greensborough            Food and Beverage       December 1997   November 1998  May 2008          $2,487,801
(Piedmont Triad) North
Carolina (1)


Asheville, North         Food and Beverage;      November 1997   November 1998  November 2007     $534,316
Carolina (1)             News & Gift


Sioux Falls, South       Food and; Inflight      August 1997     March 1999     August 2007       $762,790
Dakota (1)               Catering


Des Moines, Iowa(3)      Food and Beverage       July 1997       November 1998  July 2007(3)      $1,489,118


Cedar Rapids, Iowa(1)    Master Concession;      November 1996   October 1997   March 2004(5)     $1,598,950
                         Food and; News &
                         Gifts; Specialty
                         Stores; Inflight
                         Catering


Columbia, South          Food and; Inflight      October 1996    October 1997   October 2006 (4)
Carolina (1)             Catering                                                                 $1,483,167


Allentown, Pennsylvania  Food and Beverage;      July 1996       January 1998                     $1,450,322
                         Inflight Catering                                      July 2006


Lexington, Kentucky(1)   Food and Beverage;      July 1996       February 1997  July 2006
                         Inflight Catering                                                        $763,085


Roanoke, Virginia(1)     Food and Beverage;      June 1996       January 1997   June 2006         $673,696
                         Inflight Catering


Freeland (MBS),          Food and Beverage       May 1996        May 1996       May 2006          $268,555
Michigan (6)


Appleton, Wisconsin(1)   Food and Beverage       January 1996    January 1996   July 2005         $349,238


Madison, Wisconsin (1)   Food and Beverage       January 1996    July 1996      January 2006      $951,157


Portland                 Food and Beverage       October 1995    October 1995   June 2005         $834,981
International(1)


Los Angeles              Food and Beverage       June 1995       September      June 2005(6)      $1,184,933
International(5)                                                 1995
</TABLE>

                                     Page 5
<PAGE>
<TABLE>
<CAPTION>
<BTB>
<S>    <C>                       <C>                 <C>            <C>             <C>            <C>


                                                                   Dated of
                                                      Date        Completion
   Name/Location of          Description of        Commenced      or Expected   Expiration Date
      Concession               Concession          Operations     Completion      of Contract        2000
                                                                 of Remodeling                      Revenue

Denver International     Food and Beverage       February 1995   Two            June 2003 and     $1,173,113
                                                                 completed      November 2006
                                                                 February
                                                                 1995; one
                                                                 completed
                                                                 December 1997


Albany, New York (6)     Food and Beverage       February 1995   February 1995  February 2008     $345,438


Atlantic City, New       Food and Beverage       June 1994       June 1994      June 2011         $269,300
Jersey (6)


Pittsburgh,              Food and Beverage       October 1992    October 1992   October 2006      $1,678,445
Pennsylvania (6)


Orange County            Food and Beverage       September 1990  Completed      February 2001(5)  Franchise
</TABLE>

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

(1)      The Company is currently the sole food and beverage concessionaire at
         this airport.

(2)      Delta Airlines, the owner of the airport terminal, has reserved the
         right under its concession agreement with the Company to recapture the
         premises upon 30 days notice and payment for the Company's
         improvements.

(3)      The airport retains the right under the concession to recapture the
         premises upon payment for the Company's improvements.

(4)      After the initial year of the term, the airport authority has the right
         to terminate the concession upon payment to the Company of its
         "remaining business interest" in the concession.

(5)      After June 2001, this concession can be terminated by the airport upon
         90 days notice.

(6)      This concession was acquired by The Company when it purchased Gladco
         Enterprises, Inc.


FOOD PREPARATION CENTER

         The Company has contracted an outside firm to manufacture its bakery
products. Using the Company's proprietary recipes, several bakery items are
prepared at a central location and sold at the Creative Host concessions and at
franchise restaurants, including regular croissants, croissants filled with
meat, cheeses and vegetables, pastries, muffins and other bakery foods. The
bakery foods are prepared, frozen in dough form and shipped to concessions and
franchisees where they are baked and served on a daily basis.

         The Company has entered into an agreement with Sysco Food Services
Corporation ("Sysco") All of the purchasing for the concession locations, except
for certain perishable items such as dairy and produce, is done through Sysco
with the goal of achieving uniform cost of goods and centralized cost controls.

FRANCHISE OPERATIONS

         From 1986 through 1994, the Company was actively engaged in the
business of franchising restaurants under the "Creative Croissant" name. The
Company's restaurant franchise business was not successful, and, in 1990, the
Company began the transition to company-owned airport concessions that is the
major focus of its current business plan. See "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS." The Company
continues to have franchise relationships with 4 restaurant franchisees,
excluding the JFK and Orange County airport concessions which are operated by a
franchisee.

         The Company expects its revenues from franchising (approximately
0.2% of total revenues for the twelve month period ended December 31, 2000)
to remain unchanged or decline over time as the Company concentrates on
expanding its concession business and establishing more Company owned
facilities at airports and other public venues. If the Company is able to
establish a greater national brand name presence, through its airport and
other concession business, then it may devote some resources to the
development of the franchising segment of its business. In the meantime, it
may continue to sell franchises in special situations when a franchise would
be more advantageous to the Company than a Company owned facility, when
financing is not otherwise available, or generally in situations that do not
involve concession contracts.

                                     Page 6
<PAGE>

MARKETING AND SALES

         The Company's marketing strategy involves two fundamental components:
(i) securing the concession and (ii) increasing sales once the concession has
been granted. The Company plans to continue to concentrate its marketing and
sales efforts on acquiring high volume concessions at airports and evaluating
other public venues with high, captive pedestrian traffic such as sports
stadiums, public libraries, zoos and theme parks throughout the United States.
For the near future, the Company intends to focus on the approximately 123
airports in the United States with over 400,000 enplanements per year. In those
smaller regional airports, the Company, whenever possible, will seek to be the
master concessionaire for all concession operations conducted at such airports.

         The Company targets the airport concession business through its
presence at airport authority association meetings and trade shows, its
network of existing relationships in the airport business community, and its
submission of bids in response to requests for proposals ("RFPs") by
airports. By continually monitoring the availability of RFPs at airports
throughout the nation, the Company seeks to be involved in every RFP that is
economically feasible. In bidding for concessions, the Company focuses on
those airports with locations indicating that the concession will earn annual
gross revenues of $500,000 to $2,000,000. Once a concession has been
targeted, the Company develops a customized bid tailored to address a theme
or culture specific to the concession location. Management is currently
working with airport managers to design unique and exciting food court areas
with a variety of food choices, comfortable seating and self-serve options
without the inconveniences of traditional restaurants. The Company's
proposals for airports include children's play areas, reading areas,
mini-libraries and computer services.

         The Company has developed several marketing techniques for its
Creative Host concession locations to encourage sales and to provide
additional sources of revenues. To compete within an airport, the Creative
Host approach is to combine aroma and showmanship with high quality fresh and
nutritious foods at value prices to attract customers. The Company's food and
beverage facilities have traditionally been designed with a European flair
for fresh, healthy and nutritious gourmet and specialty foods, served quickly
and at value prices. The company is diversifying into agreements with renowned
food and beverage suppliers such as Carls Jr., Schlotzky's and TCBY Yogurt.
The food and beverage concessions sell gourmet coffee beans as gift packages,
colorful sports bottles and thermal coffee mugs featuring the "Creative
Croissants-Registered Trademark-" logo and key menu items, custom gift
baskets and other promotional merchandise.

DISTRIBUTION

       The Company relies on Sysco Corporation as its primary distributor
for foodservice products to its customer locations.  The Company's agreement
with Sysco provides for customer service, delivery service and information
services to be provided by Sysco.  The Companies annual purchase volume
from Sysco is approximately $7,000,000.

COMPETITION

         The concession industry is extremely competitive and there are numerous
competitors with greater resources and more experience than the Company. The
dominant competitors in the airport concession market are Host Marriott Services
Corporation ("Host Marriott") and CA One Services, Inc. ("CA One Services"),
which have been serving the airport concession market for decades. Host Marriott
and CA One Services have established a marketing strategy of offering
comprehensive concession services to airport authorities in which they submit a
bid on an entire airport or terminal complex, and often provide a well known
franchise such as McDonalds or Burger King as part of their package. They
generally operate large airport master concessions with annual sales in excess
of $2.2 million.

         Other formidable competitors in the concession business, especially
food and beverage, include Service America Corporation, Anton Food, Concession
International, Air Host, Inc. Other competitors such as Paradies and W.H. Smith
compete with the Company in the airport retail concession services market. Dobbs
International and Sky Chefs, LSG dominate the inflight catering business.

         The Company is focusing initially on smaller airport concessions where
competition from large competitors is less intense. However, there are a limited
number of concession opportunities domestically. If the Company achieves greater
penetration in regional airports, it will be required to enter into larger
domestic airports, or other venues to sustain its growth. Entry into larger
domestic airports will necessarily involve direct competition with Host Marriott
and CA One Services.

         The Company strives to differentiate itself in all markets with the
design and product mix it offers to each particular airport. The Company designs
its concession bids and facilities around unique themes or concepts that it
develops for each location. In this manner, the Company seeks to appeal to
airport authorities that are seeking individual bidders with interesting and
creative food concepts, both to boost the airport's income from percentage rents
and to enhance the look and reputation of the airport and the cities it serves.
The Company also offers a variety of food concepts with an emphasis on fresh
foods and high quality, while maintaining a value-oriented prices.


                                     Page 7
<PAGE>

GOVERNMENT REGULATION

         The airport concession business is subject to the review and approval
of government or quasi government agencies with respect to awarding concession
contracts. In addition, food and beverage concessions are subject to the same
rigorous health, safety and labor regulations that apply to all restaurants and
food manufacturing facilities. Concession businesses are also subject to labor
and safety regulations at the local, state and federal level. Concessions
granted by airport authorities and other public agencies may also be subject to
the special rules and regulations of that agency, including rules relating to
architecture, design, signage, operating hours, staffing and other matters.
Failure to comply with any of these regulations could result in fines or the
loss of a concession agreement.

         The Federal Aviation Administration requires airports receiving federal
funds to award contracts for concession facilities producing at least 10% of
total airport concession revenue to certain designated categories of entities
that qualify as Disadvantaged Business Enterprises ("DBE"). The federal
requirements do not specify the nature or manner in which the DBE must
participate. Historically, companies in the industry have relied on hiring DBE
employees, purchasing provisions from DBE suppliers, contracting for services
from DBEs or subcontracting a portion of the concession to a DBE in order to
meet this requirement. When the Company entered the airport concession business,
its Common Stock was owned entirely by Mr. Sayed Ali. As a result, the Company
qualified as a DBE. The Company's status as a DBE assisted it in securing
concession awards with several airports, and some of the Company's concession
agreements specify that it will retain its DBE status. As a result of the
Company's initial public offering, Mr. Ali's ownership in the Company decreased
to approximately 30%. It is unclear what impact this will have on the Company's
status as a DBE. The Company has succeeded in securing airport concession
contracts at 8 additional locations since its initial public offering, although
the Company is not aware of the extent to which the Company's DBE status, or
lack thereof, was a factor in the airport authorities' decisions to award such
contracts to the Company. The Company will have to address the issue on an
airport by airport basis. If necessary, the Company will comply with a
particular airport's request for additional DBE participation through the
industry practice of hiring or contracting with other DBEs. The Company believes
that it will retain its existing locations and can continue to secure new
concessions on the basis of the products and services it offers and its industry
reputation. To the extent the Company's historic rate of success in securing
airport concessions is attributable to its clear status as a DBE, its growth
rate may decline.

         The restaurant industry and food manufacturing businesses are highly
regulated by federal, state and local governmental agencies. Restaurants must
comply with health and sanitation regulations, and are periodically inspected
for compliance. Labor laws apply to the employment of restaurant workers,
including such matters as minimum wage requirements, overtime and working
conditions. The Americans With Disabilities Act applies to the Company's
facilities prohibiting discrimination on the basis of disability with respect to
accommodations and employment. Food preparation facilities must comply with the
regulations of the United States Department of Agriculture, as well as state and
local health standards.

         Franchising is regulated by the Federal Trade Commission and by certain
state agencies, including the California Department of Corporations. In
addition, the California Franchising Law contains specific restrictions and
limitations on the relationship between franchisors and franchisees. Franchisors
such as the Company must file an annual Franchise Offering Circular with the
Federal Trade Commission and certain states (many states do not regulate the
offer and sale of franchises) every year.

EMPLOYEES

         The Company has over 750 employees, including 22 in administration. The
employees include approximately 250 who were employed by Gladco Enterprises,
Inc. when the Company acquired Gladco in October 2000. As the Company expands
and opens more concessions, the Company anticipates hiring additional personnel
including administrative personnel commensurate with growth. The Company does
not have a collective bargaining agreement with its employees and is not aware
of any material labor disputes.

SEASONALITY

         The Company's concession operations are expected to experience moderate
seasonality during the course of each year, corresponding with traditional air
travel patterns which generally increase from the first quarter through the
fourth quarter.

TRADEMARKS

         The Company has one registered trademark with the United States Patent
and Trademark Office on the Principal Register, registered as "Creative
Croissants-Registered Trademark-." In addition, the Company is in the process of
filing trademark applications to register the names "Creative Host Services,
Inc." and as its business develops, the Company plans to continue to


                                     Page 8
<PAGE>

develop merchandising of trademark products, such as clothing, drinking bottles,
mugs and other similar products, utilizing its service marks and trademarks in
order to generate additional revenues. The Company's policy is to pursue
registrations of its marks wherever possible. The Company is not aware of any
infringing uses that could materially affect its business or any prior claim to
the trademarks that would prevent the Company from using such trademarks in its
business.

ITEM 2.   PROPERTIES

         The Company's executive offices are located in a 8,334 square foot
facility at 6335 Ferris Square, Suites G-H, San Diego, California. The combined
facility is covered by a five-year lease terminating April 15, 2002 with monthly
payments of $5,674 plus common area maintenance charges. The Company has one
option to extend the term for an additional five-year period.

         The Company also leases space as part of its airports concession
operations. In addition, the Company occasionally leases restaurant space which
it assigns to operators in connection with franchise operations.

ITEM 3.   LEGAL PROCEEDINGS

         There were no material legal proceedings to which the Company or any of
its subsidiaries was a party in the fiscal year ended December 31, 2000, other
than its dispute with Cap Ex, L.P., an investment firm that provided financing
to the Company in December 1998. The Company repaid the financing in its
entirety in March 2000. Nevertheless Cap Ex, L.P. claimed that it was owed
additional warrants to purchase the Company's Common Stock. In January 2001,
the Company settled the litigation with Cap Ex, L.P.

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

         There were no matters submitted to a vote of security holders during
the fourth quarter of Fiscal 2000.


                                     PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
          STOCKHOLDER MATTERS

         The Company's Common Stock trades on the NASDAQ Market under the symbol
CHST. The Company completed its initial public offering on July 22, 1997 and its
stock began trading on the Exchange at that time. The number of recordholders of
the Common Stock was 97 on March 26, 2001. The Company believes that there are a
significant number of beneficial owners of its Common Stock whose shares are
held in "street name." The closing sales price of the Common Stock on March 26,
2001 was $1 7/16 per share. The following chart sets forth, for the fiscal
period indicated, the high and low closing sales prices for the Company's Common
Stock.

<TABLE>
<CAPTION>
<BTB>
<S>              <C>                                                    <C>              <C>

                                                                       LOW              HIGH
                                                                       ---              ----

             Fiscal 1997
                  July 22, 1997 to September 30, 1997                  3 13/16          4 7/16
                  Fourth Quarter                                       1 7/8            4 3/16

             Fiscal 1998
                  First Quarter                                        2 1/32           2 3/4
                  Second Quarter                                       1 3/4            3
                  Third Quarter                                        1 3/8            2 3/16
                  Fourth Quarter                                       13/16            2

             Fiscal 1999
                  First Quarter                                        1 1/4            1 7/8
                  Second Quarter                                       1                1 7/16
                  Third Quarter                                        1 1/8            1 5/8
                  Fourth Quarter                                       7/8              6 1/4

           Fiscal 2000
                  First Quarter                                        5 1/2            14
                  Second Quarter                                       10               29
                  Third Quarter                                        4 3/32           12 1/2
                  Fourth Quarter                                       1 7/16           8 13/16

</TABLE>

                                     Page 9
<PAGE>


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

         WITH THE EXCEPTION OF HISTORICAL MATTERS, THE MATTERS DISCUSSED IN THIS
COMMENTARY ARE FORWARD LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES.
FORWARD LOOKING STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO, STATEMENTS
CONCERNING ANTICIPATED TRENDS IN REVENUES, THE FUTURE MIX OF COMPANY REVENUES,
THE ABILITY OF THE COMPANY TO REDUCE CERTAIN OPERATING EXPENSES AS A PERCENTAGE
OF TOTAL REVENUES, THE ABILITY OF THE COMPANY TO REDUCE GENERAL AND
ADMINISTRATIVE EXPENSES AS A PERCENTAGE OF TOTAL SALES, AND THE POTENTIAL
INCREASE IN NET INCOME AND CASH FLOW. THE COMPANY'S ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THE RESULTS DISCUSSED IN SUCH FORWARD LOOKING STATEMENTS.
FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE THE INABILITY
TO OBTAIN THE SUBSTANTIAL ADDITIONAL CAPITAL NECESSARY TO COMPLETE CONSTRUCTION
OF CAPITAL IMPROVEMENTS AWARDED UNDER EXISTING CONCESSION AGREEMENTS, POSSIBLE
EARLY TERMINATION OF EXISTING CONCESSION CONTRACTS, POSSIBLE DELAY IN THE
COMMENCEMENT OF CONCESSION OPERATIONS AT NEWLY AWARDED CONCESSION FACILITIES,
THE NEED AND ABILITY TO ATTRACT AND RETAIN QUALIFIED MANAGEMENT TO MANAGE
OPERATIONS, THE NEED TO OBTAIN CONTINUING APPROVALS FROM GOVERNMENT REGULATORY
AUTHORITIES, THE TERM AND CONDITIONS OF ANY POTENTIAL MERGER OR ACQUISITION OF
EXISTING AIRPORT CONCESSION OPERATIONS, AND THE PRIOR AND POTENTIAL VOLATILITY
OF THE COMPANY'S STOCK PRICE, OPERATING RESULTS AND FINANCIAL CONDITION.

OVERVIEW

         The Company commenced business in 1987 as an owner, operator and
franchisor of French style cafes featuring hot meal croissants, fresh roasted
gourmet coffee, fresh salads and pastas, fruit filled pastries, muffins and
other bakery products. The Company currently has 4 restaurant franchises which
operate independently from its airport concession business. The restaurant
franchise business has never been profitable for the Company. The company has
not sold a new franchise since 1994.

         In 1990, the Company entered the airport food and beverage
concession market when it was awarded a concession to operate a food and
beverage location for John Wayne Airport in Orange County, California, which
is currently operated by a franchisee. In 1994, the Company was awarded its
first multiple concession contract for the Denver International Airport,
where it was awarded a second concession in 1994 and two subsequent
concessions in 1995. The success of the franchisees operating the Orange
County and Denver International Airport concessions prompted the Company to
enter into the airport concession business. Since 1994, the Company has
opened 95 concession locations at 24 airports. In 1996, the Company was
awarded its first master concession contract for the airport in Cedar Rapids,
Iowa, where it has the right to install and manage all food, beverage, news,
gift and other services.

         As a result of this transition in its business, the Company's
historical revenues have been derived from three principal sources: airport
concession revenues, restaurant franchise royalties and wholesale sales from
its food preparation center. These revenue categories comprise a fluctuating
percentage of total revenues from year to year. Over the past six years,
revenues from concession operations have grown from 59% of total revenues in
1995 to 99% of total revenues in 2000.

         The Company had working capital for the fiscal year ended December
31, 2000 of $(613,753) compared to $(1,343,912) for the fiscal year ended
December 31, 1999. Capital improvement costs incurred to meet the
requirements of new airport concession contracts and the acquisition of
Gladco have placed demands on the Company's working capital. During the
fiscal year ending December 31, 2000, the Company raised $6,325,332 in
capital through the sale of its Common Stock in private placements made
during the year and the exercise of stock options and stock purchase
warrants, and borrowed an additional $2,000,000 through the issuance of 7%
Convertible Debentures. A substantial percentage of the 462,000 outstanding
warrants issued during the Company's initial public offering were exercised
at $5.40 per share, resulting in additional capital of $2,313,900. On the
other hand, the Company utilized $6,500,000 of capital to pay for the
purchase of Gladco Enterprises, Inc. in October 2000.

         The Company may have capital requirements in 2001 to finance the
construction of new airport concessions, restaurants and other concession
related businesses such as news & gifts, specialty, inflight catering and other
services. In this regard, the Company will have additional capital requirements
to the extent that it wins additional contracts from its current and future
airport concession bids.


                                    Page 10
<PAGE>

RESULTS OF OPERATIONS

         The following table sets forth for the period indicated selected items
of the Company's statement of operations as a percentage of its total revenues.

<TABLE>
<CAPTION>
<BTB>
<S>            <C>                                             <C>             <C>               <C>

                                                                FISCAL YEAR ENDED DECEMBER 31,
                                                                ------------------------------
                                                              1998              1999             2000
                                                              ----              ----             ----

Revenues:
         Concessions                                          95%               98%              99%
         Food Preparation Center Sales                        4                 1                1
         Franchise Royalties                                  1                 1                0
                                                              ---               ---              ---
         Total Revenues                                       100%              100%             100%

         Cost of Goods Sold                                   30                32               31
                                                              ---               ---              ---
         Gross Profit                                         70                68               69

Operating Costs and Expenses:
         Payroll and Employee Benefits                        34                33               32
         Occupancy                                            19                21               21
         General and Administrative                           12                12               12
         Interest Expense                                     1                 5                4
         Provision for Income Taxes                           0                 0                0
         Other (Income) Loss                                  0                 0                0
                                                              ---               ---              ---
         Net Income (Loss)                                    4%                (3)%             0
                                                              ---               ---              ---
                                                              ---               ---              ---
</TABLE>


         FISCAL YEAR ENDED DECEMBER 31, 2000 COMPARED TO FISCAL YEAR ENDED
DECEMBER 31, 1999

         REVENUES. The Company's gross revenues for the fiscal year ended
December 31, 2000 were $23,725,859 compared to $18,176,951, for the fiscal year
ended December 31, 1999. Revenues from concession activities increased
$5,588,594 ($23,506,452 compared to $17,917,858) and food preparation center
sales decreased $17,220 (from $188,683 to $171,463) while franchise royalties
declined $22,466 (from $70,410 to $47,944), for the fiscal year ended December
31, 2000 as compared to the fiscal year ended December 31, 1999. Substantially
all of the increase in concession activities is attributable to same stores
revenue increases and the acquisition of the Gladco locations.

         COST OF GOODS SOLD. The cost of goods sold for the fiscal year ended
December 31, 2000 was $7,368,000 compared to $5,764,769 for the fiscal year
ended December 31, 1999. As a percentage of total revenues, the cost of goods
sold was 31% in 2000 and 32% in 1999. The improvement in cost of goods sold as a
percentage of revenue is due to efficiencies at existing locations and the
consolidation of purchasing with Sysco.

         OPERATING COSTS AND EXPENSES. Operating costs and expenses for the
fiscal year ended December 31, 2000 were $15,528,001, compared to $12,002,547
for the fiscal year ended December 31, 1999. Payroll expenses increased from
$5,913,200 in 1999 to $7,575,967 in 2000. As a percentage of total revenues,
payroll expense was 33% in 1999 and decreased to 32% in 2000. The Company
expects payroll expenses to increase in total dollar amounts with the
addition of new concession facilities, but to decrease modestly as a
percentage of revenues if existing facilities operate more efficiently and
the Company reaps the benefits of recently implemented cost control
measures. The cost control measures implemented include:  improving the budget
process; implementing a standardized training program; and, improving the
efficiency of the management structure at the individual airport locations.
Occupancy expenses increased from $3,889,437 in 1999 to $4,898,596 in 2000.
As a percentage of total revenue, occupancy expense remained the same at 21%.
General and administrative expenses increased from $2,199,910 in 1999 to
$3,053,438 in 2000, and remained the same as a percentage of total revenues at
12% for 1999 and 2000. The increase was attributable primarily to increases in
administrative staff. The Company will continue to add additional administrative
staff commensurate with its growth but expects general and administrative
expenses to decline as a percentage of total revenues.

         INTEREST EXPENSE. Interest expense for the fiscal year ended
December 31, 1999 was $977,612 compared to $882,906 for the fiscal year ended
December 31, 2000. As a percentage of total revenues, interest expense was 5%
in 1999 and decreased to 4% in 2000 due to the retirement of the Cap Ex debt
in the last quarter of 1999 and first quarter of 2000. $352,941 of the
interest expenses for the fiscal year ended December 31, 2000 was a one-time
charge due to the beneficial conversion feature of the Global Capital note.
Without this one-time charge, interest expense as a percentage of total
revenue was 2% in 2000.

         NET INCOME (LOSS). Net loss for the fiscal year ended December 31,
2000 was $(68,328) compared to a net loss of $(579,758) for the fiscal year
ended December 31, 1999. Net income for the fiscal year ended December 31,
2000 was $284,613 beore the one-time non-cash charge due to the valuation of
the Global Capital Note. Management attributes the decrease in net loss to
increased efficiencies at existing stores and the acquisition of Gladco.

                                    Page 11
<PAGE>

         SAME STORE SALES. The Company operated locations at sixteen airports
during both the full fiscal years ended December 31, 1999 and December 31, 2000.
Sales for those locations were $17,029,060 for the fiscal year ended December
31, 1999 and $18,314,941 for the fiscal year ended December 31, 2000,
representing an increase of $1,285,881, or 7.6%.

        NEW ACCOUNTING PRONOUNCEMENTS.  In  June 2001, the Financial Accounting
Standards Board (FASB) issued SFAS No. 141, "Business Combinations", and SFAS
No. 142 "Goodwill and Other Intangible Assets".  SFAS No. 141 is effective for
all business combinations initiated after June 30, 2001.  SFAS No. 142 is
effective for fiscal years beginning after December 15, 2001.  SFAS No. 141
requires that the purchase method be used for all business combinations.
SFAS No. 142 addresses how intangible assets that are acquired individually or
with a group of other assets should be accounted for in financial statements
upon their acquisition.  SFAS No. 142 also addresses how goodwill and other
intangible assets should be accounted for after they have been initially
recognized in the financial statements.  The Company has not determined the
affect of SFAS No. 141 and SFAS No. 142 on future financial statements.


         FISCAL YEAR ENDED DECEMBER 31, 1999 COMPARED TO FISCAL YEAR ENDED
DECEMBER 31, 1998

         REVENUES. The Company's gross revenues for the fiscal year ended
December 31, 1999 were $18,176,951 compared to $14,720,350, for the fiscal year
ended December 31, 1998. Revenues from concession activities increased
$3,931,842 ($17,917,858 compared to $13,986,016) and food preparation center
sales decreased $488,117 ($188,683 compared to 676,800) while franchise
royalties increased $12,876 ($70,410 compared to $57,534). Substantially all of
the increase in concession activities is attributable to full year operations
for the concession locations opened during fiscal 1998 and partial year
operations for an additional three concession locations which opened during
fiscal 1999.

         COST OF GOODS SOLD. The cost of goods sold for the fiscal year ending
December 31, 1999 was $5,764,769 compared to $4,446,203 for the fiscal year
ending December 31, 1998. As a percentage of total revenues, the cost of goods
sold was 32% in 1999 and 30% 1998. Costs of goods sold is typically high for a
newly opened concession facility as the Company gathers information concerning
requirements for the specific location. Since the product is perishable,
adjustments to production level effects both sales and costs of sales. As the
Company improves accuracy of production and reduces the waste problem created by
training, cost of sales will improve. As a result, the Company expects costs of
goods sold to decline slightly as a percentage of sales as newly added stores
obtain operating data.

         OPERATING COSTS AND EXPENSES. Operating costs and expenses for the
fiscal year ended December 31, 1999 were $12,002,547 compared to $9,692,476
for the fiscal year ended December 31, 1998. Payroll expenses increased from
$5,054,800 in 1998 to $5,913,200 in 1999. As a percentage of total revenues,
payroll expense was 34% in 1998 and decreased to 33% in 1999. The Company
expects payroll expenses to increase in total dollar amounts with the
addition of new concession facilities, but to decrease modestly as a percent
of revenues as newly opened facilities operate more efficiently and the
Company reaps the benefits of recently implemented cost control measures.
The cost control measures implemented include:  improving the budgeting process;
implementing a standardized training program; and, improving the efficiency of
the management structure at the airport locations.  Occupancy expenses increased
from $2,811,508 in 1998 to $3,889,437 in 1999.  As a percentage of total
revenues, occupancy expense increased from 19% in 1998 to 21% in 1999.
General and administrative expenses increased from $1,826,168 in 1998 to
$2,199,910 in 1999, and remained the same as a percentage of total revenues
at 12%. The Company will continue to add additional administrative staff
commensurate with its growth but expected general and administrative expenses
to continue to decline as a percentage of total revenues.

         INTEREST EXPENSE. Interest expense for the fiscal year ended December
31, 1998 was $84,839 compared to $977,612 for the fiscal year ended December 31,
1999. As a percentage of total revenues, interest expense was 1% in 1998 and
increased to 5% in 1999 due to interest related to concession improvements.  The
increase in interest expense from 1998 to 1999 was due to the $3,000,000 12%
Convertible Promissory Notes sold by the Company in December 1998.  $1,495,000
of the notes were converted into common stock during 1999.  The increase in
interest expense from 1998 to 1999 was also due to approximately $2,570,000 in
leases obtained by the Company during the first quarter of 1999.

         NET INCOME (LOSS). Net loss for the fiscal year ended December 31,
1999 was $(579,758) compared to net income of $480,532 for the fiscal year
ended December 31, 1998. Operating income decreased in 1999 to $409,635
compared to $581,671 in 1998. Management attributes the decrease in net
income mainly due to the increase in interest expense.

         SAME STORE SALES. The Company operated thirteen locations during both
the full fiscal years ended December 31, 1998 and December 31, 1999. Sales for
those locations were $12,151,747 for the fiscal year ended December 31, 1998 and
$13,484,790 for the fiscal year ended December 31, 1999, representing an
increase of $1,333,042, or 9.9%.

LIQUIDITY AND CAPITAL RESOURCES

         During the fiscal year ending December 31, 2000 the Company raised a
total of $8,437,430 of equity capital through the issuance of a total of
2,144,266 shares of the Company's common stock in private placements of its
securities and the exercise of stock options and stock purchase warrants. The
Company also borrowed a total of $2,000,000 through the issuance of 7%
Convertible Debentures Due September 26, 2003 to a single institutional
investor. The purchase price of the Debentures was 95% of the principal
amount, or $1,900,000. The Debentures are convertible at the lower of 110%
of the volume weighted average sales price of the Company's common stock on
the day immediately preceding closing or 85% of the five lowest volume
weighted average sales prices of the Company's common stock during the 25
days immediately preceding the date of a notice of conversion. The Company
has registered a total of 150% of the number of shares into which it
estimates the Debentures would be converted if they were converted at the
current market price. The Company also issued to the lender 125,000 warrants
to purchase the Company's common stock at an exercise price of 102% of the
closing bid price on the day immediately preceding the closing date. The
exercise price of those warrants is $6.86 per share. The Company utilized
$6,500,000 of equity capital to pay the purchase price for Gladco
Enterprises, Inc. and $2,198,128 to repay the balance of the $3,000,000
original principal amount payable on the Company's 12% Convertible Debentures
due. Accordingly, as of December 31, 2000,

                                    Page 12
<PAGE>

the Company had working capital of $(688,503). The Company may need to raise
additional working capital in Fiscal 2001.

         When the Company is awarded a new concession facility, it is
generally committed to expend a negotiated amount for capital improvements to
the facility. In addition, the Company is responsible for acquiring equipment
necessary to conduct its operations. As a result, the Company incurs
substantial expenses for capital improvements at the commencement of a
concession term. Generally, however, the term of the concession grant will be
for a period of 10 years, providing the Company an opportunity to recover its
capital expenditures. Substantially all of the Company's concession locations
have been obtained in the past 3 years, which has resulted in significant
capital needs. As a result, the Company has been required to seek capital,
and to apply capital from operations, for the construction of capital
improvements at newly awarded concession locations. The Company intends to
continue to bid for concession locations, including bidding on larger
proposals. Anticipated cash flows from operations will not be sufficient to
finance new acquisitions at the level of growth that the Company has
experienced over the past two years. Accordingly, to the extent the Company
is successful in securing new concession contracts, the Company will continue
to need additional capital, in addition to cash flow from operations, in
order to finance the construction of capital improvements.

         The Company anticipates capital requirements of approximately $1.5
million in Fiscal 2001 to complete the construction of improvements at
concession facilities which it has already been awarded.

         The Company may have more capital requirements than anticipated during
2001 if the Company wins additional bids or acquires additional airport
concession facilities. The Company is continually evaluating other airport
concession opportunities, including submitting bid proposals and acquiring
existing concession owners and operators. The level of its capital requirements
will depend upon the number of airport concession facilities which are subject
to bid, as well as the number and size of any potential acquisition candidates
which arise. Although the Company believes that it has sufficient cash to
operate its internal business for the next twelve months, there is no assurance
that the Company will have sufficient capital to finance its proposed growth
or that such capital will be available on terms that are favorable to the
Company or at all.


                                    Page 13
<PAGE>

ITEM 7.   FINANCIAL STATEMENTS


     CREATIVE  HOST  SERVICES,  INC.  AND  SUBSIDIARIES

     CONSOLIDATED  FINANCIAL  STATEMENTS

     YEARS  ENDED  DECEMBER  31,  2000  AND  1999

                                    CONTENTS

                                                                 Page
                                                                 ----


INDEPENDENT  AUDITORS'  REPORT                                    F-1

CONSOLIDATED  FINANCIAL  STATEMENTS:
  Consolidated  Balance  Sheet                                    F-2
  Consolidated  Statements  of  Operations                        F-3
  Consolidated  Statement  of  Shareholders'  Equity          F-4  -  F-5
  Consolidated  Statements  of  Cash  Flows                   F-6  -  F-7
  Notes  to  Consolidated  Financial  Statements              F-8  -  F-20

<PAGE>



                        INDEPENDENT  AUDITORS'  REPORT


Board  of  Directors
Creative  Host  Services,  Inc.  and  Subsidiaries
San  Diego,  California


We  have  audited  the  accompanying consolidated balance sheet of Creative Host
Services,  Inc.  and  Subsidiaries  as  of  December  31,  2000, and the related
consolidated  statements  of operations, shareholders' equity and cash flows for
each  of  the  years  ended  December  31,  2000  and  1999.  These consolidated
financial  statements  are  the responsibility of the Company's management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements  based  on  our  audit.

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  assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all  material  respects,  the  financial  position of Creative Host
Services,  Inc.  and  Subsidiaries  at December 31, 2000, and the results of its
operations  and  cash  flows  for the years ended December 31, 2000 and 1999, in
conformity  with  generally  accepted  accounting  principles.



STONEFIELD JOSEPHSON, INC.

/s/  Stonefield  Josephson,  Inc.

CERTIFIED  PUBLIC  ACCOUNTANTS

Santa  Monica,  California
March  1,  2001  (except  for  Note  15,  which
  is  as  of  March  15,  2001)

                                      F-1
<PAGE>

     CREATIVE  HOST  SERVICES,  INC.  AND  SUBSIDIARIES

     CONSOLIDATED  BALANCE  SHEET  -  DECEMBER  31,  2000

<TABLE>
<CAPTION>
<S>                                                      <C>
                               ASSETS

CURRENT ASSETS:
  Cash. . . . . . . . . . . . . . . . . . . . . . . . .  $ 1,713,054
  Receivables, net of allowance of $12,608. . . . . . .      646,976
  Inventory . . . . . . . . . . . . . . . . . . . . . .      465,481
  Prepaid expenses and other current assets . . . . . .      189,500
                                                         ------------

          Total current assets. . . . . . . . . . . . .  $ 3,015,011

PROPERTY AND EQUIPMENT, net of accumulated
  depreciation and amortization . . . . . . . . . . . .   15,621,016

OTHER ASSETS:
  Deposits. . . . . . . . . . . . . . . . . . . . . . .      298,917
  Goodwill, net . . . . . . . . . . . . . . . . . . . .    4,148,555
  Other assets. . . . . . . . . . . . . . . . . . . . .      173,798
                                                         ------------

          Total other assets. . . . . . . . . . . . . .    4,621,270
                                                         ------------

                                                         $23,257,297
                                                         ============

               LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable and accrued expenses . . . . . . . .  $ 2,556,180
  Current maturities of notes payable . . . . . . . . .      147,364
  Current maturities of leases payable. . . . . . . . .      891,479
  Income taxes payable. . . . . . . . . . . . . . . . .      108,491
                                                         ------------

          Total current liabilities . . . . . . . . . .  $ 3,703,514

DEFERRED TAX. . . . . . . . . . . . . . . . . . . . . .       97,940

NOTES PAYABLE, less current maturities. . . . . . . . .    1,488,356

LEASES PAYABLE, less current maturities . . . . . . . .    2,380,049

REDEEMABLE COMMON STOCK . . . . . . . . . . . . . . . .      500,000

SHAREHOLDERS' EQUITY:
  Common stock; no par value, 20,000,000 shares
    authorized, 6,444,515 shares issued and outstanding   15,707,095
  Additional paid-in capital. . . . . . . . . . . . . .    1,736,113
  Accumulated deficit . . . . . . . . . . . . . . . . .   (2,355,770)
                                                         ------------

          Total shareholders' equity. . . . . . . . . .   15,087,438
                                                         ------------

                                                         $23,257,297
                                                         ============
</TABLE>

See  accompanying  independent  auditors'  report  and  notes  to  consolidated
financial  statements.

                                      F-2
<PAGE>

     CREATIVE  HOST  SERVICES,  INC.  AND  SUBSIDIARIES

     CONSOLIDATED  STATEMENTS  OF  OPERATIONS

<TABLE>
<CAPTION>
<S>                                                      <C>                  <C>
                                                         Year ended           Year ended
                                                         December 31, 2000    December 31, 1999
                                                         -------------------  -------------------

REVENUES:
  Concessions . . . . . . . . . . . . . . . . . . . . .  $       23,506,452   $       17,917,858
  Food preparation center sales . . . . . . . . . . . .             171,463              188,683
  Franchise royalties . . . . . . . . . . . . . . . . .              47,944               70,410
                                                         -------------------  -------------------

          Total revenues. . . . . . . . . . . . . . . .          23,725,859           18,176,951

COST OF GOODS SOLD. . . . . . . . . . . . . . . . . . .           7,368,000            5,764,769
                                                         -------------------  -------------------

GROSS PROFIT. . . . . . . . . . . . . . . . . . . . . .          16,357,859           12,412,182
                                                         -------------------  -------------------

OPERATING COSTS AND EXPENSES:
  Payroll and other employee benefits . . . . . . . . .           7,575,967            5,913,200
  Occupancy . . . . . . . . . . . . . . . . . . . . . .           4,898,596            3,889,437
  General, administrative and selling expenses. . . . .           3,053,438            2,199,910
                                                         -------------------  -------------------

          Total operating costs and expenses. . . . . .          15,528,001           12,002,547
                                                         -------------------  -------------------

INCOME FROM OPERATIONS. . . . . . . . . . . . . . . . .             829,858              409,635
                                                         -------------------  -------------------

OTHER NON-OPERATING EXPENSES:
  Interest expense, net of beneficial conversion charge             529,965              977,612
  Interest charge related to beneficial conversion
    feature . . . . . . . . . . . . . . . . . . . . . .             352,941
                                                         -------------------

          Total other non-operating expenses. . . . . .             882,906              977,612
                                                         -------------------  -------------------

LOSS BEFORE INCOME TAXES. . . . . . . . . . . . . . . .             (53,048)            (567,977)

PROVISION FOR INCOME TAXES, current . . . . . . . . . .              20,280               11,781
INCOME TAX BENEFIT, deferred. . . . . . . . . . . . . .              (5,000)
                                                         -------------------

NET LOSS. . . . . . . . . . . . . . . . . . . . . . . .  $          (68,328)  $         (579,758)
                                                         ===================  ===================


NET LOSS PER SHARE -
  basic and diluted . . . . . . . . . . . . . . . . . .  $            (0.01)  $            (0.18)
                                                         ===================  ===================

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING -
  basic and diluted . . . . . . . . . . . . . . . . . .           5,887,953            3,295,843
                                                         ===================  ===================
</TABLE>


See  accompanying  independent  auditors'  report  and  notes  to  consolidated
financial  statements.

                                      F-3
<PAGE>
     CREATIVE  HOST  SERVICES,  INC.  AND  SUBSIDIARIES

     CONSOLIDATED  STATEMENT  OF  SHAREHOLDERS'  EQUITY


<TABLE>
<CAPTION>



<S>                                                   <C>            <C>          <C>            <C>              <C>
                                                                                   Additional                     Total
                                                           Common stock             paid-in      Accumulated    shareholders'
                                                      Shares         Amount         capital        deficit          equity
                                                      -------------  -----------  -------------  ---------------  ----------

Balance at January 1, 1999 . . . . . . . . . . . . .     3,209,705   $5,971,764   $    937,662   $   (1,707,684)  $5,201,742

Net proceeds from issuance of common stock . . . . .       140,000      112,000                                     112,000

Net proceeds from issuance of common stock . . . . .       355,000      355,000                                     355,000

Warrants exercised in exchange for common stock. . .        94,572       15,190        (15,190)

Conversion of convertible debt . . . . . . . . . . .       570,610    1,315,711                                   1,315,711

Net loss for the year ended
  December 31, 1999. . . . . . . . . . . . . . . . .                                                   (579,758)    (579,758)
                                                      -------------  -----------   -----------      ------------   ----------

Balance at December 31, 1999 . . . . . . . . . . . .     4,369,887    7,769,665        922,472       (2,287,442)   6,404,695

Warrants exercised in exchange for common stock. . .       812,571    2,717,323                                    2,717,323

Conversion of convertible debt . . . . . . . . . . .       573,857    1,478,348                                    1,478,348

Net proceeds from issuance of common stock . . . . .       597,700    3,493,409                                    3,493,409

Stock options exercised in exchange for common stock        70,500      114,600                                      114,600
</TABLE>

     (Continued)


See  accompanying  independent  auditors'  report  and  notes  to  consolidated
financial  statements.

                                      F-4
<PAGE>
     CREATIVE  HOST  SERVICES,  INC.  AND  SUBSIDIARIES

     CONSOLIDATED  STATEMENT  OF  SHAREHOLDERS'  EQUITY  (CONTINUED)

<TABLE>
<CAPTION>



<S>                                                <C>            <C>           <C>           <C>              <C>

                                                                                Additional                     Total
                                                         Common stock           paid-in       Accumulated    shareholders'
                                                   Shares         Amount        capital       deficit          equity
                                                   -------------  ------------  ------------  ---------------  -----------

Common stock issued for services. . . . . . . . .        20,000       133,750                                     133,750

Issuance of warrants in connection with financing                                    450,450                      450,450

Issuance of warrants in connection with
  settlement agreement. . . . . . . . . . . . . .                                     10,250                       10,250

Intrinsic value of beneficial conversion feature
  issued in connection with financing . . . . . .                                    352,941                      352,941

Net loss at December 31, 2000 . . . . . . . . . .                                                   (68,328)      (68,328)
                                                   -------------  ------------  -----------  ---------------  ------------

Balance at December 31, 2000. . . . . . . . . . .     6,444,515   $15,707,095   $  1,736,113  $   (2,355,770)  $15,087,438
                                                   =============  ============  ============  ===============  ===========

</TABLE>

See  accompanying  independent  auditors'  report  and  notes  to  consolidated
financial  statements.

                                      F-5
<PAGE>

     CREATIVE  HOST  SERVICES,  INC.  AND  SUBSIDIARIES

     CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS

     INCREASE  (DECREASE)  IN  CASH  AND  CASH  EQUIVALENTS

<TABLE>
<CAPTION>
<S>                                                          <C>                  <C>
                                                             Year ended           Year ended
                                                             December 31, 2000    December 31, 1999
                                                             -------------------  -------------------

CASH FLOWS PROVIDED BY (USED FOR) OPERATING ACTIVITIES:
  Net loss. . . . . . . . . . . . . . . . . . . . . . . . .  $          (68,328)  $         (579,758)
                                                             -------------------  -------------------

 ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
  PROVIDED BY OPERATING ACTIVITIES:
      Depreciation and amortization . . . . . . . . . . . .           1,327,270            1,027,100
      Provision for bad debts . . . . . . . . . . . . . . .              12,608                4,850
      Amortization of debenture discount. . . . . . . . . .              38,806               13,848
      Intrinsic value of beneficial conversion feature. . .             352,941                    -
      Income tax benefit - deferred . . . . . . . . . . . .              (5,000)                   -
      Value of warrants issued in connection with
        settlement agreement. . . . . . . . . . . . . . . .              10,250                    -

 CHANGES IN ASSETS AND LIABILITIES:
  (INCREASE) DECREASE IN ASSETS:
      Accounts receivable . . . . . . . . . . . . . . . . .             (75,428)             (97,650)
      Inventory . . . . . . . . . . . . . . . . . . . . . .            (108,011)              81,952
      Prepaid expenses and other current assets . . . . . .            (116,763)             (23,571)

  INCREASE (DECREASE) IN LIABILITIES:
      Accounts payable and accrued expenses . . . . . . . .             874,024              254,427
      Income taxes payable. . . . . . . . . . . . . . . . .             108,491                    -
                                                             -------------------  -------------------

          Total adjustments . . . . . . . . . . . . . . . .           2,419,188            1,260,956
                                                             -------------------  -------------------

          Net cash provided by operating activities . . . .           2,350,860              681,198
                                                             -------------------  -------------------

CASH FLOWS PROVIDED BY (USED FOR) INVESTING ACTIVITIES:
  Property and equipment. . . . . . . . . . . . . . . . . .          (4,481,546)          (3,511,217)
  Deposits and other assets . . . . . . . . . . . . . . . .            (281,013)              27,853
  Excess of purchase price over fair market value of assets          (3,370,722)                   -
                                                             -------------------  -------------------

          Net cash used for investing activities. . . . . .          (8,133,281)          (3,483,364)
                                                             -------------------  -------------------

CASH FLOWS PROVIDED BY (USED FOR) FINANCING ACTIVITIES:
  Proceeds from notes payable . . . . . . . . . . . . . . .           1,992,362              178,527
  Issuance of capital stock . . . . . . . . . . . . . . . .           6,387,332              442,956
  Repayment on notes payable. . . . . . . . . . . . . . . .            (143,847)             (12,119)
  Repayment on leases payable . . . . . . . . . . . . . . .            (873,730)          (1,085,244)
  Proceeds from (payments on) line of credit. . . . . . . .             (56,664)              56,664
  Net proceeds from leases payable. . . . . . . . . . . . .           3,239,762                    -
  Proceeds from loan payable, officer-shareholder . . . . .              31,900                    -
                                                             -------------------  -------------------

          Net cash provided by financing activities . . . .           7,305,453            2,852,446
                                                             -------------------  -------------------

NET INCREASE IN CASH. . . . . . . . . . . . . . . . . . . .           1,523,032               50,280
CASH, beginning of year . . . . . . . . . . . . . . . . . .             190,023              139,743
                                                             -------------------  -------------------

CASH, end of year . . . . . . . . . . . . . . . . . . . . .  $        1,713,055   $          190,023
                                                             ===================  ===================
</TABLE>

     (Continued)

See  accompanying  independent  auditors'  report  and  notes  to  consolidated
financial  statements.

                                      F-6
<PAGE>
     CREATIVE  HOST  SERVICES,  INC.  AND  SUBSIDIARIES

     CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS  (CONTINUED)

     INCREASE  (DECREASE)  IN  CASH  AND  CASH  EQUIVALENTS

<TABLE>
<CAPTION>



<S>                                                                      <C>                 <C>

                                                                         Year ended          Year ended
                                                                         December 31, 2000   December 31, 1999
                                                                         ------------------  ------------------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $          557,811  $          993,813
                                                                         ==================  ==================
  Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . .  $            5,842  $            7,847
                                                                         ==================  ==================

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
  Notes payable converted to common stock . . . . . . . . . . . . . . .  $        1,505,000  $        1,495,000
                                                                         ==================  ==================
  Intrinsic value of warrants issued with common stock. . . . . . . . .  $          647,444  $                -
                                                                         ==================  ==================
  Common stock issued in exchange for outstanding
    stock of GladCo Enterprises, Inc. . . . . . . . . . . . . . . . . .  $          500,000  $                -
                                                                         ==================  ==================
  Equipment acquired and financed by a capital lease. . . . . . . . . .  $          252,142  $                -
                                                                         ==================  ==================
  Deferred tax liability arising from business combination. . . . . . .  $          200,000  $                -
                                                                         ==================  ==================
  Common stock issued in exchange for services. . . . . . . . . . . . .  $          133,750  $                -
                                                                         ==================  ==================
</TABLE>


See  accompanying  independent  auditors'  report  and  notes  to  consolidated
financial  statements.

                                      F-7
<PAGE>
     CREATIVE  HOST  SERVICES,  INC.  AND  SUBSIDIARIES

     NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

     YEARS  ENDED  DECEMBER  31,  2000  AND  1999

(1)     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES:

     ORGANIZATION  AND  BASIS  OF  PRESENTATION:

Creative  Host  Services, Inc. (the "Company") was formed in 1986 to acquire the
operating  assets  of  Creative  Croissants,  Inc.,  which  consisted  of a food
preparation  center  in  San Diego and two French-style cafes featuring hot meal
croissants, muffins, pastas and salads.  The cafes were acquired in May 1987 and
the food preparation center was acquired in April 1988 in transactions accounted
for  using  the  purchase  method of accounting.  In 1989, the Company commenced
franchising operations, licensing its trademarks to third parties, who agreed to
purchase  baked goods from the Company's food preparation center under franchise
arrangements  with  the  Company, and earned an initial franchise fee, a royalty
based  upon  sales,  and  in  some  cases  advertising  and  marketing fees as a
percentage  of  gross  sales. In 1995, the Company began operating company owned
food  and  beverage  concessions  at  airports  and  commenced certain in-flight
catering sales.  The accompanying financial statements include the operations of
Company-owned concessions (mainly at various airports across the United States),
revenues  earned  from  franchisees  and  operations  from  its  wholesale  food
preparation  activities.

Effective October 9, 2000, the Company acquired 100% of the outstanding stock of
GladCo  Enterprises, Inc., a Pennsylvania corporation, the outstanding shares of
HLG  Acquisition  Corporation,  a  Pennsylvania  corporation and the outstanding
limited  partnership  interest  in  HLG  Franchise  Marketing  Company  for $7.3
million.

     PRINCIPLES  OF  CONSOLIDATION:

The  accompanying  consolidated financial statements include the accounts of the
Company  and  its  wholly  owned  subsidiaries,  GladCo  Enterprises,  Inc,  HLG
Acquisition  Corporation  and  HLG  Franchise  Marketing  Company.  All material
intercompany  accounts  have  been  eliminated  in  consolidation.

     REVENUE  RECOGNITION:

Concession  revenues  are  recorded  as  the sales are made; sales from the food
preparation  center  are  recorded  upon  shipment  and  revenues from in-flight
catering  are  recorded  upon  delivery.  Revenues  from  the  initial  sale  of
individual  franchises  are  recognized,  net  of an allowance for uncollectible
amounts  and  any  commissions  to  outside  brokers,  when  substantially  all
significant  services  to  be  provided  by  the  Company  have  been performed.

     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.


See  accompanying  independent  auditors'  report.

                                      F-8
<PAGE>

     CREATIVE  HOST  SERVICES,  INC.  AND  SUBSIDIARIES

     NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS  (CONTINUED)

     YEARS  ENDED  DECEMBER  31,  2000  AND  1999


(1)     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED:

     FAIR  VALUE:

Unless  otherwise  indicated,  the  fair  values  of  all  reported  assets  and
liabilities  which  represent  financial instruments (none of which are held for
trading  purposes)  approximate  the  carrying  values  of  such  amounts.

     INVENTORY:

Inventory,  consisting  principally of foodstuffs and supplies, is valued at the
lower  of  cost  (first-in,  first-out)  or  market.

     PROPERTY  AND  EQUIPMENT:

Property  and  equipment  are  recorded  at cost, including interest on funds to
finance  the  construction  of  concession locations.  Such interest amounted to
approximately  $23,000  and  $24,000  during  2000  and 1999, respectively.  For
financial  statement  purposes,  depreciation  is  computed  primarily  by  the
straight-line  method over the estimated useful lives of the assets, as follows:

     Office  equipment                                           10  years
     Restaurant  concession  and commissary equipment            10  years
     Excess  of  cost  over  fair  value assigned to net assets  20  years

Leasehold  improvements are amortized over the useful lives of the improvements,
or  terms  of  the  leases,  whichever  is  shorter.

     GOODWILL:

In  connection  with its acquisition of GladCo Enterprises, Inc. (Note 2), which
was  accounted for under the purchase method of accounting, the Company recorded
goodwill.  The  goodwill  is being amortized using the straight-line method over
the  estimated  useful  lives  of  twenty-years.  The  Company  will continually
evaluate  the existence of goodwill impairment in accordance with the provisions
of  SFAS 121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived
Assets  to  be  Disposed  of".

     DEBT  WITH  STOCK  PURCHASE  WARRANTS:

The proceeds received from debt issued with stock purchase warrants is allocated
between  the  debt  and the warrants, based upon the relative fair values of the
two securities valued using the Black-Scholes method.  The value of the warrants
results  in  a debt discount which is included in additional paid-in capital and
is amortized to expense over the term of the debt instrument, using the interest
method.  In  the  event  of  settlement  of such debt in advance of the maturity
date,  an  expense  is  recognized  based  upon  the difference between the then
carrying  amount  of  the debt (i.e., face amount less unamortized discount) and
amount  of  payment.




See  accompanying  independent  auditors'  report.

                                      F-9
<PAGE>

     CREATIVE  HOST  SERVICES,  INC.  AND  SUBSIDIARIES

     NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS  (CONTINUED)

     YEARS  ENDED  DECEMBER  31,  2000  AND  1999

(1)     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED:

     INCOME  TAXES:

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

     COMPREHENSIVE  LOSS:

Comprehensive  loss  consists  of  net  loss  only.

     EARNINGS  PER  SHARE:

Earnings  per share is computed based upon the weighted average number of shares
of  common  stock  outstanding  during  each period.  Diluted earnings per share
reflect  per  share amounts that would have resulted if diluted potential common
stock  had  been  converted  to  common  stock.  Common stock equivalents, which
consist  of  157,500  shares of options and 608,575 shares of warrants, have not
been  included in the earnings per share computation for the year ended December
31,  2000  and  1999,  as  the  amounts  are  anti-dilutive.

     CASH:

Equivalents
-----------

For purposes of the statement of cash flows, cash equivalents include all highly
liquid  debt  instruments with original maturities of three months or less which
are  not  securing  any  corporate  obligations.

Concentration
-------------

The  Company  maintains  its  cash in bank deposit accounts which, at times, may
exceed  federally insured limits.  The Company has not experienced any losses in
such  accounts.

     CONCENTRATION  OF  CREDIT  RISK:

The  Company  sells  its  bakery  products  to  food  distributors,  retailers,
franchisees  and various airlines throughout the United States primarily through
its  own concession operations and does not require collateral.  Over 90% of the
Company's sales are on a cash basis.  One location accounts for more than 10% of
the  Company's  revenues.  Allowances  have  been  provided  for  uncollectible
amounts,  which  have  historically  been  within  management's  expectations.




See  accompanying  independent  auditors'  report.

                                      F-10
<PAGE>

     CREATIVE  HOST  SERVICES,  INC.  AND  SUBSIDIARIES

     NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS  (CONTINUED)

     YEARS  ENDED  DECEMBER  31,  2000  AND  1999


(1)     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED:

     NEW  ACCOUNTING  PRONOUNCEMENTS:

In December 1999, the Securities and Exchange Commission (the Commission) issued
Staff  Accounting Bulletin No. 101, Revenue Recognition in Financial Statements,
which  is to be applied beginning with the fourth fiscal quarter of fiscal years
beginning  after  December  15, 1999, to provide guidance related to recognizing
revenue  in  circumstances in which no specific authoritative literature exists.
Adoption  of  this  pronouncement  did  not  materially  impact  the  financial
statements.

In  March  2000,  the  Financial  Accounting  Standards Board (FASB) issued FASB
Interpretation  No. 44 (Interpretation 44), "Accounting for Certain Transactions
Involving  Stock  Compensation".  Interpretation  44  provides  criteria for the
recognition  of  compensation  expense  in  certain  stock-based  compensation
arrangements  that  are  accounted  for under APB Opinion No. 25, Accounting for
Stock-Based  Compensation.  Interpretation  44  is  effective July 1, 2000, with
certain  provisions  that  are  effective retroactively to December 15, 1998 and
January  12,  2000.  Interpretation  44 is not expected to have an impact on the
Company's  financial  statements.

In  June  1998,  the  Financial  Accounting Standards Board issued SFAS No. 133,
"Accounting  for  Derivative Instruments and Hedging Activities."  SFAS No. 133,
as  amended  by SFAS No. 137, is effective for fiscal years beginning after June
15,  2000.  SFAS  No.  133  requires the Company to recognize all derivatives as
either  assets  or  liabilities  and measure those instruments at fair value. It
further  provides  criteria  for derivative instruments to be designated as fair
value,  cash  flow  and  foreign  currency  hedges  and  establishes  respective
accounting  standards  for reporting changes in the fair value of the derivative
instruments.  Upon  adoption,  the  Company  will  be required to adjust hedging
instruments  to  fair  value  in  the balance sheet and recognize the offsetting
gains  or  losses  as  adjustments  to  be  reported  in  net  income  or  other
comprehensive  income,  as  appropriate.  The Company is evaluating its expected
adoption  date and currently expects to comply with the requirements of SFAS 133
in  fiscal  year 2001. The Company does not expect the adoption will be material
to  the  Company's financial position or results of operations since the Company
does  not  believe  it  participates  in  such  activities.

In  January  2001,  the  FASB  Emergency  Issues  Task  Force  issued EITF 00-27
effective for convertible debt instruments issued after November 16, 2000.  This
pronouncement  requires the use of the intrinsic value method for recognition of
the  detachable  and  imbedded  equity  features included with indebtedness, and
requires  amortization  of the amount associated with the convertibility feature
over  the  life  of  the  debt  instrument  rather than the period for which the
instrument  first  becomes  convertible.  Inasmuch  as all debt instruments were
entered into prior to November 16, 2000 and all of the debt discount relating to
the  beneficial  conversion  feature  was  previously  recognized  as expense in
accordance  with  EITF  98-5,  there is no impact on these financial statements.
This  EITF  00-27,  could impact future financial statements, should the Company
enter  into  such  agreements.




See  accompanying  independent  auditors'  report.

                                      F-11
<PAGE>

     CREATIVE  HOST  SERVICES,  INC.  AND  SUBSIDIARIES

     NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS  (CONTINUED)

     YEARS  ENDED  DECEMBER  31,  2000  AND  1999

(2)     BUSINESS  ACQUISITION:

In  October  2000,  the Company acquired for approximately $7.3 million, 100% of
the  outstanding  stock of GladCo Enterprises, Inc., an operator of airport food
concessions,  the  outstanding  shares  of  HLG  Acquisition  Corporation,  a
Pennsylvania corporation and the outstanding limited partnership interest of HLG
Franchise  Marketing  Company  a  Pennsylvania  limited  partnership.

Consideration  consisted  of  an aggregate amount equal to $7,000,000 subject to
adjustments  as  set  forth  in the Purchase Agreement, payable as follows:  (i)
$4,000,000  in  cash,  (ii) payments and assumption of obligations not to exceed
$2,500,000;  (iii)  the issuance of 69,638 shares of the Company's common stock.
The  purchase  agreement provides for contingent payments of up to approximately
$700,000  based on the execution of definitive leases within one year at certain
airport  locations.  Any  such  payments,  if  earned,  will be allocated to the
assets  acquired or, if applicable, recorded as goodwill.  The operating results
of  this  acquisition  are  included  in  the  Company's consolidated results of
operations  from  the  date  of  acquisition.

The  acquisition has been accounted for using the purchase method of accounting,
and  accordingly,  the  acquisition  cost  of  approximately $7,300,000 has been
allocated  to  the assets acquired and liabilities assumed based on estimates of
their  fair  value.  A  total of approximately $4,200,000 (Note 4), representing
the excess of acquisition costs over the fair value of GladCo's tangible assets,
has  been  allocated  to  goodwill  and  is  being  amortized  over  20  years.

The  following  unaudited pro-forma summary presents the consolidated results of
operations of the Company as if the acquisition had occurred at the beginning of
the  2000  and  1999  fiscal  years.

                                                          2000     1999
                                                          ----     ----
                                            (in  thousands,  except  per  share)

          Net  sales                                 $  31,019    $  27,690
          Net  income  (loss)                              145       (1,107)
          Earnings  (loss)  per  common  share            0.02        (0.33)

The  above  amounts  are  based upon certain assumptions and estimates which the
Company  believes  are reasonable, and do not reflect any benefit from economies
which  might  be achieved from combined operations. The pro-forma results do not
necessarily  represent  results which would have occurred if the acquisition had
taken  place  on the basis assumed above, nor are they indicative of the results
of  future  combined  operations.



See  accompanying  independent  auditors'  report.

                                      F-12
<PAGE>

     CREATIVE  HOST  SERVICES,  INC.  AND  SUBSIDIARIES

     NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS  (CONTINUED)

     YEARS  ENDED  DECEMBER  31,  2000  AND  1999


(3)     PROPERTY  AND  EQUIPMENT:

     A  summary  at  December  31,  2000  is  as  follows:

          Food  and  beverage  concession  equipment     $     16,209,560
          Leasehold  improvements                               2,395,835
          Food  preparation  equipment                            352,932
          Office  equipment                                       189,779
                                                               ----------

                                                               19,148,106
          Less  accumulated  depreciation  and  amortization    3,527,090
                                                               ----------

                                                         $     15,621,016
                                                               ==========

Depreciation  and  amortization expense (related to property and equipment only)
totaled  $1,279,667 and $953,912 for the years ended December 31, 2000 and 1999,
respectively.


(4)     OTHER  ASSETS:

     Goodwill
     --------

Goodwill,  arising  from  the acquisition of GladCo. Enterprises, Inc., is being
amortized  over  20  years.  A  summary  at  December  31,  2000  is as follows:

          Goodwill                        $     4,204,472
          Less  accumulated  amortization          55,917
                                                ---------

                                          $     4,148,555
                                                =========

Amortization  expense  amounted to $55,917 for the year ended December 31, 2000.

     Other
     -----

     A  summary  at  December  31,  2000  is  as  follows:

          Franchise  costs                   $     171,909
          Loan  fees                               102,382
          Other                                      2,098
                                                   -------

                                                   276,389
          Less  accumulated  amortization          102,591
                                                   -------

                                             $     173,798
                                                   =======

Amortization  expense  amounted to $18,686 for the year ended December 31, 2000.



See  accompanying  independent  auditors'  report.

                                      F-13
<PAGE>

     CREATIVE  HOST  SERVICES,  INC.  AND  SUBSIDIARIES

     NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS  (CONTINUED)

     YEARS  ENDED  DECEMBER  31,  2000  AND  1999




(5)     ACCOUNTS  PAYABLE  AND  ACCRUED  EXPENSES:

Purchases  from  one  supplier amounted to approximately $3,852,000 for the year
ended December 31, 2000.  Approximately $165,000 of the accounts payable was due
to  this  supplier  at  December  31,  2000.


(6)     NOTES  PAYABLE:

     A  summary  is  as  follows:

     Note payable to equipment finance company, interest at 7%
       per annum, due April 2001                                    $     92,803
     Note payable to shareholder, interest at 8% per annum,
       originally due in November 2001.  The note was converted
       to shares of the Company's common stock in January 2001
       at a conversion rate of $1.00 per share                            48,400
     Note payable to landlord of former franchisee, interest
       at the greater of 10% or bank prime rate plus 1%,
       due in monthly installments of $1,264 through 2001                  6,161
     Convertible debentures to investment company, interest at
       an effective rate of 30.2% per annum, due September 26,
       2003, net of unamortized discount of $511,644                   1,488,356
                                                                       ---------

                                                                       1,635,720
     Less current maturities                                             147,364
                                                                       ---------

                                                                 $     1,488,356
                                                                       =========

     The  following  is a summary of the principal amounts payable over the next
three  years  and  thereafter:

                           2001     $     147,364
                           2002                 -
                           2003         1,488,356
                                        ---------

                                  $     1,635,720
                                        =========



See  accompanying  independent  auditors'  report.

                                      F-14
<PAGE>

     CREATIVE  HOST  SERVICES,  INC.  AND  SUBSIDIARIES

     NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS  (CONTINUED)

     YEARS  ENDED  DECEMBER  31,  2000  AND  1999


(6)     NOTES  PAYABLE,  CONTINUED:

     Convertible  Debentures
     -----------------------

In  September  2000,  the  Company  entered  into  a  purchase agreement with an
investment  company  to  issue a total of $2,500,000 convertible debentures with
interest at 7% per annum at a 5% discount rate and 1 warrant to purchase 125,000
shares  of  the  Company's common stock at an exercise price of $6.86 per share.
In September 2000, the Company issued $2,000,000 of the convertible debenture at
a 5% discount rate, or $100,000, and the warrant.  A payment of interest only is
payable  on  the  last  day  of  each  quarter  starting December 31, 2000.  The
remaining  principal  balance  of  the debenture is payable in full in September
2003.  The  debentures  are  convertible at the option of the holder at any time
after October 26, 2000 at the lesser of $7.70 per share or 85% of the average of
the 5 lowest volume weighted average sales prices of the common stock during the
past  25  trading days immediately preceding the notice of conversion.  Included
in accrued expenses is approximately $37,000 of accrued interest.  The intrinsic
value of the beneficial conversion feature totaled $352,941 and has been charged
to  interest  expense pursuant to EITF 98-5.  The debenture is collateralized by
substantially  all  assets  of  the  Company.  The  fair value of the associated
warrant  was determined based on the Black-Scholes pricing method.  The value of
the warrants totaled $450,450 and is included in paid-in capital at December 31,
2000.  The  debenture,  net  of  discounts  totaling  $550,450, has an effective
interest  rate  of  30.2%.  The  discount is being amortized to interest expense
over  the life of the debenture using the interest rate method.  Amortization of
the  discount  totaled  approximately  $39,000  at  December  31,  2000.

In  January 2001, $190,000 of the outstanding debenture was converted to 108,436
shares  of  the  Company's  common  stock at an average rate of $1.75 per share.


(7)     LINE  OF  CREDIT:

The  Company  has  a  $2,500,000  revolving  line of credit with a bank expiring
October  31,  2003.  The  line incurs an interest rate of 0.25% under the bank's
reference  rate.  The  line is collateralized by inventory, furniture, equipment
and  intangible  property.  No amounts were due the bank on the line at December
31,  2000.  The  Company  must  maintain  the  following  covenants:

          Debt to worth                     .85 : 1.0
          Current ratio                  .7 : 1.0 to June 30, 2001
                                         .9 : 1.0 thereafter
          Debt coverage ratio           1.5 : 1.0 to September 30, 2002
                                        2.5 : 1.0 thereafter
          Capital expenditures limit    $5,000,000 per year
          Acquisition limit             $5,000,000 per year


See  accompanying  independent  auditors'  report.

                                      F-15
<PAGE>

     CREATIVE  HOST  SERVICES,  INC.  AND  SUBSIDIARIES

     NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS  (CONTINUED)

     YEARS  ENDED  DECEMBER  31,  2000  AND  1999

(8)     13.3%  CONVERTIBLE  NOTES  PAYABLE:

In  December  1998,  the  Company  conducted  a private placement offering.  The
Company  sold  3,000  units.  Each  unit consisted of a $1,000 note payable with
interest  at  12% per annum and 80 common stock purchase warrants.  Each warrant
entitles  the  holder  to  buy one share of common stock at an exercise price of
$1.48.  The  warrants  expire  on December 31, 2003.  A payment of interest only
was  payable  monthly  commencing  January  1999 until January 2001.  Commencing
January  2001,  a payment of total principal and interest of $43,041 was payable
monthly until December 2003, at which time all unpaid principal and interest was
due.  The  notes  were collateralized by substantially all assets of the Company
and  shares  owned  by  the  president  and  major  stockholder  of the Company.
Commencing  March  1999,  each  note  could  be  converted, at the option of the
holder, to shares of the Company's common stock at the price per share of $2.625
(up  to  the  outstanding  balance  of  principal  and  interest  due).

In  December  1999  and  March  2000, $1,495,000 and the remaining $1,478,348 of
notes,  were  converted  into  570,610  and  573,857  shares  respectively.


(9)     LEASES  PAYABLE:

Equipment  leases  payable,  finance  company,  approximate  average interest at
17.2%, are due in monthly installments through the year 2004, and are secured by
food  and  beverage  concession  equipment.

The  following  is a summary of the principal amounts payable over the next five
years:

          2001                                           $     1,270,460
          2002                                                 1,229,224
          2003                                                   991,502
          2004                                                   533,331
          2005                                                    14,121
                                                               ---------

          Total minimum lease payments                         4,038,638
          Less amount representing interest                      767,110
                                                               ---------

          Present value of net minimum lease payments          3,271,528
          Less current maturities                                891,479
                                                               ---------

                                                         $     2,380,049
                                                               =========



See  accompanying  independent  auditors'  report.

                                      F-16
<PAGE>

     CREATIVE  HOST  SERVICES,  INC.  AND  SUBSIDIARIES

     NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS  (CONTINUED)

     YEARS  ENDED  DECEMBER  31,  2000  AND  1999


(10)     INCOME  TAXES:

For  federal income tax return purposes, the Company has available net operating
loss  carryforwards  of  approximately $2,057,000, which expire through 2020 and
are available to offset future income tax liabilities.  Due to the completion of
an  initial  public offering, there are significant limitations on the Company's
ability  to  utilize  this  operating  loss  carryforward.

Temporary  differences which give rise to deferred tax assets and liabilities at
December  31,  2000  are  as  follows:

          Deferred  tax  asset  arising  from  net
            operating  loss  carryforwards                 $     822,800
          Valuation  allowance                                  (822,800)
                                                                ---------

                    Net  deferred  tax  asset              $           -
                                                                =========

          Deferred tax asset and liability arising from:
            Depreciation and amortization                   $     97,060
            Non-taxable business combination                    (200,000)
                                                                ---------

                                                                (102,940)
          Amortization of deferred tax                             5,000
                                                                ---------

                                                           $     (97,940)
                                                                =========


(11)     COMMITMENTS  AND  CONTINGENCIES:

Leases
------

The  Company  leases its office facility, food preparation center and concession
locations  under various lease agreements expiring through 2010.  Rental expense
under  operating  leases  totaled  $3,577,693  and $2,885,545 for 2000 and 1999,
respectively.  As  of December 31, 2000, future minimum rental payments required
under  operating  leases,  exclusive  of  additional  rental  payments  based on
concession  sales  and  number  of  enplanements,  are  as  follows:

          Year  ending  December  31,
              2001                         $     3,073,513
              2002                               3,068,856
              2003                               3,079,306
              2004                               2,977,805
              2005                               2,512,113
              Thereafter                         5,940,531
                                                 ---------

                                          $     20,652,124
                                                ==========


See  accompanying  independent  auditors'  report.

                                      F-17
<PAGE>

     CREATIVE  HOST  SERVICES,  INC.  AND  SUBSIDIARIES

     NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS  (CONTINUED)

     YEARS  ENDED  DECEMBER  31,  2000  AND  1999


(11)     COMMITMENTS  AND  CONTINGENCIES,  CONTINUED:

Leases,  Continued
------------------

In  connection  with  the  concessionaire  agreements  with  various  airport
authorities,  the Company has obtained surety bond coverage for the guarantee of
lease  payments  in  the  event  of non-performance under the agreements, in the
aggregate  amount  of  approximately  $425,000.  The  insurer  may  seek
indemnification  from  the  Company  for  any  amounts  paid  under these bonds.

Capital  Improvements
---------------------

The  Company  plans  to  make capital improvements at two of its locations.  The
cost  of  the  capital  improvements  is  estimated at approximately $1,500,000,
excluding capitalized interest.  The construction is expected to be completed by
2001.

Contingencies
-------------

The  Company  is a party to legal proceedings arising from the normal conduct of
operations.  Although  the  ultimate  disposition  of  the  proceedings  is  not
determinable  by  legal  counsel,  management  does  not believe that an adverse
determination  in  such  proceedings would have a material adverse effect on the
financial  position  of  the  Company.

Settlement  Agreement
---------------------

In  December 2000, the Company entered into a settlement agreement with a former
note  holder.  In  March  2001,  pursuant  to  the  agreement,  the Company paid
interest and issued stock purchase warrants in satisfaction of this matter.  The
interest  payment  is  included  in  accounts  payable  and  accrued expenses at
December  31,  2000.  The  warrants  expire  in  January 2004.  The value of the
warrants  totaled  $10,250  and  is  included in paid-in capital at December 31,
2000.


(12)     REDEEMABLE  COMMON  STOCK:

In  connection with the business acquisition as described in Note 2, the Company
issued  69,638  shares  of its common stock for a portion of its purchase price.
The  Company  agreed  to  permit  the sellers to elect to require the Company to
repurchase  these  shares  when they are freely tradable at a price equal to the
per  share  issuance price times the number of shares repurchased.  Accordingly,
these  shares  are  excluded  from  the  stockholders'  equity.


(13)     COMMON  STOCK:

In  September  2000, one purchase warrant was issued to an investment company in
connection  with  the  convertible debenture (Note 6).  The warrant entitles the
holder  to  purchase 125,000 shares of the Company's common stock at an exercise
price  of  $6.86 per share.  The warrants are exercisable immediately and expire
in  September  2003.


See  accompanying  independent  auditors'  report.

                                      F-18
<PAGE>

     CREATIVE  HOST  SERVICES,  INC.  AND  SUBSIDIARIES

     NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS  (CONTINUED)

     YEARS  ENDED  DECEMBER  31,  2000  AND  1999


(13)     COMMON  STOCK,  CONTINUED:

In  January  through  July  2000,  shareholders  exercised  500,950  warrants to
purchase  common  stock  at an exercise price of $5.40 per share.  The exercises
generated  proceeds,  net  of  costs,  totaling  $2,567,898.

In  January  and  July  2000, shareholders exercised 83,000 warrants to purchase
common  stock  at  an exercise price of $2.06 per share.  The exercise generated
proceeds,  net  of  costs,  totaling  $134,625.

In  June  2000, a note holder exercised 10,000 warrants to purchase common stock
at  an  exercise price of $1.48 per share.  The exercise generated proceeds, net
of  costs,  totaling  $14,800.

In  2000,  individuals exercised 229,100 warrants to purchase common stock.  The
individuals  exercised  the  warrants on a "cashless" basis and as a result were
issued  218,621  shares  of  the  Company's  common  stock.

In  2000,  employees  and  directors  of the Company exercised 70,500 options to
purchase  common  stock  at  an  average exercise price of $1.63.  The exercises
generated  proceeds  totaling  $114,600.  In  2000,  the Company commenced three
private  placement  offerings  of  261,700,  211,000  and  125,000 shares of the
Company's  common stock at a purchase price of $5.00, $7.25 and $7.00 per share,
respectively.  The offerings generated proceeds, net of offering costs, totaling
$1,133,120,  $1,485,289  and  $875,000,  respectively.


(14)     STOCK  OPTIONS:

The  Company has adopted the 1997 Stock Option Plan (the "1997 Plan").  The 1997
Plan  authorizes  the  issuance of an additional 280,000 shares of the Company's
common  stock  pursuant  to  the  exercise  of  options granted thereunder.  The
Compensation  Committee  of the Board of Directors administers the Plan, selects
recipients to whom options are granted and determines the number of shares to be
awarded.  Options  granted  under  the  1997  Plan  are  exercisable  at a price
determined  by  the Compensation Committee at the time of grant, but in no event
less  than  fair  market  value.

The  number  and  weighted  average exercise prices of options granted under the
1997  plan,  for  the  years  ended  December  31, 2000 and 1999 are as follows:

<TABLE>
<CAPTION>



<S>                                   <C>       <C>      <C>      <C>
                                              2000           1999
                                              ----           -----
                                                Average          Average
                                                Exercise         Exercise
                                       Number   Price    Number  Price
                                       -------  -------  -------  ----
Outstanding at beginning of the year   223,000  $  2.89  171,500  3.61
Outstanding at end of the year . . .   157,500     3.52  223,000  2.89
Exercisable at end of the year . . .   151,000     3.46  203,500  2.78
Granted during the year. . . . . . .     5,000     4.88   68,000  1.07
Exercised during the year. . . . . .    70,500     1.63        -     -
Expired during the year. . . . . . .         -        -   16,500  2.82
</TABLE>


See  accompanying  independent  auditors'  report.

                                      F-19
<PAGE>

     CREATIVE  HOST  SERVICES,  INC.  AND  SUBSIDIARIES

     NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS  (CONTINUED)

     YEARS  ENDED  DECEMBER  31,  2000  AND  1999


(14)     STOCK  OPTIONS,  CONTINUED:

The  Company  has  elected to follow Accounting Principles Board Opinion No. 25,
"Accounting  for Stock Issued to Employees" (APB 25) and related interpretations
in  accounting for its employee stock options because the alternative fair value
accounting  provided  for  under  FASB  Statement  No.  123,  "Accounting  for
Stock-Based Compensation," requires use of option valuation models that were not
developed  for use in valuing employee stock options.  Under APB 25, because the
exercise  price  of the Company's employee stock options equals the market price
of  the  underlying  stock  on  the  date  of  grant, no compensation expense is
recognized.

Proforma  information regarding net loss and loss per share under the fair value
method  has not been presented as the amounts are immaterial for the years ended
December  31,  2000  and  1999.


(15)     WARRANTS:

On  July  3,  and  October  2, 2000, the Company issued warrant dividends to its
shareholders  of  record at an exercise price of 110% of the closing stock price
on  each of the dates.  Each shareholder of record received one warrant for each
40 shares of stock owned.  The Company issued 151,128 and 162,864 warrants at an
exercise  price  of  $13.20  and  $8.32  per  share  in  July  and October 2000,
respectively.

At  December  31,  2000,  the  Company  had  warrants outstanding that allow the
holders  to  purchase  up  to  608,575 shares of common stock at exercise prices
ranging  from  $1.38  to  $13.20,  expiring  through  November  2004.

The  number  and  weighted average exercise prices of the warrants for the years
ended  December  31,  2000  and  1999  are  as  follows:

<TABLE>
<CAPTION>



<S>                                   <C>        <C>      <C>        <C>
                                               2000              1999
                                               ----              ----
                                                 Average             Average
                                                 Exercise            Exercise
                                      Number     Price    Number     Price
                                      ---------  -------  ---------  -----

Outstanding at beginning of the year  1,057,693  $  3.65  1,063,093  $3.64
Outstanding at end of the year . . .    608,575     7.37  1,057,693   3.65
Exercisable at end of the year . . .  1,057,693     3.65
Granted during the year. . . . . . .    438,982     9.58    145,000   1.49
Exercised during the year. . . . . .    823,050     3.93    150,400   1.48
Terminated during the year . . . . .     65,050     5.40
</TABLE>


                                      F-24
                                      F-24



(16)     SUBSEQUENT  EVENT:

In  March  2001, $145,000 of the outstanding debenture (Note 6) was converted to
99,881  shares  of  the  Company's  common stock at an average rate of $1.45 per
share.




See  accompanying  independent  auditors'  report.

                                      F-20
<PAGE>






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

     None.


                                    PART III

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



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

Sayed Ali                           52               Chairman of the Board of
                                                     Directors,
                                                     President and Chief
                                                     Financial Officer
Booker T. Graves(1)                 61               Director
John P. Donohue, Jr.(1)(2)          69               Director
Charles B. Radloff                  71               Director
Tasneem Vakharia                    39               Secretary


-----------
(1) Member of Compensation Committee.

(2) Member of Audit Committee.


         SAYED ALI is the founder, Chairman of the Board of Directors, President
and Chief Financial Officer of the Company. Mr. Ali has served as Chairman of
the Board of Directors and President since 1986. Mr. Ali served as Chief
Financial Officer from December 1986 to February 1997, and since August 1997.
Mr. Ali served as the Secretary of the Company from 1986 to December 1996. Prior
to founding the Company, from May 1985 to September 1987, Mr. Ali was the
Director of Operations of Steffa Control Systems, a manufacturer of energy
management systems, which had annual sales of $30 to $35 million. From March
1980 until May 1985, Mr. Ali was the Director of Operations for Oak Industries,
Inc., a telecommunications equipment manufacturer which had annual sales of
approximately $250 million.

         BOOKER T. GRAVES has been a director of the Company since March 1997.
Since 1993, Mr. Graves has been president of Graves Airport Concession
Consultants, a consulting company located in Denver, Colorado, which provides
consulting services to airports and other businesses. From 1993 to 1996, Mr.
Graves was the principal food and beverage consultant to the Denver
International Airport. From 1990 through 1993, Mr. Graves was General Manager of
CA One Services, Inc. (formerly Sky Chefs) at Denver Stapleton International
Airport. From 1980 until 1990, Mr. Graves was the General Manager of CA One
Services, Inc. of Phoenix Sky Harbor Airport.

         JOHN P. DONOHUE, JR. has been a director of the Company since March
1997. From 1990 to the present, Mr. Donohue has been a private investor. Prior
to that time for 25 years, Mr. Donohue was employed by Oak Industries, Inc., a
NYSE listed company, in various capacities. From 1985 to 1990, Mr. Donohue
served as President of Oak Communications, Inc., a division of Oak Industries,
Inc. which manufactured communications equipment for the cable television
industry. From 1982 to 1985, he served as Vice President of Manufacturing
overseeing up to 6,000 manufacturing employees. From 1977 to 1982, Mr. Donohue
served as Vice President of Operations for the Oak Switch division of Oak
Industries, Inc.

         CHARLES B. RADLOFF has served as a business advisor and member of the
board of directors of DB Products, Inc. a privately owned company engaged in the
design, manufacture, and sale of electronic components for the communications
and aerospace industries. From 1987 to 1991, Mr. Radloff was President and Chief
Executive Officer of AKZO Electric Materials Company, an electronics
manufacturer and wholly-owned subsidiary of AZKO, which is a Dutch
multi-national corporation with annual sales of approximately $12 billion. From
1965 to 1987, Mr. Radloff served in various executive positions with Oak
Industries, Inc., including his position as President and Chief Executive
Officer of Oak Technology. Mr. Radloff has also served on the board of directors
of Comstream, Inc.

ITEM 10.  EXECUTIVE COMPENSATION

DIRECTOR COMPENSATION

         Directors receive no cash compensation for their services to the
Company as directors, but are reimbursed for expenses actually incurred in
connection with attending meetings of the Board of Directors. In addition, each
outside director is entitled to receive options as approved by the Board of
Directors under the Company's 1997 Stock Option Plan and 2001 stock Option Plan.
During


                                   Page 33


Fiscal 2000, each outside director was issued an aggregate of 15,000 options
under the 1997 Stock Option Plan, all of which are now vested.

NEW STOCK OPTION PLAN

In January 2001, the Company's Board or Directors adopted the 2001 Stock Option
Plan for the directors, executive officers, employees and key consultants of
Creative Host Services, Inc. (the "2001 Plan"). Under the 2001 Plan, a total of
300,000 shares are reserved for potential issuance upon the exercise of up to
300,000 stock options that may be granted under the Plan. No stock options have
yet been granted under the Plan. The Company expects to grant stock options
under the Plan to directors, executive officers and other qualified recipients
in 2001 and in future years. The 2001 Plan is expected to be ratified by the
Company's shareholders during the fiscal year ending December 31, 2001.

EXECUTIVE OFFICER COMPENSATION

         The compensation and benefits program of the Company is designed to
attract, retain and motivate employees to operate and manage the Company for the
best interests of its constituents. Executive compensation is designed to
provide incentives for those senior members of management who bear
responsibility for the Company's goals and achievements. The compensation
philosophy is based on a base salary, with opportunity for significant bonuses
to reward outstanding performance, and a stock option program. The Compensation
Committee is responsible for setting base compensation, awarding bonuses and
setting the number and terms of options for the executive officers. None of the
current Committee members are employees of the Company. The Committee currently
consists of Messrs. Donohue and Graves.

         The following table and notes set forth the annual cash compensation
paid to Sayed Ali, Chairman of the Board and President of the Company. No other
person's compensation exceeded $100,000 per annum during the Company's fiscal
year ended December 31, 2000.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
<BTB>
<S>                           <C>             <C>           <C>          <C>             <C>          <C>           <C>

                                       ANNUAL COMPENSATION                        LONG TERM COMPENSATION
                              ------------------------------------    -----------------------------------------
                                                                                 AWARDS                PAYOUTS
                                                                      ----------------------------     --------
                                                                                        SECURITIES
                                                             OTHER       RESTRICTED     UNDERLYING                  ALL OTHER
                                                             ANNUAL         STOCK         OPTIONS/       LTIP        COMPEN-
NAME/TITLE                     SALARY           BONUS         COMP.         AWARDS           SARS       PAYOUTS      SATION
YEAR                             $                $             $             $             # (1)          $            $
----------                     ---------        -----        ------       ---------     ----------     ---------    ---------

 Sayed Ali
      President
           2000                 $148,750          --            --             --               --            --           --
           2001                 $200,000          --            --             --               --            --           --

</TABLE>


         The following table sets forth the options granted to Mr. Ali during
the Company's fiscal year ended December 31, 2000. The table includes 60,000
stock options granted to Mr. Ali under the Company's 1997 Stock Option Plan
pursuant to Mr. Ali's new five year employment agreement made with the Company
in January 2000. See "Item 10. Executive Compensation - Employment Agreement".


                           OPTION/SAR GRANTS IN 1999

                                INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
<BTB>
<S>                   <C>                      <C>               <C>                 <C>           <C>
--------------- ------------------------- ----------------- --------------------- ------------- ------------
                  Potential Realizable       Number of        Percent of Total
                Value at Assumed Annual      Securities         Options/SARS
                  Rates of Stock Price       Underlying          Granted to       Exercise or
                Appreciation for Option     Options/SARS    Employees in Fiscal    Base Price   Expiration
     Name                 Term              Granted (#)           year (%)           ($/SH)        Date
--------------- ------------------------- ----------------- --------------------- ------------- ------------

Sayed Ali       $69,600                   10,000            10,000                $1.02         10/18/2004
</TABLE>

                                    Page 34


         The following table summarizes the number and value of all unexercised
options granted to and held by Mr. Ali at the end of 2000. Mr. Ali exercised
20,000 stock options during 2000.

                          FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
<BTB>
<S>                         <C>                  <C>                      <C>           <C>
                                    Number of Securities               Value of Unexercised
                                    Underlying Unexercised           In-the-Money Options
                                    Option at FY-End (#)               at FY-End ($)(1)
                           ------------------------------   ----------------------------
         Name              Exercisable      Unexercisable              Exercisable      Unexercisable
-----------------         ------------      -------------             ------------      -------------

Sayed Ali                  85,000                    0                   $276,250         0
</TABLE>

------------
(1)      Based on the closing bid price for the Company's Common Stock at the
         close of market on December 31, 2000 as reported by NASDAQ

EMPLOYMENT AGREEMENT

Sayed Ali, Chairman of the Board, President and Chief Executive Officer of
CHST, entered into a new five-year employment agreement with CHST which
commenced as of January 1, 2000. The new employment agreement provides for an
annual salary for Mr. Ali of $175,000 in 2000, $200,000 in 2001, $225,000 in
2002, $248,000 in 2003 and $275,000 in 2004. Mr. Ali is also entitled to be
granted 60,000 additional stock options, vesting 20,000 upon grant, 20,000 in
January 2001 and 20,000 in January 2002. The exercise price will be 110% of
the fair market value of the stock on the date of grant, and the exercise
period will be three years from the date of vesting. In the event of a loss
of the services of Mr. Ali, CHST could be materially adversely affected
because there is no assurance that CHST could obtain successor management of
equivalent talent and experience.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

         The following table sets forth certain information known to the Company
with respect to the beneficial ownership of the Company's Common Stock as of
March 29, 2000 by (i) each person who is known by the Company to own
beneficially more than 5% of the Company's Common Stock, (ii) each of the
Company's directors and executive officers, and (iii) all officers and directors
of the Company as a group. Except as otherwise listed below, the address of each
person is c/o Creative Host Services, Inc. 6335 Ferris Square, Suites G-H, San
Diego, California 92126.

<TABLE>
<CAPTION>
<BTB>
<S>                                                      <C>                  <C>
Name and Address of Owner                            Shares Beneficially Owned(1)
--------------------------------------               --------------------------------
                                                    Number                    Percent(2)
                                                    ---------------   --------------

Sayed Ali                                             1,020,000 (3)             17.9%

Booker T. Graves                                         30,000 (4)                *

John P. Donahue, Jr.                                     30,000 (4)                *

Tasneem Vakharia                                         45,000 (5)              0.8%

Charles B. Radloff                                       15,000 (4)                *

All officers and directors as a group                 1,140,000                 19.8%
  (5 persons)

</TABLE>

--------------------
  * Less than one percent.

(1)    Beneficial ownership is determined in accordance with the rules of the
       Securities and Exchange Commission and generally includes voting or
       investment power with respect to securities. Shares of Common Stock
       subject to options and warrants currently exercisable or convertible, or
       exercisable or convertible within 60 days of March 25, 2001, are deemed
       outstanding for computing the percentage of the person holding such
       option or warrant, but are not deemed outstanding for computing the
       percentage of any other person. Except as pursuant to applicable


                                  Page 35


       community property laws, the persons named in the table having sole
       voting and investment power with respect to all shares of Common Stock
       beneficially owned.

(2)    Does not include 630,600 shares of Common Stock issuable upon exercise of
       outstanding warrants or 300,000 shares of Common Stock issuable upon
       conversion of long term debt.

(3)    Includes 85,000 shares issuable upon the exercise of options outstanding
       under the Company's 1997 Stock Option Plan and 20,000 shares issuable
       upon the exercise of options outstanding under the Company's 2001 Stock
       Option Plan.

(4)    Includes 30,000 shares issuable upon the exercise of options outstanding
       under the Company's 1997 Stock Option Plan. The Company expects to grant
       additional stock options to the directors in 2001 under the Company's
       newly adopted 2001 Stock Option Plan.

(5)    Consists solely of shares issuable upon the exercise of options
       outstanding under the Company's 1997 Stock Option Plan. The Company
       expects to grant additional stock options to the directors and officers
       in 2001 under the Company's newly adopted 2001 Stock Option Plan.

(6)    Consists solely of shares issuable upon the exercise of options
       outstanding under the Company's 1997 Stock Option Plan. The Company
       expects to grant additional stock options to the directors in 2001 under
       the Company's newly adopted 2001 Stock Option Plan.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

          None.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits


Exhibit No.                                 Description
------------                                -----------

   3.1        Amended and Restated Articles of Incorporation*
   3.2        Bylaws*
   4.1        Specimen Certificate for Common Stock*
   4.3        Warrant Agreement (including form of Warrant
              Certificate)*
   4.4        The Company's 2001 Stock Option Plan for Directors,
                  Executive Officers, Employees and Key Consultants*
   10.1       1997 Stock Option Plan*
   10.2       Employment Agreement between the Company and Sayed
              Ali*
   10.3       Lease Space In The Cedar Rapids Municipal Airport Terminal For The
              Purpose of Operating Food/Beverage, News/Gift, And Airline
              Catering Concessions dated as of September 16, 1996 between the
              Company and Cedar Rapids Airport Commission.*
   10.4       Food And Beverage Concession Agreement And Lease dated
              as of October 4, 1996 between the Company and Richland
              -Lexington Airport District.*
   10.5       Agreement between the Company and Delta Airlines.*
   10.6       Concession And Lease Agreement dated as of May 24,
              1996 between the Company and Lehigh-Northhampton
              Airport Authority.*
   10.7       Food And Beverage Concession Agreement And Lease
              Bluegrass Airport between the Company and Lexington-
              Fayette Urban County Airport Board.*
   10.8       Food And Beverage Concession Agreement dated as of
              July 26, 1995 between the Company and Outagamie
              County.*
   10.9       Food And Beverage Lease And Concession Agreement dated
              as of May 17, 1996 between the Company and Roanoke
              Regional Airport Commission.*
   10.10      Food And Beverage Concession Agreement dated as of October 24,
              1995 between the Company and the County of Dane.*



                                   Page 36
<PAGE>
   10.11      Food And Beverage Concession Lease Agreement dated as of June 10,
              1994 between the Company and the Port of Portland.*
   10.12      Concession Agreement dated as of March 25, 1995
              between the Company and City of Los Angeles.*
   10.13      License And Use Agreement Food/Beverage Service Aspen/Pitkin
              County Airport 1994 Through 1999 dated as of April 1994 between
              the Company and Board of County Commissions of Pitkin County
              Colorado.*
   10.14      Food Court Agreement dated as of November 14, 1996 between the
              Company and City and County of Denver.*
   10.15      Agreement between the Company and the City and County
              of Denver as of November 19, 1996.*
   10.16      Agreement dated as of February 8, 1996 between the
              Company and the County of Orange.*
   10.17      Concession Agreement for Food and Beverage Operations
              at the Des Moines International Airport between the
              Company and the City of Des Moines, Iowa dated as of
              June 2, 1997.**
   10.18      Concession Agreement between the City of Los Angles
              Department of Airports and the Companing Covering the
              Operation and Management of the Food and Beverage
              Package #3 Concession at Ontario International
              Airport.**
   10.19      Concession Agreement and Lease between the Piedmont
              Triad Airport Authority and the Company.**
   10.20      Form of Franchise Agreement.*
   10.21      TCBY Franchise Agreement dated October 29, 1996
              between TCBY Systems, Inc., and St. Clair Development
              Corporation.*
   10.22      Industrial Real Estate Lease between the Company and
              WHPX-S Real Estate Limited Partnership.*
   10.23      Employment Agreement between the Company and Sayed Ale, Dated
              January 1, 2000.***
   10.24      Purchase Agreement between Creative Host Services,  Inc. and
              Edwin L. Klett,  Louis Coccoli, Jr., Herbert H. Gill and the
              Virgil Gladieux marital Trust dated as of September 28, 2000.****
   10.25      Securities Purchase Agreement, dated as of September 26, 2000,
              between Creative Host Services, Inc.and GCA Strategic Investment
              Fund Limited.****
   10.26      Convertible Debenture, dated as of September 26,2000, issued by
              Creative Host Services, Inc. to GCA Strategic Investment Fund
              Limited.****
   10.27      Warrant, dated as of September 26,2000, issued by Creative Host
              Services, Inc. to GCA Strategic Investment Fund Limited.****
   10.28      Registration Rights Agreement, dated as of September 26,2000,
              between Creative Host Services, Inc. and GCA Strategic Investment
              Fund Limited.****
   10.29      Escrow Agreement, dated as of September 26,2000, between Creative
              Host Services, Inc.and GCA Strategic Investment Fund Limited and
              the Law Offices of Kim T. Stephens.****
   10.30      Sysco Corporation Master Distribution Agreement dated January 3,
              2000

---------
* Incorporated by reference from the exhibits included with the Company's
Registration Statement (No. 333-6722) on Form SB-2 filed with the SEC on April
3, 1997.

**Incorporated by reference from the exhibits included with the Company's Annual
Report (No. 000-22845) on Form 10-KSB filed with the SEC on March 31, 1998.

***Incorporated by reference from the exhibits included in the Company's Form
S-3 Registration Statement filed with the SEC on March 13, 2000.

****Incorporated by reference from the exhibits included in the Company's
Form 8-K filed with the SEC on October 9, 2000.

         (b)The following is a list of Current Reports on Form 8-K filed by the
Company during or subsequent to the last quarter of the fiscal year ended
December 31, 1999.

                  Report on Form 8-K, dated October 9, 2000, relating to the
         acquisition of Gladco Enterprises, Inc.


                                   Page 37


                                   SIGNATURES

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

Dated:  October 8, 2001                     CREATIVE HOST SERVICES, INC.

                                            By:   /s/ Sayed Ali
                                            ------------------------
                                            Sayed Ali, President

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



  /s/ Sayed Ali              Chairman of the Board and          October 8, 2001
----------------------       President
 Sayed Ali

  /s/ Booker T. Graves       Director                          October 15, 2001
----------------------
 Booker T. Graves

  /s/ John P. Donohue, Jr.   Director                           October 8, 2001
----------------------
 John P. Donohue, Jr.

  /s/ Charles B. Radloff     Director                           October 8, 2001
----------------------
 Charles B. Radloff